Reporting for Low Cost & Regional Airline Business Magazine, Alex Preston speaks to Lindsay Cooper, Head of Asset Management at AJW Group, about the complex scenario of the landing gear spare parts market. 

Delays in new aircraft deliveries are having a significant impact on the demand for refurbished landing gear shipsets and spare parts. This is both a challenge and an opportunity for businesses such as AJW Group, and Preston begins by asking Cooper how AJW is responding to the high levels of demand. 

“Effectively managing inventory is vital for MRO stakeholders to maintain minimal equipment levels and for optimal customer service delivery,” says Cooper.  
 
“It requires forward planning and a strong business strategy. Businesses such as AJW that have made substantial investments in stock are better equipped to mitigate supply chain disruptions, meet their economic targets, and achieve business success,” she continues. 
 
What supply chain difficulties has AJW Group faced? Cooper remarks that supply chain disruptions are causing significant delays in the delivery of new components such as landing gear and affecting the shop processing times for the repair of unserviceable components. 
 
“This bottleneck in the repair cycle amplifies the difficulties faced by operators in fleet maintenance,” comments Cooper. She adds that “aftermarket demands are back at pre-Covid levels, with MRO businesses across the globe struggling to ramp up capacity to supply the demand to sufficient levels.” 

Aircraft teardown and part-out provides a sustainable source of high-quality, cost-effective spare parts for aircraft operators, maintenance facilities, and other industry players, and helps to address the growing demand for spare parts, especially for older aircraft models or those that are no longer in production. 

Cooper elaborates on this trend, explaining that “By salvaging and reselling serviceable components, the teardown/part-out process offers an environmentally friendly solution by extending the lifecycle of existing parts and reducing the need for new manufacturing.” 
 

Preston next looks to Cooper for insights into the most sought-after landing gear parts. She replies that AJW is receiving “daily requests” for A320 and A330 enhanced landing gears. “Boeing 737NG sets are constantly on loan, with further customer requests lined up,” she observes. 

What about the increasing costs of spare parts? There are two primary factors responsible, she responds. Firstly, TAT through the repair cycle requires more serviceable inventory to meet demand for serviceable parts. Secondly, OEMs are increasing catalogue list price by 7-12% per annum. This drives up the fair market value (FMV), where the price is pegged to the list price. When you add the reduced availability caused by 45-day shop processing times, “simple supply and demand economics” dictates that the price must increase.  
 
Preston poses his final question, asking AJW’s Head of Asset Management for a forecast into the future of the teardown market.  

“The outcome resides in resolving the shortage in the supply of spare parts verses the demand profile,” she asserts. “The spares market is undergoing rapid recovery, which is creating a high demand for parts and used serviceable material. In our opinion, it is going to be well beyond 2026 before we see an alleviation in this situation while the OEMs gets to grips with their labour, supply, and delivery issues.”  
 
Cooper concludes by stating that while planned retirements will improve the parts supply and soften the current demand to some extent, it won’t happen anytime soon.