Delta TechOps and Chromalloy have teamed up to strike the latest blow against CFM International's aftermarket business for the CFM56 family of engines.
Under a 10-year, $1 billion agreement, Chromalloy and Delta will develop parts manufacturing approval (PMA) alternatives to dozens of CFM56-7 and CFM56-5 engines, including several life-limited parts. PMA alternatives are reverse-engineered and certificated versions of parts sold on the aftermarket by original equipment manufacturers.
Since the engine business traditionally depends on aftermarket sales to offset development costs for new engines, the influx of PMA competitors could be a destabilising force in the engine market.
"This sends a clear message that this business has to be done differently in the future," says Tony Charaf, Delta Air Lines senior vice-president of technical operations.
The deal comes about 18 months after Pratt & Whitney launched a line of PMA alternatives for CFM56-3 parts, of which the first component is already in operation with European carrier Jet2.com. Perhaps more significantly, the agreement boosts the credibility for PMA alternatives, which must achieve wide market acceptance quickly for the business strategy to succeed.
"I think [the Delta/Chromalloy deal] really validates that the industry needs competition in the CFM56 marketplace," says Matthew Bromberg, vice-president and general manager of P&W Global Material Solutions.
"It's good news as far we're concerned," Kate Schaefer, vice-president sales and marketing at Heico Aerospace Parts Group. "First Pratt & Whitney and now Chromalloy, they're all playing in CFM's sandbox."
After Chromalloy and Delta develop the PMA parts, Delta will become the launch customer for the CFM56-7, the exclusive engine for the next-generation Boeing 737. The deal also adds the CFM56-5 to the portfolio of engine overhauls offered by Delta TechOps.
Dr Martin Weinstein, chief executive of Chromalloy parent Sequa, says CFMI's -5 and -7 models have been scrutinised by the company for three years.
"We consider that at this point it is the perfect opportunity to develop further the type of capability that Chromalloy has perfected over the last 35 years," he says.
Weinstein estimates that the agreement with Delta could double the number of PMA parts in circulation worldwide.
One industry source, whose business manufactures PMA parts for Boeing under licence, says: "Heico may well say it's over the Moon, but this not only puts CFM under further pressure, but also a business like Heico, which now really needs to up its game in the high-value end."
Source: Flight International