Scope#23 | Magellan Aviation Group
Parts in the Sky –Providing Solutions in the Aviation Industry
Year after year, the aircraft market is experiencing sustained growth in tandem with increasing demand caused by more and more people wanting to fly. On the other hand, the need for aviation companies to rethink their cost reduction strategies has also been rising in recent years, as they are exposed to intensifying global competition. In the middle of this growing market in which reducing costs on the procurement of parts that account for a large portion of an aircraft company’s maintenance expenses is essential, Magellan Aviation Group, a company that supplies high-quality used serviceable aircraft parts to Airlines and MROs, is in a strategically advantageous position.
Marubeni realized the potential of Magellan Aviation, and invested in the company in 2012. Previous to Marubeni’s investment, Magellan mainly operated in European markets, but through the application of Marubeni’s international network, Magellan’s sales channels expanded exponentially. Now, Magellan Aviation’s sales network has been amplified to encompass Asian markets as well, which have experienced growth at a rate that far exceeds that of the aircraft maintenance markets in the rest of the world.
The two companies were also able to fully apply Marubeni’s industry experience in retired aircraft part procurement – a cornerstone of Magellan’s business; Marubeni devised a strategy whereby a company jointly established with a large airline company procures and owns retired aircraft materials that it then sells to Magellan on a consignment basis.
This has enabled Magellan to generate profit from the sale of scrap parts without actually owning any assets. Additionally, through collaboration with a Marubeni owned engine leasing company, Magellan has been able to consider large scale joint bidding, which would not have been possible before. Magellan has also been buying retired aircraft parts from an aircraft leasing subsidiary of Marubeni – thus producing further synergy between the two companies.
Through the combination of Magellan’s vast knowledge and human network and Marubeni’s global sales network and company development ability, the Marubeni Group will continue to provide solutions to aviation companies around the world.
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