The ins and outs of importing rare/AOG components to Russia

The ins and outs of importing rare/AOG components to RussiaDuring the first 8 months of 2014 Russian airlines carried more than 63 million passengers and 658 thousand tons of cargo and mail, reports the Federal Air Transport Agency of Russia. These numbers suggest that the Russian aviation market is developing steadily. As a result, the share of foreign-made aircraft and the need for spare parts in the country are increasing with every year. However, given the complexity of the local components import procedure established in the Customs Union, how can airlines deal with the import of rare components or spare parts supply in AOG situations?

Passengers are not the only ones who experience the consequences of damaged aircraft. A single day of keeping an unusable Boeing 737 costs around 20 thousand dollars. For a wide-body aircraft this sum gets even bigger – keeping a Boeing 767 or a Boeing 747 may result in 100-150 thousand dollars-worth of losses per day. This amount accumulates from not only spare parts and components, but also the expenses of accommodating passengers at hotels and compensating them the delay, leasing another airplane (in case if a carrier cannot provide a spare aircraft on its own) and additional parking at the airport, as well as leasing payments and salaries for the employees (while the aircraft is on the ground and doesn’t generate any revenues).

“Not every company has its own stock of spare parts available whenever it’sMarija Cholodova, the CEO of FL Technics Line Russia needed. Establishing own stock of spare parts for an Airbus 320 or a Boeing 737 NG fleet approximates USD 5-10 million. In the meantime, the stock will account for only as few as 100-150 part numbers – the most demanded components for a particular type of aircraft. But what should a carrier do if a required replacement is not in the stock?” – says Maria Cholodova, the CEO of FL Technics Line Russia.

Only a while ago the import procedure or even a temporary delivery of components to Russia used to take around 4 days, including the logistics and preparation of the required documents. Today, however, if the delivery process is well-managed, the time limits have greatly reduced. A required part may reach one’s AOG-ed aircraft in Russia within 24h from placing the order.

According to Maria Cholodova, the order itself may not a guarantee that someone will proceed to its execution. There are a number of rare components, such as radio navigation, radio communication systems, radar equipment, oxygen generators or portable fire extinguishers for universal use, which require additional time due to procedural and logistical difficulties. At times, a delivery may require an arrangement and approval from a number of authorities and agencies, including the Federal Security Service, the Ministry of Trade, Radio Frequency Centre and other. Unsurprisingly, most suppliers are unwilling to undergo the entire process just to import a single component.

Moreover, many companies which deliver components to Russia do that through one or two customs offices only. This means that operators are initially limited in terms of receiving fast delivery, as parts can be shipped with the first flight to a certain airport, rather than with the first flight to any Moscow airport.

“For instance, there is only a small number of companies in the market which are able to provide fast delivery in case of an emergency through all three Moscow‘s main airports as well as road customs points, which are commonly used for oversized or dangerous component logistics. Then there are also several companies which may provide components from their own warehouses, if those components are in place,” continues Maria Cholodova, the CEO of FL Technics Line Russia. “At the same time, certain Russian carriers have the opportunity to import spare parts by themselves. But for many airlines, especially foreign ones, which neither have the resources nor the expertise to work with the Russian customs, this process may be extremely difficult and may result in a longer time period than the one the competitors have to suffer through. Therefore, since aircraft downtime may cost airlines a fortune, it is necessary to opt for the most appropriate approach in selecting the supplier, as the fastest order response does not mean the fastest delivery.”