IATA and CFM renew pro-competitive engine maintenance agreement through 2033

The International Air Transport Association (IATA) announced the renewal of an agreement with CFM International (CFM) supporting increased competition in the market for maintenance, repair, and overhaul (MRO) services for the next seven years.

The new contract extends the existing agreement through February 2033, for engines manufactured by CFM – a 50/50 partnership between GE Aerospace and Safran Aircraft Engines. First signed in 2019,  the contract is aimed at improving opportunities for third-party providers of engine parts and MRO services that cover the CFM56 engine family and CFM LEAP engines.

IATA said that the agreement allows airlines and MROs to continue using CFM technical manuals and repair instruction even when non-CFM parts or repairs are used. In addition, the agreement protects warranty coverage by basing decisions on root cause rather than penalizing airlines for using alternative parts or repairs; supports greater maintenance capacity by enabling independent MRO competition; and helps ease supply chain constraints by facilitating third-party parts and repair solutions where appropriate, easing pressure on limited engine and parts availability. The framework also retains the CFM liaison officer and the trustee to address market concerns and find solutions. 

Airlines have long struggled with the aftermarket business practices of manufacturers, which have limited competition and resulted in high costs for airlines. These pressures have become even more acute as limited maintenance capacity and aerospace supply chain constraints have driven up costs and grounded aircraft, said IATA.

The renewal of this agreement is well-timed, said Willie Walsh, IATA’s Director General. “While not a panacea, the practical and pro-competitive aftermarket practices that this agreement obligates are essential for a healthy industry in the long-term. Critically, if used to its full potential, this agreement will also provide much-needed short-term cost and capacity relief for airlines as they work to meet customer demand amid ongoing aerospace supply chain failures,” he stated.

Gaël Méheust, President and CEO of CFM International, said that the extension of the agreement between CFM and IATA reaffirms their commitment to a competitive open aftermarket for CFM products. “Our growing MRO ecosystem includes dozens of third parties that overhaul, repair, and maintain our engines, resulting in lower cost of ownership and maximum choice for our airline customers,” he noted.

As part of the MRO ecosystem for CFM56 engines, close to 40 shops compete for work, with CFM accounting for only about a third of overhauls. “We’re applying the same model to CFM LEAP engines, in which six Premier MRO providers and more than a dozen other licensed shops compete for work,” said Méheust.