The aviation industry is a competitive market. Under massive pressures (economic & regulatory), airlines are increasingly looking at ways to reduce cost, improve efficiency and increase competitiveness.
There are many costs to monitor. Aircraft component maintenance, engine maintenance and heavy maintenance are big costs for all operators. According to IATA, 65% of direct maintenance costs go to engine and components alone. In order to reduce costs, we must focus on efficiency.
Initial provisioning, maintaining appropriate spare levels without over investing capital, ensuring component reliability, managing turn-around-time, repair management (including warranty management), and performing stock management are key challenges in component maintenance and planning. Each of these tasks requires considerable investment and labor hours.
In order to overcome these obstacles, trusted partnerships are important to reach efficiency goals.
Component support solutions provide tailor made solutions that address these key areas. These solutions aim to provide guaranteed component availability from a single channel pooling partner while reducing initial investment and giving a predictable cost model.
Think about it. Having a trusted single distribution channel or trying to maintain 20. Which one is more efficient? The single distribution channel. As long as that channel is reliable and willing to work in a win/win relationship.
This model, which is gaining increased popularity among airlines, works on the following simple principle:
A unit in demand is arranged from a service provider on a forward exchange basis (from a pool of components). The unit removed from aircraft (called core or unserviceable) is sent to service provider in exchange. This arrangement which is charged on the principle of power by the hour (normally) ensures guaranteed availability of components to support aircraft maintenance.
Choosing an appropriate pooling partner is a critical decision. It involves multiple considerations (which may vary from case to case).
Here’s some of the key criteria for you to consider:
History of service excellence
Component support programs for a fleet of aircraft is a very specialized service, and involves expertise across multiple domains. It is in definition a comprehensive solution for a very large number of components installed on an aircraft fleet. It is therefore imperative that while choosing a pooling partner, one must consider a service provider’s history of service excellence. One way of telling this is to know how many aircraft are already supported by the service provider. Equally important is the variety of airlines under contract with the service provider.
A great start for your due diligence is customer testimonials. This allows you to gauge the service excellence of the service provider.
Repair arrangements and repair facilities available
For a comprehensive component support program, it’s important that the service provider has a strong backup support of repair facilities and arrangements. The better network means better component reliability, increased support, and also economies of scale for an airline.
The lower the rotable cycle times the better the reliability.
Volume of pool inventory available to support
The volume of pool inventory available with a service provider determines the level of guaranteed support which could be extended to a customer at the time of demand. The higher the volume, the better service level is expected.
It’s also important to note if the provider is willing to invest in a long term relationship.
Beyond Economical Repair (BER) support
BER costs (in the event of a component becoming beyond economical repair or BER, it is scrapped and a replacement unit has to be procured) are a significant cost head in repair management. What level of support is the service provider willing to offer in the event of a BER?
Having a cost sharing formula is critical to a healthy relationship. Determine what percentage of cost the service provider will bear and what percentage the customer will bear when a BER event occurs.
Flexibility in component scope coverage
Component support programs cover a very large number of components installed on an aircraft fleet. This number can vary with the configuration of aircraft. The induction of new aircraft in a fleet results in a revised scope. The service provider should be flexible in adjusting scope coverage as and when needed.
These are typically called inclusions and exclusions. The more flexible you can add and remove components from the scope, the better.
Compliance to desired service levels
The service levels for AOG, critical and planned orders vary depending upon the ground realities such as supply chain, operational parameters, and the inventory level maintained by an airline. Compliance on the part of service provider is important to ensure dispatch reliability of aircraft fleet.
Specifics of airline requirements are just as critical. These can be services required such as SB/AD implementation, warranty management, and rogue unit administration.
Consideration of hidden costs
Component support programs are supposed to provide a steady budget for component maintenance of an aircraft fleet. If there’s hidden costs, it becomes a surprise.
Hidden costs may come in the form of deviation from core return time, NFF (No Fault Found) limits, and AOG / MEL A limits among others. Due planning and consideration is essential to ensure minimum hidden costs. If a service provider has multiple overheads, it may affect economic viability of a component support program.
When deciding to hire an aircraft component service partner, these key criteria are a great place to start discussions. It’s also important to note that if they’re hard to deal with, go back on their word, and make life difficult, it’s best to continue your search. You not only want good component search, you also want a friendly win/win partnership.
As we say here at Skylink…Never Forget Your Wings.
This post was brought to you by Irfan Alam. He’s an aircraft engineer for Pakistan International Airlines and has expertise in technical contracts, rotable planning, and provisioning.