At last, the hype surrounding the aerospace e-business sector has diminished and reality is beginning to dawn. Aerospace executives who gathered in Los Angeles last week for First Conferences' Eye for Aerospace event appear to be recognising that e-business perhaps is not the be-all and end-all and the aerospace e-business road is a longer one than they first imagined.
Following their launches in a blaze of publicity last year the large supplier-led exchanges have calmed a bit as they attempt to fulfil the promises they made to industry.
These exchanges have faced their problems, including delays in getting off the ground due to ownership issues, lack of customers and determining what needs to be offered.
While BAE Systems, Boeing, Lockheed Martin and Raytheon's Exostar and SITA-led Aerospan at least have something to show for the efforts, with the latter even boasting a growing customer base, the newly combined AirNewco and MyAircraft are still working on their offerings with a planned launch by May - although they are unlikely to be offering full services until at least a year later.
Aerospace e-business growth has not followed the path many originally expected. Aerospace companies have not rushed to join the large exchanges, as the chief executives of the Exostar partners, in particular, expected when they launched the venture last year. In fact, a number of large aerospace and defence companies, including Northrop Grumman and EADS, are still unsure of the whole concept of the mega industry marketplaces.
Last year's dotcom stock crash has also affected the exchanges' plans, many of which were keen on an initial public offering (IPO) once their sites were established. IPOs are now, understandably, lower down the priority list.
The airline e-business response, with the formation of airline groupings AirNewco and Aeroxchange, also took the supplier-led exchanges by surprise. The merger of supplier-led MyAircraft with airline grouping AirNewco was a smart move, although one which has delayed MyAircraft launching services. Aeroxchange, meanwhile, is still going it alone, despite supplier-led exchanges continuing to woo it and its highly attractive airline founders, which include Air Canada, All Nippon Airways, Cathay Pacific, FedEx, Japan Airlines, Lufthansa and Singapore Airlines.
The rash of manufacturer and supplier-led e-business initiatives has also severely affected the so-called independent portals. Although first to market with services, they appear to be struggling to compete in a sector increasingly dominated by exchanges backed by industry giants with deep pockets, at the same time as coping with dotcom stock no longer in favour.
One of the aerospace e-business pioneers, Aviationx was first to dump its ambitions of providing a broad online aerospace marketplace and instead supply specific internet-based applications only. Now, Skyfish.com has fallen by the wayside, PartsBase's last financial figures painted a less than rosy picture, while Avolo is increasingly pursuing new activities, including pushing its data-streaming technology to new markets.
Despite the early teething problems, aerospace exchanges still believe they have much to offer. And so they do. There is no doubt that internet technology is giving the industry an opportunity to sort out its inefficiencies and hopefully eliminate the $38 billion which is estimated to be wasted annually across the aerospace and defence industry because of inefficiencies in the supply chain.
But at least now the exchanges appear to recognise that e-business is not going to turn around the industry overnight and the long e-business road does not necessarily have Utopia as its final destination. Exchanges are, after all, just another business tool. The hype has to be kept at bay and reality must take a firm hold. Without it those that are outside of the aerospace marketplaces will always remain outsiders and the global industry opportunities that e-business can offer will not be fully realised.
Source: Flight International
