The Dot-Coms Are Here!
A new force in the aviation business
By Bill de Decker
It had to happen sooner or later and it affects all of us. How it affects each of us will depend greatly on how we react to this new force in the aviation business. Those that make the effort to understand the Internet and apply the new ways of doing business can benefit greatly - those that do not, will be overrun by those that do.
Breaking the cycle
So what's it all about? The aviation business is very fragmented and is stifled by tradition, regulation, and a very limited number of suppliers. This in turn results in little competition and high prices - particularly on the maintenance side. To break through this cycle requires more and better information.
The Internet is many things, but first and foremost, it is an incredible channel for receiving and disseminating information. And, it does so at little or no cost. That allows it to be the basis for some significant cost reductions, improvements in efficiencies, and better marketing. The serious thinkers in the Internet business believe that cost savings of 5 to 35 percent can be obtained, with those that embrace the new Internet business model most skillfully reaping the greatest rewards. They also think that this year about $15 billion (yes, that's a "B") in aviation business-to-business (B2B) sales will take place on the Internet with a rise to $35 billion by 2004!
The aviation e-commerce businesses that have sprung up cover the gamut from aircraft classified ads, airline ticket sales, charter aircraft marketing, and technical information to a number that focus on the maintenance side of the house.
Categories of involvement
The general and business aviation e-commerce ventures tend to fall into four categories:
2. Existing aviation parts brokers
3. Existing Internet businesses that have added aviation offerings
4. Independent entrepreneurs
The first represents the OEMs, such as Honeywell/UTC's myAircraft.com. The second involves existing aviation parts brokers who have added an Internet outlet. An example of this type is aerospan.com. Then, there are the folks that were already heavily into the Internet, such as mySAP.com, who have added aviation parts and services to their repertoire because they have heard that aircraft parts are expensive.
Lastly, there are the independent entrepreneurs, such as Skyfish.com, PartsBase .com, and AviationBid.com who see an opportunity to provide a valuable, much needed service and believe they will profit by this. This is not a commercial for any of these organizations, since I'm sure there are and will be others, but I don't know their names. I should also say that I have been involved with AviationBid.com since mid-1999 as an unpaid advisor and our company is looking at providing certain services to them.
Why use dot-coms?
So, what do these organizations have to offer? If you maintain aircraft, you need both parts and services. Getting parts is a perpetual problem since the suppliers are often far away, they may not have the required parts in stock, and the delivery delays can be exasperating. Getting services can be an even greater headache. It's tough to know who all the organizations are that provide each service as they are often at a considerable distance and they seldom provide directly comparable quotes. This consumes a lot of time, results in significant expense, and also causes most operators to carry a substantial stock of spare parts, which further adds to the cost.