Used serviceable material is increasingly in demand in the aviation supply chain.
Jim Scott, CEO and Co-founder of Artemis Aerospace, looks at how compliance with airworthiness regulations is monitored within the USM market, and discusses the need for change.
According to statistics*, it’s estimated that the USM market size will reach over USD 11,135.64M by 2032, up from USD 7,854.84M in 2024. It’s projected to grow to USD 8,065.21M in 2025 alone, a compound annual growth rate of 4.5% from 2025 to 2032. It’s a crucial part of the aviation supplies market, but can airworthiness be assured? Jim answers our questions:
What are the current issues with the supply chain?
“Both MROs and aircraft operators are continuing to experience supply chain issues. The fallout from the COVID-19 pandemic is still creating widespread manufacturing disruption, along with a shortage of raw materials. The burgeoning post-pandemic increase in air travel has caused an increased demand for parts and materials as fleets are expanded and older aircraft brought back into service.
“Of course, geopolitical unpredictability such as conflict in Ukraine and Middle East renders some flight paths unusable, leading to long diversions and possibly extra stops en route which in turn cause additional wear and tear on an aircraft. Sanctions resulting from conflicts create shortages; for example, Russia is a major world supplier of titanium, which is used in the manufacture of aircraft engines. While there are some exemptions (for example, the EU allows for its import under specific conditions including the operation of civil nuclear capacity) its reduced availability only exacerbates supply insufficiency, and the bewildering see-saw of US-initiated tit-for-tat global tariffs further complicates an already-strained chain.”
“I hate to sound pessimistic, but while issues with the supply chain are getting better, it’s only very gradually, and we don’t know if they will ever get back to how they were before.”
Has this led to a rise in demand for USM?
“Absolutely – there are not enough new aircraft being delivered, so there’s been a major upswing in the demand for USM and a lot of competition in the teardown market. The advantages of USM include faster delivery times and increased cost-effectiveness at a time of rising prices, and there’s the added benefit of higher sustainability in a sector increasingly conscious of environmental concerns. However, given the overall situation, USM is as much in demand as new parts, and compliance with aircraft safety regulations has to be the top priority. But what safeguards are in place to ensure that USM is of the calibre to pass muster? That’s a big question.”
How does enforcement by regulatory bodies help?
“It differs from area to area. In the UK, the CAA oversees compliance to guarantee the reliable incorporation of USM into British aircraft, with detailed mandatory evaluation of the integrity of materials and the history of usage in line with industry best practice.
“In the EU, EASA (European Union Aviation Safety Agency) regulations require that USM is covered for safety under the framework for Continuing Airworthiness. This focuses especially on parts, materials and components, and ensuring their history, maintenance and any modifications are fully documented; in short, USM meets the same rigorous safety standards as new parts. EASA stipulates that organisations using USM carry out thorough due diligence on their suppliers, including verifying their certifications, reputation and quality management systems.
“Over in the USA, USM is supervised by Federal Aviation Adminstration (FAA) regulations, which mandate all parts used meet the necessary standards. Airlines and MROs are responsible for maintaining accurate records of part origins, maintenance history and alterations which are needed for demonstrating compliance and traceability and preventing unapproved parts entering the supply chain.
“It all sounds pretty watertight, but there are still issues which need to be addressed. Basically, ensure your components are tagged by a trustworthy shop.”
How can suspect parts be identified?
“The challenge of identifying a SUP (Suspect Unapproved Part) where the authenticity and quality is uncertain is huge. It may be something as simple as a properly tested part which gets damaged in transit. There may be irregularities in the documentation or issues with the quality of the part, or it may not even be a genuine item, which poses serious risks to the safety of an aircraft.
“Really, it all comes down to the integrity of the repair shops which are doing the work. If you’ve got, for example, a US-based workshop which is certified by the FAA, they’ve got to recertify every year or two. But what happens if it’s bought out by a company from another country – they’ll just continue to use the FAA certification until they have to recertify, but in the meantime a completely different ethos could be in place. And the component maintenance manual (CMM) they’re using is meant to be completely up to date, but who checks that?
“A comprehensive approach is essential to detecting these parts, and the FAA, EASA and CAA hold databases of suspect parts which can be cross-referenced in the event of a query. But, again, are they fully up to date?
“Safeguarding against suspect parts requires a multi-faceted approach with strong industry collaboration, and most major manufacturers have programmes to recover components from teardowns, acquisitions and lease returns which they then repair and certify for airworthiness.”
How can things go wrong?
“One example really shook our industry in 2023 when components supplier AOG Technics allegedly inserted engine spare parts into the supply chains of numerous major airlines including American Airlines, Delta and Ryanair. They were informed of the possible danger by the CAA and EASA and AOG Technics was shut down. This triggered widespread inventory reviews and raised serious concerns about the integrity of USM compliance.
“To be frank, you’d have to be an idiot to try and get away with this sort of thing as the penalties are pretty severe. The director of AOG Technics was arrested by the Serious Fraud Office and charged with fraudulent trading – he’s in prison and going to be subject to the US legal system. I think this kind of behaviour is thankfully genuinely rare, but it’s interesting because despite all the apparent safeguards, it still happened, and people were still taken in. There’s also a problem with reliance on systems which only go as far as checking the last person who supplied something, instead of going back to the part’s actual source.”
Were there any repercussions from this case?
“It’s likely that it was one of the reasons behind the 2024 launch of the Aviation Supply Chain Integrity Coalition, set up by leaders from the aerospace industry, including Airbus, Boeing, Delta and United Airlines. The aim is to enhance the integrity of the aviation supply chain and prevent SUPs entering it. The coalition came up with three recommended actions:
- Vendor accreditation, with the long-term aim of establishing a database of accredited vendors to verify identities and quality management standards.
- Document traceability and verification, with the long-term aim of establishing a voluntary industry database of back-to-birth parts documentation.
- Non-serialised parts traceability, with the long-term aim of the development of new technological solutions to improve parts traceability.
“In the short term, they are hoping to:
- Promote industry use of suppliers which meet FAA and EASA standards.
- Establish a feedback loop between parts installers and accreditors.
- Expand the use of digital ARCs and increasing the use of digital authentication tools.
- Strengthen training materials and best practices.
- Verify and audit scrap material and recycling vendors.
“AOG was fabricating a certificate of airworthiness, which would have had a single identifying tracking number up in the top right-hand corner. Now, if there were a global database which covers all the workshops, and they certify a part and enter it on the database with the tracking number, then you could spot any duplicates immediately.
“I really hope the ASCIC initiative will make a difference, as it’s very easy to do something like this as a response and then find the momentum peters out. There seems to be a genuine move here for a global change, but the entire aviation sector needs to buy into it, including the manufacturers. We all need to make an effort to engage with it and with each other for the good of the industry as a whole, not just our own particular area of interest.”
Are there any benefits from the use of AI?
“USM suppliers must adhere to stringent safety regulations and, crucially, ensure that any changes are immediately implemented. Compliance requires thorough documentation and quality control measures; the increasing use of AI is reducing time spent on this as the right software can extract precisely what information is needed and pull it all together for any specific part. That’s a big leap forward.
What do you see as the future for USM?
“The aviation industry has undoubtedly made huge strides in promoting the safety and traceability of USM in the last few years, and all reputable suppliers are fully on board with the need to maintain aircraft security and operational integrity. It’s essential that all of us in the sector maintain this momentum in future.
“The industry will always rely on the supply of USM – it’s a vital part of the chain, and of course it’s also 100% ethical, in that everyone is making efforts to improve sustainability and maximise the life of components which are manufactured at vast cost. There’s undoubtedly the need for tighter regulation, and the industry must accept that this is an issue for every business in the sector, from the giants at the top to the small companies. Providing everyone is playing by the rules, it’s a shared responsibility for us all, and with that kind of cooperation, we could really make some changes.”
