The Critical Importance of Negotiating Long-Term Parts Supply Agreements When Purchasing a New Aircraft

When purchasing a brand-new aircraft, it is crucial to negotiate a parts supply agreement with the manufacturer that extends until the aircraft's end of life for several important reasons:

1. Ensured Long-Term Availability of Spare Parts

Aircraft have long operational lifespans, often exceeding 20-30 years. Negotiating a long-term parts supply agreement ensures that you will have guaranteed access to replacement parts throughout the aircraft's life cycle. This mitigates the risk of parts becoming scarce or obsolete, especially as newer aircraft models are developed.

• Example: Manufacturers may stop producing specific parts for older models as demand decreases, leading to difficulties in sourcing parts in the future. A long-term agreement ensures a steady supply even for aging aircraft.

2. Cost Control and Predictability

Parts replacement can be one of the highest ongoing costs of aircraft ownership. By negotiating a long-term parts supply agreement upfront, you can lock in pricing or secure favorable terms, avoiding unexpected price hikes in the future. This helps with budgeting and financial forecasting over the aircraft’s operational life.

• Example: Without a negotiated agreement, spare part prices could increase significantly due to inflation, supply chain disruptions, or changes in market demand, driving up maintenance costs.

3. Avoiding Unplanned Aircraft Downtime

Aircraft require routine maintenance, and quick access to spare parts is crucial for minimizing downtime. A parts supply agreement with the manufacturer ensures that you have prioritized access to parts, reducing delays caused by waiting for critical components. This helps maintain operational efficiency and aircraft availability, especially in commercial operations.

• Example: If a critical component fails and you don't have a reliable parts agreement, the aircraft could be grounded for weeks while sourcing the part from third-party suppliers, leading to revenue loss.

4. OEM-Guaranteed Quality and Certification

Aircraft parts must meet stringent regulatory standards. Original Equipment Manufacturer (OEM) parts are typically guaranteed to be compliant with FAA or EASA regulations. Negotiating a parts supply agreement ensures that you are receiving genuine, certified parts that meet safety and quality standards, reducing the risk of subpar or counterfeit parts entering your supply chain.

• Example: Non-OEM or aftermarket parts might not meet the exact specifications required, leading to safety risks or failure to meet regulatory maintenance requirements.

5. Warranty and Support Coverage

When you negotiate a long-term parts supply agreement, it often includes extended warranties, maintenance support, and other service agreements. This provides additional protection and cost savings over the aircraft's lifespan. The manufacturer may also offer technical support or even service centers to assist with repairs and installation, ensuring the aircraft remains airworthy and compliant.

• Example: Without a long-term supply agreement, the warranty may expire early, leading to higher out-of-pocket costs for future parts and maintenance.

6. Increased Resale Value

Aircraft with a well-documented parts supply and maintenance history typically retain higher resale value. Prospective buyers look favorably on aircraft that have been maintained with genuine OEM parts, as this ensures consistent quality and regulatory compliance. A negotiated supply agreement can be transferred to future owners, adding to the attractiveness of the aircraft.

• Example: An aircraft that has a clear, uninterrupted supply of parts and maintenance from the manufacturer is perceived as lower risk and more reliable, making it more valuable on the resale market.

7. Mitigation of Supply Chain Disruptions

Global supply chain disruptions, such as those caused by economic shifts, pandemics, or geopolitical issues, can affect the availability of aircraft parts. A long-term supply agreement helps mitigate these risks by ensuring that the manufacturer is obligated to prioritize your parts needs, regardless of market conditions.

• Example: During periods of high demand or supply shortages, operators without pre-negotiated agreements may face delays, whereas those with agreements have secured access.

In summary, negotiating a parts supply agreement with manufacturers for the life of the aircraft ensures access to OEM-quality parts, helps control costs, minimizes downtime, and protects both operational efficiency and the aircraft’s long-term value. This proactive step is vital for ensuring smooth, cost-effective aircraft operations over its entire lifespan.

At The Jet Corporation we specialize in guiding clients through seamless aircraft transactions, whether in the new or used aircraft market. Our expertise ensures a stress-free experience, providing comprehensive support from purchase to delivery, helping buyers and owners navigate each stage with ease and confidence.

Feel free to email us at [email protected] or call +1(202)840-5492.