THREAD: Transdigm & switching costs.

What does it really take to switch out from $tdg parts?

Most airline purchases are the detail parts used in a repair, not the line replaceable units (LRU’s).

$TDG mainly sells the detail parts that make up the LRU’s.

The detail sub-parts of the LRU’s ARE NOT interchangeable from one brand of LRU to another

So switching detail parts requires converting the LRU’s across the fleet. This means managing a retrofit on every aircraft and building another spares pool for the new LRU’s.

The cost, effort, and time to do this is huge.

https://inpractise.com/articles/tdg-pricing-operations

Even though the detail spare parts are relatively inexpensive, the volume of purchases is huge and are crucial to a fully functioning supply chain.

The high embedded switching costs highlights why $TDG have such a strong position in the aftermarket and the airframers are left helpless.

https://inpractise.com/articles/satair-aerospace-distribution

Other tier 1's have also realised the airframers are all bark and no bite and are following somewhat similar but less 'aggressive' strategies as $TDG

The airframers know what is going on but time will tell how much muscle they really have to claw back $$ & influence a company like $TDG

https://inpractise.com/articles/satair-aerospace-distribution