Printed headline: Revenge of the Engine PMA
During the 1992 Los Angeles riots, Rodney King famously pleaded: “Can we all just get along?” Attendees at maintenance, repair and overhaul conferences over the past decade who have observed the lively debates and sparring matches between original equipment manufacturers (OEM) and parts manufacturing approval (PMA) suppliers can surely relate.
PMA parts, or non-OEM-produced parts, have played a vital role in commercial aviation for over half a century. Believe it or not, PMA parts weren’t always as contentious or controversial as they are today. Conflict only began when the OEMs realized that there was greater shareholder value in selling spare parts over the 25+ year life cycle of the aircraft or engine than in the initial equipment sale.
And with this realization came numerous clever (although some would argue strong-arm) OEM strategies and tactics to recapture aftermarket market share—from leveraging their unique position at the point of sale to bundling long-term maintenance contracts to negating warranty and insurance claims if an operator installed non-OEM authorized parts.
However, unlike the ink-jet printer and razor blade companies that long ago figured out that there was more value in the aftermarket, one minor problem existed for aviation OEMs—there was already an established aircraft and engine PMA supplier base.
For background, FAA and European Aviation Safety Agency regulations allow several methods for approving PMA part production:
Identicality: Applicant proves that the PMA part is identical to the original approval holder (OAH) part—typically the OEM.
Identicality by Licensure: Applicant is provided the required data and drawings by the OAH and is subcontracted to produce the part.
Test and Computation: Applicant reverse-engineers the part and demonstrates that the new part meets the fit, form and function of the OEM part.
Historically (when we all got along), the vast majority of PMAs were produced via No. 2—Identicality by Licensure. For various commercial reasons, PMA suppliers were positively viewed as a critical link and often as an OEM partner in the MRO supply chain. Examples include providing spare-parts support for out-of-production aircraft/engines, low-quantity production runs, production capacity surge support, general cost savings and others.
Unfortunately, many of those partnerships were dismantled as the OEMs focused on capturing an ever-increasing share of the lucrative spare-parts market.
And let there be no doubt—over the past decade, OEMs, and engine manufacturers in particular, successfully achieved their market-share growth objectives, nearly decimating the engine PMA part industry.
Fast-forward to today, and industry dynamics are quite different. After years of bankruptcies, restructuring and consolidation, financially anemic airlines have returned to profitability, orders for new aircraft are at historic highs, and MRO shops are approaching full capacity.
Amid all this industry success, a quiet, not-so-perfect storm appears to be brewing in the engine MRO world that has the potential to severely affect airline operations. A confluence of challenging industry dynamics includes the following:
- A majority of global engine MRO shops are at capacity managing scheduled overhauls for mature engines (many engine shops are reportedly refusing to accept additional engines due to an inability to obtain sufficient spare parts).
- Significant “teething pains” for recently delivered new-technology engines consume ever more shop capacity with unscheduled shop visits (e.g., Rolls-Royce Trent 1000 fan blade issues, Pratt & Whitney PW1000G geared turbofan knife-edge seals and cooling issues, and the CFM Leap turbine blade issue).
- An industry shortage of spare engines and piece parts required to meet demand for both new engine production and maintenance shop visits (especially turbine blades).
All of this spells trouble for airlines.
So what’s an engine OEM to do to help their customer airlines to avoid grounding aircraft and canceling flights due to a lack of spare parts?
One potential solution . . . you guessed it—leverage engine PMA!
Engine OEMs could either subcontract spare part production (i.e., identicality by Licensure) and/or allow customer airlines to leverage PMA from their respective MRO suppliers without penalty. After the initial schadenfreude wears off, I’m confident that engine PMA suppliers (and their shareholders) would be more than happy to lend a helping hand.
After all, minimizing airline operational disruptions is clearly in everyone’s best interest.
Jonathan M. Berger is managing director of Alton Aviation Consultancy, a global independent boutique aviation and aerospace advisory firm.
The views expressed are not necessarily shared by Aviation Week.