Companies operating in the parts segment are re-adjusting their strategies as they look to grow market share, increase innovation and acquire new capabilities, an industry analyst said.
Speaking at MRO Europe in Amsterdam on Oct. 16, Joost Groenenboom, principal at ICF International, said that in recent times there has been a lot of movement in the industry’s component segment with some of the larger companies fine tuning their strategies.
Acknowledging UTC’s blockbuster pending $30 billion acquisition of Rockwell Collins, which resulted in the parts giant being told by U.S. regulators to divest two Rockwell Collins business units as a condition of the takeover, he said that larger companies like UTC and GE Aviation are starting to think about “whether or not they should divest and is it better to move away from being a big conglomerate and consolidate more”. They are actively thinking about whether they should split up the business and this is driven by a desire to be more innovative and capture a bigger market share,” he said.
The emerging PMA parts segment, which Groenenboom predicts will grow at a rapid pace in the coming years, is also seeing companies adopt new strategies to grow their market share with M&A being one route taken by the likes of U.S.-based HEICO, which produced around $1.5 billion of sales last year.
"They’ve been acquiring new knowledge through mergers and acquisitions to be able to provide airlines with integrators, giving them the design, development and manufacturing of these parts. While it is still a relatively small portion of the industry, it is something that we feel will grow aggressively over the next few years,” Groenenboom said.