by Loren Nasser, President & CEO

by Loren Nasser, President & CEO

Once, what seems like decades ago now – commercial air travel was truly pleasurable. In those days, we had plenty of leg-room even in economy class. Cabins were clean and full of blankets, pillows and magazines, and passengers were treated as customers rather than cattle. And in those days the airlines even made money too.

On a recent flight I had to smile when the person sitting across the aisle from me commented “I’d rather visit the dentist for a tooth extraction over getting on another commercial airline flight.” Most of the airlines have been in, or are, or have been on the verge of bankruptcy. The airlines are bleeding from excessive costs and, in an attempt to stop the bleeding; one by one passenger perks are being eliminated. Most recently, one airline was bragging in their advertising that it will save $100,000 per year by eliminating the serving of lemons during flights. I have to wonder if this is really the best solution to cutting costs.

In the October 5th publication of Forbes, Maureen Farrell wrote, “Spare parts are to jet-engine makers what razor blades are to Gillette.” She went on to say the handful of jet-engine makers garner 40% margins on the replacement parts they sell to the airlines. Is this aspect of the business ripe for cost savings by commercial airlines? Yep – probably more so than lemons.

According to FAA representatives, more than 10,000 third party replacement parts makers and parts repair companies are qualified to do business with the commercial airline sector. Yet, these companies only account for a small fraction of the overall market. Why? Well for one, it has traditionally taken a long time and costs a lot of money to prove that the 3rd party parts are as good as the original equipment manufacturer parts. VEXTEC is working on changing this aspect. But further, the original equipment makers are doing everything they can to keep their tight hold on this business. They are even going so far as to buy ownership stakes in aircraft leasing companies and prohibiting that spare parts come from anyone but them.

One has to wonder what would happen if the airlines collaborated enough to rectify this. Maybe then we’d at least get our lemons back…


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