Just at a time when there is a prime focus on PMA parts approval by the FAA to lend sanity to parts prices, it seems that there appears to be a quiet effort by at least one engine manufacturer to rein-in the use of PMA (Parts Manufacturing Approval) parts and DER (Designated Engineering Representative) approved repairs in their repaired and overhauled OEM engines. This is of course a relatively small effort considering that the PMA market is projected to reach $750 million by 2017, but maybe that is just the point …
This program, so far, by a single major airline engine manufacturer, provides its own method to identify individual engines that contain only their original new or repaired parts. Obviously, it is attempting to provide a specialized value-added service which it claims can better support its engines which have only factory-provided internal parts. Therefore, it says it is in a far better position to evaluate its own engines’ configuration and content. It also claims it has the technical data to better evaluate the internal condition of its engines that contain its own factory parts.
Well, everybody knows that PMA parts are usually lower in cost than so-called original OEM parts, keeping in mind, of course, that many OEM parts are also manufactured outside of the OEM facility, many times in far removed remote locations, and at lower cost than their domestic OEM produced parts.
How it works
Once the manufacturer signs up the customer for its value-added program, it will simply examine an incoming overhaul candidate and its records to determine if it contains any PMA parts and if so, the price to overhaul the engine (by the OEM) will suddenly rise or it simply rejects the engine for inclusion in its value-added program. The manufacturer will say that the value of the engine however will increase if all the ersatz (PMA) parts are replaced with OEM parts. (What happens to the PMA parts that are removed is of course probably open to price negotiation.)
It claims that the program is especially useful to leasing companies that intend to resell their aircraft when a lease is up. The idea is that the engines with a lot of PMA parts and or components and DER type repairs will be worth less than the engines with all factory original parts and or factory repairs. The factory parts and repairs would be valued at a higher rate than engines that contain PMA parts and thus the planes should bring a higher price on resale by the lessors.
Some have suggested that this type of program and any others that attempt to force a customer to use only OEM parts and repair services, is simply a way to increase revenue. They say that the expected rise in the use of PMA parts is simply being attacked at the factory level in order to protect their market. Of course there are those that argue otherwise and that it is a good program that gives added value to the purchaser. But the question continues to come up … if PMA parts are equal in quality and airworthiness to that of OEM parts (FAA says so ...) then why should engines with PMA parts be treated any differently than engines with OEM repair parts?
And, what about airlines? In many cases they have their own maintenance and repair facilities to take care of their engines. FAA and EASA around the world approve PMA parts and repairs for airlines. Virtually all of the top airlines in the world gladly use PMA parts and DER or their own repair procedures. The savings has to be huge considering the costs of factory parts that we all know about. Even a leasing company has to carefully weigh the costs involved with the purchase, at factory prices, of engines, aircraft parts, and factory repairs. It seems clear that if they are willingly paying the increased costs for engine repairs then somebody is going to pay for it … namely the lessee — user. They may have to think twice about who they are dealing with and attempt to discount any increased leasing fees that are designed to offset increased costs for engine repairs.
FAA establishes legitimacy of PMA parts — Period.
Sponsored jointly by Heico and Chromalloy, the PMA/DER conference hosted about 80 participants, representing all of the major air carriers from China.
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