Pratt & Whitney enters market for PMA parts

 - September 19, 2006, 8:16 AM

Pratt & Whitney took the aviation world by surprise when it announced in February the launch of a new division to manufacture PMA replacement parts for CFM56-3 engines. The CFM56, one of the most popular turbofans, is made by CFM International, a joint venture between France’s Snecma and General Electric.

PMA parts are FAA-approved parts made under Parts Manufacturer Approval regulations in FAR 21, and they are usually manufactured by entities other than the OEM. For many years, OEMs such as Pratt & Whitney and General Electric have publicly criticized PMA parts as not being manufactured to the same testing and quality standards as OEM parts, and until now, no major OEM has gone into the business of replicating its competitors’ parts.

Pratt & Whitney earns 60 percent of its commercial engine revenue from its services business, which includes engine overhaul and repair, according to Matthew Bromberg, vice president and general manager of the new Global Material Solutions division that will manufacture the CFM56 parts. And some of that revenue comes from CFM56 repair and overhaul, which Pratt & Whitney has been providing for many years following purchase of some independent overhaul companies.

“A lot of customers have asked us for this,” said Bromberg. “There is a strong demand for lower-cost maintenance solutions, and we’ve done a significant job of [expanding] our capability on the CFM56.” United Airlines is the launch customer for Global Material Solutions.

Another important reason for the PMA move, he added, “is that we need to look long term at our strategic position.” It’s no secret that Pratt & Whitney has not enjoyed the greatest success in new engine sales. “We need to create relationships for future engine purchases,” he explained. “There are many operators that operate the CFM56 exclusively, and we want to be able to sell engines to them. That’s the hope.”

Life-limited Parts

At Pratt & Whitney, the move to enter the CFM56 PMA market began more than two years ago, according to Bromberg. Customers encouraged Pratt & Whitney to figure out how to lower costs on CFM56 overhauls, due to the enormous financial pressure on the airline industry. While the Pratt & Whitney overhaul shops were repairing CFM parts, Bromberg said, “We were not offering full competition on everything that [customers] wanted.”

Another unusual aspect of Pratt & Whitney’s move into the PMA business is that it is targeting FAA approval of life-limited critical parts, something that the PMA industry has avoided because of safety and liability concerns and lack of FAA guidance. Global Material Solutions plans to offer PMA replacement critical parts such as CFM56-3 disks, shafts and spools as well as non-critical vanes, blades and seals.

“We’re working with the FAA,” Bromberg said. The plan is to show FAA certification experts that Pratt & Whitney’s experience in manufacturing critical parts for its own engines will persuade the FAA that Pratt knows what it is doing. Pratt & Whitney believes that its engineering and testing capability is superior to the capabilities of PMA manufacturers, but PMA manufacturers dispute that contention.

Pratt & Whitney doesn’t offer maintenance services for the General Electric CF34 engine that powers regional and business jets, so it doesn’t plan to manufacture those parts. But sister company Pratt & Whitney Canada could use its manufacturing and repair and overhaul capability for possible PMA opportunities, according to Bromberg. “We’re all part of the same company,” he said. “We’ll look at opportunities where we can provide alternatives and coordinate that with Pratt & Whitney Canada.”

Pratt & Whitney isn’t the first to market with CFM PMA parts. PMA companies such as Heico Aerospace and Belac have been targeting the CFM56 for years, and Belac even PMA’d a line of CFM56 turbine blades (which by FAA definition are not critical parts).

“Several companies are already authorized to provide CFM56-3 parts,” agreed a General Electric spokesman. “The CFM56 engine [series] has the largest and fastest-growing installed base in the industry and is understandably attractive to PMA providers.”

GE doesn’t plan to try to ask the FAA to block Pratt & Whitney’s plans, according to the spokesman, who added, “We will continue to compete intensely using the value of CFM parts and repairs packaged into competitive service offerings.”

Pratt & Whitney’s official entry into the PMA parts market “legitimizes PMAs much, much more,” said Russell Adamson, president of PMA manufacturer Wencor. “The value of our company probably went up after that announcement. It demonstrates how left out of the market Pratt was not to pursue an engine to compete with the CFM56 platform. They realized they were getting way behind and felt they had to do something.”

PMA manufacturer Heico, which sells a large variety of CFM56 parts, sees nothing but good coming from Pratt & Whitney’s PMA plans. “The way we look at it, Pratt has validated Heico’s business model,” said president and CEO Eric Mendelson. “We’re proud that they’ve come into the replacement-parts business.”

Mendelson isn’t worried about competition from Pratt & Whitney’s life-limited PMA parts. “Their life-limited parts are complementary to the Heico product in that if a customer decides that it wants to move away from the OEM, it now has a bigger basket to choose from. So we applaud Pratt’s bold move and believe it will save the airlines a lot of money.”