Two major online exchanges set to transform aerospace

The birth of two new online exchanges marks the aerospace and airline industrys’ commitment to transferring more of business-to-business dealings to the internet.

Exostar.com – developed by four leading aerospace manufacturers, and aeroxchange.com – launched by 13 major airlines, are set to begin trading this year.

BAE Systems, Boeing, Lockheed Martin and Raytheon said that from September, Exostar would begin operations as a neutral marketplace for procurement and collaboration across the aerospace and defence industries.

The four companies decided in principle to launch an exchange in March this year. Now a definitive agreement has been signed, with each founding partner taking an equal stake in the new venture.

This is open to adjustment based on the use that is made by each company of the exchange during its first three years.

The founders have selected Andersen Consulting to develop Exostar, and Kent Swanson – a partner – will become its acting chief executive during launch.

A phased roll-out for Exostar will begin with non-production purchasing. Production-part purchasing, auctions, collaboration services, management tools and financial services will follow as the site develops.

Exostar will be based in Washington DC and will have a `significant presence’ in Europe and Asia, the founders said.

John Weston, chief executive of BAE Systems, said: `We have the critical mass, the global presence and the determination needed for an industry-wide exchange to be successful.’

The launch of Exostar coincided with the announcement of a second important B2B exchange from the airline industry.

Thirteen carriers – including Lufthansa, Air Canada, Cathay Pacific, Japan Airlines and FedEx Express – said their site, Aeroxchange.com, will begin trading within months.

Aeroxchange will be used by the airlines for an estimated $45bn (£30bn) of purchases of products and equipment, not including aircraft and fuel. Its founders claim this makes it the airline industry’s largest B2B e-commerce exchange.

In April, six global carriers, including British Airways, also announced plans to set up their own marketplace.

The launch of Aeroxchange will increase the pressure on independent players hoping for a share of the online B2B action.

www.exostar.com

www.aeroxchange.com

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