Unremitting, above-inflation price rises for OEM-manufactured parts are an unwelcome feature of the aftermarket for airlines and lessors.
Engine components are the among the most severely affected: Life-limited part (LLP) prices for the CF6-80E, for instance, have almost doubled in the past 10 years, according to Engine Lease Finance Corp, while CFM56-7B LLPs are up 85 per cent.
Maintenance companies have responded by increasing the supply of used serviceable material (USM) and DER repairs, with USM estimated to have knocked $200m off new parts sales last year.
The response from engine manufacturers has been to make it more difficult to incorporate alternative parts or repairs, or at least to drive USM sales towards their own operations. Under GE’s TRUEngine program, for instance, LLPs are subject to back-to-birth records audits to ensure they have been maintained to the OEM's specification.
“Usually, lessors will sell an old engine to a breaker for part-out, but if we are unable to satisfy OEM demands to provide certification that no non-OEM part (PMA) or non-OEM repair (DER) has ever been installed in the engine, there may be no value in the part-out,” says Jon Sharp, CEO of ELFC.
The manufacturers defend their pricing policy by arguing that more reliable engines justify the annual increases. The CFM56-7B fleet, for instance, has stayed on wing for about a third longer than expected before hitting its first big wave of overhauls.
“Increases in new material parts cost over time are generally offset by increased engine durability and introduction of new part repairs, resulting in flat engine maintenance-related costs per flight hour,” says Perry Bradley, communications leader at GE Aviation.
Thoughts from all the other big OEMs on their pricing strategies are included in the forthcoming Engine Yearbook, alongside features examining the regulatory response; alternatives to buying new; and the reaction from the leasing community.