Increased flight activity during the last quarter boosted TransDigm’s aftermarket sales both sequentially and year-over-year (YOY), yet another positive sign that the sector is in recovery mode.
The components and subsystems specialist saw aftermarket sales rise 6% in the three months ended July 3—its fiscal 2021 third quarter (Q3)—compared to the previous three months. YOY sales jumped 33%, a reflection of low activity as the COVID-19-driven downturn forced airlines to park aircraft in 2020.
“We, like most aero suppliers, are hopeful that we will realize a more meaningful return of activity in the second half of the calendar year,” CEO Kevin Stein said on a recent earnings call. “We continue to be encouraged by the recovery we have seen in our commercial OEM and aftermarket bookings throughout the fiscal year, along with the continued improvement we have seen in our commercial aftermarket revenues.”
Stein said the growth is a sign of not just more flying, but also operators needing to replenish spare parts inventories that were allowed to deplete as carriers pushed off spending money as long as possible.
“We’re certainly seeing whatever destocking [airlines] had come to an end. But we are seeing increased takeoff and landing cycles, which we think are important to follow this industry and certainly preparing for future capacity and needs,” he said.
While the company expects to see another steady increase in commercial sales this quarter, Stein cautions that uneven recovery time lines in certain regions could create a “lumpy” recovery profile.
“I would expect there to be fits and starts,” Stein said. “I don’t think you’re going to have a seamless perfect growth out of this. But I still expect things to be moving in the improving direction.”
The company’s aftermarket business comes from within two segments: airframe and power and control. It typically generates about 30% of its total revenues from aftermarket support. Its total Q3 revenue was $1.2 billion.
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