By Sam Tobin and Tim Hepher
LONDON (Reuters) - Jet engine maker CFM International said on Wednesday thousands of engine components may have been sold with forged paperwork by a British distributor, as the fallout from a probe into falsely certified parts reached London's High Court.
Matthew Reeve, a lawyer for CFM and its co-owners General Electric (NYSE:GE) and Safran (EPA:SAF), said AOG Technics had engaged in a "deliberate, dishonest and sophisticated scheme to deceive the market with falsified documents on an industrial scale".
European regulators have said they are investigating reports that some parts supplied by the London-based firm without valid certificates had been found inside CFM56 engines, which power some Airbus and Boeing (NYSE:BA) jets.
AOG did not address the underlying claim of forgery in the hearing, which was called to discuss procedural issues. The company did not immediately respond to a request for comment on its main number, which went to hold then voicemail.
The discovery has prompted airlines to change parts on a handful of planes and so far only a fraction of the 23,000 existing CFM56 engines has been affected.
But Reeve said in court filings that CFM and its engine partners have "compelling documentary evidence that thousands of jet engine parts have been sold by (AOG) to airlines operating commercial aircraft fitted with the claimants' jet engines".
These include parts for CFM56 engines, built by the GE-Safran joint-venture CFM, and a very small number of CF6 engines used mainly to power cargo planes and manufactured purely by GE.
Industry sources said the majority of spare parts sold by distributors like AOG involve small items that are not made by the engine makers themselves and are not considered critical.
Even so, the number of planes that could have to be taken out of service for checks is approaching 100 and analysts say any disruption to the tightly monitored system of controls underpinning the safety of air travel must be tackled quickly.
Reeve said that so far, 86 falsified documents known as release certificates had been identified. By Monday, the number of engines suspected to have parts with forged documents had risen to 96.
"Potentially, that means between 48 and 96 aircraft being taken out of service whilst airlines arrange for the parts to be removed," Reeve added.
'COOPERATING FULLY'
The sale of parts with fake or missing release certificates "potentially puts aircraft safety in jeopardy" and makes it impossible to verify airworthiness, CFM said in a filing.
A release certificate is akin to a birth certificate for an engine part, guaranteeing it is genuine.
The engine maker and its French and American parent companies took AOG and its sole director Jose Zamora Yrala to court to force them to hand over documents related to any remaining parts and paperwork linked to CFM56 and CF6 engines since February 2015.
They said they were first alerted to the alleged forgery by a Portuguese maintenance and repair company in June, prompting a scramble to discover the extent of the issue.
Lawyers representing AOG and Zamora Yrala said the defendants were "cooperating fully" with an investigation by Britain's Civil Aviation Authority (CAA).
AOG lawyer Tom Cleaver argued GE did not need a large amount of documents in order to contact possible buyers of the parts.
"Everybody now knows that AOG parts are not necessarily to be taken to be the claimants' parts," he said.
Judge Richard Meade ruled that AOG and Zamora Yrala should disclose "invoices, release certificates, memos of shipment and purchase orders" for 230 transactions.
CFM welcomed the court order, which it said would help the industry identify unapproved parts more rapidly.
CFM56 engines power the previous generation of Boeing 737s and about half the previous generation of Airbus A320s. These are gradually being upgraded but thousands remain in service.
The CFM56 is also used on Boeing P-8 maritime patrol planes sold to the United States and Britain, while the GE-built CF6 powers Boeing KC-767A tankers sold to Italy and Japan.
There have been no reports of suspect parts on military aircraft. Boeing and Airbus had no immediate comment.
The European Union Aviation Safety Agency, in a filing first reported by Bloomberg, said in August it was examining reports of parts with suspected falsified documents supplied by AOG. Britain's CAA said in August it was "investigating the supply of a large number of suspect unapproved parts".