Engine spare parts not manufactured by the original equipment manufacturer may become harder to find in the future. While engine OEMs' assertive practices to expand their share of the engine aftermarket plays a big role, leasing companies, which own a growing part of the global fleet, are now playing a more dominant role, too.

This recently came to the forefront when CFM announced that AerSale, CIT, GE Capital Aviation Services and International Lease Finance Corp. signed agreements to include their CFM56s in the TRUEngine program, which is a method to identify individual engines that contain only CFM-approved new or used material.

“Lessors who have joined the CFM TRUEngine program make up approximately 25% of our qualified engines,” says Christina Gromada, TRUEngine program manager. “This number represents a portion of their CFM fleets, and has the opportunity to grow even further as existing unqualified engines get overhauled and records are submitted for qualification,” she adds.

CFM partners GE and Safran say they can better support engines with OEM-only content and repairs because they know the whole engine's content and configuration—their technical data supports these engines with known parts. TRUEngine status also increases the engine's value, they assert. CFM56-3s that contain extensive parts manufacturer approval (PMA) components and designated engineering representative (DER) repairs are worth $400,000 less than an engine that contains all OEM material and qualifies for the TRUEngine program, according to a study that GE commissioned the International Bureau of Aviation to complete.

Leasing companies like the increased asset value as well as the tighter control of their products, which makes it easier to remarket the engines at the end of a lease.

To become one of a growing number of TRUEngines, customers must submit their CFM56 serial numbers, fleet operational and maintenance records to CFM, which evaluates the engine's material content and maintenance history to ensure any repairs and overhauls comply with CFM standards. Engines with PMA parts or DER repairs will not qualify.

Scott Welsh, GE Aviation's materials program leader for strategy, says if a CFM56 contains a non-OEM part or repair, the customer seeking TRUEngine qualification can replace that part with an OEM version, but CFM considers how the part interacts with the whole system, which could require more replacements.

Gromada says operators who have used PMA parts typically do not submit those engines for TRUEngine status. “The configuration is our support model,” she says, because verified content configuration expedites product support.

Although CFM just announced the four leasing company agreements in February, each of the lessors signed stand-alone pacts in 2011—they are not linked. Last year CFM did modify how it calculates the program's benefit of complimentary access to spare engines, which Gromada says is now more appealing to lessors.

Welsh says CFM plans to add one or two other program benefits this year. “We've been engaging with lessors since the beginning to come up with a program that aligned with asset value,” he says, adding that lessors “see incremental value and no downside” to the program.

Some industry executives, however, have mixed reactions. “There is a big fear in the industry that we're going to see aggressive [engine] material escalation going forward, with limited possibilities for discounts,” says Tim Hoyland, an Oliver Wyman partner. Part of the reason is that there are fewer PMA providers of high-tech powerplant parts.

Oliver Wyman plans to release a survey this week that shows respondents expect to use 56% fewer high-tech PMA parts this year versus in 2011, and 48% fewer parts over the next three years, says Hoyland. This compares to respondents anticipating a 27% reduction in low-technology PMA parts this year compared to last, and a 25% notional drop over the next three years.

Contributing factors on the high-tech side could be OEMs signing longer-term maintenance, repair and overhaul agreements with airlines, programs such as TRUEngine that prohibit PMA parts, and MROs that cannot use PMAs because they are licensed OEM service providers. These factors do “not bode well for the overall growth of the PMA market,” says David Marcontell, TeamSAI president and CEO.

CFM argues that it provides a total value—including new part warranties, repairs and overhauls—“whereas individual PMA providers or DER providers only have that part to play with,” says Brian Ovington, GE Aviation's director of marketing services.