Page 27 - AAA JULY - SEPTEMBER 2019 Online Magazine

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Partnering

for Growth

AAR’S OEM SOLUTIONS BUSINESS IS SET Making Waves in Asia
TO TAKE ADVANTAGE OF A GROWING ASIAN With Asia increasingly becoming the place to
MARKET be for players in the aviation industry, AAR is
investing heavily in the region. The company is
Arun Sivasankaran close to signing “major, long term contracts”
with companies in Asia, says Young.
Helping OEMs increase their share of aftermarket profits, at a time “It will be in the parts supply chain side of our
when they are investing more than ever in aftermarket services, business; there will be a number of announce-
may sound counterproductive for stand-alone companies that ments later this year about contracts that we
focus solely on the aftermarket, but AAR has turned conventional will sign with companies in Japan and China. We
wisdom on its head with its OEM Solutions business. have offices in Tokyo, Singapore and Shanghai;
we are very active in the region as is everyone
The parts distribution business, which helps partner OEMs better else.”
penetrate the global commercial and military aircraft markets, has With America and Europe being mature
grown rapidly over the last few years. This year alone, several more markets in terms of supply chain solutions,
companies – BASF, Leach, Safran, Zodiac, Ametek and Woodward companies are making a beeline for Asia. “We
– have joined the growing list of OEMS that are looking to benefit are starting to see Asian operators, both com-
from AAR’s global reach and its aftermarket expertise. mercial and military, being more interested in
being not just transactional but more strategic
with partners,” says Young.
In May 2018, the business signed an exclu-
sive deal with Sumitomo Precision Products to
provide global support to airlines and MRO cus-
tomers for the IAE V2500 Pneumatic Starter
and Starter Air Valve. “We have helped them
grow their market in a big way,” says Young.
“We hope to do more with Japanese OEMs, not
just import to Asia but export as well.”

Surge in Interest from OEMs
Many OEMs are looking to divest a lot of the
aftermarket activity, says Young. “That is not
what they are good at. Everyone is focusing on
their core; airlines want to set routes and sell
tickets while OEMs want to design and produce
products. OEMs want to capture profits from
“MY BUSINESS HAS DOUBLED IN THE LAST FIVE the aftermarket but that is different from want-

YEARS,” says Eric Young, Senior Vice President, OEM ing to sell direct. We are really a one stop shop
Solutions. “A LOT OF THAT GROWTH WAS SIGNING for component and systems OEMs to monetize
AGREEMENTS WITH EXISTING OEM PARTNERS. their intellectual property in the aftermarket.”
THEY LIKE WHAT WE HAVE DONE IN THE PAST AAR’s strategy - growing while helping OEMs
AND WANT US TO DO MORE. OEMS OFFER SO increase their aftermarket share - isn’t for com-
MANY OPPORTUNITIES FOR US TO GROW WITH panies that do not have the same breadth of
THEM. OUR STRATEGY IS TO GO DEEP WITH FEW.” service. “There is no other company that has the
same combination of businesses that we have,”

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