Aircraft Parts: Private Equity Spikes Costs, Sustainability in Question
By Russ Niles
One of the biggest players in aircraft parts and systems says it’s investing in its aviation companies and intends to continue strengthening “their manufacturing and service capabilities and better serve aircraft owners and operators.” The quote is part of a written response by Arcline, an investment company that has recently purchased several aviation companies, including Continental Aerospace, to a study done by an Alaska pilot on the impact of those and other acquisitions.
Maj. Ryan “Lit” Gourley is an F-22 instructor and evaluator for the Alaska Air National Guard, but on his time off he’s flying his Cessna 180 as much as he can. When he needed tailwheel parts he was taken aback by the cost. He put his analytical mind to work and quantified what anecdotal reports have been alleging for years: When investment funds take over companies that make parts for certified aircraft, prices go sky high. Arcline and Victor Sierra started buying up such historic aviation brands as Hartzell (Arcline) and McFarlane (Victor Sierra) several years ago, and the common perception in the industry is that price increases were immediate and substantial. Scroll down for the full copy of his report.
Gourley began gathering data on price increases and discovered there was real substance behind those hangar bitch sessions. He’s afraid it might spell the end of recreational and small charter aviation as we know it and he’s been asking aviation groups for help in highlighting the peril. AvBrief Editor Russ Niles and Smart Aviator Editor Larry Anglisano did a video interview with Gourley and sought responses to his concerns from Arcline and Victor Sierra. Arcline responded through its public relations firm, but we never heard back from Victor Sierra. Arcline gave us a statement on behalf of the whole organization and also one from the perspective of Signia Aerospace, the subsidiary that includes its aviation properties.
Here’s the Arcline statement:
“The aviation industry has faced meaningful supply chain constraints and rising supplier costs in recent years, contributing to higher costs across the market. During this time, Arcline has continued to invest in the manufacturing and service capabilities of its aerospace businesses, including expanding access to more affordable, used serviceable parts and investing in maintenance, repair and overhaul (MRO) operations to support aircraft uptime, factory-quality service at convenient locations across the country and flat-rate overhaul and exchange programs. These investments also include the development of a $30 million, 150,000-square-foot Innovation Center in Ohio to enhance composite propeller manufacturing and MRO activities. We remain focused on investing in our aviation businesses to strengthen their manufacturing and service capabilities and better serve aircraft owners and operators.”
Here’s the Signia Aerospace statement:
“Our partnership with Arcline has enabled us to make significant investments in our businesses, expanding our capabilities and strengthening how we serve our customers. In addition to investing in our products and maintenance, repair and overhaul capabilities, we have extended warranty periods, reduced lead times, and developed flat-rate and exchange programs to give aircraft owners and operators greater predictability in maintenance and repair pricing. We continue to expand our offerings to meet their evolving needs.”
If we hear back from Victor Sierra, we will publish whatever form its comments take. Here’s Gourley’s report: Aircraft Parts: Private Equity Spikes Costs, Sustainability in Question – AvBrief.com
