Can you Justify the Cost of an Engine Maintenance Program?

When weighing the cost of an hourly aircraft engine maintenance program, there can be multiple benefits to measure the expenditure against. Andrew Robinson shares a few as they relate to aircraft operators enrolled with Rolls-Royce CorporateCare Enhanced.

AvBuyer  |  06th March 2024
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    The pros and cons of jet engine maintenance coverage

    When it launched CorporateCare Enhanced in 2018, Rolls-Royce was looking to standardize support levels for operators of aircraft powered by its engines. The aim was for aircraft owners enrolled on the hourly engine maintenance program to never get another bill beyond their CorporateCare Enhanced fee.

    “Working with a selected group of our operators at our C3 Corporate Customer Council, the overwhelming feedback we received was to consider a program covering the nacelle, too, since no one was taking ownership of that part of the aircraft,” says Andrew Robinson (below), Senior Vice President of Customers & Service, Rolls-Royce.

    By launching CorporateCare Enhanced, Rolls-Royce essentially created a new, standardized level of support. Enrolled owners who have engines with Rolls-Royce-sourced nacelles could have those components covered like their engines – including labor, Service Bulletins, corrosion, erosion, and all material.

    “The only thing we don’t cover is foreign object damage,” Robinson clarifies, adding that CorporateCare Enhanced covers the gaps with elements other than the nacelle, too, including coverage for troubleshooting, MRT travel, and more.

    Indeed, Robinson cites several cases in which operators have felt the additional benefits of their CorporateCare Enhanced coverage – especially those needing an engine change in remote, hard-to-reach places.

    “Some were located on islands such as Kona, Masset and the Maldives which required us to charter Lockheed C-130s, Boeing 747s, and even a barge to source a forklift truck. But because of the powerful infrastructure we’ve built, we can back up our service and get people back in the air quicker, at no additional cost to them,” he says.

    And Robinson points to two other incidents in Iraq last year, highlighting how the company handles AOGs in difficult places in a timely manner.

    Supporting a Globally Dispersed Aircraft Fleet Base

    Across its CorporateCare and CorporateCare Enhanced programs, the company already has an impressive 72% capture rate of the Rolls-Royce powered fleet. In fact, approximately 76% of new business jet deliveries with Rolls-Royce engines were enrolled in 2023.

    With the AE 3007, TAY, BR710, BR725, Pearl 15 and even the Pearl 700 (which starts to deliver this year) all eligible for enrolment, “Overall, 2,500 of the Rolls-Royce powered business aircraft in operation are on CorporateCare,” Robinson says. “Of that, half (1,250) are with CorporateCare Enhanced.”

    There is an especially good acceptance of the program in locations where the environment is harsh, since the program covers unlimited corrosion and erosion.

    Given the high acceptance levels, and the fact that Rolls-Royce engines power larger business jets capable of transcontinental flying, and are therefore flown by owners and operators in diverse regions and environments worldwide, establishing a powerful support network enables it to reach customers wherever they need help.

    “We have developed a support network to enable our team to achieve metrics such as resolving an AOG incident in less than 24 hours and having around 99% averted missed trips,” Robinson explains.

    Within that network are 85 authorized service centers, 78 dedicated technicians, 250 engine and nacelle lease assets, ten CorporateCare spares stores, and a 24/7 aircraft availability center. “We’re also opening a new CorporateCare spares store at JFK to further strengthen our capabilities with the East Coast market.”

    Enhanced Aircraft Value and Liquidity?

    Rolls-Royce makes some big claims about CorporateCare Enhanced, including how it ‘consistently enhances asset value and increases liquidity’. Though words can be easy, according to Robinson CorporateCare Enhanced is proven to increase asset value, a fact he says is recognised not only by brokers and appraisers but aircraft valuation sources like Aircraft Bluebook.

    “The increased residual value and the protection the program provides are also highly valued by banks and financiers. And those on the program can sell their aircraft more quickly, thereby improving liquidity.”

    In fact, Robinson says Rolls-Royce has seen many cases where the residual value of an aircraft has increased by the amount paid into the program, though he points out owners shouldn’t overlook the immediate value of the greatly improved aircraft dispatch rates that enrolment brings.

    With all being said, when weighing the pros and cons of CorporateCare Enhanced enrolment, how should an aircraft operator view the program? Is it a form of insurance (adding protection against unexpected maintenance expenses, but at an hourly cost), a way of lowering maintenance costs on engines in the long run (or at least making them easy to anticipate), or something different?

    “It’s all of the above,” Robinson argues. “It is a form of insurance in which an operator’s otherwise unpredictable variable engine maintenance costs become fixed, and all risk is passed to us.

    “This ultimately lowers maintenance cost by putting it onto Rolls-Royce. And our program ensures that our customers spend more time in the air and less time on the ground due to maintenance issues saving costs in the long run, too,” he reiterates.

    Innovative Digital Tools to Enhance Service Offerings

    And there’s more to come. Looking ahead with the Pearl engine family, Rolls-Royce’s Engine Vibration Health Monitoring Unit (EVHMU) capabilities will take the company’s technology further allowing it to be predictive with its engine health monitoring data.

    “We can measure over 10,000 parameters, which enables us to address potential faults before they become issues,” Robinson says. “The new technology is a step-change in ‘on-wing’ engine intelligence, providing instant access to thousands of engine performance and health parameters with unprecedented levels of data quality. This is helping us troubleshoot more efficiently than before.

    “This benefit is only provided through the Enhanced program and helps us to maximize the flying time of our operators without them having to worry about engine-related issues,” he concludes.

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