IATA files complaint with EC on OEM aftermarket control

IATA has filed a formal complaint with the European Commission (EC) on behalf of its airline members that the association says has “deep concern” about the control of OEMs over aftermarket repairs, parts and services.

In a statement released Wednesday, IATA confirms it is a complainant in an investigation being conducted by the EC’s Directorate General for Competition (DG-COMP) into alleged abuses of dominant positions by manufacturers of aviation equipment.

“This is an area of deep concern for our members. There are relatively few equipment vendors and our members are frustrated that there is little flexibility in negotiations for aftermarket services. Airlines do not have the leverage to resolve these concerns individually. So IATA is fulfilling its role as their global trade association and representing their interests as a complainant,” IATA DG and CEO Tony Tyler said in the statement.

IATA is making no claims for monetary damages or any other forms of compensation for past conduct.

“Our focus is on the future. Our members want to be able to negotiate contract terms more effectively and with more options than the OEM community will entertain today. Our aim is to help re-balance the relationship so that airlines and OEMs can work together as true business partners in a normal commercial relationship,” Tyler said.

“OEM revenues are airline costs, so there is a natural tension on this issue. But airlines are and will continue to be important customers for OEMs. And we all have major common interests in our dedication to the continuous improvement of safety, efficiency and sustainability. Whatever conclusion the investigation comes to, at the end of the process there will be greater clarity on the rules of the game and how they should be applied. That will be a good development for all involved.”

In 2015 DG-COMP sent questionnaires to several industry stakeholders, including IATA member airlines, requesting information to validate claims of abuses of dominant positions by OEMs with respect to their control of aftermarket repairs, including parts and services.

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