AIRCRAFT MANUFACTURERS MUST ADD COMMERCIAL SERVICES

Boeing just released its results and they're still not brilliant. With a turnover of more than 66 billion dollars, an increase of 7% compared to 2021, the manufacturer nevertheless shows an operating loss of $3.55 billion, i.e. still $9.5 million per year. day or $400,000 per hour. The numbers quickly make you dizzy. In question, of course, aircraft deliveries are still struggling, but the manufacturers are paid on the day the aircraft is taken into account by the operators and above all a 13% drop in turnover in the Defense sector. Only the services part shows good results: 17.6 billion dollars in turnover (+18%) and an operating profit 35% higher than the previous year.

The American aircraft manufacturer is however not in great danger with an order book of 4,500 aircraft, just in the commercial aircraft part. Remember that the average value of a device is $100 million. For its part, Airbus continues to lead the race with more than 7,000 aircraft on order. Its only problem is increasing the production rate to meet the needs of its customers.

Both of the major manufacturers have created a very complete range of services, essentially linked to the life of the devices. This ranges from assistance in setting up a lease to the supply of spare parts manufactured by subcontractors, including staff training, the improvement of operations, and now the management of environmental constraints. In short, operators can find everything they need to finance, maintain and fly the aircraft from their suppliers. And all these services are not only very useful for air transport because they contribute to its reliability, but they constitute a very appreciable and very profitable source of income.

However, I note a big gap in the list of services available, it is commercial assistance, not for the devices themselves, but for the realization of the turnover necessary for their customers, if only to pay for aircraft leases. Admittedly, the major airlines all have powerful and perfectly competent commercial departments. But how many medium and small carriers have demand analysis tools, access to distribution channels, and a commercial presence outside their national market?

However, it seems that once the aircraft has been taken into account by its operator and therefore paid to the manufacturer, the latter loses interest, not in the aircraft itself, but in the way in which the operators will be able to operate profitably. This ranges from the choice of lines to serve to the ability to find customers, all while maximizing revenue with the efficient use of the famous “yield management”. This is a shame because assistance from the aircraft supplier in these areas would certainly avoid many setbacks and bankruptcies often caused by elementary errors in the choice of network and in the use of means of distribution and marketing.

This part of the activity should not be thought to be simple, but it is essential. After all, all of an airline's expenses are paid for by all of the revenue. Well, I am struck by how, very often, the leaders of many carriers take for granted the turnover that must be generated. They are also surprised to see that their flights are not filled while they provide the planes. We have the impression that all of their energy goes into ensuring the reliability of their operations and that they have nothing left for the sale of the seats offered. Many also think that the commercial side is not noble enough to be really interested in it and they tend to trust the firstcomer who will explain to them that a good website will be enough to fill their planes. And, based on this principle, they do not listen to the real professionals, who do not have the power to be heard.

But manufacturers have the ability to make themselves heard by their customers. They would therefore be well advised to include in their catalog of services, a marketing and distribution component for the flights that will be created by the aircraft sold. There is no doubt that they will find specialized and efficient subcontractors to deliver such a service, which will undoubtedly avoid many problems both for the airlines thus advised and for their passengers.