Marking a PMA Industry Milestone: New CFM Agreement
OEM vs. PMA Background
For decades, OEMs monopolized the replacement parts market with their own product, and dominated that industry as a result. In the early 1990s, PMA usage became more widespread and created unwelcome competition for OEMs. In an effort to counteract the surge in PMA usage, OEMs disparaged the technical aspects of PMA parts through advertising, and implied that using such parts would jeopardize aircraft safety. This tactic was always unjustified, and unfairly cast doubt on product that did not deserve it.
FAA Approval: The Truth about PMA Parts
The FAA thoroughly examined the PMA safety record and concluded, “…the team did not find any substantial evidence of failures or unsafe conditions arising from non-TC/PC holder developed data (Aviation Safety (AVS) Repair, Alteration and Fabrication (RAF) Study published on May 22, 2009). Their report went on to state: “Some TC/PC holders have mis-represented a few random isolated events involving aftermarket parts as implying there is a systemic breakdown in FAA compliance oversight…”
Now that the FAA had provided evidence that PMA parts are indeed safe and do not present technical risk, the OEMs changed their tactics. They began to find ways to make it more difficult for customers to incorporate and maintain PMA parts.
Throughout the industry, customers reported that OEMs prevented OEM authorized shops from installing non-OEM parts and refused to honor warranties when non-OEM parts were installed. They also removed and scraped all non-OEM parts found in engines.
All of these practices are were explicitly anti-competitive. The legality of these tactics is still cause for much concern in both the industry and with regulatory organizations.
Under Pressure, CFM Agrees to Curtail Anti-Competitive Aftermarket Practices
The International Air Transport Association (IATA) filed an unfair competition complaint against CFM with the Competition Directorate of the European Commission (A joint venture between GE and Snecma, CFM is the OEM manufacturer of the CFM56 engine).
Prior to a ruling, CFM entered into a settlement and agreed to:
- License its Engine Shop Manual to an MRO facility even if it uses non-CFM parts
- Permit the use of non-CFM parts or repairs
- Honor warranty coverage of the CFM components and repairs on a CFM engine even when the engine contains non-CFM parts or repairs
- Grant airlines and third-party overhaul facilities the right to use the CFM Engine Shop Manual without a fee
- Sell CFM parts and perform all parts repairs even when non-CFM parts or repairs are present in the engine.
What This Means for PMA
This agreement between IATA and CFM marks a milestone in the progress of PMA and in the industry as a whole. At last, a large OEM engine manufacturer has recognized its own use of unfair restrictive practices and is taking concrete steps to change its anti-competitive policies against the use of PMA. While this agreement is not binding for other companies, it does serve as an example for other manufacturers that continue to embrace anti-competitive practices.
Please take the opportunity to remind your Authorized Maintenance Centers or Designated Overhaul Facilities of this landmark agreement.