Torsten Tamm, Managing Director, AviTrader CS GmbH explains the business model for the company’s new service in surplus inventory remarketing and parts auctioning. (interview AviTrader MRO magazine May 2018)
AviTrader MRO: You recently founded AviTrader CS in Munich, Germany together with your business partners. Are you moving the Vancouver, Canada based AviTrader publication business to Europe?
Tamm (laughs): No, not at all. We founded AviTrader in 2005 while I was still living in Vancouver. Since then, we have established AviTrader Publications Corp. which has become a key player in the aviation news publications business. We are very proud and happy about that continued success and we see no reason to move the publication business away from North America to Europe.
AviTrader MRO: And why has AviTrader CS been founded?
Tamm: Aviation companies with recommendations and joint venture opportunities have approached AviTrader frequently in the past. Many of the ideas they presented to us were very interesting, but we decided at that time that we would focus on our core business of publishing digital aviation news. Last year however after a very engaging conversation with an American aviation industry veteran, my business partners and I decided that we would offer various services to the industry under the established brand of AviTrader. AviTrader CS would be like a holding company responsible for offering different aviation services and will have a slightly different shareholder structure. AviTrader Publications Corp. in Canada will continue focusing on delivering up to date aviation news in digital format.
AviTrader MRO: What kind of services will be offered?
Tamm: Initially we will focus on what we know well. These are services we have offered for many years through the various consulting companies and executive positions held by the partners and associates – we are bringing all that expertise under one roof. So firstly, we will continue offering surplus inventory remarketing, inventory consulting and the management of MRO tenders. This is what we´ve done for decades and it’s where we have derived an international reputation. We are not strategic advisers for an airline’s operation but rather our expertise is supply chain, development of technical sourcing strategies, aircraft spare parts and tendering of MRO contracts.
AviTrader MRO: You mention surplus inventory remarketing? Does this entail managing warehouses?
Tamm: We have a deep knowledge of aircraft parts and the review of part certificates. However, we are not managing warehouses. We want to take the stress out of some of the issues that airlines and MRO executives face every day. Executives must deal with daily technical requirements that come up especially ensuring that the right part is in the right location at the right time. Inventory helps reduce technical delays and cancellations. Over time, every airline operation generates surplus inventory. This is where we kick-in to help supply chain organisations generate cash from non-working capital allowing them to focus on the initial provisioning and setup of their current fleet parts requirements.
AviTrader MRO: Are you buying surplus aircraft spare parts?
Tamm: No, we don´t and I don´t see that we will go into that business. There are many professional part distribution companies out there. We are a consulting firm acting on behalf of our customers. The remarketing of surplus inventories is our profession and we help airlines and MROs identify their hidden assets and assess the market value. We tender the package in the market in a transparent way and according to company policy. We take compliance very seriously to ensure the project is managed accordingly. This is a very important subject to us. We focus on getting the highest possible selling price and fast cash flow for our customers. Once we´ve collected the inventory data, the customer´s organisation will not be disturbed by the project. We will establish a locked data room where the customer can review the status of the sales process at any time. We will manage the project until the customer is paid. Such a project usually takes four to six months’ time until the buyer has received all surplus material. The first cash flow to the customer will arrive at least three months after the project starts.
AviTrader MRO: What other services will be offered?
Tamm: We will be launching a very exciting product in June 2018. AviTrader will launch a platform for daily online auctions for expensive rotables. This will be the ideal vehicle for owners to sell expensive assets. The auctions will be limited to one part a day to give the auctioned part the highest buyer attention. We are in the final stage of development and hope that we can start by early June 2018. We have a huge list of services we will offer to the market and we are currently in discussion with many industry professionals to explore partnership opportunities. By next year we hope to provide large-scale professional services to aircraft leasing companies and CAMO organisations of airlines. We want to provide professional services to cover times of peak resource requirements of our customers. No company can afford holding internal resources for peak capacity requirements – this is where I see our business niche. In the long run I see AviTrader as a kind of franchise business combining professional aviation services with best in class business partners under one roof.
AviTrader MRO: Interesting times. Last question, what is CS standing for?
Tamm (laughs): We wanted a short company name using the brand AviTrader. The name shouldn´t restrict the business activities though. Maybe it stands for “consulting services” or “customer satisfaction”. The company name is not so important. For years the AviTrader family has the slogan “your success is our business”. This is our commitment.
For more information visit: www.avitradercs.com.
