Aviation Week reported that the FAA is entering the debate about instructions for continued airworthiness (ICA). Specifically the FAA is trying to define what is, and is not, included in the definition of ICA. According to the article, “FAA proposed the policy to clarify its position on the availability of instructions for continued airworthiness (ICA), saying it was not acceptable for manufacturers/design-approval holders (DAHs) to limit the distribution of ICA by placing contractual requirements or adding restrictive language to control the use of the instructions.” The article goes on to say that the FAA’s attempt to clarify ICA has generated a lot of resistance from a number of sources.

At the heart of the problem is Boeing and Airbus (and probably others) who find themselves in a price war, with profits becoming scarce even as they roll out expensive new airplanes. In response, they are trying to generate more revenue by controlling the maintenance, repair and overhaul (MRO) market. Their strategy is based on restricting access to service and parts information, which is considered to be ICA by the airlines, MRO shops and FAA. The OEMs restrict information in two ways: 1) by making ICA available only via their own proprietary software applications; 2) by imposing highly restrictive contract language that limits what airlines can do with ICA. As a result, airlines that purchase the newest breed of aircraft must agree to these terms or they won’t be able to keep those fleets airworthy. (The whole situation is quite ironic because the OEMs have been advertising S1000D data compliance but the purpose of the S1000D standard is data exchange and re-use across multiple software systems. Prohibiting airlines from re-using ICA eliminates the very basis for S1000D.) If they submit to the OEMs' demands, airlines are then forced to learn new software systems and integrate those systems into their own maintenance and engineering (M&E) environments, both of which cost a lot of money. (This assumes the Boeing and Airbus systems work as advertised.)

The reason the FAA is getting involved now is that any restriction on ICA is detrimental to safety—not to mention fair competition. There seems to be a fundamental conflict of interest when the DAH (Boeing, Airbus, et al) has the ability to decide what information qualifies as ICA and what information is proprietary. Any OEM trying to dominate the maintenance business would consider all forms of service and parts information to be proprietary, which is exactly what Boeing and Airbus have done.

Boeing and Airbus' strategy has been emerging for years. It all started with parts, which are typically sold at a big markup (>300% in some industries). To help fight price gouging, the FAA authorized alternate parts (PMA) as a way to lower airline operating costs (and ticket prices) without sacrificing safety. However, that hasn’t stopped the OEMs from (mostly) eliminating PMA through restrictive warranty and lease agreements that prohibit the use of PMA. They now appear to be doing the same thing for maintenance services by controlling ICA and creating restrictive contracts.

This Aviation Week article supports what Enigma has heard from a number of airlines, that Boeing and Airbus are now moving past their (near) monopoly on parts and are starting to dictate which organizations can maintain their products and when the work must be done. The new contract language defines who may access, use and modify the airline’s manuals, bulletins, catalogs, etc. From what we’ve heard, if an airline comes up with new ways of repairing those aircraft then Boeing and Airbus claim to own the new procedures. If this OEM strategy is successful the result will be a complex environment where airlines are responsible for maintaining safe aircraft but Boeing and Airbus will define how much it costs to be “safe.” In other words, airlines will hold all the responsibility and OEMs will hold all the authority.

As described in Aviation Week, the FAA now believes that certain manufacturers have gone too far. FAA Order 8110.54A Chapter 2 Paragraph 3 says, “As stated in paragraph 1 of this chapter, we require DAHs to furnish acceptable ICA to product owners per 14 CFR § 21.50(b). We also require that they make the ICA available to any persons required to comply with the ICA.” That is a clear statement that the people responsible for keeping aircraft flying must be given the information necessary to do their jobs. Since airlines are responsible for airworthiness, how can OEMs restrict critical information? Apparently, Boeing and Airbus are putting their lawyers to work debating the meaning of words like safety, instructions, maintenance, airworthy, etc.

None of this bodes well for airline profits or ticket prices. Monopolies are illegal because they create an unfair business environment. If the OEMs restrict access to ICA then they control the supply chain and can dictate prices. Although we’ve heard that airlines are fighting the Boeing and Airbus strategy, it’s unclear what kind of short-term incentives the OEMs might offer to make the airlines surrender. However, as stated in a previous blog airlines should realize that short-term savings often turn into long-term costs. The OEMs will probably even lean on government politicians to slow down the FAA, but if this isn’t resolved soon only two things are sure: 1) lots of lawyers will get rich; 2) the flying public will get poor.