An Example: Spare Parts Asset Management

Airlines have substantial capital tied up in spare parts (equivalent to about $1-2 million per aircraft). This is a heavily regulated area (for safety reasons) and is critical for the overall operation of the business.

In a Capital Outsourcing deal, STAR would acquire the spare parts pool and contract back a spare parts management service, including the obligation for timely delivery and meeting regulatory requirements. STAR could also provide other services such as repair and maintenance - freeing up management resources of the airline. By combining parts pools from a number of airlines, the overall amount of parts required is reduced - providing a synergy benefit. The airline liberates capital and gets a cheaper more efficient service. In particular, it can benefit from industry-wide synergies it could not access itself.

STAR is already developing this business - starting with the acquisition of SR Technics.