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Q&A: At the leading edge – James Bennett

We speak to James Bennett, Director – Sales and Marketing at AerFin

James has a career spanning over 16 years in the aviation industry, including senior commercial and sales and marketing positions within a leading engine consultancy services business, a rapidly growing aerospace and electronics parts manufacturer, and Chromalloy, the worldwide manufacturing and repair services provider of gas turbine engine parts. He has extensive experience in an engine and MRO environment, including eight years in Thailand leading sales and customer services. Fluent in Spanish, James joined AerFin in July 2016 as a senior member of the management team and is responsible for group sales and marketing (airframe and engines).


How significant are the regional and low cost airline sectors to AerFin?

AerFin views the regional and low cost sectors as hugely significant to its ambitious growth trajectory. This is largely due to our involvement in the Embraer E-Jet market, where we offer operators a breadth of bespoke service solutions. The most notable of these is our BeyondPool service, which is a completely tailored flight-hour component programme, offering operators a substantial cost saving without sacrificing the quality of material and reliability of dispatch.

In addition, with competition squeezing passenger yields, coupled with rising fuel prices adding further cost pressure to airlines, we understand the importance of offering a service that gives airlines some relief on maintenance cost exposure. We are, therefore, very active in acquiring aircraft and engine assets for tear-down, allowing us to maintain a comprehensive inventory holding. As a result, we can offer extensive ad hoc and contractual support to our airlines at an extremely competitive price point.

Clearly AerFin is ramping up activities with Embraer products. What is driving this?

In a market that has historically been controlled by the Original Equipment Manufacturer (OEM), AerFin identified a niche opportunity to support Embraer E-Jet operators through an array of aftermarket service solutions. This foresight drove our decision to purchase an entire fleet of 15 Embraer E170-LRs from Saudi Arabian Airlines in 2017, along with 10 spare engines, which also included an inventory of more than 24,000-line items and all the tooling and equipment from the airline’s CF34 engine shop. The acquisition provisioned AerFin with the largest stock of E-Jet inventory of any third-party business in the world.

The acquisition’s biggest success has been the cost-saving opportunities that it has presented to E-Jet operators around the world.  AerFin provides customised contracted supply chain solutions (BeyondPool) to E-Jet operators, at a substantially reduced cost. This has allowed us to ramp up activities significantly and really grow our presence in the regional segment.

What trends are you seeing in the remarketed secondary market for regional aircraft today?

With the introduction of next-generation aircraft such as the A220, Embraer E2 series and Mitsubishi MRJ aircraft, plus rising fuel prices, operators are deciding to phase out existing regional equipment, particularly the E190 variant. Take the recent announcements from JetBlue and Air Canada as two examples. Not only are we seeing an abundance of these aircraft being remarketed, we are also seeing these aircraft being remarketed at a much younger age than the traditional phase-out one would expect from first hand operators. We expect that a lot of these aircraft will be rehomed with either airlines that do not yet exist, or with airlines that do not yet operate E-Jet aircraft. We also expect that a number of these potential airlines will be situated in emerging markets, with regional jets being utilised on either tester or development routes, as airlines will often not want to fly a larger narrowbody that they may not potentially be able to fill. This presents AerFin with an excellent opportunity to support these airlines with cost-saving maintenance solutions, primarily via BeyondPool.

For small regional airlines what’s the best approach for inventory management?

When it comes to supporting the operating fleet with inventory, an airline has the option to purchase inventory based on recommendations made by the aircraft OEM. These recommendations are predicated on various factors and aim to ensure an optimal supply chain process, and minimise the downtime in AOG (Aircraft on Ground) situations. However, this could lead to an airline, even one with just two or three aircraft, facing a capital expenditure of several million dollars, and would still not guarantee avoiding technical delays or AOGs. Other necessities, such as setting up approved vendors to repair components and organising the logistics of shipping parts to and from operational base to MROs, require added financial and human resources.

The good news is that there are alternative solutions for an airline looking to control overhead costs. The most common of these is to use FHA component pool contracts, which effectively replace the need for ownership and tied-up capital. This means that the airline avoids the initial investment in stock, as well as the human and capital resource of managing the component supply chain, as it is all outsourced to a third-party provider. If the airline does proceed down an FHA route for component support the added benefit is that, if the airline decides to add more aircraft, it will know what costs for component support are required for that aircraft. >>


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