HEICO to target generic parts sales to small airlines (updated)

Heico

19/06/2023 10:42

(Adds context, comments from interview)
    By Allison Lampert
       PARIS, June 19 (Reuters) - Aerospace supplier HEICO Corp
 HEI.N  is targeting generic parts sales to smaller airlines
that lease their planes, which could generate millions of
dollars as demand to keep aircraft flying soars, co-president
Eric Mendelson said on Monday.
    HEICO has made inroads in selling generic aircraft parts to
service planes leased by larger carriers. 
    Now, the company is trying to grow sales with smaller
carriers which are not always aware they can negotiate using
such alternative parts in their leasing contracts, he told
Reuters on the sidelines of the Paris Airshow.     
    The strategy comes as airlines and aircraft repair shops are
increasingly relying on used and generic parts to keep jets
flying at lower costs, as supply chain disruptions sometimes
hinder availability of name-brand parts from companies such as
General Electric Co.  GE.N 
    Lessors usually allow their planes to be serviced with
alternative aircraft parts, such as those that have obtained
parts manufacturers' approval (PMA) from a regulator, but their
usage must be negotiated in advance, Mendelson said.  
    Inroads in the smaller market "would mean millions of
dollars in sales for HEICO and a similar amount of savings for
airlines," he said. 
    Mendelson said if HEICO could fully crack the leasing market
for smaller carriers the company could grow its total sales of
generic parts by roughly 25%.
    In May, HEICO said it would buy Wencor Group in a deal
valued at $2.05 billion to boost its portfolio of generic parts.

 (Reporting by Allison Lampert  Editing by Tassilo Hummel and
Mark Potter)
 ((tassilo.hummel@thomsonreuters.com ; Twitter handle:
@tassilo_hummel;))