TOULOUSE, France—Airbus, aiming to become a “major” player in A350 aftermarket support, is poised to announce its first long-term agreement with an A350 customer and is in talks with several more, a company executive reports.
The 12-year deal is at the airline’s board-approval stage, according to Airbus Vice President-Services Solutions Pierre Yves Reville, and should be finalized soon. An announcement is expected in a few weeks.
“This is the first step into a very promising market,” Reville says. “We do intend to be one of the major players on A350” aftermarket support, he adds.
The deal is expected to be an Airbus Flight Hour Services (FHS) agreement, in which operators pay per flight hour for access to spares pools. Customized services are added based upon customer needs.
Airbus is talking with several other A350 customers, including Latam Airlines Group and Thai Airways, Reville confirms. The manufacturer also is in discussions with at least one other major European operator, and two Chinese operators.
Spares pools are becoming more popular as airlines look to minimize parts-stocking costs, particularly with the newest-generation aircraft. The increased technological sophistication and improved reliability means that complex components for models like the A350 and Boeing 787 are needed less often than similar parts on earlier-generation aircraft. This makes them more expensive to stock, and more challenging to stock in the right locations within a single airline’s network.
Reville gave one example of an A350 part that retails for about $500,000 and has an expected life of 300,000 flight hours. Though that is beyond the aircraft’s projected service life, the part is a go-no-go item, so operators must have one available just in case, or face pulling an aircraft out of service.
The trend has operators turning to aftermarket services and logistics experts—ranging from traditional MROs like Lufthansa Technik to the component manufacturers themselves—to provide on-demand pools for certain spares. Airbus, which can team with its wholly owned parts and logistics subsidiary Satair on comprehensive-support packages, sees itself as in a prime spot to help meet the growing demand.
Airbus calculates that an airline needs 80-90 A350s before it can economically justify its own spares pool. A typical A350 spares pool to support 10-12 aircraft can run about $30 million.
Airbus’s FHS offering and its more-comprehensive sibling, FHS Tailored Support Package (TSP), have been slow to take off, but the manufacturer says interest is picking up, both among A350 customers and current customers looking to add in-service aircraft to their agreements.
Singapore Airlines (SIA) is in talks on a TSP setup for its Airbus A380s. The carrier has its A330s under an agreement that includes engineering services handled by SIA Engineering, and had its recently phased-out A340s under a similar deal.
Thai Airways—which has A380s and A320s under an FHS deal—is considering adding both A330s and A350s, Reville reports.
Airbus is also talking to several would-be new aftermarket-support customers. It is in deep discussions with Latam about A350 support and is in “advanced discussions” with at least two carriers in China that could lead to deals “in the coming year,” Reville says.
Reville says the size of the current pool of aircraft under Airbus’s managed-care services is close to 200 with 11 announced customers, and includes A320s, A330s, and A380s.
FHS deals for the A380 have proven particularly popular in part because of the expensive spares, but also because operators fly so few of them, rendering dedicated-spares pools uneconomical. As of March 31, 156 A380s were in service with 13 operators, but only Emirates and Singapore had at least 20.
Note: This story has been updated to correct the name of Airbus's TSP offering and to clarify that the initial A350 FHS customer's identity and location have not been made public.