The early aerospace e-commerce pioneers are convinced that online business is set to transform the aerospace industry and if they don't have a dotcom they don't stand a chance of effectively competing in the billion-dollar aerospace industry of the future. But once the excitement surrounding this new way of doing business dies down, exactly how dotcom fever will transform the industry is hard to gauge. For the e-commerce revolution is providing more questions than answers. Are companies blindly joining the e-commerce bandwagon for fear that they'll be left behind, or is the e-revolution really going to meet the industry's ever-rising expectations?
First there is the money issue. Are companies in this to save money or make money? If they are out to save money, then joining one huge independent aerospace and defence trading portal would appear to be the best approach. But if they just want to cash in on dotcom fever, they will stick with their own ventures and wait for the inevitable initial public offerings to profit from the new way of doing business. E-commerce advocates point to the efficiency and financial gains which will naturally accrue from online business, but real figures to support these claims are hard to come by and only once they are in operation are we likely to know their full potential.
Then there is the issue of independence. Can industry e-commerce initiatives led by aerospace giants like Boeing, Lockheed Martin, BAE Systems and Raytheon be as independent as they claim? If such a venture becomes a ubiquitous business tool, like CATIA is for design, then it simply becomes the medium over with the industry conducts its business - a standard that everyone uses, like SPEC 2000 or ISO 9000. But if it becomes a competitive weapon, an extension of "Airbus vs Boeing", how can it ever achieve its cost-saving or wealth-generating potential?
And can Boeing et al ever create a truly independent site? The question then becomes whether any truly independent site can attract enough business to sustain itself? What the Boeing-led portal brings is the buying and selling power of the world's four biggest defence and aerospace companies, with the same applying to the Honeywell/United Technologies-led MyAircraft.com and SITA/AAR's aerospan.com. Each comes with the guarantee of the patronage of their creators. But the emergence of the mega-portals makes life for the truly independent aerospace web-based marketplaces difficult, to say the least. True independents like AviationX have to attract every piece of business because they have none of their own.
Boeing and its partners want their e-commerce venture to be the marketplace for the industry, but some big names are missing from the grouping - Airbus, EADS, Bombardier, Northrop Grumman, for example. The reasons are obvious. Boeing, Lockheed Martin and Raytheon have come together in their common interest in serving the Pentagon. As has BAE, which also wants to steal the march on EADS and cement a transatlantic relationship - even if it is just an electronic one for now.
Boeing, meanwhile, had to do something to keep its grip on its commercial customers, or see them deal direct with its suppliers. But some of the big aerospace industry names, such as Airbus and Rockwell, are not yet part of the e-commerce stampede. The question is, can they afford to be left out? Other e-hopefuls are zeroing in on the Airbus vs Boeing aspect of all this, suggesting it will be impossible for them to share a site, even though they share so many suppliers.
Boeing and its partners' e-venture is not the first to claim to cater for the needs of the entire industry, but how many of such trading exchanges can the industry support? The creation of separate incompatible systems could reduce any savings participants are basing the ventures on. As a result, rationalisation of the e-commerce business seems as inevitable as the rationalisation of the aerospace industry before it.
And as industry-wide portals proliferate they are bound to attract attention from competition authorities, even though the new e-business ventures claim to be open to all. No doubt the e-commerce ride for the industry will not be an easy one, but it is a path aerospace is now on and one which is set to transform the sector. It's more than just buying and selling. Handled properly, the web is the new medium over which all aspects of aerospace will operate - as important and fundamental a development as aluminium.
Source: Flight International
