Replacement parts manufacturer Heico Aerospace has signed a deal with United Airlines expected to be worth $100-150 million over the next seven years. United joins American Airlines and Lufthansa as a major customer for lower-cost airframe and engine parts designed by Heico to replace components supplied by the original equipment manufacturer (OEM).
Heico says the United deal will accelerate efforts under way to gain US Federal Aviation Administration parts manufacturer approval (PMA) for additional airframe and engine components. United has agreed to purchase these parts, plus most of Heico's FAA-approved product line, under the new "strategic relationship" agreement.
American and Lufthansa are shareholders in Heico and are helping the company develop replacement parts.
The Hollywood, Florida-based company's efforts to develop lower-cost replacement parts have drawn the ire of the OEMs, particularly engine manufacturers General Electric and Pratt & Whitney, which rely heavily on spares sales for revenues. Airlines have been slow to adopt PMA parts, but the United deal is a sign that the reluctance may be fading in the face of cost pressures. Heico says airlines can save up to 25% with its parts.
Heico's revenues have been hit by the airline recession, but sales are showing recovery, it says, increasing 14% in the second quarter over the first. Despite this, sales at Heico's Flight Support Group were down 11% to $57.4 million for the first six months.
Source: Flight International