Jim Miccio, the Managing Director of Engineering for the United Services Division of United Airlines, was one of the two keynote speakers at the 2009 Gorham PMA Conference. He explained some of the reasons why United embraces PMA parts.
Miccio explained that that business models are changing, with United opening routes and closing routes to improve profitability. He said that the current environment is one in which costs need to be controlled. “I think this is the new norm – I don’t think we are going to return to a time when costs are going to be able to float; the time when we could allow costs to float because revenues will make up for it are a thing of the past.”
One of the solutions that United is relying on is PMA parts. “PMAs and DER repairs are extremely important tools in the battle against escalating costs,” he explained. United wouldn’t have adopted the use of PMA parts if the parts were not reliable. “An aircraft that is flying is generating revenue, and an aircraft that isn’t flying isn’t generating revenue, so the reliability of the fleet is very important,” he illustrated.
“PMA parts and DER repairs are very important” to the efforts to control cost streams while maintaining United’s high level of safety. In Miccio’s experience, PMA parts are less expensive and their price escalations over time are not as extreme as the escalations of their OEM counterparts. He explained that in some cases, the PMA parts are so good that they are actually challenging the OEM parts for the marketplace. In his view, this sort of competition is good for the industry.
Miccio reported that last year, United saved over 43 million dollars through the use of PMA parts. In 2008, United saved 28.6 million dollars by using engine PMA parts, and 14.8 million dollars by using airframe PMA parts. PMA turn-around-time is another issue that has impressed Miccio. “In many, many, cases, the PMA vendor can deliver faster than the OEM can.”
Miccio noted that leasing companies have been less enthusiastic about PMA parts. Engine leasing companies have ascribed a lower value to an engine with PMA parts in it. But Miccio believes that this practice could change in the future. “As more and more folks are using these PMA parts, perhaps that devaluing is not really warranted; and as a consequence we expect to see the shift toward PMA parts continue.”
United expects to obtain ODA soon, and is considering additional privileges related to PMA approval. Miccio explained that “This doesn’t necessarily mean that United is going to jump into the PMA manufacturing community,” but it does mean that ”it provides an opportunity to partner with you to develop parts that make sense.”
Miccio explained that PMA parts that offer clear reliability enhancements, and PMAs in the avionics world, represent some of the areas of PMA interest for United.
Life-limited parts also represent “the new frontier.” They need to be treated in a different way, to be sure that they meet the regulatory and safety requirements. But as we push these machines farther into the future we are going to be coming up on life limits, so it will be important to assure that our life-limits are appropriate. Miccio explaine dthat this is an area that has to be treated with a lot of delicacy because these parts are unforgiving, and United will not tolerate a lack of safety.