AERFIN (CAERPHILLY)

1. AERFIN (CAERPHILLY)

Aircraft ground support equipment manufacturer | Established in 2010

AerFin Limited is a market leading civil aviation parts distributor and lessor, supplying quality serviceable used aircraft parts to the global aviation market. It does this through technically focussed, innovative supply chain solutions aimed at reducing airlines maintenance and operational costs. The business operates over two locations and is headquartered in a 105,000 square foot former General Electric Aero Engine Services facility in Caerphilly where it provides engine leasing, engine disassembly, engine part sales and technical advisory services. AerFin added a second location (Crawley, West Sussex) in September 2015. This is focussed on airframe component sales, 24/7 Aircraft on Ground Support, Cost per Aircraft Landing (CPAL) and Power By the Hour (PBH) programmes. AerFin drives cost savings and efficiencies in the supply chain of its customers by obtaining the majority of its inventory from retired aircraft. In a typical transaction, the engines are dropped from the aircraft and, depending on condition, are either kept whole for lease or sent to the Bedwas facility for disassembly to piece parts. By working alongside select partners, airframe components are removed from the aircraft before the empty hull of the aircraft is environmentally disposed of.

1044.3% growth between 2013 and 2015

Origins

Record order books for new aircraft, coupled with second tier operation aircraft becoming harder to finance through conventional debt structures, has created a wave of opportunity for purchasing quality retired aircraft and engines. In addition, global competition amongst airlines has compressed profit margins. Airlines are focussed in working with suppliers with a high level of technical expertise who can not only reduce aircraft maintenance spend but can provide pertinent specialised advice to maximise product performance, enhance asset residual values and give enhanced predictability of maintenance spend.

Our main challenges when starting the business

Despite having a seasoned management team of aviation professionals backed with a track record of success, the business still suffered the same growing pains of any start up business with no traceable history. To begin with, it couldn’t get credit for mobile phone contracts and foreign currency payments over a certain value had to be transacted over the counter at the bank. Whilst harbouring ambitious growth plans, the business has adopted a sensible growth strategy aimed at producing sustainable revenues, high quality services and financial stability for the company. In the early days, this required selective attention to the projects that it could take on.

Success Factor

Benefitting from a strong regional presence in the Aviation sector, AerFin has been able to recruit high quality aviation professionals to provide a consistently excellent service for customers. The challenges of working in a fast moving, and global market space have allowed the business to benefit from excellent staff retention levels, which is paramount to the success of the business. In 2013, AerFin benefitted from support through the Welsh Government, who backed its relocation programme. The support offered allowed the refurbishment of the former General Electric Aero Engine Services facility at Parc Bedwas and the creation of 10 high quality jobs that were instrumental to the growth of the business. Finally, in December 2014 the company benefitted from investment made by CarVal Investors, who acquired a major stake in the business. The continued backing of the majority shareholder has allowed the business to extend its service offering and enhance the platform to become capable of handling higher transaction volumes without detracting from the quality of supply. This includes the opening of a 24/7 aircraft on ground support facility near to Gatwick Airport.

The Future

With strong access to capital for new product line investment and a fast-growing brand reputation, the business is well placed for significant growth over the next five years. The major aim of the company is to achieve global growth and it has plans to add representation in Asia, the Middle East and the Americas. It will also to increase its market share in both its engine leasing and power by (the) hour service offerings.