A Behind-The-Scenes Look at Professionals Engaged in the Challenging Aircraft Aftermarket Business

Can you give us an overview of the used aircraft parts business and the factors underpinning Sumitomo Corporation’s decision to enter this market?

KondoThe used aircraft parts business involves harvesting parts from retired aircraft for reuse, or in other words, "aircraft recycling.” There are more than 1,000 different parts that can be removed from a retired aircraft and reused, ranging from large parts like landing gear and auxiliary power units, to cabin seats and panels. Our used aircraft parts business repairs and sells these parts.

In the past, Sumitomo Corporation had developed its aircraft business along two lines: the aircraft leasing business and the engine leasing business. We began to consider entering the part-out business around 2016 to develop a new revenue stream, while anticipating greater demand for used parts due to soaring material prices, and widespread new cost-cutting measures introduced by airlines.

What motivated Sumitomo Corporation to move forward with the business despite unparalleled disruption in the aviation industry due to the COVID-19 pandemic?

Kondo The aviation industry was heavily impacted by the outbreak of COVID-19 and the introduction of travel restrictions to curb the spread of the virus. But the significance of aircraft in bringing people together remained unchanged. The airline industry had seen other disruptions prior to COVID, but it always recovered within one or two years. We had faith the world’s airlines would take off again.

While many viewed our market entry during the pandemic as risky, we managed to convince the company that betting on a field experiencing a temporary downturn, yet destined for growth, was a wise decision. As a result, in 2022 we were able to team up with Werner Aero, a company operating a used aircraft parts business in the US for approximately 30 years.

What were your thoughts when Sumitomo Corporation decided to participate in this major aircraft aftermarket business project?

What are your current responsibilities at Werner Aero?

YagiWerner Aero is headquartered in New Jersey, USA, and has around 30 employees. In addition to office space, the headquarters houses a huge 2,500 m2 warehouse, where more than 10,000 different aircraft parts are managed.

As a sales representative, I make proposals and sell parts. Our clients are primarily North American airline companies and aircraft maintenance providers. My main job is to communicate closely with clients to identify their needs, and to stay fully on top of our inventory and market prices in order to link this information to sales.

KondoI manage aircraft procurement and the sales team that Yuhei belongs to. In fact, as is common in the industry, individual aircraft transactions are almost never open to the public. Aircraft are mostly bought and sold within a private network of aviation industry professionals, and related information isn't available to anyone outside that network. For this reason, since entering the industry, I have made a point to actively participate in conferences and meetings around the world to build industry connections.

Has working with Werner Aero served to reaffirm that company’s strengths?

Kondo Werner Aero’s founder and president is fond of saying, “We don’t sell parts; we provide solutions.” He feels that the company's “expert eye” – its ability to understand customer needs, identify parts that are likely to sell, and service them ahead of time, is one of its greatest strengths.

Also, while there are many companies in the U.S. that simply resell aircraft parts, Werner Aero’s business structure is unique in that the company handles everything from purchase of decommissioned aircraft to disassembly, maintenance and sales. I feel like it shares this mindset with Sumitomo Corporation, an integrated trading company.

Yagi Certainly, there is a willingness on our part to work with customers’ needs to be able to help them in a pinch. While our competitors might not be able to immediately acquire expendable components and other top-selling parts, or the somewhat scarcer parts that customers need on short notice, we have the advantage of buying decommissioned aircraft whole, and in some cases are able to deliver them to clients.

Another memorable experience occurred shortly after my secondment, when I traveled with Werner Aero's operations leader to a dismantling site in Arizona where a contractor was disassembling aircraft for us. The sight of more than 500 decommissioned aircraft on a desert site the size of one hundred Tokyo Domes took my breath away. Watching the operations leader climb into aircraft that were being dismantled and make difficult decisions on the spot, such as which parts to prioritize for dismantling and transportation, was truly impressive.

I had assumed that the disassembly and removal of parts were generally handled by partner contractors independently, but learned that we maintain close communication throughout the process. This reinforced the fact that Werner Aero has a professional workforce that draws on a wealth of knowledge and experience across 30 years of accumulated data being put to good use in the business.

Finally, what is the most rewarding aspect of your job and what future prospects are you looking forward to?