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AJW CEO discusses easyJet maintenance deal_0

AJW CEO discusses easyJet maintenance deal

Boris Wolstenholme, CEO of AJW Aviation, talks about the firm’s signing of a multi-year component maintenance and inventory management contract with easyJet.

AJW has signed a contract to provide component support and inventory management for easyJet. How did the deal come about?
It was part of a long tender process where the easyJet team engaged with firms and we were one of the companies advised to tender around eighteen months ago when it went industry wide to all organisations. The tender documents stipulated requirements for a different kind of service. easyJet was looking for innovation and as well as other considerations, such as taking into account the changing face of an airline’s supply chain and it saw us a good fit to help it achieve this.

What does the contract mean for AJW?
It enables us a different approach to the market place. Historically we have predicated the majority of our business with the availability of pool and stock inventory on a forward exchange or loan basis. By virtue of offering those contract services, we’ve developed our business on the logistics and repair management sides. But those have been more internal elements of how we deliver our contract as opposed to the services we are selling. So this contract means that now we’re being supported by easyJet’s inventory and not ours, we can now take contract elements which were internal enablers and turn them into contract services direct to the customer. Now we are the logistics and warehouse as well as the repair management arm for easyJet using their stock. So that opens up the market place where airlines want to maintain self-sufficiency in their inventory and also where they need to optimise their supply chain and logistics whilst lowering their costs. The consumer expendables contract means we are going into consumer expendables on a very large scale rather than as a niche contract service. We will now be able to engage with a broader market demographic.

This new contract takes the number of aircraft AJW oversees to more than 900. How is AJW planning to cope with such a large increase?
It’s a natural development from where we are and we’re certainly well positioned to take up a contract of this size. When we established our headquarters in 2012, it was with a ten-year plan in mind. So this contract brings forward that ten year plan by two years. We are also well resourced from an infrastructure perspective to manage the contract. But what we have to ramp up is our human resource. We’re planning on bringing some additional skills into the business to enable the broader business and not just the easyJet contract. The majority of resources are a manpower volume issue. We need to complement the existing skills and add capabilities to existing skills, but it’s a high volume contract so we need the right level of resource to deal with this volume. The whole tender process involved us sharing with easyJet our detailed implementation plan, which has now formed part of the contract.

Will there be further investment in software and IT infrastructure?
From an IT infrastructure perspective we are ready. AJW will use its existing IT platforms but we’ll also be developing those platforms further. We’ll also be looking at other IT and software applications that optimise the programme, but certainly, what AJW has in place today is enough to deliver the improvements.

easyJet spoke of the significant savings it will make as a result of the contract. Where will these savings be and how will this be implemented?
I assume some of those are bedded in within AJW’s competitive rates to help easyJet save on its existing position. But the most important element of this is AJW having a continuous improvement programme running through the contract. This continuous improvement programme has a set of targeted savings. The unique element of this deal is it’s aligning both organisations to lower the overall cost of the contract so AJW will be sharing its costs with easyJet while lowering their costs through running the continuous improvement strategy. Normally, in a flight-hour contract, the customer has very little incentive to reduce the vendor’s costs, as they’ve already been paid and budgeted for, therefore customer behaviour doesn’t necessarily generate savings. However, this contract structure makes it in the customer’s interests to reduce costs. We want to produce those cost savings across many areas; IT, innovation, improved logistics, keeping the supply chain efficient and enhancing reliability. To help ensure this, we’ll be launching new continuous improvements annually over the course of the contract.

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