The IP Debate Behind Airbus’ Royalty Fee Proposal

Although Airbus has withdrawn its proposed royalty fees on MRO invoices, the issue of how OEMs will protect their IP is far from resolved.

Printed headline: Data Usage and IP

The controversy over the royalty fees that Airbus was planning to impose on MRO invoices—then rescinded at the last moment via letter—highlights some key issues about data rights and usage and intellectual property (IP).

At the heart of the matter, Airbus wanted to be fairly compensated for its investment in improving and digitizing its aircraft technical data—and to protect its intellectual property.

As Airbus’ Oct. 30 letter withdrawing its July royalty fee proposal states, “an important part of our IP is incorporated within Airbus technical data,” so it wanted “to better control access to and usage of this technical data.”

This relates to questions of data ownership, which comes up at nearly every data-related conference session I’ve attended over the last few years. Given that data is viewed as a new currency, it’s easy to understand why people want to protect it.

The simplest way to look at data ownership is that those who generate the data own it—meaning that OEMs, airlines and MROs all control pieces.

How these players share, interact and aggregate data to derive value from it is the key point. Great operational improvements are happening because of data analytics—and that’s only going to increase as more information is digitized and people find new ways to glean value from it.

For example, Delta Air Lines has an internal analytics team that has achieved a 95% accuracy rate on its predictive maintenance calls, says Don Mitacek, the airline’s senior vice president for technical operations. This helped to prevent 2,000 delays in 2018.

Despite its internal success, Delta announced in October that it is forming a “digital alliance” with Airbus to provide predictive maintenance for mixed fleets of aircraft. The portal, called Predictive Maintenance Services, is designed to provide predictive maintenance for airframe, component and engine MRO—and allow customers to work in a more integrated way with Skywise starting in the first quarter of 2020.

While dozens of airlines fiercely opposed Airbus’ proposed royalties on MRO invoices for multiple reasons, including the increased MRO costs that would have resulted, the quest for deeper analytics obviously continues. Just look at the number of airlines that have signed up for Skywise services— now at about 100--—and did so even during the royalty fee debate.

Aviation Week’s Commercial Fleet & MRO Forecast predicts aircraft OEMs will deliver 2,420 new aircraft in 2020, which will bring the global commercial aviation fleet to 33,900 by the end of next year—meaning that the global fleet will be generating even more data to harness.

Airbus admits that it mishandled communications about its new General Data Release Agreement for MROs, which it rescinded, and is open to proposals from the industry about how to protect its IP fairly while providing the industry with what it needs to maintain aircraft.

Stay tuned.

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