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Wednesday, June 1, 2005


Resolving the MRO Versus OEM Avionics Battle

Want to make a group of avionics repair companies angry? Ask how they feel about the current state of avionics repairs. Chances are you'll be rewarded with a litany of complaints against avionics original equipment manufacturers (OEMs); how they are stealing avionics repair work from maintenance, repair, and overhaul companies (MROs) by withholding technical information and support.

It makes sense for the OEMs to grab a share of the MROs' market if they can get it. That is the way business runs. However, the real problem appears to be technological change rather than corporate greed.

The reason? The avionics of yesteryear included many electro-mechanical moving parts whose failures were related to wear and tear, just like the engines and landing gear in use today. However, today's avionics are electronics-based, with non-moving circuit boards and transistors taking the place of cogs and gears. As a result, they're much more akin to computers than clocks and thus much harder for non-OEM technicians to troubleshoot and service.

At least, that's what the OEMs will tell you.

For MROs, a simple case of poaching

In a contentious story like the MRO versus OEM avionics fight, the safest place to start is with well-accepted facts. In this instance, the fact people agree on is that avionics service manuals have become harder to come by if you're an MRO.

"The problem of being unable to get avionics manuals has really become noticeable in the past two to three years," said Tim Fogle, director of technical services for Capital Aviation Instruments & Avionics in Manassas, Virginia. "We find that avionics OEMs stonewall us when we ask for information on the latest components. They don't want to give this information out to us or other MROs. From what I've heard, this is a general trend."

"Rather than release technical information to MROs, many avionics OEMs require us either to swap the component out with another one or send it to them for analysis and repair," added Danny Barnfield, vice president of Air Dallas Instruments in Lewisville, Texas. "When you do this, the turnaround time can take from one to six months before you get the part back!" (One OEM that doesn't cause Barnfield this grief is Astronautics Corporation, because this OEM recently approved Air Dallas Instruments as an authorized service center.)

The level of conflict between MROs and OEMs varies from company to company. To date, the most extreme seems to be the ongoing battle between the U.S.-based Aeronautical Repair Station Association (ARSA) and Germany's Liebherr Aerospace Linderberg (Liebherr), which is now before the FAA.

ARSA charges that by refusing to supply MROs with Airbus-related technical manuals, Liebherr is violating FAA regulation 14 CFR 21.50(b) which says that "the holder of a design approval... shall furnish at least one set of completed Instructions for Continued Airworthiness [ICAW]...and thereafter make those instructions available to any other person required by this chapter to comply with any of the terms of these instructions." When Aviation Maintenance reported on this fight last year, then-Airbus spokesperson David Venz responded by saying Airbus's ICAWs contain "some level of proprietary information. We don't want to get into the business of freely giving that information out."

At press time, ARSA's FAA complaint remained unresolved by the federal agency, despite the published 1999 legal opinion of FAA deputy chief counsel James W. Whitlow that "FAA-certificated repair stations are `other persons'" who are entitled to receive Airbus ICAWs, as specified by FAA regulation 14 CFR 21.50(b). The FAA's delay in addressing this issue incenses ARSA executive director Sarah MacLeod. However, what worries her more is that "the longer it takes the FAA to address this issue, the longer OEMs will have to build more `black box'-style components that can only be repaired at the factory, because MROs won't have the technical knowledge to do so," she said. "This could effectively shut us out of the avionics repair market, even if the FAA chooses to enforce its own regulation and come down on our side."

For OEMs, an issue of quality control

Not surprisingly, OEMs object to the notion that they're withholding technical information in order to cut into the MROs' markets. Instead, they defend their actions on the basis of quality control and aviation safety.

The first issue is complexity: today's avionics are electronics-based devices using miniaturized surface-mounted circuits. As a result, the equipment needed to test and repair them is beyond the budgets of most MROs, said Scott Gunnufson, Rockwell Collins's vice president of business operations. "In the past, it might cost $10,000 for an MRO to buy an avionics test bench," he explained. "For today's all-electronic avionics, an equivalent test bench would run about $3.5 million."

The second issue is MRO training, Gunnufson continued. In the past, electro-mechanical avionics might end up in the shop every 4,000 hours, thus providing MRO technicians many opportunities to become proficient on their upkeep and repair. "Due to the move into electronics, today's avionics are far more robust and reliable, which means they may not have to be removed from service for 36,000 or even 40,000 hours," he said. "Even in an airline that flies 100 aircraft of the same type, the average airline MRO technician may only see a specific avionics component two to three times a year at best. That's not enough times to become familiar with it."

"What's happening to avionics maintenance is what happened to automotive repair years ago," said Adrian Paull, Honeywell's vice president of customer service for the aerospace electronics business. "The newer generation of equipment are so much more reliable that they're simply not needing service that often. In the automotive sector, for instance, a car used to require service at 12,000 miles. Nowadays, new cars can go 18,000 miles before requiring a tuneup."

Beyond the issues of complexity and training is quality control. According to Tim Casey, aviation marketing manager for Garmin, factory repairs substantially reduce the chance of counterfeit parts being unwittingly installed in avionics systems. Add the issues of repair complexity and technician training, and one can understand why Garmin "does not allow component repairs by third parties," he said. "Very few third-party shops are properly set up to test these components, nor to repair them with the degree of precision and accuracy that we require."

"The cost of modern test equipment is so high," Paull said, "that my own department sometimes ends up sharing it with our manufacturing division until a given model's sales are high enough to support buying more, let alone distributing it to field centers."

It is worth noting that some OEMs are supporting MRO-executed avionics repairs. For instance, "when a customer has selected a third-party MRO to perform their avionics work, we simply redirect our technical documentation deliveries from that client to their MRO," said Paull. "Our customers are perfectly entitled to specify third-party MROs if they so choose."

Finding a middle ground

Now that we have seen both sides of this dispute, one has to ask: is there a compromise that can be struck that will serve the OEMs, MROs, and most of all, the aviation industry and its customers?

To answer this question, let's start by summarizing the facts.

On the MRO's side of the dispute, the underlying issue is money: by withholding technical manuals, OEMs are cutting into MROs' bottom lines. Worse yet, by putting MROs into a position where they have to send avionics back to the OEMs for repair, the OEMs are delaying the MROs' turnaround times while pushing up costs as well. Since the MROs' customers bear the brunt of both consequences, one can see why the MROs are not pleased.

On the OEMs' side, it is understandable that they want all avionics repairs to be up to standard. Whether or not the OEMs' contention that most MROs are not up to repairing increasingly-complex avionics components is a matter of opinion. It suffices to say that the OEMs have their doubts, and after all, if an airplane crashes due to an avionics' failure, the OEM who made it risks being sued no matter who last serviced the component.

Finally, the actual factor that is driving this whole debate is technological change. By evolving into all-electronics devices, avionics have moved out of the realm that MROs service, said Gunnufson; namely moving parts that experience wear and tear. Smart MROs recognize this fact, he added: "We've talked to some of the biggest ones, and they've decided that repairing avionics is not part of their long-term strategy. Instead, they're focusing on what they know to be a lucrative source of income, which are moving parts' maintenance, repair, and overhaul." Gunnufson's argument makes sense. However, no MRO is going to abandon the avionics revenue stream without getting something in return. First and foremost is a piece of the action: if OEMs are serious about repairing avionics themselves for quality reasons, then they must ensure that MROs still earn money when they send parts for repair. This means that OEMs must keep repair prices down, and not undercut MROs by dealing directly with MRO customers. If they do, then the MROs' accusations of poaching will be justified.

Second, OEMs must ensure that MROs can get repaired or serviced parts quickly. MROs should not have to inconvenience their customers--and risk losing them--just because an OEM doesn't have their repair process up to speed. For the record, Rockwell Collins's Gunnufson said his company's average turnaround time for repairing avionics components is 3.4 days. Meanwhile, Garmin's Casey said his company "has a 24- to 48-hour turnaround time."

Finally, MROs need to take a hard look at Gunnufson's "moving parts" argument, because it makes sense. However, OEMs shouldn't delude themselves that MROs will withdraw from avionics repair just because the OEMs think they should. Frankly, what's required to end this dispute is a working partnership between both sides, because MROs and OEMs still need each other. -- By James Careless

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