Promoting A Healthy Lifecycle For Engines
It is no great secret that the entities at the center of the air transport industry – the airlines – generally turn in profit margins somewhat lower than companies in the industries which support their operations – manufacturers, airports, IT suppliers and so on.
Low-fare airlines, of course, have a reputation for their low-cost operations. The larger carriers in this category have such a size that they are often able to push suppliers down on the price of products. However, even the full-service carriers which offer high-quality service in their premium cabins also want to ensure that they do not overpay in order to deliver that service.
In the field of aero engines, the OEMs recognize that airlines will always be looking to get the maximum out of their powerplants while keeping costs down. The support packages they present to customers now are wide and varied and extremely valuable to both parties in any deal.
The development of these packages was accelerated in the 1990s, when there was a fear that bogus parts – or parts with bogus documentation – were being put into the market. In addition to that situation, some engine manufacturers looked to muscle in on their competitors’ aftermarket dealings by creating parts for engines which were not part of their own portfolio.
The engines targeted – particularly in the bogus parts scare – were those powering the workhorses of the global fleet, CFM International’s CFM56 and the V2500 from International Aero Engines (IAE) on the Boeing 737 family and the Airbus A320 family. For those who were trying to scam airlines, the most lucrative part of the market was the place to start.
Add in the parts made by a competitor and it is easy to see why any engine manufacturer would want to make it worthwhile for one of its airline customers not to shop elsewhere for their spare parts or, indeed, have their maintenance done except to OEM specifications. This was also aided by the fact that as an engine could move between operators throughout its life – whether with an aircraft or simply via rotation as repairs and/or exchanges were carried out – each different operator was likely to work to a different standard. Thus an engine with a number of non-OEM parts might not be accepted by a number of carriers and its residual value on the market would be diminished.
Airlines, therefore, when considering the cost of an engine throughout its time with them and what value it might have when moved on, began to weigh up the value of using non-OEM parts. Naturally, there were encouraged by the engine manufacturers highlighting the residual value argument and bringing in appropriate programs to back up their case.
First out of the blocks with a solution to counter this situation was CFM with its TRUEngine program. As the engine manufacturer itself points out, this program “was developed in response to a growing industry need to better understand engine material content as assets are operated, evaluated and redistributed. With the TRUEngine designation, industry stakeholders, including potential buyers, lessors or appraisers, know that an engine’s content and maintenance history have been verified by CFM, enabling them to more easily evaluate engine resale value as well as market commonality and acceptance”.
To qualify for TRUEngine status, the maintenance of a CFM engine has to be in accordance with CFM manuals and recommendations, including the life-limited parts (LLPs) used. CFM does not carry out the maintenance itself, but has many authorized service centers around the world. Some of these have investment from CFM’s parent companies GE Aviation and Safran, but the network also involves airline-originated MRO providers such as Air France Industries/KLM Engineering & Maintenance as well as independents such as StandardAero.
Pratt & Whitney later followed suit and incorporates similar use of OEM parts (and their recognition) into its Enginewise suite of MRO solutions. Additionally, the two programs expanded to incorporate the new CFM LEAP and P&W PurePower engine families on the upgraded 737 MAX and A320neo aircraft.
While OEM LLPs are required by these programs, they do not necessarily have to be new. Used Serviceable Material (USM) has a very important role in providing operators with a full range of materials solutions. Moreover, GE Aviation is one of the largest sources of USM for CFM engines, achieving hundreds of millions of dollars in annual USM sales.
According to GE, USM can offer savings as high as 30%-50% depending on the engine model and the phase of life, and is an important element of mid-life and mature fleet solutions. “As part of a customized workscope, USM can help to create economical, tailored solutions that precisely match an airlines’ specific fleet plans,” the company notes.
Whether it be with new parts or USM, aircraft operators are increasingly signing up for these through-life programs and having their engine maintenance managed and carried out accordingly.