The aviation aftermarket’s traditional “don’t-share-data-unless” mindset should be replaced with a “must-share-data-unless” mindset, argues Wouter van Dis, analytics manager at Fokker Services. And van Dis is now practicing what he preaches by sending about 400 actual part-transaction prices each week to ILS, so the part-searching and market intelligence platform can improve its estimates of fair market values for aircraft parts.
Fokker does about €110 million (approximately $119 million) a year in business, repairing, exchanging and distributing parts for Airbus, ATR, Boeing, De Havilland, Fokker and Mitsubishi aircraft. After discussions with ILS at MRO Europe in October 2021, Fokker agreed to send part prices, at first in Excel spreadsheets and now through an automated system using APIs. Once ILS set up the APIs, it took van Dis only a few hours to arrange the automatic weekly transfers.
Van Dis first ensured the prices were only used to calculate market values, and ILS would not “get between” buyers and Fokker.
Fokker gets about 1,200 emails a week asking for prices—a third through ILS, a third through PartsBase and the rest from its own web site. It responds to about half of these requests. Buyers who get special contract prices are confidential, but every Sunday Fokker sends ILS the past week’s other price quotes, classified by new parts, serviceable used parts and overhauled parts.
The MRO does not get paid or receive any special services for providing the prices. “We benefit because ILSmart is able to provide a better fair market value,” van Dis explains. If these values are based on insufficient data points, he says negotiations between buyer and seller take longer, waste time and deals may be done at incorrect prices. With more price data, van Dis believes ILS will make better value estimates and customers will understand the market better.
Both Fokker and ILS hope this approach spreads further. “I hope that companies in the aerospace ecosystem will recognize the benefits of sharing data, instead of keeping it by themselves,” van Dis says. “Data in our industry is too sparse; sharing data is key.” Eventually, van Dis expects blockchain to integrate the aftermarket into a far more data-rich and trusting marketplace.
ILS’s chief marketing officer, Eric-Jan Schmidt, says the company now gets part price data from several OEMs, including some larger OEMs, as well as distributors like Fokker Services. To date, ILS has captured over 500 million data points and has estimated fair market values for well over 10 million parts. Schmidt expects that the Fokker announcement “will be helpful in rallying more participation.”
Schmidt says potential price contributors all agree that they and other aftermarket participants would be better off with more robust data backing up market value estimates. However, “Obviously … everyone wants to know the details, how we make this all non-attributable and so forth.”
The announcement of Fokker’s contribution came as ILS was launching other upgrades to its pricing intelligence. ILS now makes it possible for other part suppliers to automatically upload part pricing transaction data, just as Fokker is now doing.
ILS says it has also improved its market-value algorithms to calculate prices at the exact part number, condition and description level. Furthermore, value estimates now come with confidence levels, which are a function of the number of data points captured for a particular part and the variation in the values so captured.
Finally, ILS has added more data on PMA products, improved its algorithms to find and fix any abnormalities in PMA data, and it now allows users to filter out cancelled PMA parts. The company is seeing more interest in PMAs from discerning commercial customers and defense organizations.
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