Driving profitability through aftermarket parts pricing
The business and technical challenges of aircraft design and manufacturing keep many original equipment manufacturers (OEMs) focused on production. What is typically the most profitable side of the business — aftermarket parts — often receives much less attention. We have seen that OEMs often choose to spend time and effort in other areas, such as improving customer service, rather than rigorously analysing and pricing individual parts to reflect the OEM’s business mix and market power.
OEM executives tend to overlook aftermarket pricing opportunities because typically the aftermarket is already very profitable. In addition, these executives often have no basis for comparison. Once they do, they usually find that the insight the data provides is quite powerful.