Drinking in Bombardier’s $2bn aftermarket
Maintaining business jets is thirsty work. Strategically placed water dispensers (Scottish Pure to be precise) were much in evidence when touring Bombardier’s newly inaugurated Biggin Hill Service Centre at London Biggin Hill Airport this week.
The new 250,000sqft (about 23,225sqm) facility is full of business jets undergoing maintenance and upgrades. (The new hangar is equipped with 22 service bays capable of accommodating up to 14 Global 7500 aircraft simultaneously). London Biggin Hill Airport aircraft will throng the bays.
Growing its aftermarket service – jauntily encapsulated under the tagline ‘Bring Your Jets Home’ – has become a key 10-year strategy for the manufacturer since 2016. Demonstrating its success in achieving this goal, Bombardier is projecting its aftermarket services sales will reach the value of $2bn a year by 2025. In the third quarter of this year, the aftermarket accounted for 26% ($380m) of Bombardier’s total $1.46bn revenue.
“Bring Your Jets Home was the best way to proceed with this growth because it also answered our customers’ expectation,” Jean-Christophe Gallagher, executive vice president, Services and Support and Corporate Strategy, Bombardier told CJI during the inauguration event. “They appreciate the OEM level of expertise, service, quality, safety and our customers were asking for more of the OEM around the world. That’s why you see that a brand new facility is already full.” The Biggin Hill investment follows similar upgrades at Bombardier’s Singapore facility, Opa-Locka in Florida and Melbourne in Australia.
Water dispensers in the vast new hangar are refreshing engineers and technicians tasked with more than conducting scheduled (and unscheduled) maintenance. About 18 months ago the company launched its Bombardier Certified Pre-owned aircraft programme, like car manufacturers’ schemes. It’s now looking for pre-owned aircraft worldwide to retrofit these aircraft with what Gallagher calls “the latest and greatest technologies”.
About 10 years ago, the latest technology was available only on aircraft fresh off the the production line. “Today, most of the technologies we have on our production lines are available as retrofits on Bombardier’s platforms,” said Gallagher. That includes upgrades to interiors, cabin management system, avionics and connectivity. “We are able to provide a plane that looks perfectly new, with a brand new interior, new coat of paint and the latest connectivity and avionics capabilities.”
The aftermarket is becoming a major source of income for all OEMs. This now accounts for between 26% and a third of sales for some companies, including Gulfstream (including Jet Aviation) and Textron Aviation, as revealed by CJI research last month.
But it’s not solely about diversifying revenue streams – at least for Bombardier. “Obviously, a service facility will sell airplanes for us,” says Gallagher. “Our employees are not just technicians and engineers; they are brand ambassadors – every one of them.”
So, what future for maintenance, repair and overall (MRO) competitors? Rapid consolidation in the sector, as the OEMs have expanded their aftermarket offer, has become increasingly evident. Not least Dassault acquiring TAG and Execujet and Jet Aviation’s acquisition of Hawker Pacific.
It’s a trend that shows no sign of slowing. Bombardier’s independent authorised service centres have fallen from a high of about 70 to fewer than 15.
But independent MROs will retain a place, says Gallagher. “We have been very clear for the Bombardier fleet, we are looking at a 50% share of a $4bn market. There is plenty of room for everyone else.” To prove the point, he singles out US partner Duncan Aviation as one of the manufacturer’s “specular MROs” around the world. “We will continue, as an OEM, to support these facilities that are able to provide a level of service to our customers that exceeds everybody’s expectations.”
Meanwhile, if Bombardier does hit its target of achieving a target of $2bn a year for its aftermarket services by 2025, the whole team may want to toast their success with something a little stronger than Scottish Pure water.
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Above: Bombardier’s Jean-Christophe Gallagher addresses guests at the service centre inauguration.
Top: The new hangar during the inauguration ceremony of Bombardier’s new Biggin Hill Service Centre.