Those of you who were not able to make it to the 2011 MARPA Conference this week missed a show packed with business opportunities, suggestions concerning new markets, previews of FAA and EASA policies affecting PMAs and market information about the ever-changing PMA market.
The 2011 MARPA keynote speaker was Tony Charaf, President of Delta TechOps. Charaf challenged the PMA industry to continue evolving to meet the changing needs of the airline industry.
Charaf explained that “the world will be inherited by the fasted changing organization.” He explained that today’s business environment requires constant change in order to continue to meet customer expectations.
Charaf explained that the top three expenses for an airline are fuel, labor and maintenance costs. Maintenance is an important cost center when trying to reduce Cost per Available Seat Mile (CASM). Delta TechOps finished the third quarter of this year with $455 million in revenue which means that they are on pace for a record year. Part of TechOps’ success is based on their use of PMAs – Delta TechOps has been using PMAs as a strategy for reducing airline CASM.
Charaf noted that “the OEMs are changing, the world is changing the airlines are changing, cost structures are changing, our business is changing and you’ve got to change as well.” Charaf noted that today, PMAs only reflect about 5% of the market. “We are stuck between you and the OEMs,” he explained.
Charaf warned the group that the “OEMs are squeezing you out.” He explained that the OEMs who control the bulk of the marketplace are able to control prices on a wide range of parts, and a 3-4% reduction on a hundred millions of dollars worth of parts from an OEM may be more valuable than a 40% reduction on a handful of PMA parts. For this reason, PMA manufacturers need to find ways to meet a broad range of air carrier parts needs in order to remain competitive.
He also suggested that PMA manufacturers investigate other systems like IFE.
Charaf pledged to continue working with the PMA industry. “We as an airline will work with you in the segments where PMA parts have merit and we will continue to support you as we have in the past.” He explained that “Delta and Delta Airlines are still very committed to the PMA industry.”