LARA's Glenn Sands came to our headquarters in West Sussex to meet our president and CEO, Christopher Whiteside...

 

An aviation MRO company that has come a long way

 

Whether it's the stunning location, the suave look of its headquarters, or the sheer enthusiasm of the staff, it's obvious that the AJW Group is an MRO company that has come a long way. And the business has no intention of stopping its pursuit to become the best within the MRO supply industry.

 

From introducing new technology to increasing their global customer base, Christopher Whiteside, president and CEO of AJW Group, has a vision to make the whole commercial MRO aviation supply chain business more streamlined and efficient from beginning to end.

 

Will he achieve this goal? It's highly likely as the company is in a unique position within the industry. Independent but of a size that most other competitors envy, AJW is flexible enough to quickly adapt to a changing market through the combination of smart technology and staff with decades of experience.

 

There's a strong sense of pride within the company's headquarters at Slinfold, West Sussex. Everyone matters – from the warehouse pickers, checkers and packers, to the boardroom executives at their desks within the glass partitions. The company ethos comes from the top, as Whiteside explains:

 

"As a company, we need to be dynamic, innovative and drive efficiencies through continuous improvement. Within the MRO side, I foresee the AJW Group diversifying our capability into rotary, corporate and, if possible, military. But when I say military I mean, for example, for types like the C-130 Hercules, not the fast-jets. I am not intending for us to get involved in landing gear and engines."

 

Canada is a new area of business, particularly Quebec where Bombardier has a significant facility and where Bell Textron also has its commercial helicopter production line. It is a province gaining a significant reputation within commercial and corporate aviation circles.

 

Given the forward planning that AJW's management puts into the business, it already has an MRO facility in Montreal, known as AJW Technique.

 

"The Canadian card is a strong one," says Whiteside. "With two companies out there and us, there's an opportunity to really increase business. So, I want to fill the shop not only with Airbus, Boeing and Embraer but also with Bombardier and have a helicopter MRO capability, too. We are going to deal with components only, we're not going to get involved in services. But we already do quick engine change stands and accessories like that. This is the basis of how AJW Technique operates."

 

However, AJW is already looking beyond the rows of neatly stacked stock in its warehouses to grab a further slice of the MRO pie, in terms of asset management. The company has a contract with Bombardier to support 6,000 corporate jets that Bombardier effectively manages via a rotatable pool of aircraft.

 

But as one of the leading independent players within the MRO business, AJW still has challenges to face. Whiteside explains his view of the industry and the challenges that AJW face:

 

"I regard MRO as really being in different sectors, such as components which is engines and engineering and maintenance. I call that the 'hangar and spanner' perspective. Then there's also ground handling from a maintenance viewpoint.

 

"So obviously, if you take our side, let's say the arrangement we have with easyJet – currently we fill around 54 outstations, which went up from around the mid-40s when the airline acquired airberlin. We have to fill these outstations with spares, but it's also transporting the spares to and from these locations, repairing their inventory and, when needed, recovering engines. So there are a number of levels to this partnership."

 

The Volkswagen approach

 

"In terms of challenges, I think they aren't any different from what our competitors face. There's a shift in the marketplace – what I call the 'Volkswagen principle' – a process that is finally being introduced after I've been raising it for the past 10 years or more.

 

"For example, let's say you drive a Golf, you had a Polo and you aspire to buy a Passat next time. The car is serviced at a VW dealership. You may have financed and insured it through a VW partnership.

 

"If you were to drive from the UK to Germany, you'd go through France and see the same sort of dealership with a similar reception area; the same coffee pots and they'd use identical Mobil One oil as in the UK. So the whole experience is totally integrated.

 

"In aviation, we don't have that. What you have had in the past is a manufacturer saying to a customer, 'thanks for the US$50 million for the aircraft, see you again in 20 years when you need a new one.'

 

"The likes of Airbus have finally realised that in order to capture 'more share of wallet', as the Americans like to say, they need to offer what they are terming 'services'."

 

Echoing Whiteside's observations was the recent announcement at the Paris Air Show that Boeing's contract with IAG would mean that it would now be looking after the operator's Airbus fleet. The Americans are well aware that they are agnostic on product and Airbus executives were mortified that their great rival would now be servicing its products, although a relatively small number.

 

But the supply industry is changing and as Boeing enters into Airbus's home territory in Europe supporting Iberia and Aer Lingus fleets, this is increasing the pressure on the AJW Group. Whiteside explains:

 

"What we are seeing at the moment is confliction point with manufacturers using vendors as the supply chain. The vendors are normally part of the original deal in the first place, as a risk-sharing partner in order to get the tail of the transaction through its 20-30 year lifecycle, which is standard for a commercial aircraft.

 

"You now have OEMs that want that business for themselves, so it's causing a very strange dynamic. On one hand, you're a partner – that is our 'gig' when they deliver a 787. But now Boeing wants a piece of the action, too."

 

A number of aircraft manufacturers are investigating acquiring the suppliers to give themselves a larger slice of profit, along with a guaranteed source of items. To push through this new approach, manufacturers will have to buy, or partner with new companies, so each can then expand organically.

 

"For us at AJW, it's my belief that the likes of Airbus and Boeing need to work out how to get to this kind of operation. I believe that they could only accomplish this by purchasing, organic development and partnering with others. For example, Embraer are moderately successful at it already and Gulfstream have been fantastically good at it."

 

Boeing demonstrated this new approach when it partnered with the Air France 777 fleet and KLM's 737NG and 787, and appointed SR Technics to be its partner on the IAG transaction.

 

"The strength of the AJW Group is that we don't have affiliations with an airline, any manufacturer, or an OEM – we work with all of them. In my world in five years' time, I see AJW becoming an enabler for these larger companies to get a more effective profit and to give the customer increased confidence..."

 

Read the full article in LARA Magazine

 

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