China's - Orient Aviation

SPECIAL REPORTMaintenance, Repair and OverhaulIt’s more a drip, drip than a flood, butas the industry continues to drivedown costs, PMA providers areseeing growing acceptance in theAsia-Pacific of replacement partsthat undercut OEM prices.Industry leader, HEICO, says regionalsales are increasing by 17% a year andhopes a recent breakthrough deal withBritish Airways (BA) will be mirrored inthe region.Rival Wencor now has a workingpartnership up and running with GarudaIndonesia. And Pratt & Whitney (P&W)is set to announce a China customer for itsambitious CFM56-3 engine maintenanceprogramme under which its makes andsupplies parts normally sourced fromCFM manufacturers, Snecma and GeneralElectric.Frost & Sullivan analyst, DiogenisPapiomytis, author of a report on PMAmarket potential, says significant growth ispossible in Asia, which currently accountsfor some 15% of sales worldwide. Butregulatory issues need further attention.Aircraft imported already fitted withsuch components pose no problem. ButPMAs – the acronym stands for “partsmanufacturer approval” gained underFederal Aviation Administration (FAA)auspices – require individual clearance ifthey are fitted in the region.“At this point there is no clear policyby any state in the region ... PMAs arereviewed by the local aviation authoritieson a case by case basis, meaning it takeslonger for them to be certified. Thebureaucracy may be a restricting factorfor most airlines,” said Papiomytis.HEICO’s director for Asia, Joe DePaoli,doesn’t agree. That problem is not uniqueto the Asia-Pacific, he argued. “Even inthe U.S. most customers approve partson a case by case basis,” he said. “Yes,this process may take some time, but thebenefits greatly outweigh the associatedcost.”His company helps customers with thisand also works to find ways to fit PMAs intoan airline’s current spares system.The general message has been accepted,however. “The current obstacle to thegreater expansion of PMAs in the regionhas more to do with actual implementationthan philosophical mindset changes,” saidDePaoli.U.S.-based HEICO, which includesLufthansa among its shareholders, recently50 ORIENT AVIATION NOVEMBER 2007PMAs findingmore favourin Asia-Pacificsigned a deal with BA that involves extensiveuse of non-critical engine and aircraftcomponents by the carrier. The move couldlead to massive savings, said BA.Under the deal, HEICO will manage analternative parts programme on BA’s behalf.It will supply many of its own components,but will also find, audit and monitor othersfrom elsewhere.‘The current obstacle to thegreater expansion of PMAs inthe region has more to do withimplementation than philosophicalmindset changes’Joe DePaoliDirector for AsiaHEICO“It’s very comprehensive and couldbe an excellent way for customers in theAsia-Pacific – particularly those airlineswithout an existing programme – to gainthe benefits of PMAs in an expedited andorderly fashion,” said DePaoli.HEICO is either selling to, or is in closecontact with, most of the region’s majorairlines and DePaoli believes prospects inthe Asia-Pacific are good. The company hasan agreement with China Aviation SuppliesImport and Export Group Corporation(CASGC) to promote its parts in themainland market.P&W meanwhile will soon announcea “major”, but as yet unnamed, Chinesecarrier as a customer for its Global MaterialSolution (GMS) programme, which caused astir when it was launched last year. The giantengine maker offers to supply parts for theubiquitous CFM56-3 engine previouslyprovided by the OEM, the rival Snecma-GE partnership.Last year, P&W signed a 15-year jointventure with China Eastern Airlines foran engine overhaul facility in Shanghai,which will open in 2008 and concentrateon CFM56 repair.United Airlines is the launch customerfor the GMS programme, which will befully operational in a year and containsoptions for full-service agreements.British low-cost carrier, Jet2.com,which operates 30 B737s, has joined theprogramme.Matthew Bromberg, GMS vicepresident,sees a Chinese customerproviding the final piece of P&W’s initialstrategy of securing one customer each inNorth America, Europe and China, hometo 70% of the installed CFM56-3 enginebase and areas where initial regulatoryclearance can clear the way for othercustomers. There are 1,200 of the enginetype in operation in China alone.“When we launched the business therewere many sceptics who said you won’tbe able to find a good customer in Chinabecause of the reluctance [to accept] PMAsor alternative materials,” said Bromberg.“To the contrary. They study otherairlines around the world. They recognisethat if this is an accepted way to reducemaintenance costs, it’s a solution that mustbe evaluated.”P&W wants the same geographic spreadwith its first MRO customers and is talking