Printed headline: No Satisfaction
To put it bluntly, commercial aviation OEMs score poorly on aftermarket customer satisfaction, at least compared to other industries. Given that airframe manufacturers expect to deliver about 2,000 aircraft each year in the near future and are pursuing more revenue from the aftermarket, the pressure to perform across the supply chain is compelling.
To benchmark OEMs’ aftermarket customer satisfaction, AeroDynamic Advisory and Aviation Week conducted a joint survey of 224 qualified respondents from 130 airlines around the world, asking them to rate aircraft, engine, component and interior commercial aviation OEMs (see the survey methodology on page MRO 22).
Airline respondents scored manufacturers on nine satisfaction metrics: ease of doing business, product design and reliability, technical support, parts costs, parts availability and aircraft-on-ground (AOG) support, OEM repair costs, OEM service center performance, overall satisfaction and likelihood to recommend to a peer or colleague.
Operators are generally satisfied with OEMs’ product reliability, except for those that supply interiors and inflight entertainment, but they are not pleased with the manufacturers’ parts costs and repair costs.
For the highest overall scores, on a scale of 1 (lowest) to 10 (highest), the top three OEMs comprise Boeing (7.8), CFM International (7.2) and Embraer at 7.1 (see graph; right).
Boeing not only received the highest overall satisfaction score but also ranked highest in ease of doing business, product design and reliability, parts availability/AOG support and OEM service center performance.
“Boeing has a clear advantage in customer support compared to its peers,” and it historically has been good at this, says Kevin Michaels, AeroDynamic Advisory managing director.
The OEM launched Boeing Global Services on July 1, 2017, to combine the aftermarket capabilities from its commercial and defense services portfolio into one service organization, with the goal of growing it to a $50 billion annual business within 5-10 years. As it moves toward this goal, which will include organic growth and acquisitions, how it underpins the ease of doing business as it scales up and leverages life-cycle support services could affect customer satisfaction.
While Boeing also scored the best in the repair cost category, it should be noted that its 6.4 score is below average—but every one of the 15 OEMs are also below average in this category.
The group doesn’t achieve much better satisfaction scores when it comes to parts costs, either. The only OEM of the 15 that is not below average is Rockwell Collins, at 6.5, the threshold score for being considered “average.”
Airline customers’ dissatisfaction is not surprising, because OEM parts have a reputation for being expensive and for cost escalation, which has buoyed the used serviceable material market. About half of the 15 OEMs also scored below average in the parts availability and AOG support category. There is clearly room for improvement here—at least for the perceived cost-to-benefit ratio.
Another notable survey takeaway is the tight distribution of scores for engine OEMs, with the exception of Rolls-Royce. CFM International, the joint venture between GE and Safran, captured the highest overall rating at 7.2, with GE Aviation and Pratt & Whitney following closely behind at 7.0. These three companies all scored high marks in ease of doing business, product design and reliability, and technical support. Rolls-Royce had an overall score of 6.6, just barely past 6.5, which is considered “average,” and it fell behind in the other categories, too.
CFM, which produces the venerable CFM56 engine family—about 33,000 of which have been delivered to date—has an open service network, which gives operators more choices but also contributes to the engines’ long-term valuation. This philosophy, along with the engine family’s high reliability, has definitely positively impacted customer satisfaction scores.
CFM captured the second-highest score in the technical support category, a 7.6 rating compared to Boeing’s 7.7, despite the fact that the Leap engine’s low-pressure turbine discs and thermal coating on high-pressure turbine shrouds have been experiencing teething problems. (The survey was completed before the Southwest Airlines Flight 1380 accident on April 17 involving a defective fan blade on a CFM56-7B-powered Boeing 737-700.)
Until recently, Rolls-Royce traditionally has embraced a closed network, which hurt resale values, but since late 2015 it has shifted its aftermarket model to become more flexible. The problems with Trent 1000 engines that have grounded Boeing 787s could be affecting Rolls-Royce’s score as well. With its more flexible TotalCare programs on the market now, it will be interesting to see if the new aftermarket offerings boost its future scores as they gain acceptance.
But which companies have the most room for improvement? The winner there is Zodiac, which garnered the lowest overall score in its two categories: interiors/IFE suppliers and avionics. It also scored the lowest in those categories for parts costs, repair costs and ease of doing business.
Whether it is Zodiac or another large, multi-unit company, Michaels points out that suppliers that are easier to work with tend to have higher satisfaction scores—and customers can have a hard time navigating through complex organizations with different units. The ease of doing business can suffer when companies get too big and broad, something companies should consider when planning mega-mergers such as between UTC and Rockwell Collins. Michaels points to Safran as a company that is big but has set up five business units that are all fairly autonomous and seem to be customer-focused.
While the ease of doing business can be considered “a low-hanging fruit, it’s a soft thing that makes overall satisfaction higher,” notes Jonas Murby, an AeroDynamic principal.
Net Promoter Score
The survey also tabulated Net Promoter Scores (NPS), based on how likely customers say they are to recommend a company to others on a scale of 0 to 10. The NPS subtracts the percentage of detractors (those responding 6 or lower) from the percentage of promoters (responding 9 or 10) to obtain the net score—which shows how satisfied and loyal a customer is to the company’s product or service.
The Net Promoter Score, created by Fred Reicheld and Bain & Co., can range from -100 to 100, with any number higher than zero essentially being positive—meaning that more people would recommend a company’s product or service than would speak negatively about it. Fifty is considered “good,” while 60-70 is “world class.”
This is where all of the OEMs, except Boeing, are in trouble. Boeing scored 27%, but the rest scored 2% or less, with the bulk falling in the negative territory. This means more customers would not recommend a company’s product or service than would do so.
Given that high-scoring NPS companies often perform better and have loyal customers, this metric shows that airlines would like a lot of improvement in manufacturers’ aftermarket services quality.
To put this in perspective, Satmetrix’s 2017 NPS survey of 23 industries, including 65,200 U.S. respondents, gave internet service providers a score of 2 and cable/satellite TV providers a 3—the two lowest-scoring industries measured. Then again, how many times have you had a good experience with your internet or cable provider?
The survey, conducted in early 2018, covered 45 major aerospace OEMs and suppliers of aircraft, engines, mechanical/electrical systems, avionics, interiors and inflight entertainment systems, and nacelles and thrust reversers. Of those, 15 generated enough responses to be considered statistically valid. Those included all of the aircraft and engine OEMs, along with some avionics, interiors and one mechanical/electrical supplier (Honeywell’s mechanical division).
Results are based on responses from 224 qualified operator personnel—each of whom interacted with and was familiar with the OEMs surveyed. Of these, 40% are in North America, 22% in Europe, 18% in the Asia-Pacific regions, 10% in South America, 5% in Africa and 5% in the Middle East.