Hourly Maintenance Programs: Getting Value for Money

Do today’s aircraft maintenance programs offer owners and operators flexibility to get optimal value for money without significant exposure to expensive maintenance risks? Gerrard Cowan asks the experts and highlights some of the ‘gotchas’.

Gerrard Cowan  |  20th July 2022
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    Gerrard Cowan
    Gerrard Cowan

    Gerrard Cowan is a freelance journalist who focuses on aerospace and finance. In addition to his regular...

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    Private jet parked in a maintenance hangar

    Hourly maintenance programs offer business jet and turboprop operators a high degree of security, with the knowledge that their engines, avionics, airframe, APUs, and/or parts will receive the maintenance they need.

    But in a challenging economic climate, how can operators ensure they get the best value for money, while still guaranteeing the coverage they need?

    According to Francisco Zozaya, Jet Support Services Inc’s (JSSI’s) Chief Revenue Officer, the Hourly Cost Maintenance Programs (HCMPs) offered by JSSI are “a bespoke service for our customers”, with different coverage options, depending on their requirements and level of risk tolerance.

    It includes a “tip-to-tail” program for the entire aircraft, along with engine-only, or parts-only coverage.

    With concerns on the horizon for operators, notably supply chain shortages which are unlikely to end any time soon, Zozaya believes “in the coming years there will be more demand for HCMPs, since having a maintenance program in place means better access to scarce parts and engines, and additional peace of mind.”

    JSSI provides coverage for a range of aircraft equipment and components, from engines, to avionics, to APUs – and the nature of the coverage is strongly affected by the system in question.

    “It will also depend on an operator’s use of the business jet - because scheduled maintenance is determined by either calendar date or usage,” Zozaya adds. “An operator with a more intense schedule and higher hourly and cycle usage is going to need inspections sooner.

    “They may see higher maintenance costs within a smaller time, compared to a low usage user – especially when their maintenance is hourly, and cycle-driven.”

    Moreover, operators of older and higher usage aircraft can expect more unscheduled risk, since these aircraft are more susceptible to unscheduled maintenance requirements.

    No One-Size-Fits-All

    Honeywell provides maintenance programs for a range of systems, including engines, engine nacelles, APUs, and mechanical and avionics components. Nadya Krisko, Senior Director of Business and General Aviation, EMEIAI, highlights that the company’s Maintenance Service Plan (MSP) is designed to provide flexible options and cut back on unplanned maintenance costs and unnecessary downtime.

    “Pay-as-you-go maintenance can result in unmanageable costs and insufficient maintenance budgets, especially when multiple unexpected failures happen,” she warns. “This can also lead to an extended aircraft downtime.”

    With MSP, business jet operators can choose to cover particular systems and components, or opt for broader coverage across the aircraft. There are also different service levels, extended service coverage, and consigned inventory management options, while the MSP Gold Level Service provides a 24/7 Road Crew Service and Extended Troubleshooting.

    “There is no ‘one size fits all’,” Krisko highlights. “Each operator has a unique operation, whether short flights, long-range flights, flying into remote destinations, operations in areas with a comprehensive MRO network, Minimum Equipment List items to consider, new versus pre-owned aircraft, flight hours flown annually, and other factors.

    “These will all be parameters defining individual priorities,” she illustrates, adding that in general, engine and APU coverage appear to be a higher priority over avionics.

    Similarly, the type of system involved will impact coverage in numerous ways. For example, turbine engines will be subject to such processes as Major Periodic Inspections (MPIs), which “can be pricey, and their cost may vary depending on whether there are any issues identified that need to be fixed to keep the engine in working order,” Krisko explains.

    On top of that, operators need to consider Life Limited Parts (LLP) replacement for APUs and engines once they have reached the end of their lives, which is something that’s less of a concern on mechanical and avionics components, Krisko says. Such concerns are factored into the company’s MSPs.

    Balancing Budget with Maintenance Demand

    Delray Dobbins, Senior Manager, Eagle Service Plan (ESP) Sales & Global Strategy at Pratt & Whitney Canada says the right hourly engine maintenance programs allow operators to balance budgetary needs with engine maintenance demands.

    “The benefits of hourly maintenance plans apply to all engines, no matter the type,” he argues. “Even when an engine is highly reliable, with high mission availability, hourly maintenance plans help operators pay less over the life, or length of ownership, of their aircraft.

    “This comes from cost savings associated with both scheduled and unscheduled maintenance,” he explains.

    Pratt & Whitney Canada’s ESP was traditionally built on four levels of coverage – Silver, Silver Lite, Gold and Gold Lite – but has since been simplified to two: ESP Gold and Platinum.

    “The data showed customers didn’t really want more than two coverage levels, and the trend is definitely for customers today to want more of a turn-key solution for their engine needs,” Dobbins observes. (While the Gold and Platinum options are offered to new customers, the company continues to honor those who signed up to the Silver or Silver Lite coverage previously.)

    The company offers a range of other benefits, depending on an operator’s need. For example, operators of engines like the PW300 can combine the ESP hourly plan with digital engine health monitoring services, while, as well as ESP, P&WC offers a Fleet Management Program (FMP) for those operating six or more aircraft.

    Shop Scheduling

    Steve McManus, Sales Director for GE Aviation, highlights that his company’s OnPoint program provides exceptional levels of availability through dedicated slots for shop visits, along with full risk transfer for an engine’s service and maintenance needs.

    “OnPoint addresses and eliminates lifecycle cost spikes while offering a great option for long-term operational readiness,” he adds, highlighting that it especially eliminates induction time and turn time for customers.

    “There are occasional surprises even with on-condition engines, so we’ve also invested in our field and technical support staff to proactively manage customer’s needs,’ McManus added. “These practices help insulate customers from market swings or pricing increases because of built in supply practices and defined economic adjustments.”

    Selecting Coverage Levels: Beware the “Gotchas”

    According to Dobbins, there are two common ‘gotchas’ to look out for when it comes to choosing the right coverage level.

    First, consider your geographic needs. If you operate in a saline environment, corrosion coverage is a vital part of your package.

    The second ‘gotcha’ relates to Life Limited Parts (LLPs)... “When an engine goes through an overhaul, the LLPs are not reset to zero hours – their limit is fixed,” he highlights.

    “That means buyers of older, or higher-time aircraft (perhaps one formerly flown in a Fractional Ownership program) need to be especially careful about the level of coverage they choose. Some coverage levels include LLPs, some don’t.

    “When parts reach their limit, if the owner hasn’t selected the right level of coverage, they will find that while the overhaul cost is covered, the cost of LLP replacement isn’t, which could result in a bill of as much as $1.5m per engine.”

    Krisko suggests the big ‘gotchas’ can be avoided with the right questions being asked. “Ask whether the maintenance provider will stand by the quality of its services and has a good reputation in the industry,” she advises. “Consider the types of spare parts that will be installed, and whether the plan fully covers parts and maintenance.”

    Operators should also establish whether LLPs will be replaced with new parts within the plan, she adds. “And operators should check whether upcoming and existing upgrades and service bulletins are included in the coverage, and whether the annual minimum of the plan matches the utilization.”

    There are other questions operators should ask, too, including whether the service centers are easily accessible from their base and other regular flying destinations? Does the plan cover off-site support?

    Will the support be given by a maintenance provider that can make it easy for operators to choose from a range of selectable coverage options, tailored to their platform and operations?

    Zozaya reiterates that customers must first understand their projected utilization and the type of operation they will have – for example, there’s a big difference between private travel and charter use.

    Second, he advises, they should ask whether they’re looking for a one-stop service that requires a HCMP, or just need parts supplied, with maintenance handled in-house.

    The big question, Zozaya summarizes, is whether you, as the aircraft owner, are ultimately comfortable taking on the inevitable peaks and troughs of maintenance costs, or if you would be more comfortable with consistent, stabilized costs?

    The answer will establish whether a maintenance program is right for you, and, if so, the extent of the program coverage you ultimately choose.

    More information from:

    GE: www.geaviation.com/services/regional-business/onpoint
    Honeywell: https://aerospace.honeywell.com/us/en/learn/services/maintenance-and-service-plans
    JSSI: www.jetsupport.com
    Pratt & Whitney Canada: www.pwc.ca/en/products-and-services/services/maintenance-programs-and-solutions/maintenance-programs/

    Do you have a specific aircraft maintenance, upgrade or repair need?

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