With a shrinking percentage of proprietary parts on new platforms, aircraft manufacturers are looking for new sources of aftermarket revenue and they need to focus on bundling point of sale services, supplier relationships, global footprint, and engineering knowledge.
Issue 8 -- Rethinking aftermarket revenues: New growth strategies for aircraft manufacturers
With a shrinking percentage of proprietary parts on new platforms, aircraft manufacturers are looking for alternative sources of aftermarket revenue.
To achieve this, manufacturers should leverage their unique competitive advantage in four areas: point of sale opportunities to bundle services with sale, relationship with suppliers, global footprint in commercial and defense, and engineering knowledge. For some high-margin services with a strong network effect, critical mass may need to be acquired. Other services (like component services) will require achieving supply chain excellence and fundamental changes to the operating model to be cost and service competitive.
The opportunities for aircraft manufacturers to profitably grow their aftermarket revenues in the next decade are intuitively clear. However, taking advantage of these opportunities will require some business model, operational, and organizational changes.
About the series
PwC Aerospace & Defense has launched a new thought leadership series called "Gaining Altitude with PwC." In this series of whitepapers, we will share with you our insights that we gain from working with you and your peers, customers and suppliers in the ever changing dynamics of the global value chain for aerospace and defense. Our insights will cover all aspects of the program lifecycle: program strategy; bid and proposal; design, engineering and planning; field sustainment; program delivery; IT effectiveness and cross phase processes.
Read other issues in the Gaining Altitude series: