Airlines urge more competition on used jet engine parts

• Pratt & Whitney Canada agreed to lift restrictions on used parts supply after European Commission investigation into alleged anti-competitive behavior, making it easier for independent suppliers to access dismantled turboprop engines for parts harvesting
• IATA estimates engine parts and maintenance capacity shortages cost airlines nearly $6 billion in the previous year, with executives predicting issues will take 'a few years' to resolve
• Airlines regularly accuse engine makers of restricting competition and raising prices, while manufacturers argue they need to recoup massive technology investments; IATA now seeks to extend turboprop settlement terms to the larger jet engine markets

Market Summary: Airlines Push for Competition in Used Jet Engine Parts

Key Development:

The International Air Transport Association (IATA), representing 300 airlines, is urging jet engine manufacturers to allow independent suppliers broader access to reconditioned parts markets, following a European settlement in the turboprop sector.

Regulatory Action:

In August, the European Commission closed an anti-competitive investigation into Pratt & Whitney Canada after the company agreed to lift restrictions on used parts for turboprop engines. The settlement allows independent suppliers easier access to dismantled engines for parts harvesting, benefiting ATR and Dash-8 aircraft operators.

Financial Impact:

IATA estimates engine parts and maintenance capacity shortages cost airlines nearly $6 billion in 2023. The industry faces ongoing supply chain challenges stemming from post-COVID labor and parts shortages.

Key Companies:

• RTX (Pratt & Whitney/Pratt & Whitney Canada): Main turboprop engine maker, subject of EU investigation
• CFM International (French-U.S. joint venture): Reached separate agreement with EU on aftermarket competition
• Safran: French engine manufacturer
• Dubai Aerospace Enterprise: Industry participant

Market Outlook:

Industry executives expect engine delays to persist for "a few years," according to Jennifer Moulton of Dubai Aerospace Enterprise. While Pratt & Whitney reported easing maintenance disruption in July, the sector continues facing significant capacity constraints.

Industry Dynamics:

The dispute highlights tension between airlines seeking lower costs through independent repair shops and manufacturers defending their need to recoup R&D investments. Engine makers argue substantial technology and financial risks justify controlled aftermarket participation. Increased used parts availability could reduce demand pressure for new engines, affecting the broader aircraft supply chain.