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2014-05-01

AAR Leads and Expands in Competitive Market

Supply chain readiness is critical in the aerospace industry. AAR is a global aerospace and defense contractor and a recognized leader in providing comprehensive aviation supply chain programs to the US and allied nations’ defense sectors. In recent years, AAR has expanded its global supply chain business to better serve the commercial sector with operations around the world. It has a presence in the Middle East and is keen to expand it. DAVID P. STORCH, Chairman & CEO AAR Corp, speaks to Nation Shield.

By: Sakha Pramod

A theme of the recent Global Aerospace Summit was that partnerships can increase profit in aviation industry? In what way does a collaboration with AAR result in greater returns?

AAR is constantly looking at cooperation rather than competition with various MRO partners. We believe that combining the strengths of two partners is often better than one. In the competitive industry we operate in, it is the better way of looking at the future opportunities. AAR is constantly striving to be the best by focusing on our core competencies of providing cost-effective solutions to help airlines and MRO partners to be more efficient in managing inventory and cost.

A modern airline needs to make itself lean and self-sufficient to stay in business. How can AAR contribute in this regard?

With the diverse products and services we offer to global aviation partners, AAR provides value-added services for the airlines by providing inventory management solutions that use our state-of-the-art IT systems and our forecasting models to assess the required inventory planning. Our services help airlines optimize inventory and reduce risk. Adopting lean processes in our MROs provides customers with quality aircraft in the most suitable turn times, resulting in a minimal maintenance time and more rapid return of aircraft to service. Outsourcing all major MRO requirements allows airlines to focus on their core competency of serving passengers. AAR has a diverse product range that offers nose-to-tail support for majority of the aircraft in service today.

How do you rate the Asia-Pacific market in terms of commercial potential? Where do you see growth for your company?

The Asia-Pacific market is very important to AAR. New aircraft orders from the region have ballooned over the last decade. So we have a very strong presence in Asia-Pacific including headquarters in Singapore and offices in countries such as Japan, Australia, China and Malaysia. We see great potential in the region, and we will be deploying more resources to capture a growing market share there.

What are your impressions of IDEX and the Dubai Air show?

This is my sixth visit in UAE in less than three years. AAR has been participating in IDEX and the Dubai Air Show for the last six years exhibiting our products and services to the MEA region. Both the shows are very important to AAR. We are very encouraged by the results so far in the region.

You provide specialist products and services to support national defense, homeland security and humanitarian aid operations. Which are your major clients in the Middle East?

Although we have a long history of support to the US military and other government agencies, our government and defense work in the Middle East is relatively new so the client list is small but growing. In the UAE, we have done work for special forces and have established an important link with the Advanced Military Maintenance, Repair and Overhaul Centre (AMMROC). We see this as an important foundation for growing future relationships throughout the region.

Logistics and supply management is a key area for defense and civil sectors. How important is this for cost-effective and efficient management and do you think this aspect is often overlooked?

Yes, AAR is focused on helping the defense and civil sectors achieve more efficient logistic and supply chain solutions to reduce costs and increase effectiveness. The readiness of aircraft for deployment is very important and having an effective supply chain partner who can provide 100 per cent dispatch reliability is the very key to the success of any mission.

How intense is the competition in aircraft overhaul and maintenance? How do you stay competitive?

Competition within aircraft overhaul and maintenance is extremely competitive worldwide. We remain competitive by continually striving to serve our customers more effectively. We seek to provide a superior level of maintenance service, time-effectiveness, cost competitiveness and quality, which allows our airline partners to reduce costs and focus on their core business.

You have recently added airlift service and aircraft modification services to your portfolio. How has this been received by the industry?

AAR Corp acquired our airlift services business unit, which we branded AAR Airlift Group in 2010. Since then we have fully integrated this business within our corporate structure and have strengthened the leadership team. We’ve also focused on enhancing Airlift’s compliance, safety and dispatch reliability standards. As a result, AAR Airlift Group is performing magnificently and has earned an extremely positive reputation as a high-end performer within the industry. In fact, AAR Airlift Group is now one of the largest US Part-135 Airlines operating outside the United States. This is really one of our greatest success stories of this decade.

Your presence in the Middle East is based on Abu Dhabi. When did you open an office there and what factors guided your decision?

It is noteworthy that in our view the UAE has the most progressive leadership in the region. We have been in Abu Dhabi for the last six years. One of the key factors in selecting Abu Dhabi is our philosophy of staying close to our customer base. AAR provides solutions to both commercial and defense organizations and, by choosing Abu Dhabi, we have achieved proximity to both. We were very fortunate to receive the UAE Black Hawk modification program for 20 L model Black Hawks with Presidential Guard 18 contract. We also have fostered a very good relationship with Mubadala, AMMROC and GHQ on various initiatives to support their requirements. On the commercial side, we have a good business relationship with Etihad as well as ADAT, where we support them on both airframe and engine components. So the decision to open an office in Abu Dhabi has paid off for us.

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