Because companies will continue to recover from the recession, repairs will become more routine and maintenance costs are expected to normalize. As a result, prices over the next three years are expected to increase at a slower rate.
Los Angeles, CA (PRWEB) November 27, 2013
The buyer power score for aircraft maintenance and repair services is 2.2 out of 5. This score reflects a lack of substitutes, high regulation, moderate price driver volatility and high service specialization. Regulation requires aircraft owners to have preventative maintenance checks, boosting demand for maintenance services. These checks are essential and there are no substitutes for aircraft maintenance and repair. Additionally, the services are highly specialized and must be performed by a certified aircraft maintenance technician. "Quality of work, reputation and experience all supersede price as a factor, limiting buyer power," says IBISWorld procurement analyst Lauren Setar. "Aircraft maintenance and repair that is not done properly can lead to litigation or even accidents."
However, buyers also face a number of factors that benefit their negotiating power. The aircraft maintenance and repair services market's high level of competition allows buyers to visit a variety of suppliers and compare prices. Major suppliers include General Dynamics Corporation, General Electric Company and The Boeing Company. Although not the most important factor, price is still a consideration for buyers. "Buyers have some options to reduce prices, including exchanging parts and ensuring that parts are under warranty, if applicable," adds Setar. Nevertheless, this may not always be a viable option for buyers, depending on the type of maintenance and repair work required.
In the past three years, prices for aircraft maintenance and repair services have grown. During the recession, buyers put off repairs and maintenance that were not immediately needed, driving up the cost once these items became issues that required costly service. Over the next three years, the price of aircraft maintenance and repair services is expected to increase further, but not at the fast pace of the previous three years. Because the need for these services increases as flight hours accumulate, the increase in inbound trips and international trips will boost demand and prices for these services. Total trade value, corporate profit and disposable income are all set to rise with the strengthening economy, boosting demand for flights, and thus, maintenance and repair services. For more information, visit IBISWorld’s Aircraft Maintenance and Repair Services procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of aircraft maintenance and repair services, including fixed wing and rotary wing maintenance services. Aircraft maintenance and repair companies provide support services like aircraft inspection, testing and parts repair. Services include both scheduled and unscheduled maintenance. This report does not cover the maintenance or repair of navigation equipment.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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