Air France-KLM resists the OEMs again

GE has beaten Rolls-Royce in the race to power 25 Air France-KLM 787s, plus another 12 the airline will lease from ILFC.

Yet GE, like its British rival, failed to force Air France-KLM into one of the full-service maintenance support contracts that characterise the majority of widebody engine sales nowadays.

Instead, Air France-KLM has won the right to overhaul the GEnx-1B engines itself and to offer such services to other customers, although GE did manage to secure a comprehensive material support mandate that strengthens its control in the lucrative parts market.

Although few airlines today win aftermarket concessions from the engine OEMs, Air France-KLM has history keeping work in-house at its MRO arm, AFI KLM E&M.

This includes a two-year tussle with Rolls-Royce over the support of the Trent XWB engines to power 25 A350-900s.

The aircraft order was only signed in 2013 after Rolls agreed to an MoU stating that AFI KLM E&M “intends to be on the market for the maintenance of these engines [Trent XWBs]”.

In that case, Rolls-Royce probably felt it could play hardball as it was the sole engine supplier on the A350, but such tactics may have backfired when it came to a choice of manufacturers on the 787.

That is speculation, though, and Air France-KLM’s choice may well have been determined by its expertise and experience servicing the GE90, the engine on which much of the GEnx’s architecture is based.

Whatever the reason, the contract is to be celebrated for retaining a degree of diversity in the modern engine aftermarket, where OEM-led consolidation in the past 20 years has hit the number of independent maintenance providers.

Airframe maintenance, in contrast, is a wildly fragmented market where no supplier has more than a six per cent share.

“In the airframe sector, consolidation needs to happen but progress will be slow because hangar mania is alive and well, and hangars rarely die. Rather than consolidate, competitors will wait for a supplier to fail before picking them up for pennies on the dollar,” David Stewart, VP and global head of aerospace and MRO at aviation consultancy ICF SH&E, recently told Aircraft Technology Engineering & Maintenance.

To find out more about consolidation in the MRO sector please see the forthcoming issue (No. 129) of ATE&M.

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