TransDigm’s Profits Are Growing Faster Than Demand for Its Parts

TransDigm Group operates as a holding company with a clear, consistent strategy: acquire businesses that supply proprietary aircraft components with high aftermarket content. TransDigm’s businesses manufacture and sell replacement parts for aircraft, like ignition systems, pumps, actuators, flight controls, and cabin equipment, among other things. Since TransDigm is the only provider of many of their products, the company has significant pricing power. The firm also operates with a high degree of financial leverage to amplify operating results.