How Big is the US Aircraft Parts Distribution Industry?

February 16, 2020 by Leave a comment

How big is the US aircraft parts distribution industry? It is difficult to get a perfectly accurate number, but we can use US Census Bureau data to approximate the size.

The Census Bureau tracks industries under the North American Industry Classification System. This is abbreviated “NAICS” and people often refer to NAICS Codes as the codes by which the Census Bureau tracks industries.

The NAICS code for aircraft parts distributors is 423860. This code also includes commercial vessels, golf carts, railroad cars, and military vehicles so it is a little broader than just aircraft parts distributors, but it would also exclude those businesses who identify under another NAICS code, like repair stations, air carriers or manufacturers (but manufacturers’ parts distributors are counted under this NAICS code, when they are separately reported). If we assume that these two groups cancel each other out (the extra industries under 423860 and the companies that distribute parts but are classified under other NAICS Codes) then we can assume that 423860 probably represents a good proxy for the size for the aircraft parts distribution industry.

Note that this NAICS-based vision of the industry will include both commercial aviation and general aviation.

The Census Bureau maintains statistics for NAICS code 423860.  The Census Bureau 2017 statistics for NAICS code 423860 show a total of 2139 businesses, with annual sales of 49 billion dollars. Those businesses employ over 37,000 employees with an annual payroll of 2.5 billion dollars.  The 2017 statistics for NAICS code 423860 are the most recent that are currently available to the public.

Census maintains Statistics on US Businesses (SUSB).  These are currently available through 2016.  If we examine the 2016 SUSB data, then we can identify industry business sizes, as well.  2016 SUSB data showed 2158 businesses under NAICS code 423860, distributed according to the following table:

Firm Size by number of employees Number of firms Number of employees Annual Payroll
0-4 1,108 2,054 136359
5-9 370 2,500 173010
10-19 267 3,591 248557
20-99 280 10,548 708603
100-499 58 5,744 427769
500+ 75 12,246 974444

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Aviation Industry NAICS and SIC Codes

May 10, 2015 by 1 Comment

We frequently get calls from companies that need help identifying the right NAICS code that applies to their business.  We have taken some typical business activities performed by ASA members and captured their NAICS and SIC codes in the table below.

Typically, a NAICS code is assigned based on the primary business activity of the enterprise.  Sometimes, identifying the primary business activity of an enterprise can be difficult if it engages in multiple business activities.  Ideally, the primary business activity is identified by the relative share of capital investment, but in practice, other variables, such as revenue, value of shipments, or employment, are used as proxies to identify the primary business activity.  The Census Bureau generally uses revenue to determine an establishment’s primary business activity.

We have also included the 1987 SIC codes.  Even though the NAICS codes replaced the SIC codes in 1997, some agencies and programs still rely on (or ask for) SIC codes.

Aircraft and Aircraft Parts Business Classification Codes

Business Activity NAICS (2012) SIC (1987)
Aircraft Parts Distribution 423860 5088
Aircraft Sales 441228 5088
Commercial Aircraft Leasing 532411 7359
Repair Station 488190 4581
Aircraft Upholstery Repair 811420 4581
Aircraft Rebuilding 336411 3721
Aircraft Engine Rebuilding 336412 3724
Aircraft Storage at Airports 488119 4581
Engineering Research and Development on Aircraft Parts
on a Contract or Fee Basis (e.g. DER Services)		 541712 8731

Aircraft Disassembly

Increasingly, we are seeing members of the ASA community that are disassembling aircraft for parts.  The precise NAICS and SIC for disassembly may vary depending on the business’ primary business activity.  In many cases, it appears that NAICS 488190 (Other Support Activities for Air Transportation) is the best NAICS for aircraft disassembly when the purpose is to recover parts, and NAICS 423930 (Recyclable Material Merchant Wholesalers) is the best NAICS for aircraft disassembly when the purpose is to recover the scrap metal or other materials (this NAICS includes breaking up vehicles for scrap); but NAICS 488119 (Other Airport Operations) may also be appropriate in some cases (especially for a business that focuses on parking of aircraft).

A business that sorts and recycles aircraft materials may also be considered a non-hazardous waste treatment facility under NAICS 562219.

If you need to identify a SIC code for aircraft disassemblers who disassemble on a contract basis to reclaim parts, then it is likely to fall within the scope of SIC 4581, which encompassed both MRO activities and airport operations.  Aircraft recyclers that break up aircraft and sort the materials (without reclaiming parts) would fall within SIC 5093 – but this SIC specifically stated that dismantling for parts was considered to be a distribution activity.  So aircraft disassemblers who disassemble aircraft in order to sell the used parts for their own account would likely fall into SIC 5088 (distribution).

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