Albert Koszarek, president and CEO, Aeroxchange Aeroxchange

Fast 5: Aeroxchange Pursues Streamlined Parts Solutions

Albert Koszarek, president and CEO of Aeroxchange, talks with Lindsay Bjerregaard about the company’s recent agreements with Volaris and Component Control, as well as its future focus on providing transparency and automation within the digital MRO marketplace.

Aeroxchange* is owned by 13 global airlines. What has been the biggest benefit of having the backing of these airlines?

I think [the biggest benefit] is being truly neutral so that you don’t have one supply chain trading partner having advantage over another. You can achieve neutrality by having an ownership structure where the top of the supply chain is owned by the buyers. And so, in this case, the global airlines are the top of the mountain in terms of buying activity as they procure all of the supply chain services to operate their airline. And by doing that now, the ownership structure shows no bias to any particular trade partner—all with a very unified focus to create efficiency, reduce cost and improve service level so they can do a better job servicing their customers.

You mentioned that MRO task card collaboration is a new focus for Aeroxchange. What work is Aeroxchange doing in this area?

If you think about the aviation ecosystem, you have collaboration between the airline and the MRO provider doing checks, where there’s a communication of work cards describing the check. For the MROs and the airlines to accomplish the work cards, there’s collaboration with a variety of trading partners that provide components that are engaged in pool exchanges; that provide components that come off of a repair cycle; that provide spare parts acquisitions through simple purchase order as well as consignment. A lot of this infrastructure historically has been manual. Aeroxchange has now created an electronic infrastructure to make that entire process paperless in real-time. By solving the availability of parts in the maintenance event, Aeroxchange goes a long way in helping people become better at the maintenance activity and to run more efficient checks.

Recently, we have been developing the capability to enable airlines to electronically transmit C-check work cards to the MRO provider so that it can work in a paperless environment, thereby eliminating all those PDF and paper copies on the work floor, and allowing real-time communication of work progress, status and findings. The Aeroxchange objective is to create that collaboration tunnel, allowing airlines’ engineering departments to communicate with the MROs, and to do that neutral of format or whatever systems the airlines are using. The airlines can be running their own homegrown systems, but [by] putting an Aeroxchange collaboration engine in the middle, we do the translation so the MRO gets the same type of data reliably the same way, regardless of the customer. This allows them to be more efficient and do a better job of meeting FAA and other regulatory agency requirements.

Aeroxchange recently signed agreements with Volaris and Component Control. What do these entail?

Volaris has purchased [our] automation platform to manage spare parts. The Aeroxchange AeroBuy platform provides global access to the world’s suppliers—including the OEMs, distributors and surplus dealers—giving full visibility into global availability of components. The AeroBuy platform allows [Volaris] to view contracts and secure pricing that particular trade partners offer Volaris in a unique and secure way. There’s also a quotation engine where Volaris can conveniently ask for quotes, lead time and pedigree documents for any components or parts that it would like to purchase. Once [Volaris] has identified the source, the AeroBuy platform then automates the whole procure-to-pay lifecycle with the electronic movement from Volaris’ TRAX system.

We’ve recently signed a strategic agreement with Component Control so we can fully integrate our repair management solution into Component Control, so [its] users can interact with aviation buyers to manage repairs, which is a more complex collaboration. This allows repair vendors that run Component Control’s Quantum system to be able to facilitate repair orders with direct, real-time communication into the Component Control workflow. It also reduces the administrative burden significantly—not only for the users of Quantum, but also for the airline partners on the buyer side.

What trends have you noticed in terms of the way buyers and sellers are looking to conduct business digitally?

People want more automation. They want higher levels of transparency around real parts and component availability. And when we talk about transparency, we’re not talking about “somebody lists a phantom stock in somebody’s catalog listing service,” but, “somebody has stock available with all of the pedigree documents and all of the certification necessary to give the buyer confidence that he’s making the right purchase at the right time.” So we’re seeing movement where people want improved transparency. They want automation in tool exchanges. They want to use more asset management programs. When they’re buying a component, they would like the data to follow the component—where the component has been over its lifetime. All of that transparency now is becoming available, and we’re seeing higher and higher demands for better information, in real-time and secure.

What’s next for Aeroxchange?

We are completing our deployment for the AeroMRO product, which creates electronic task cards. And as we orchestrate these electronic task cards, there’s coordination with the regulatory agencies [so] people have comfort that the technology meets the requirements. As we do that, the next piece on the horizon is the implementation of a real blockchain solution—[ensuring] that information follows the part, historical information follows the task and that a trusted utility such as Aeroxchange is positioned to secure the data and deliver it to the aviation trade partners so that they can make better decisions. I think blockchain technology as it is applied to currency isn’t terribly relevant in our space, but blockchain capability in terms of securely understanding history and pedigree is a terrific opportunity that people are going to get comfortable with over the decade. I think it’s going to change the way predictive maintenance happens and the effectiveness in which aircraft are made available. The whole process of lease returns now becomes much easier because all of the information is available, it’s digital, you can search it and it’s not a bunch of PDFs and pictures—which basically don’t help people—but it’s the real data.

*Aeroxchange was formed in 2000 by Air Canada, Air New Zealand, All Nippon Airways, American (originally America West), Austrian, Cathay Pacific, Delta (originally Northwest Airlines), FedEx, Japan Airlines, KLM/AFI, Lufthansa, SAS and Singapore Airlines.

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