MARKET FOCUS.

Exclusive parts-distribution deals with large customers are expected to pay big dividends for aeronautical company Aviall Inc., which racked up 12.4% higher sales in the most recent quarter. The company recently landed a 10-year contract with Honeywell International Inc. for the aftermarket sales and distribution of all of its lighting products for airline and general aviation aircraft. Aviall has a similar agreement with Rolls-Royce PLC, and the Dallas, Texas-based company is continuing to promote such arrangements to other original equipment manufacturers (OEMs) in the industry. JSA Research analysts believe the strategy will lead to more exclusive contracts in the next few years, especially as major airlines restructure. By JSA estimates, Aviall's current parts-distribution infrastructure could support annual sales of about $1.5 billion, compared with the 2004 run-rate of approximately $1 billion, providing further opportunity for accretive distribution deals.