IATA and CFM in engine MRO settlement

The International Air Transport Association (IATA) has entered into a commercial settlement agreement with CFM International that it says will lead to “increased competition in the market for maintenance, repair and overhaul (MRO) services on engines manufactured by CFM.”

“Airlines spend a tremendous amount of money on the maintenance and repair of aircraft and engines to ensure we are always operating to the highest levels of safety and reliability. This milestone agreement with CFM will lead to increased competition among the providers of parts and services related to the servicing of CFM engines. We expect increased competition will reduce airline operating costs and help to keep flying affordable. And we hope that this agreement will be an example for other manufacturers to follow,” said Alexandre de Juniac, IATA’s director general and CEO.

Based on the agreement, IATA has also withdrawn a formal complaint it filed with the Competition Directorate of the European Commission in March 2016.

CFM stated it “reaffirms its commitment to maintain and foster robust and open competition within the MRO market, as well as the competitive nature of its MRO model, which serves as a reference in the jet engine industry and has been a key element in the ongoing success of the CFM product line.”

Under the agreement, CFM International – the 50/50 partnership between GE and Safran Aircraft Engines – has adopted a set of ‘Conduct Policies’ that will enhance the opportunities available to third-party providers of engine parts and MRO services on the CFM56 and the new LEAP series engines.

Among elements of the deal, CFM has 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 by any licensee of the CFM engine shop manual
– Honour warranty coverage of 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

The agreement includes specific provisions ensuring the implementation of CFM’s commitments with regard to CFM56 series engines, which currently power 13,400 single-aisle aircraft. The manufacturer has also committed to apply the agreement to all commercial engines produced by the company, including engines in its new LEAP Series.

GE has also agreed to apply the conduct policies to other commercial aircraft engines that it produces in its own right.

Beneficiaries of the agreement include IATA, CFM’s airline customers, aircraft lessors, third-party MRO facilities and parts manufacturers, says the association.

Gaël Meheust, president and CEO of CFM International, said: “This agreement reflects CFM’s strategy to promote competitive MRO services and its continuous commitment to customer satisfaction.”

Written by: Mark Thomas

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