Toyota Tsusho Signs Sales Representation Agreement with A J Walter Aviation Limited
- Aiming for entry into maintenance, repair, and overhaul market -
Toyota Tsusho Corporation (Toyota Tsusho) has signed a sales representation agreement with A J Walter Aviation Limited (AJW), a British company engaged in the business of maintenance, repair, and overhaul (MRO) of parts for aircraft bodies and engines. The agreement was signed in November 2019. Toyota Tsusho is the first in Japan to sign a sales representation agreement with AJW.
1. Environment surrounding the aircraft industry
Demand for civilian aircraft in the world is expected to double from 26,000 aircraft in 2018 to approximately 51,000 aircraft after 20 years because of the increase in the number of air travelers centered on emerging countries and the expansion of routes due to the rise of low-cost carriers (LCC).*1 Demand for civilian aircraft MRO is growing yearly together with this trend, and its market scale is expected to reach approximately US$115 billion in the next 10 years from approximately US$77.4 billion in 2018.*2 In Japan, the aircraft market is also expected to grow stably in the future, with demand in the MRO market growing even higher.
2. Background to signing of agreement
Agreements related to aircraft maintenance are governed by the aviation laws of each country. In Japan, parts repaired by organizations other than those approved by Japan Civil Aviation Bureau (JCAB) under the Ministry of Land, Infrastructure, Transport and Tourism must undergo spare part certification by the Minister of Land, Infrastructure, Transport and Tourism. However, between Japan and Canada, JCAB and Transport Canada Civil Aviation (TCCA) signed a technical arrangement for maintenance (TA-M) in December 2017. This agreement allows maintenance to be conducted on aircraft and parts by maintenance facilities which have undergone inspection of either JCAB or TCCA without having to undergo inspection by the aviation bureau of each other’s country.
AJW Technique, a company under the AJW Group, has a repair facility in Canada. Parts with certificates issued by AJW Technique—which is an approved organization of TCCA that attained TCCA approval in accordance with the TA-M in January 2019—do not require spare part certification as stated in Japan’s Civil Aeronautics Act. This puts in place conditions for easily providing parts to airlines in Japan.
Toyota Tsusho seeks to enter the MRO field, while AJW aims to expand its share in Asia. The agreement was signed this time amid such background as a result of Toyota Tsusho and AJW working toward partnership in opening Japan’s market.
3. Future prospects
By entering the MRO business through signing this sales representation agreement with AJW, Toyota Tsusho will establish its network within Japan’s MRO market and provide the wide range of services offered by the AJW Group to Japanese airlines. In addition, Toyota Tsusho will contribute to the development of Japan’s aviation market by utilizing the network and logistics expertise of the Toyota Tsusho Group to provide specialized services to customers such as Japanese airlines.
About A J Walter Aviation Limited
AJW is a major independent MRO company that supplies, exchanges, repairs, and lease spare parts for aircrafts and engines. AJW delivers highly effective supply chain management and asset management through innovative and tailored services to transform aviation efficiency. It has sales and logistics locations in various regions and countries, such as Africa, the Asia Pacific, China, CIS, Europe, Latin America, the Middle East, North America, Asia, and the United States.
Overview of A J Walter Aviation Limited
|A J Walter Aviation Limited|
|President and CEO Christopher Whiteside|
|Full range of MRO services for airlines and aircraft manufacturers, repair management, and power-by-the-hour (PBH) service|
Number of employees (consolidated)
|Approximately 1,000 (as of December 31, 2019)|
*1 Figures announced by Boeing at the Paris Air Show 2019
*2 Source: Global Fleet & MRO Market Forecast Commentary 2018-2028