The commercial agreement between the International Air Transport Association (IATA) and CFM International concerning the OEM’s aftermarket practices takes effect Feb. 28, seven months after it was signed. Expect CFM to issue a communication on Feb. 28.
IATA was primarily concerned that CFM was discriminating against customers who wanted to use non-OEM parts and repairs, including parts manufacturer approval (PMA) part and designated engineering representative (DER). After presenting IATA informational about its technical and commercial support processes related to how it conducts its aftermarket practices, CFM did not have to change many aspects of its policies to satisfy IATA’s concerns about competitiveness, but it did need to spell them out and make them transparent, which is what CFM’s Conduct Policies, published in July 2018, include.
The five major things clarified in the Conduct Policies include:
• CFM waived the fee for purchase license agreements for overhaul shops. Licenses that require technical support still carry a fee.
• CFM’s warranties are based on cause and effect, which hasn’t changed. What changed is if CFM rejects a customer’s warranty claim on an engine that includes a non-OEM part, it will provide an engineering assessment.
• In the past, when a non-OEM part provided introduced a critical influencing part (CIP) that was a life-limited part (LLP), CFM issued a letter to its customers saying it didn’t have information about the part and how it would influence LLPs. CFM agreed to not issue those letters, which it hasn’t done for a while since it started including a list of CIPs in Chapter 5 of its engine manual.
• If CFM inducts an engine and finds a non-OEM part that the customer was not aware of, CFM will remove the part. CFM will propose to replace it with a new or used serviceable OEM part, but if the customer wants to reinstall the part, CFM will reinstall the part only if it is in a serviceable condition as removed, and will be released of legal liability. This surprise situation should be very limited. CFM has not supported PMA parts in the past and this agreement doesn’t change that based on technical concerns.
• A limited number of MROs requested an exclusive contract where they compete all of their purchase volume in return for discounts. As a result of the IATA agreement, these customers with exclusive material contracts have the right to cancel their agreement.
To prepare for this agreement to take effect, CFM and its partners GE and Safran had to formalize some practices to show transparencies and start documenting them. They also trained more than a 1,000 employees for this.
CFM will continue to promote an open, competitive aftermarket and not prohibit PMA or DERs, “but we will continue to explain the differences and compete against it,” says a spokesperson.