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THE EMERGING MARKETS AS AN UNFORSEEN NICHE
LOCATORY.COM IS A PART OFAVIA SOLUTIONS GROUP
MRO SECTOR GROWTH
MARKET OVERVIEW:
NEW JOINT VENTURES
ECAR - Engineering Centre of Airbus in Russia - despite the existing downturn in the world airline industry, Airbus has decided to remain fully committed
The Airbus (Beijing) Engineering Centre (ABEC) - marked a new phase in the decades-long industrial partnership between China and Airbus
Kaman Aerospace Group, Inc., a subsidiary of Kaman Corporation and Kineco Private Limited in March announced that they have entered into an agreement to form a manufacturing company in India
Cessna and Aviation Industry Corporation of China (AVIC) entered into two strategic agreements to develop general and business aviation in China
2011 | 20,203 AIRCRAFT
2012 | 20,840AIRCRAFT
2017 | 24,365AIRCRAFT
2022 | 29,995AIRCRAFT
Fleet growth forecast at 3.7 % CAGR to 29,955 in 10 yearsAverage age of fleet has declined since 2009 – 12.2 to 11.9 years over >20,000 aircraftLatin America represents only about 5% of the global air passenger market
*The Global MRO Forecast 2012-2022, Teamsai 2012
LONG TERM FLEET GROWTH
Narrowbody60%
Regional Jets17%
Widebody23%
Narrowbody60%
Widebody23%
Regional Jets17%
Narrowbody59%
Regional Jets18%
Widebody23%
Narrowbody57%
Widebody24%
Regional Jets19%
GROWTH OF MRO SECTOR IMPLICATES THE EXPANSION OF SPARE PARTS BUSINESS
- $49.5B industry will grow to $68.4B over 10-year forecast period - Engine remains the largest segment with the highest growth rate - Component expected to grow as fast as engines MRO in the latter half of the forecast
2012 2017 20220 $
10 $
20 $
30 $
40 $
50 $
60 $
70 $
80 $
8.9 10.6 11.5
9.5 11.3 13.4
22.427.7
31.68.7
9.9
11.9
2012 Global MRO Forecast, Total Value $B
HMV&ModEnginesComponentLine
$ 49.5
$ 59.5
$ 68.4
GROWTH OF MRO SECTOR BY REGIONS
Americas Europe Asia Middle East Africa0 $
5 $
10 $
15 $
20 $
25 $
17
13.711.6
3.1 1.5
21.93
17.8115.08
3.3171.545
20112021
Americas Europe Asia Middle East AfricaMarket ($B)
(2011)$17 $13.7 $11.6 $3.1 $1.5
M-kt Share(2011)
36% 29% 25% 7% 3%
CAGR(2011-21)
2.4% 4.7% 6.8% 5.3% 3.5%
M-kt Share(2021)
29% 30% 30% 7% 3%
Major market regions show relative parity in ten years time
Growth in the airline business will continue to generate new MRO demands
GROWTH OF MRO SECTOR IMPLICATES THE EXPANSION OF SPARE PARTS BUSINESS
AeroStrategy (2010-2019) TeamSAI (2011-2021)0%
2%
4%
6%
8%
10%
12%11.00%
9.60%10.00%9.10%
3.30%3.90%
MRO market forecast according to TeamSAI and AeroS-trategy
IndiaChinaGlobal average
IF EMERGING MARKETS LOOKS SO PROMISING,
WHYIT IS SO HARD TO APPROACH THEM FOR
WESTERN COUNTRIES?
IF EMERGING MARKETS LOOKS SO PROMISING, WHY IT IS SO HARD TO APPROACH THEM FOR
WESTERN COUNTRIES?
Western companies should leave the “I’m from the West, I know best” attitude at home. Entrance into the emerging markets is a new learning experience as companies must find the best ways to adapt to new cultures and navigate their businesses according to new rules and regulations.
- Who knows the Russian political system better than the Russians? - Who is better than an Indian to advise you on the Indian authorities’ documentation requirements?- And who speaks Chinese better than a native?
3 MAIN OBSTACLES
WHYCOMMUNICATION BETWEEN EMERGING AND
EVOLVED MARKETS IS COMPLICATED?
Geographical distance
Language barrier
Cultural differences
3 OBSTACLESWHY COMMUNICATION BETWEEN EMERGING
AND EVOLVED MARKETS IS COMPLICATED:
FROM WESTERN POINT OF VIEW – IT’S……A REAL PAIN IN A NECK…
SOLUTIONS?
SOLUTION NO. 1
JOINT VENTURESREPRESENTATIVE OFFICE
PROBLEMS
PROBLEM NO. 2 – YOU STILL NEED SEVERAL OFFICES TO COVER DIFFERENT MARKETS – E.G. RUSSIA, CIS, SOUTH ASIA, NORTH AFRICA
PROBLEM NO. 1 – YOU STILL DEAL WITH CULTURAL DIFFERENCES
SOLUTION NO. 2
USAGE OF TECHNOLOGY
NO BOUNDARIES FOR TECHNOLOGIES
Internet is global although some emerging markets still feel a lack of internet broadcast.
If you want to Travel from India to US, it will take at least 20 hours. With internet, you can make it in fraction of a second.
Africa Asia Europe Middle East North Amer-ica
Latin America/
Carib.
Oceania/Aus-tralia
Internet users, 2000
4514400 11430400 105096093 3284800 108096800 18068919 7620480
Internet users, 2012
139875242 1016799076 500723686 77020995 273067546 235819740 23927457
100,000,000
300,000,000
500,000,000
700,000,000
900,000,000
1,100,000,000
1,300,000,000
1,500,000,000
World internet usage statistics (thousands)
CHALLENGE FOR AVIATION INDUSTRY
- SECURE PRESENT BUSINESS- WIN TRUST OF NEW CUSTOMERS- INCREASE COMPETITIVENESS
- CATCHING-UP WITH NEW TECHNOLOGIES- CAPABILITY EXTENSION- REMAIN IN THE GAME
TRADITIONAL AIRLINE MODEL
AeroStrategy estimates the amount of MRO supply chain inventory is $44 billion – greater than current annual MRO spend.
SO THE TRADITIONAL AIRLINES MODEL MEANS:
EFFECTIVELY MANAGING SPARES ROTABLES
UNPREDICTABILITY
INSUFFICIENT INVENTORY VOLUME OR MIX
SIGNIFICANT OVERHEADS
DIFFICULTIES IN MANAGING FLEET CHANGES
This inventory costs the industry in excess of $10 billion annually
60% of this inventory is owned by Airlines. Airlines are holding a total of $12 B in component inventory.
KEY FACTORS OF POOLING
FLEET PLANING
GEOGRAPHICAL LOCATION
FINANCIAL MODEL
SYSTEM CAPABILITIES
LOGISTICS
EXPERIENCE IN AIRCRAFT TYPE
POOLING
A BETTER WAY FOR AIRLINES IS PARTS POOLING
SERVICES AND AVAILABILITY
If a billion people living in India gained the same air travelling habits as the Americans, it would account for a market share of 2.1 billion passengers. Even if the Indians chose air transport three
times less than the Americans, India would still become a serious competitor to the USA.
More passengers, more aircraft, more MRO, more usage of technology.
SERVICES AND AVAILABILITY
Airlines should demand a solution based on
SERVICE & AVAILABILITY:
STRONG COMPONENT AVAILABILITY
PREDICTABLE & CONSISTENT COMPONENT COST
WORLDWIDE COMPONENT AVAILABILITY
MINIMAL ADMINISTRATIVE EFFOR
WHY LOCATORY.COM?
- Get aircraft parts you need by moment - faster solutions for AOG situations- Market your stock to different regions- List, sell and search for MRO services & repair capabilities- Use supplier management tool- Aircraft spare parts and components Marketplace- Multilingual platform
THANK YOU