IATA withdraws complaint against CFM International
The International Air Transport Association (IATA) dropped a formal complaint to the European Commission against CFM International following a new agreement between the two parties. Signed on July 31, 2018, the agreement is aimed to increase competition among MRO service providers of CFM engines.
Under the agreement, CFM adopts a set of "Conduct Policies" expanding “opportunities available” to third-party providers of engine parts and MRO services on the CFM56 and the new LEAP series engines. The company also agrees to:
· License its Engine Shop Manual to an MRO facility even if it uses non-CFM parts
· Permit the use of non-CFM parts or repairs by any licensee of the CFM Engine Shop Manual
· Honor warranty coverage of the CFM components and repairs on a CFM engine even when the engine contains non-CFM parts or repairs
· Grant airlines and third-party overhaul facilities the right to use the CFM Engine Shop Manual for without a fee
· Sell CFM parts and perform all parts repairs even when non-CFM parts or repairs are present in the engine
In general, the agreement is to “lead to increased competition among the providers of parts and services related to the servicing of CFM engines,” according to Alexandre de Juniac, IATA’s Director General and CEO as noted in a statement. “We expect increased competition will reduce airline operating costs and help to keep flying affordable. And we hope that this agreement will be an example for other manufacturers to follow".
It includes special provisions of “implementation of commitments” regarding CFM56 series engines that power some 13,400 single-aisle aircraft. CFM has, however, committed to apply the agreement to all of its commercial engines, including LEAP Series. GE, moreover, has agreed to apply the Conduct Policies to other commercial aircraft engines that it produces in its own right.
“CFM International support and service network already relies both on internal and third party maintenance workshop," said Charles Soret, Safran press officer to AeroTime via phone. "This agreement reaffirms our policy of transparence regarding MRO practices. CFM International is the first original equipment makers of the aviation market to sign such an agreement with IATA, and the first against which the complaint was withdrawn. We can expect more to follow the same path in the coming months.”
Based on the agreement, IATA has withdrawn a formal complaint filed with the Competition Directorate of the European Commission (DG-COMP) in March 2016. In 2015, DG-COMP sent questionnaires to several industry stakeholders, including IATA member airlines, requesting information to validate claims of abuses of dominant positions by original equipment makers (OEMs) with respect to their control of aftermarket repairs, including parts and services.
CFM International is a 50/50 partnership between GE and Safran Aircraft Engines, which produces two engines, the CFM56 and the LEAP.
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