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The MARPA Report: PMA Makes Great Strides for an Industry in Need |
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This report is reprinted courtesy of Aviation Maintenance, originally appearing on the Aviation Today web site, www.aviationtoday.com, Tuesday January 1, 2008. There’s no such thing as something for nothing. But sometimes, you can get more than you ever expected out of a bargain. PMA parts are a great example. They are generally much less expensive than parts sold by the original equipment manufacturers (OEMs). There are a number of reasons for this. Sometimes, the PMA holder is also the real supplier to the OEM, and therefore the so-called OEM’s pricing represents a mark-up from the price offered by the actual producer of the part. Another reason is because of the business model used by many engine manufacturers, who will sell an engine to an air carrier for less than its market value with the expectation of making an inflated profit from the aftermarket parts. PMA parts can be sold at a more commercially reasonable price and drastically undercut the super-inflated prices of the OEMs. Sometimes, the fact that PMA parts are designed and approved later than the OEM parts means that they are able to take advantage of new manufacturing techniques that were not available to the OEM, which can lead to lower manufacturing costs and tighter manufacturing tolerances for PMA parts. We are facing an opportune moment in the history of PMAs. For years, the large engine manufacturers criticized PMA parts; and for years, we answered criticisms about PMA parts with basic education. Now, GE has purchased a new subsidiary that holds PMAs (and GE has had a number of PMAs reissued in its own name); and Pratt & Whitney has applied for PMAs on parts for CFM-56 engines. The greatest opponents of PMA have jumped on the bandwagon. The PMA industry is facing a level of acceptance that we could only dream about 10 years ago when the association was founded. There’s no such thing as something for nothing. But, people are recognizing that you can get a great deal on PMA parts. |
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A Manufacturer’s Viewpoint As a company that has long been an OEM of electrical wiring harnesses, ignition leads and conduit assemblies to Prime STC Holders, Co-Operative Industries is acutely aware of PMA alternatives and their benefits. From a customer’s perspective the cost benefits, improved reliability, and responsive deliveries of PMAs have made them an attractive alternative in today’s market place (considering, that in the past customers had been reluctant to accept them due to the history of some PMAs). From an OEM perspective, it is frustrating to supply product to an STC Holder at drastically reduced margins, only to then see them control the aftermarket at obscene margins. This practice puts both the customer and the OEM at a disadvantage. Our philosophy at Co-Operative Industries has always been to supply the end-user with a quality product at the right price. For this reason, Co-Operative Industries has been a long time supporter of PMAs. As an OEM ourselves, we recognize the potential of other companies targeting our products with PMA alternatives. That being said, we are keenly aware of the fact that a manufacturer’s product quality must remain at an extremely high level and that PMA of one’s own product should be pursued at the earliest convenience. In addition to the key points made in the accompanying article, building solid customer relationships has also contributed to PMA acceptance. OEMs of good standing with a customer may be approached for a solution to a competitors’ troublesome product. Because of the favorable relationship, the customer knows they will receive a reliable and reasonably priced quality replacement from someone they trust. It is important to point out that the supplier must understand that it is the quality of their replacement product, and attention to customer needs, that secures the business opportunity. The negative stigma associated with PMAs in the early 1990’s has passed. Thanks to more stringent approval requirements, less-than-reputable companies building PMA parts with ‘bogus’ materials have been replaced with legitimate organizations capable of supplying quality products. I believe the acceptance of PMA parts can only mean good things for the industry as a whole. To remain competitive, and retain customer trust, companies will need to pay close attention to product quality and customer service in order to maintain a strategic business advantage. |
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MARPA has always been focused on education, whether it was informing parts installers about the benefits of PMA or keeping PMA holders abreast of the latest regulatory changes. MARPA hosts an annual meeting each year. At the annual meeting, we package the information that PMA parts manufacturers need to know in order to remain competitive in the coming year. This includes market analysis to help identify new opportunities, safety programs to help improve the already exceptional safety record enjoyed by PMAs, and regulatory discussions aimed at keeping our members compliant with an ever-changing body of law of the United States and of other nations where PMA parts are sold. We have appreciated the exceptional support provided to us by the FAA, as they have joined us in the past to discuss both their ongoing programs affecting manufacturing approval and also their impending programs. In return, MARPA’s members have actively sought to support the FAA by providing input and assistance in the development of policies affecting the industry. The annual meeting has also become a venue at which air carriers meet with PMA manufacturers in a relaxed environment to discuss the ways that PMA manufacturers can help them increase safety and reliability while reducing costs for replacement parts. What else does MARPA plan for 2008? We are investigating a deal that would bring reduced rates for product liability insurance to our members. We will also be working with the FAA and with the industry to help our members develop continued operational safety programs. With the growing acceptance of PMA outside the United States, we also hope to develop some tools to assist our members in exporting parts in compliance with the export laws and regulations. There’s no such thing as something for nothing. But with the help of our members, MARPA is trying to make sure that each association member recognizes value from the association’s efforts. Jason Dickstein
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