The Sharing Economy – What Is It and How Can it Benefit the AOG World?

Firstly, however sceptical of new trends or technology, I’m willing to bet most of us have made some use of the sharing economy at some stage during the past few years. Uber, Airbnb, Ebay, anyone?

While these are the poster children of the sharing economy trend, alongside them is a growing economy, facilitating €28bn worth of transactions in 2015 alone. And that was just in Europe. Price Waterhouse estimates that by 2025 this will have grown to €570bn annually.

By definition, the sharing economy is another term for collaborative consumption, or simply a sharing of resources or goods to mutually benefit users. For example, owners rent out something they are not using, such as a car, a room or office space, using peer-to-peer platforms that efficiently link everyone together by what they actually require. The owner generates some extra income, the user gets a better deal or service, and the platform takes a small commission. It’s a win-win – everyone is happy.

While it has led to efficiencies and disruption in other markets, in our world of aircraft parts, the competitive and highly regulated nature of the industry means there has been very little historic collaboration. Sure,  some parts pooling, consignment stocks, loans and exchanges take place , but nothing like other industries such as logistics or employment.

Consider how many parts you have sitting on shelves at different locations, certified and ready for use. Are they always where you actually need them in an AOG situation? Of course not. Unless you can have every component in every location, any inventory is merely an intelligently planned insurance to hopefully cover what may be needed.

So if everyone has parts sitting on shelves all over the world, it stands to reason that someone is going to have what you need closer to where you have your actual AOG requirement. The problem is, you won’t know – and probably by the time you find out you have already made another arrangement or sent your own part. Everyone has their network of approved suppliers, sourcing websites and friendly airlines, but the method of contacting them probably hasn’t changed much. Phone calls or a generic RFQ email fired out will probably net a bunch of AOG quotes from Singapore to Miami – but that won’t help much if it takes 15hrs to ship to the required location.

This is where the sharing economy can help. A platform like Airbnb knows that if you are looking for apartment rentals in New York, you won’t be interested in apartments in London or Paris, so the results and choices are focused on exactly what you specify; in other words, it’s an intelligent collaboration.

This is the same for AOGs, in fact more so – since you need to make the best decision in real time, and cost is probably not the primary concern. If you can only use a part with FAA8130 certification for example, why waste time sifting through numerous quotes. Or if your aircraft is grounded in Sydney, a quote from Paris isn’t going to help much, regardless of how cheap it is. But that part could be sitting in the MRO hangar next door, owned by someone you’ve never spoken to before but who is willing to help you out because they’re wondering what to do with it anyway. They make money, you get your aircraft back in service. Win-Win!

By using technology to drill down and focus on intelligent collaboration, solutions that are relevant and live can be achieved, and that really can bring efficiencies to the world of AOG procurement.

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