Every day we read about modern platforms, devices, systems, and others. But, who is behind these creations? What are they developing? It is something that many wonder in the aviation industry.
To answer these and other questions, AeroLatinNews had the opportunity to talk with Oscar Torres, CEO Kellstrom Materials, a technology company with more than two decades delivering solutions to airlines and MROs in the US, Europe and Asia and now, they are expanding their presence in Latin America with innovative proposals.
A few months ago, Kellstrom Materials launched its "Fast Track Exchange Program" (FTE). It was created to help global operators avoid unnecessary downtime while also reducing their inventory and operating costs.
We have recently heard of Kellstrom Materials due to technological innovation in the aviation industry. What are your most important projects and what is their origin?
Our Airline and MRO customers are seeking increasingly cost effective solutions to their parts and repair service requirements. Kellstrom Materials focuses every day on how we can leverage our technology, personnel, relationships, and capabilities to bring new products and services to those customers to reduce their overall cost structure while increasing their operational effectiveness. One such example is our information technology system. Kellstrom uses a proprietary internally developed system to handle all of our operations. This system was specifically designed to address the various complexities of the aviation aftermarket. Also, since we designed it ourselves, we are constantly modifying and adapting the system to meet our customer"™ requirements as the industry changes.
Where can we see that innovation reflected?
Our recently announced Fast Track Exchange (FTE) Program is a good example of our efforts at continuous innovation. With this program, we have partnered with airlines and overhaul facilities to provide 24-hour access to a dedicated inventory pool of critical components. This enables operators to have the parts they need to make sure their aircraft are operational without having to make investments in those parts. Our investment in information technology systems and the FTE Program are a couple examples of important projects for Kellstrom which stem from our desire to continuously find creative solutions to our customer"™ greatest business needs.
Over time the company has developed important partners and allies within the industry, what would you say are the most relevant and your relationship with them?
We believe that we can significantly improve our ability to service our customer by partnering with other companies and therefore maximizing our capabilities. Some examples of these partnerships include:
The 2013 merger between Kellstrom Commercial Aerospace and AirLiance Materials. The combination of these entities enabled Kellstrom to leverage each organization"™s significant strengths to better service our worldwide customer base;
Partnerships with airlines and leasing companies whereby we provide our customers access to surplus material owned by our airline and leasing company partners. This enables our partners to maximize the value they realize from their surplus inventory while providing Kellstrom"™s customers increased access to surplus material.
Partnerships with repair and overhaul facilities to provide our customers with cost effective repair solutions;
Partnerships with OEMs which enable us to provide airlines and overhaul facilities just in time access to new OEM parts.
Our relationship with Ametek Aerospace & Defense is a great example of one such partnership. Our partnership with Ametek extends over 10 years where we have been their exclusive international distributor of aftermarket spare parts for the majority of such time. This relationship has enabled Ametek to focus its efforts and capital resources on R&D and manufacturing while allowing Kellstrom to provide excellent customer service and a significant stock of new OEM parts available to airlines and overhaul facilities.
Why is Kellstrom Materials different from the rest, what sets you apart from the competition?
We believe that one of the things that makes Kellstrom unique from our competitors is the breadth and diversity of products and services that we offer our customers combined with our unwavering commitment to providing the highest level of quality and customer service. Because of the increased focus on maintenance and supply chain costs by the airlines, we believe that our customers are looking for a partner that has a broad range of capabilities, skills and solutions to address their increasingly complex material requirements in a cost-effective manner.
Can you give us some examples?
Technical expertise across different platforms (airframe and engine) and OEMs (Airbus, Boeing, GE, Pratt & Whitney, Rolls Royce, etc.); A wide range of product offerings including supply of new OEM parts, refurbished surplus parts, repair management, access to exchange pools, etc.; Partnerships with OEMs, MROs, Airlines, etc. which enable us to offer increased capabilities.
In short, we believe that Kellstrom Material"™ greatest asset is its ability to offer our customers very diverse, cost-effective solutions to their parts and repair services requirements.
Talking about Latin America, How do you see the Latin American market? Are you planning to increase your presence in this region? What are your main challenges and benefits of doing business there?
Kellstrom Materials is very excited about the prospects in the Latin American market. We have dramatically increased our resources in the region in order to better service that area. The combination of several factors including, improving macroeconomic conditions, a greater shift in the population"™s demographics towards the middle class and significant airline consolidations have all contributed to a very strong environment for the aviation industry in Latin America. Whether you measure growth using GDP, Airline traffic, Cargo traffic or Airplane fleet, all of these measures place Latin America ahead of the global average with only Asia and the Middle East showing comparable opportunities.
The largest challenge to a company like Kellstrom in the Latin American market is the reduced age of the fleet in the region. As an aftermarket parts and services provider, Kellstrom"™s business is driven by the demand for parts and repairs. A young fleet generally requires less of both and therefore creates growth challenges. Latin America has seen their average fleet age drop dramatically over the past several years as a result of significant new aircraft deliveries to replace aging aircraft. However, in spite of that challenge, we believe that our presence in South Florida, a key gateway from the US to Latin America, provides a tremendous benefit in our ability to service our customers with innovative solutions.
What are the main challenges for Kellstrom Materials in the future?
Kellstrom Materials provides aftermarket parts and repair services to commercial aviation operators, and maintenance, repair and overhaul companies. Our business is primarily driven by the demand for engine and airframe heavy maintenance, phase checks and line maintenance. Airlines around the world are accelerating the rate of retirement of older, less fuel efficient, higher maintenance aircraft, creating a younger global fleet. Clearly, the new global aircraft fleet is growing at an attractive rate. However, the growth rate for aftermarket suppliers is not as robust due to the reduced maintenance requirements of a younger fleet. Kellstrom has positioned itself to continuously identify new and innovative ways to support both new and older aircraft in its efforts to keep pace with the market, including expansion of our new distribution partnerships and increased platform offerings.
