Airbus MRO Royalty Fees Rescinded.jpg

Airbus Rescinds Controversial Royalty Proposal For MROs

The company withdrew the proposal in an Oct. 30 letter sent to aftermarket providers.

Airbus is backing away from a controversial plan to charge MROs a percentage of their gross invoices, rescinding the proposed mandate a day before the deadline, Aviation Week has learned.

The company withdrew the proposal in an Oct. 30 letter sent to aftermarket providers. Airbus has “decided not to implement the royalty scheme and to reconsider the policy for the usage of Airbus Technical Data for Part 145 related activities,” the letter said.

The issue started when Airbus, seeking to recoup some of its technical data-related expenses and monetize use of its intellectual property (IP), sent a revised General Data Release Agreement, including the royalty-fee, to MRO shops in July. Shops that wanted to keep using Airbus data were to return signed agreements by Oct. 31.

Airbus initially planned to charge a royalty fee of 0.5% on total gross invoices in 2019, retroactive to Aug. 1. Given the short notice, it revised its plan in September, agreeing not to charge in 2019 but implementing a 1.25% fee in 2020—up from the original 1%—1.5% in 2021 and “to be determined” in 2022.

Under the proposal, any repair station that maintain Airbus aircraft for third parties and used Airbus technical data would have been charged the royalties. This would have affected not just the shops but their customers as well, costing industry—and netting Airbus—millions of dollars annually.

The proposal surprised and angered not only MRO providers, but also customers that knew the added fees would likely mean higher costs for them.

MROs were concerned on multiple fronts. They didn’t want to share their invoices with Airbus and were concerned that they would be double-billed for parts and services purchased from Airbus that would then be rolled into the gross total. 

Signing the deal meant seeing their profit margins eroded or angering customers with higher costs. Not signing the agreement would create problems accessing the latest data needed to perform maintenance.

Based on input from industry sources, Aviation Week estimates that each MRO could have been charged $1-4 million annually, depending on the amount and type of Airbus maintenance they perform.

In addition to rattling the industry, the royalty-fee scheme has shed light on the costs of technical data and IP.

Airbus did not disclose how much it spends annually on technical data and IP, but in the Oct. 30 letter it says it “has invested a lot in the recent years to significantly improve and digitize its aircraft technical data.” The letter also says “the protection of IP has also become a key concern for Airbus.”

Airlines and MROs agree that paying to access OEM data is reasonable, but faulted Airbus for the way it handled the issue.

In the Oct. 30 letter, Airbus says it agrees that “communication could have been better prepared,” adding that “we understand that the market considers access to and general usability of Airbus Technical Data as a key differentiating factor for our aircraft.”

Going forward, Airbus states that it wants to protect its investment and IP, and is open to comments from the industry on how to do it in a more acceptable manner.

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