You Bought the Aircraft. Who Controls the Spare Parts?

You can own an aircraft outright and still need another government's cooperation to keep earning money from it. The purchase agreement settles who owns the machine. Its useful life can involve people who were never invited to the closing dinner.

We like assets because they feel more solid than promises. You can photograph a factory. You can touch an engine. The investment committee can put both in a presentation, ideally at sunset. Nobody puts the export-licensing queue on the cover.

Yet the queue may determine how much the photographed asset earns.

Washington's reported use of aircraft-parts licensing against China makes that dependence unusually visible. For a founder buying an equipment-heavy business, the question travels well beyond aviation: which parts of the operating model require someone else to keep saying yes after you have paid?

That belongs in the acquisition price, the financing plan and the documents. Leaving it in a general paragraph called geopolitical risk gives it an impressive name and no owner.

Reuters reported on October 1, 2026 that Commerce had slowed aircraft-parts export licensing for China and limited quantities authorised for COMAC to discourage stockpiling. Sources also described a possible wider rule affecting aircraft parts, with landing gear and aviation hydraulic fluid among the items discussed. Commerce and the White House had not immediately commented. This was reporting on administrative pressure and proposals, rather than an announced blanket ban.^NEWS

The distinction matters commercially. A slower decision, a smaller approval and a prohibition create different operating problems. They require different responses. Procurement cannot build a useful contingency plan from the instruction to be concerned about everything Chinese by Monday.

There is a precedent for permission changing direction. In July 2025, Reuters reported that Washington had told GE Aerospace it could resume engine shipments to COMAC after earlier licence suspensions. The report identified both the LEAP-1C used on the C919 and the CF34 used on the C909.^REOPEN

That sequence demonstrates reversibility. It does not establish a predictable political cycle or guarantee another reopening. A business that survives an interruption still has to decide what the experience says about its next investment.

Keep production and maintenance separate, too. A manufacturer unable to obtain an input may delay building a new aircraft. An airline unable to obtain a necessary replacement may eventually lose the use of an existing one. The second mechanism explains the title of this article; the current reporting does not establish that aircraft have been grounded by these measures.

Nor does it supply the individual licence terms or enough operating data to calculate a fleet-wide cash loss. Treating an undisclosed delay as a known shutdown would make the article more dramatic and the diligence worse.

The timeline below separates the earlier reopening from the latest reported pressure and the still-proposed measures. The broader lesson is that yesterday's permission cannot be assumed to settle tomorrow's supply. A supplier can celebrate resumed deliveries while the buyer quietly adds another tab to the contingency workbook. Both can call the relationship a success.

A continuing supply relationship gives a government repeated opportunities to influence an asset it does not own. The buyer has already committed capital. Walking away means abandoning some of that investment or paying to replace it. That makes the ability to wait economically important.

The acquisition team may describe this as a long-term strategic partnership. The person responsible for keeping the equipment running would like to know whether the partnership includes Tuesday.

US export rules provide concrete reasons to inspect the actual authorisation. Under 15 CFR 750.7, commodity licences have quantity and dollar-value limits, subject to the applicable tolerances. Licences generally have a four-year validity period, with exceptions and terms specified on the licence. Conditions also matter. A licence can support repeated shipments within its scope; a new political decision is not necessarily required for every box.^ISSUE

That is different from permanent access. Section 750.8 makes export and reexport licences subject to revision, suspension or revocation, in whole or in part, without notice.^REVOKE A printed expiry date therefore does not promise uninterrupted permission until that date.

My inference from this framework is straightforward: reducing a buyer's usable buffer can preserve opportunities for future pressure. A buyer with lawful access to enough suitable inventory can wait longer before another shipment becomes essential. A buyer with a thin buffer reaches that moment sooner. There is no need to seize the underlying machine to make the next delivery consequential.

This is why spare inventory can have a strategic value beyond its purchase cost. It buys time to negotiate, qualify an alternative or absorb an interruption. Its value depends on the specific failure it covers. A warehouse full of the wrong parts buys a warehouse tour.

The relevant questions are operational. Which part would stop production first? How much verified stock is available to this business, rather than promised to several customers? Does a repair exchange require sending a failed unit abroad and receiving a replacement? Which authorisations cover those movements?

The same distinction between ownership and the ability to exercise it appears in Citgo's sanctions-constrained governance. The legal mechanisms differ. The diligence habit is the same: identify the permission needed for the next useful action.

For the illustrative acquisition below, assume a buyer acquires industrial equipment while a separate supplier provides controlled replacement parts. The purchase transfers title. Support still requires contractual performance and lawful export authorisation. These are separate dependencies, and the diagram deliberately does not represent COMAC's undisclosed contracts.

Aircraft make the dependence easy to see because the product combines specialised systems and continuing support. Safran identifies the C919's LEAP-1C engine as a product of CFM International, its joint venture with GE Aerospace.^ENGINE A domestic aircraft programme can incorporate an international engine supply relationship without any contradiction.

The contradiction arrives in the presentation that converts the location of final assembly into a claim of complete independence. Apparently the procurement department's international contact list did not receive the sovereignty memo.

Support also extends beyond buying a replacement object. In a September 2023 announcement, Liebherr described a letter of intent with COMAC covering spare-parts provisioning for air management and landing gear systems. It described lifecycle support, maintenance training and technical assistance through its Shanghai service centre.^SUPPORT That is evidence of the support ecosystem, not proof that the letter became a binding guarantee or that those particular items face US restrictions.

An acquisition review should map that ecosystem. Include maintenance instructions, diagnostic tools and access credentials. For software-dependent equipment, inspect the licence and service terms governing updates, remote access and transfer to a buyer. The relevant question is whether the new owner can operate and maintain what it acquires. This is a general diligence extension, not a claim that Washington has disabled COMAC software.

Physical substitutes also need a lawful and technically valid route into use. The FAA's Parts Manufacturer Approval is one US mechanism combining design and production approval for replacement and modification articles. It demonstrates that alternative parts can exist within an approval system; it does not make every available part interchangeable.^PMA

US operating rules separately place primary responsibility for airworthiness on the owner or operator and require compliance with applicable mandatory replacement times and inspection intervals.^AIRWORTHY Those are US examples of distinct regulatory gates. A Chinese-operated aircraft requires analysis under its applicable aviation regime. An export licence is not an airworthiness approval.

For a proposed substitute, demand the qualification evidence, approved configuration, production capacity and delivery schedule. A procurement manager's assurance that a second source is available may mean someone has found a website with a contact form. That is a lead, and should be valued as one.

Geography alone also fails the test. BIS explains that US-origin items subject to the Export Administration Regulations remain subject to them wherever located. Certain foreign-made items can also fall within the rules through US-content or foreign direct product provisions.^SCOPE This does not put every foreign product under US control. It means a different supplier address cannot establish regulatory independence.

Ask counsel and engineering to assess the same alternative. One determines whether it can legally arrive and be used; the other determines whether it will work. A substitution plan needs both answers on the same calendar.

The usual supplier-spend report is a poor starting point for this risk. A cheap component can constrain a valuable production line. Rank dependencies by cash flow exposed and time to restore operations, then look at spend.

Otherwise the largest catering contract may receive more diligence than the replacement controller that keeps the plant running. At least the investment committee will have lunch while it discusses the outage.

Build a schedule around the critical operating inputs:

Then run a cash scenario. Consider a fictional industrial business, unrelated to COMAC, with 30 days of fully usable spare coverage. Assume replenishment is interrupted from day zero and restored on day 90. The affected operation stops when coverage ends, losing US$20,000 of daily contribution after avoided variable costs. Demand cannot be recovered later.

The exposed interval is 90 minus 30, or 60 days. Lost contribution is therefore 60 × US$20,000 = US$1.2 million. These are illustrative inputs, not a forecast of aircraft downtime or a measured effect of US policy.

Now suppose an additional, lawfully obtained US$200,000 buffer would extend usable coverage to day 60. Within this same scenario, it prevents 30 days of lost contribution, worth US$600,000. Subtracting its purchase cost leaves a US$400,000 advantage before financing, storage and obsolescence. The comparison assumes the entire additional purchase cost is charged to this mitigation decision and gives no credit for residual inventory value.

That result is conditional. If no interruption occurs, the buyer has committed cash to inventory without receiving the interruption benefit. If the missing item is different, the buffer may fail entirely. If permission prevents obtaining the extra stock, the strategy never becomes available. A sensible model keeps those branches visible.

Do not subtract US$1.2 million mechanically from enterprise value or multiply a temporary disruption by the full acquisition multiple. Start with scenario cash flows and liquidity needs. Consider a valuation adjustment for persistent effects separately. Otherwise the same bad quarter gets charged once as lost cash and again as though it repeats forever.

The financing question can be more urgent than the valuation question. Debt payments and some operating costs continue while output is constrained. Model minimum cash and covenant headroom through the interruption, including any restart costs. The seller may offer a persuasive account of eventual normalisation. Your lender has scheduled the payment for the less philosophical date printed in the agreement.

The timing problem has a close relative in Magna's tariff-recovery experience: a cost can ultimately be recovered while the business still has to finance the wait. Here, the buyer may also need to survive a period when it cannot produce the revenue at all.

A supplier cannot contract the government out of export law. It can still accept meaningful obligations about the application process, allocation, information and the consequences of non-delivery. That is where a founder should spend negotiating effort.

The phrase best efforts can become a remarkably comfortable place for everyone except the person who bought the machine. Give the effort a task, an owner and a deadline before putting it in the model.

Start with the existing permissions. Obtain the relevant licence documents and conditions where disclosure is permitted, the basis for any claimed exception, remaining authorised quantities and the shipment record. Reconcile these against the planned use. Have export counsel assess changes in the customer, destination, end use or supplying entity. A seller's statement that shipments have always gone through answers a historical question.

If the transaction involves transferring a US export licence to another licensee, 15 CFR 750.10 requires prior written BIS approval.^TRANSFER Keeping the same licensee does not settle the analysis: section 750.7(c)(2)(iv) identifies a change in ownership of a person on the licence, including through merger or acquisition, as a material change for which a new application should be submitted.^ISSUE Check every relevant party on the licence against the proposed deal structure. A licence transfer and an ownership change are different questions, and both can matter.

Next, distinguish supply promises from permission promises. Negotiate who applies for authorisation and supplies supporting information, how quickly problems must be disclosed, and how scarce parts are allocated among customers. Review whether service commitments cover access to manuals, diagnostic software and repair tooling. An impressive response-time promise achieves little if the response is a prompt explanation that the required part cannot ship.

For inventory, establish location, title, physical segregation and release rights. Check whether supposedly reserved stock can be allocated elsewhere or still needs an export approval before it reaches you. Ask who bears storage and obsolescence costs. A supplier's stock count and your usable buffer can be very different numbers.

Then read the force majeure, change-in-law, suspension and termination provisions with the same attention as the delivery clause. The governing law and drafting determine their effect. Identify which losses remain with the buyer if performance becomes prohibited, and whether insurance actually covers that event. Do not assume a damages claim will procure a lawful replacement or arrive before the next payroll.

The acquisition agreement can address the period before closing through specific conditions, information obligations and agreed responses to a deterioration in access. After closing, a holdback or contingent payment might allocate a defined exposure if commercially agreed. Neither creates missing parts. The buyer still needs a funded operating response.

There is a cost to demanding certainty. More inventory consumes cash. A qualified second source costs money before it becomes necessary. A seller may refuse to carry years of political risk. Those are real tradeoffs, and they belong beside the purchase price rather than beneath a reassuring heading about integration.

Before the next acquisition meeting, ask the operating team to identify the five inputs whose absence would stop the most cash generation. For each, require one named owner to produce the permission basis, usable coverage, restoration plan and downside cash requirement. Put unresolved dependencies in the investment paper with an explicit decision: fund a mitigation, change the terms, reduce the price or accept the exposure.

If the answer remains that the supplier has always been supportive, ask for the document that keeps the operation running when support stops being sufficient.