Today PMA parts account for approx. 3-4% of the world’s spare parts market. The market share occupied by the providers of such parts has the potential to increase even further should airlines continue the liberalization of their supply chain strategies thus becoming more and more open to available alternatives. 

According to Tadas Goberis, the CEO of AviaAM Leasing, during the last 10-15 years the role of PMA-parts in the aircraft aftermarket has been constantly rising. ‘It is widely believed that the main airlines’ concern regarding PMAs is their safety. But it’s not. First of all, PMA-alternatives are mostly non-critical aircraft parts. Secondly, they are fully certified by FAA and EASA and have a proven history of reliability accumulated through the utilization by major Western carriers. Moreover, the U.S. and European aviation authorities are no longer the only CAAs in the world which approve PMAs, meaning that such parts are steadily moving towards the point of universal acceptance,” commented T. Goberis. 

Today PMA parts are being manufactured for almost every ATA chapter on the aircraft. According to PMA-manufacturers, the use of such parts facilitates up to30-50% cost-savings which can translate in as much as $100.000 per shop visit. Considering the fact that engine maintenance accounts for the majority of all MRO related costs, there is no wonder that today approx. 55% of the entire PMA market accounts for engine-related parts alone.

 

 

The traditional role of leasing companies in the aviation market has always revolved around the financial aspects of aircraft transaction, leaving technical issues to third-party MRO partners. However, following the path of OEMs, aviation leasing companies have also started the penetration of the MRO market. Expected to own over 50% of the world’s fleet in less than ten years’ time, leasing companies are set to stretch their influence over the MRO segment in order to improve the control of their assets. Over the past decade many aviation leasing companies have started to invest into their own MRO capabilities, by either acquiring MRO entities or establishing long-term partnerships thus becoming more enlightened with regard to aircraft maintenance and the supply chain. But even with a wider knowledge and deeper technical understanding of an aircraft, leasing companies are still concerned whether pro-PMA approach might influence the residual value of their assets.

 

 

While evaluating the market price of an asset, the owner considers 4 main factors: market strength of an aircraft type, econometric indeces, technical condition and the age of a particular aircraft. The latter, in the majority of cases, corresponds to 2/3 of the aircraft market value. Thus, from a technical point of view, PMA is not a major factor. 

 

But it is an important issue when it comes to airlines. Carriers around the globe are still rather sceptical about PMAs and DER-repairs, particularly in the emerging markets, where such alternatives are being commonly considered as counterfeit. 

 

One of the reasons for such a conservative perception is the lack of information and general knowledge regarding the alternatives. As a result, the PMA-history of an aircraft may force lessors to provide discounts in order to realize the asset in the market. This leads to the reduction of an aircraft’s residual value and, eventually, to a financial loss. 

 

“Meanwhile, one should bear in mind that PMAs are mostly being utilized on 10+ years’ old aircraft. In many cases this means that PMAs are not the only alternatives to new OEM parts. There is also the growing market of dismantled parts which have less residual value-related risks. In other words, leasing companies will remain reluctant regarding the PMA usage as long as carriers worldwide remain so.  One way or another, the PMA industry should be much more active, persuasive and educative if it is willing to win a bigger share in the market,” concluded the CEO of AviaAM Leasing.