As oil prices surge to record-shattering levels, the world's major aircraft manufacturers are building more fuel-efficient planes and turning to alternative fuels.

  But Pierre Steffen, Airbus China's vice-president for customer services, believes aircraft makers could help airlines save costs not only by selling more advanced airplanes but also through customer services.

   "Cost saving initiatives always need to be a complete process. Fuel cost is just one element of this. Another is spares management, logistics, flight operation and the quality of engineering processes," says Steffen.

   Airbus launched a door-to-door customized spares logistics service in China at the beginning of June. Using DHL as a forwarder for both domestic and international shipments, Airbus provides spare parts deliveries, including customs clearance, and takes full control of the supply chain for the customers.

   It is the first time that an airplane manufacturer took the full responsibility for transporting spare parts for Chinese customers. Usually airlines transport spare parts themselves. The service is designed to reduce the logistical complexity and administration workload for customers, enabling them to shorten transit and turn-around time while concentrating on their core business.

   An aircraft maintenance, repair and overhaul company based in Shanghai has signed up for the service. But Steffen declines to give the name of the company. He adds Airbus is "in process of signing two more customers".

   "We believe that in the next three years we would have about 50 percent of all the spares transported under this program. The cost pressure will help us because it is more efficient for customers," Steffen says.

   But Steffen also says the biggest concern for Chinese companies now lies in the fact that they have to pay for the transportation. "Most airlines say they transport both people and goods so they can handle their own spare parts, which does not cost anything. That is a one-side view," he says.

  Due to the logistical complexity of spare parts and the country's import and export rules and regulations, Chinese airlines are forced to have a high level of spare parts in stock to counterbalance the negative effects of the longer transit time, which increases airlines' costs.

   "Chinese airlines have 30 percent more spares on stock than air carriers in other parts of the world. That is because their transport (of spares) is not yet optimized," Steffen says.

   Steffen says it is a challenge to change many Chinese airlines' way of evaluating costs.

   "They still look too much at unit cost. For example, if a spare part costs $100. They would not pay $110 for it even though the price also covers door-to-door transportation," Steffen says.

   "But in fact at the end of the day they must check the overall cost of the spare parts, including transportation, import and export procedures, storage and repair. By signing for our logistics service, they could optimize their transport, cut down transportation and transition time and lower their warehouse stock. They could reduce overall costs, much more than what they have paid for the transportation," he says.

   The spares logistics service was developed at Airbus' spares support and service headquarters in Germany more than five years ago and has been introduced to Europe, the United States and Asia. Now about 45 airlines, including Lufthansa and Singapore Airlines, are using the service.

Just pilot training?

  Driven by the country's double-digit economic growth, China will need 100 to 150 aircraft per annum in the next 20 years, making it the world's fastest-growing commercial aircraft market, according to Airbus' estimation. Boeing has similar forecasts that China will need about 3,400 new airplanes over the next 20 years to satisfy domestic and international travel needs.

  Airbus sold its first plane to China in 1985, while Boeing had a 13-year head start. Airbus had only a 7-percent market share in China in 1995. But now there are 412 Airbus aircraft in service in the country, accounting for 38 percent of the Chinese fleet in service. There are still over 450 Airbus planes on order.

  "Most of the Airbus aircrafts in China were delivered in the last few years, which means many Chinese airlines are still in the growth process of our aircraft," Steffen says.

  "In the early days we used to focus on pilot training, mechanics and crew training. But the fast growing Chinese market requires a different menu of services and proactive support measures, in addition to the classical support functions."

  Airbus China launched Enhanced Flight Operations Support service with Spring Airlines in April. Unlike other specific technical training, this program focuses on the operation of an airline's Airbus aircraft fleet safely and more efficiently.

  The program starts with an assessment of the airline's flight operation. The airline management and Airbus experts together define the actions, which need to be taken. In the following two to three years, Airbus experts will stay at the airline to help it implement the new way of working.

  Steffen says another four Chinese airlines, all start-up carriers, are going to sign up for the service.

  "Now due to cost pressure, I believe we will have more success in creating a good response in this service," Steffen says.

  Airbus plans to implement the program to other fast growing markets, such as India, Steffen says.

  The program is part of the Marco Polo Sino-European Aviation Training Solutions initiated by Airbus and a number of European aviation companies. The training content ranges from safety and quality management, aircraft performance engineering, aviation management, flight operation support, and English for aviators to air traffic management and airport operations.