AirLiance Materials: David Sisson

David Sisson, president and CEO of AirLiance Materials, provides insight into the global materials supply chain, as well as how capital markets are affecting aviation aftermarket business. Edited for length and clarity.

O&M: What trends do you see in the parts market given the financial pressure on carriers?

Sisson: The tendency for carriers to try to reduce maintenance costs by reducing material costs continues. As you know, [the cost of] heavy maintenance on engines, airframes and other components is made up primarily of labor and materials. There are limited opportunities to reduce labor costs, so carriers, MROs and component overhaulers do their best to decrease both their inventory carrying costs as well as material consumption costs. They come to AirLiance Materials and other providers of surplus material in an effort to reduce material costs, and they obviously go to other providers such as PMA manufacturers. Of course, we're in the scrap replacement business, too. The first order of the day for customers is to repair these components rather than replace them. So, if a component is beyond economic repair, then they come to surplus parts providers like ourselves, PMA providers and finally OEM providers, the latter of which usually is the most expensive option.

O&M: How do you balance supply and demand, and what material is most demanded now?

Sisson: We get about 10 times more requests for material than we can fulfill from the surplus parts marketplace.