The major opportunities for airlines to improve the timeliness, cost and quality of part procurement lie in the surplus market for aging fleets, partnership pooling of components and use of PMAs, according to SAS contract head Annika Dalsvall and supply chain manager Peter Berg.
SAS is seeing a trend toward a more monopolistic market as major OEMs incorporate suppliers into their organizations or allow only selected suppliers or repair facilities to be used, especially in engine, interior and tool markets. Berg point to Safran and UTC examples. “It prevents carriers from using other suppliers, providers and MROs and increases operational and business risks when we have only a single source option and big providers do not perform as expected.”
The SAS managers foresee a larger role for surplus materials to reduce lifecycle cost on aircraft planned for phase-out. “The market for surplus material has expanded rapidly during past years and will also be utilized in a broader scope for replacing Beyond Economical Repairs, instead of being charged full Component List Prices to replace a unit in a pool agreement,” Berg predicts.
Dalsvall and Berg also expect PMAs to challenge OEMs with competing customer support, lead times, pricing, better reliability and more flexible agreements. “PMAs are an important alternative for sourcing when an OEM is unable to deliver within required timeframe. We believe PMAs will play an even bigger role in the future not only for carriers within EU, but also Asia in particular.”
The biggest hurdle for wider PMA use is restrictions in agreements with the lessors. “We have seen some openings from engine OEMs concerning installation of PMAs, but today we see hardly any benefits from that due to strict regulations in sale-leaseback transactions with lessors.”
The SAS execs argue that regulators can help airlines breach monopolies in some portions of the market when other suppliers are available. They hope the EU will become more active in using existing anti-monopoly and pro-competition laws.