Airstart has enjoyed continuous growth as it extends its inventory so as to keep aircraft from being grounded anywhere around the world.
Could you give us an introduction to AirStart and outline your key products and services?
AirStart was founded in 2000, and we now support over 75 airlines, maintenance, repair and overhaul, and leasing companies. Our world headquarters are across the street from Pearson International Airport and allows us proximity to not only Canadian Domestic Airlines, but also international airlines such as Lufthansa and British Airways. Exports account for 80% of our business. A grounded aircraft incurs a large financial loss when they our out of service, so they need to be re launched immediately. Airlines lose about $350,000 every day a plane is out of service. We offer a qualified team and 24-hour service to swiftly put planes back into service. If an aircraft requires a spare part, we deliver it anywhere in the world within 22 hours. Using our own analytics, we have compiled an inventory with 20,000 components and at least 150 parts for each aircraft. We are thus an ideal provider for any airline should a plane needs a new part. We are very customer focused.
Besides Ontario, where are your other operations located?
Besides Ontario, we have a presence at JFK International Airport in New York and also have critical inventory stocked at other major gateway airports worldwide Our inventory locations are no more than four hours’ flight from major customers. We will continue building our inventory as clients’ demands increase. We are pursuing more density, looking at high growth areas worldwide.
What gives you competitive advantage?
In 2015, Deloitte voted AirStart as Canada’s best managed company, and we are also on the Profit 500 list of fastest growing companies for three consecutive years. Although we are a small company, our sales numbers are continually growing. We are a capital-focused business so we have a prudent approach to investment. Every day we buy between $50,000 to $200,000 in inventory. We use Canadian vendors wherever possible and offer our customers unique cost and time saving solutions, such as our Exchange Model.
For example, in many cases airlines do not need to purchase an expensive part for their aircraft- their part is unserviceable, and always repairable. So essentially most transactions are for rental of the component, resulting sometimes in over $100,000 USD in savings to the airline.
We are unique in our capabilities and, in many cases, we are the only company in Canada that stock parts for many commercial aircraft such as Bombardier Boeing and Airbus. On one occasion, a U.S. company offered to sell one of our local customers a new part for $150,000, while we offered to exchange their part for $5,000. We acquired the asset and repaired it. They took advantage of our stock, and we delivered the part in 11 minutes and no passenger realized there was a service fault. Had they ordered the part from the United States, it would have taken 36 hours to be delivered. The advantages of our service in terms of cost are apparent.
Looking to the future, what will be the key changes in requirements and trends?
Big data is infiltrating every industry, and the aerospace aftermarket is no exception. There is a tremendous drive towards data driven solutions. There is also a trend towards consolidation, with big companies acquiring smaller companies like ours. We do not want to be bought, and instead we want to grow, so we are constantly seeking new customers. Every year we attend tradeshows and conferences where we learn about industry and market trends as well as realize opportunities with customers, trading partners, and even competitors. We always ask prospective customers what can we do for them that no one else has done. With our partnership with EDC (Export Development Canada) customers often talk about extending credit, having access to local inventory, and getting airplane parts transported faster, so this is where we come in.
Next year marks your 15th anniversary, what are your plans for growth beyond this landmark?
We are looking to double in sales every two years for the next few years. I want to grow through mergers and acquisitions and through improving our current services. We are looking to expand our business to airplane and engine leasing and also airplane sales and contracts with bigger airlines such as Air Canada. As we grow, we want to maintain our existing flexibility as a company. Besides growth in terms of figures, our main goal is to be known as the best partner an airline can work with.