Like most independent aftermarket companies operating today, GA Telesis is seeing an increased OEM presence. But rather than seeing this as a pressing challenge, the U.S.-headquartered MRO sees a role for itself in providing extra volume for a market short on capacity.
“Due to the sheer amount of aircraft and engine repair and overhaul that will be required in the future, the OEMs don’t have enough capacity to handle it all,” says Jason Reed, president of GA Telesis’ Component Solutions Group, who believes the company is proof of the ever-growing cooperation between MROs and OEMs.
“By selecting an independent shop, the OEM’s still achieve their sales targets via piece parts required for the repairs - plus any other royalty schemes that may be in place for the repair or parts sourcing partnership,” he adds.
GA Telesis counts more than 3,000 customers on its books in total, comprised of MROs, OEMs, airlines and lessors, with specialities in segments such as used serviceable material (USM) supply with the parts emanating from teardown work.
The past decade has seen manufacturers grow their presence in the used parts space, most recently in April 2019, Boeing announcing the formation of a USM division. So far however, GA Telesis has navigated the growth of OEMs into the parts supply segment by forming partnerships with them, acknowledging many manufacturers wish to have only their own equipment off the aircraft.
“Because we have a large global sales reach, we partner together to buy the equipment they are not interested in and sell to them equipment that they want for their customer base and repair network,” Reed explains. “Not only that, for all of our flight hour and repair management services, we collaborate heavily with the OEMs since customers prefer an OEM repair tag.”
New technologies are also taking effect in the industry, and Reed says that in some respects, there are certain areas where some OEMs may already possess a competitive edge. “There are special laser, robotic welding, waterjet cutting, and surface coatings on various products on the aircraft where the OEM may have an upper hand,” he says.
Reed continues: “For example, newer landing gear have no chromium on them anymore but have high velocity oxygen fuel (HVOF) coating in its place due to its environmentally friendly characteristics. Investment in HVOF is capital intensive and may not allow many independent MRO’s to participate in those repairs.”
Reed says roughly, it sees around 80% of OEMs on board with aftermarket partners such as GA Telesis today, noting that many manufacturers do understand the future of collaboration. “For the others, they are behind and will feel the effects heavily between 2020-2025 when the wave of heavy teardowns take place,” he warns.
He predicts the OEM-MRO dynamic will become even more cooperative in future. “For the first time we are going to see less of a line between OEM and aftermarket and perhaps more cohesion and M&A activity between those parties in the next 2-3 years to come,” Reed forecasts.