Opinion: Why ‘OEM’ Is A Misleading Term In MRO Regulations

“OEM” means nothing under the civil aviation safety regulations. Maintenance professionals—whether gathering with colleagues at Aviation Week events or poring over this issue of Inside MRO, which highlights powerplant maintenance—need to understand and accept this reality.

A dedicated International Air Transport Association (IATA) advisory group supporting “alternative solutions” to aftermarket constraints was formed last year. To build on the findings of the association’s white paper, “Reviving the Commercial Aircraft Supply Chain,” the group surveyed airlines on “practices and perceptions” of parts manufacturer approvals (PMA).

Nearly three-quarters of the 46 responding airlines confirmed use of PMA parts. The vast majority cited cost and availability as driving factors, and two-fifths indicated better performance from “non-OEM” replacement articles. The most prevalent obstacles to the use of PMA were commercial leasing agreements and OEM contracts.

For more than 40 years, the abbreviation “OEM” has been used in aviation with various meanings, none of which carry any legal or regulatory significance (without context) or provide for a singular definition. In the case of aircraft, many manufacturers contribute to the design and construction of the product, each having some commercial “rights” to aspects of the design or production. Among the myriad manufacturers that contribute to the design and production of an aircraft, which one is the OEM?

To clearly understand how “PMA” and “OEM” are more synonymous than different, one must look at the regulations. Unless producing standard or commercial parts, or if an owner-operator or maintenance provider is fabricating replacement or modification parts for installation, one must be an “approved” design and/or production holder to manufacture products or articles for sale and installation on civil aircraft. The abbreviation given to production approval holders by the civil aviation authorities is “PAH.”

“PMA” is an example of a “PAH,” as the definition of “production approval” in Title 14 of the Code of Federal Regulations, Part 21, points out. The majority of PMAs are issued to an OEM, meaning the production approval holder’s chosen supplier that usually holds “proprietary” rights to the article. Airlines that report contractual prohibitions imposed by OEMs are likely purchasing articles produced under a PMA issued to those same OEMs.

In civil aviation, there are no OEMs, only design and production approval holders; using “OEM” is misleading and can create potential violations by producers. Commercially, the term has little impact without a contractual definition that does not contradict the requirements of the civil aviation authorities for the producer of the article to hold an approval.

Aerospace businesses should consider any single source of replacement and modification articles through their safety management systems and scrutinize opportunities to reduce or mitigate any risks uncovered. IATA is aiming to help the industry find and celebrate alternative parts, repairs and materials that are vital to success as essential material supplies diminish. That success demands embracing the regulatory realities that free us of the burdens imposed by long-accepted, if essentially meaningless, abbreviations.

Sarah MacLeod is a managing member of Obadal, Filler, MacLeod & Klein and a founder and executive director of the Aeronautical Repair Station Association. She has advocated for individuals and companies on international aviation safety law, policy and compliance issues since the 1980s.