RE:Aftermarket sales and support The razor/razor blade model is a great model to have. Sure helps to drive up the installed base of razors, tho.
stockitnow wrote: As charter bizz jet operators, private jet sharing companies and like expands, this gives tremendous growth to aftermarket sales and support. Now is the time for these companies to expand.
Airlines are going through aircraft pax densification to increase profitability as they are reducing routes and lossing business class clients. Airlines are going towards low fare max pax on poplar routes, and private jet sharing are picking up business class flyers for time saving and flexibility. Both sector will do well.
While new jet delivery numbers are important for healthy number of aircraft in the field, its aftermarket which will be cash generator over and over. Bombardier makes money one time on initial sale of jet. Aftermarket will generate cash from same aircraft everytime it comes in for services and upgrades.
I dont know what the margin on aftermarket sales and service is, but on new jet sale its ~5-11%. 5% for Global 7500 and 11% for Challenger. This is what was reported few years back. Global 7500 learning curve and ramp up should bring it to 11%.
What would be nice is if more Airlines had private jet service as their ultra business class flying division. Delta had teamed up with Wheels up to do exactly that.