PMA stands for Parts Manufactural Approval and is a design and production approval for modification and replacement parts. It allows a manufacturer to produce and sell these parts for installation on Type Certificate products. More commonly, PMA parts are an alternative to OEM parts which are generally more expensive.
OEM’s prices increase :
Rising maintenance and repair costs continue to be a reality for aircraft operators worldwide. According to IATA, over the past decade, airlines have experienced an annual increase in the price of spare parts of approximately 3 to 5 percent per year. As a result, today, maintenance materials and parts account for about 4% (or a total of $120 million) of total airline operating costs. Not surprisingly, managing spare parts procurement budgets remains one of the biggest challenges for market players. However, with OEMs gaining a stronger foothold in the aftermarket, is there a way out?
Repair prices in aeronautics :
According to IATA, when it comes to maintenance costs in the aviation industry, purchased parts account for about 30 percent of total costs (most of the rest is labor). This is particularly true in segments such as aircraft engine repair or overhaul services, which account for up to one-third of the total MRO market. For example, in 2004, the cost of a high-pressure turbine (HPT) blade in a CFM56-7 engine was $6600, and in 2014, it increased to $10660 (the cost of a set of 80 HPT blades increased from $528,000 to $852,000, a 61 percent increase). This is a significant cost when talking about parts that are often changed during an engine shop visit.
Entry of PMA in the market :
According to the Modification and Replacement Parts Association (MARPA), historically, OEMs have held a strong monopoly on the sale of replacement parts. This has allowed them to maintain an increase in spare parts prices of about 5% per year. However, a growing reliance on alternatives such as surplus, disassembled parts and PMA products has had a fairly strong effect on the OEM market. As a result, OEMs have been forced to think of new ways to adjust their price lists.
In the aviation industry, maintaining cost efficiency is critical to airline survival. With this in mind, operators are looking for alternatives to OEM parts, which have continued to increase in price. As a result, interest in PMA parts continues to grow. This alternative spare parts supply method allows significant savings on engine repair costs of up to 15%.
It has been proven that in some cases, by tapping into the PMA market, MRO providers can offer much more cost-effective solutions. According to MARPA statistics, using PMA parts can result in savings ranging from 25% to 45% (compared to the option of using OEM parts). Therefore, PMA solutions can help carriers increase their competitiveness in the highly competitive aviation industry. It’s no surprise that over the past decade, the PMA market has gained momentum. Some industry experts estimate that the PMA segment of commercial aircraft will reach a value of approximately $1 billion in the short to medium term. The total share of PMA parts in the market is expected to grow by 5%.
PMA availability and reliability :
The quality and reliability of PMAs is still questioned by some aviation players, yet they are perfectly in line with the OEM’s parts drawings. In practice, it has even happened that at the end of the contract with the main aircraft manufacturer (first-tier OEM), the second- and third-tier OEM chose to apply for a parts manufacturer’s approval and, upon receipt, continued production of certain components (but not under the OEM brand). “OEMs are putting a lot of pressure on PMA manufacturers and aviation authorities, but all market experts agree that it is more about commercial than technical factors,” says Alexey Ivanov.
“We have observed the gradually increasing interest of the industry in alternatives such as PMA parts over the last 10 to 15 years. Today, industry players in Europe account for up to 35% of the overall PMA parts market (almost double the share of 20 years ago), while North America remains the main buyer of these components with a share of about 50%. However, due to the latest developments in the aircraft aftermarket – more surplus materials, spare parts and other relevant options produced by OEMs available than ever before – the PMA industry has found itself in a position where it has to fight even harder for recognition within the global aviation community,” comments Gediminas Ziemelis, chairman of the board of Avia Solutions Group.
“The use of these alternatives requires thorough evaluation and long-term planning. In any case, the MRO industry today offers a variety of spare parts supply options. Each has its own advantages and disadvantages. Unfortunately, not all airlines have the experience and resources to choose the best approach for their fleet and MRO strategy,” concludes Avia Solutions Group’s Chairman of the Board.
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