Wise management of an ADS-B slot program will not only keep your customers flying, but it will positively impact your bottom line.
Recently, we wrote an article ADS-B Slot Programs: What the Pros Don’t Want You to Know discussing what aircraft owners need to know before signing an agreement for a future slot to install ADS-B and posted it at Equip ADS-B News.
Today, we are going to drill down further into why shops should try to maximize their bottom line by holding some of their workload capacity in reserve, and take a look at three specific reasons to reconsider how you operate your slot program:
Rising Equipment & Parts Pricing
One of the biggest drawbacks of slot programs and advance sales from the aircraft owner’s point of view is that while they may be guaranteed their particular installation slot and time, they will almost be certainly looking at a higher out of pocket cost the longer they delay. As avionics manufacturers raise prices, costs are passed along to consumers. Your shop can buck this trend, and position yourself to be extremely price-competitive by staying on the lookout for opportunities to acquire equipment used in your most popular approved ADS-B solutions now, at current — presumably lower — prices. For example, if one of the avionics OEMs notifies of a pending price increase on a particular ADS-B part or sub-system you use, acquire extra units now, sit on them, then mark them up in the future (though not quite as far as MSRP). You’ll make more profit, your customer will pay a lower price, and both of you will walk away happy.
Specialize in Your Preferred Models
Most avionics shops service as many customers as possible. This leads many of them to have a rather complex workload; this week they may be working exclusively on same model business jets for a large corporate contact, next week they may be working on a dozen different models of piston aircraft for owner/operators. The reality of the situation is that despite relatively fixed costs regarding parts and labor, your shop probably has a comparative advantage over other shops when it comes to servicing particular types of aircraft. If for example, you focus on becoming the top ADS-B system integrator for WAAS/LPV, RNP, TCAS II, or CPDLC and then reserve a small portion of your total workload capacity to work exclusively on providing that solution for select models, you can often have a small but significant impact on your profitability.
Adapt to Customer’s Requirements
One final but potentially compelling reason to consider reserving at least a fraction of your workload capacity is the flexibility it gives you in addressing the specific needs of your customers. Depending on which numbers you believe, anywhere from 20,000-40,000 GA aircraft owners may be left out in the cold when the mandate finally arrives, due to postponing the scheduling of their installation. As this becomes apparent, look for a growing contingent of owners who will be able and willing to pay a premium above and beyond your standard charges. By having a built-in capacity to offer service to clients who show up at the last minute, but need to ensure that their particular aircraft stays flight-ready for mission-critical reasons (maybe humanitarian) you will reap more than just monetary rewards.
For most avionics shops, running an intelligent advance slot sales program combined with a few smart choices will let at least a portion of your inventory appreciate in value up to and slightly past the mandate. Reserving a small part of your workload capacity will also likely have a net positive effect on your profitability. You can work with people willing to pay to skip the line, or if you happen to be in possession of a solution considered non-standard for your region, can begin to look for these underserved customers further afield.
At the Equip ADS-B Marketplace, we always do our best to help both aircraft owners, as well as avionics shops, navigate these last few years before the mandate taking effect. Be sure to regularly check back for further articles and tips on how you can maximize your profits on ADS-B equipment and installations.
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