Parts Players.jpg Nigel Howarth/AWST

Parts Players

Top-heavy distribution market could be ideal place for upstart competition.

Among the most talked-about aftermarket growth opportunities is parts distribution. Among the key questions: will the existing duopoly continue to keep the market cornered, or will others step up and grab some share?

Anyone that procures parts knows that the market has two colossal players: Boeing Global Services's Aviall business, and Airbus's Satair unit. Together, they have gobbled up an estimated 50% of the global parts-distribution market, Canaccord Genuity analyst Ken Herbert's number-crunching concludes.

Exactly how dominant is their combined position?

In a research note earlier this year, Herbert listed the top 14 parts distributors by market share, with Aviall and Satair heading the list. The next 12 combined for an estimated 23% share of the market.

While market-dominance has its advantages--dominating the market being chief among them--it also has its downsides. Herbert points out that some parts manufacturers are seeking out smaller distributors to help keep as much control as possible of how their parts move.

Airlines buy an estimated 40% of their parts from distributors, and Herbert sees this percentage rising as cost-conscious carriers offload costly inventory without threatening fleet reliability. Airbus and Boeing know this--hence their investments in their distribution businesses. And while they have 50% of the market, that leaves a lot of business for some very nimble--and very large--companies. 

Among the so-called also-rans that have a percentage or two of the market are aftermarket blue-bloods AAR Corp. and traditional alternative-parts specialists such as Heico, Wencor, and Wesco. 

Put another way, even setting Aviall and Satair aside, there are some pretty big names chasing an increasingly larger market.

TAGS: Components
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