When your aircraft was built, it was certified to the then-current certification standards. Since that time, new regulations have been added, primarily to enhance safety and secondarily to improve ATC efficiency. These include:
• Changes to burn criteria relative to materials used on aircraft interiors;
• Environment regulations such as Stage 4 Noise and Emissions; and
• Operational efficiency changes such as the Future Air Navigation System (FANS) and Reduced Vertical Separation Minimums (RVSM).
Aircraft that were manufactured in the late 1990s are more than 20 years older, and the technology in the cabin is certainly outdated or obsolete. If you own such an aircraft, how do you decide whether to modernize and upgrade or hit the reset button and purchase a new asset equipped with the latest technology and current on all regulatory issues? There is a tipping point.
The first question to answer concerns what is available for your aircraft. This issue must be viewed from two perspectives:
1. Service Bulletins covering the aircraft’s airframe: A list of available airframe Service Bulletins may be obtained through the service provider that handles your maintenance tracking program. That organization can also compare the list of items relevant to your aircraft. Service Bulletins are usually classified as Optional, Recommended and Mandatory. Mandatory Service Bulletins must be completed. However, there are numerous Optional and Recommended Service Bulletins you might wish to consider that are able to improve reliability, comfort or operational efficiency. Needless to say, this step can be a very detailed and involved, but it is a very important part of the upgrade and modernization process.
2. Supplemental Type Certificates (STCs) issued since your aircraft was manufactured: It is also important to review the list of currently available options to determine the ones you would like to install on your aircraft. Some of the options are simple kits that can be installed at any service center, while others will require obtaining an STC that may be costly and can only be performed by an Authorized Service Facility. The good news is that if an STC is available, so is the kit and a center to perform the work.
At some point you will run into the law of diminishing returns. But how do you know when you are approaching this point? The answer is simple: If an STC is not available with respect to a contemplated major upgrade, such as an engine change, avionics change, wing or winglet redesign. It usually is too expensive for an owner to make these changes on a one-off basis, due to non-recurring engineering and certification costs that can easily exceed the value of the aircraft.
The next question to answer is how to select the best options and Service Bulletins to implement? Consider the following check list:
• Ask your pilots and maintenance personnel if there are any Optional Service Bulletins that would improve their ability to operate and/or maintain the aircraft.
• Look for Optional or Recommended Service Bulletins that enhance passenger comfort. For example, there are now premium noise and acoustic packages to reduce cabin noise and humidification kits to improve cabin air quality at altitude.
• Consider options that improve the overall efficiency of the aircraft. They range from seats that convert to flat beds, to cabin systems that provide Internet connectivity, high speed communications and/or high-definition video systems.
There are so many new options and Service Bulletins available that an extensive comparison between your aircraft and what is available may be required.
How will you know if your modernization plans have gone too far? This is the financial analysis part of the process, and the answer often hinges on the reason you are considering modernizing your asset. Are you doing this work to operate the aircraft for at least another five years? Or, are you doing this work in order to improve the asset’s re-marketability?
Keep in mind that modernizing your aircraft will not alter its age, so consider your asset’s costs with respect to future maintenance requirements. Is the aircraft enrolled on any Hourly Cost Maintenance Program? If it is not, you may wish to include the cost of Program enrollment in your financial analysis. If your modernization effort is the result of a planned near-term sale of the asset, keep in mind that the cost of some STCs, especially those involving avionics or electronics, may be difficult to recover. So you may wish to reconsider your thinking.
In the next article in this series we will discuss the costs involved, detail the upgrade process, and introduce the ‘QUALITY–SCHEDULE–COST’ triangle, as well as the effect it has on any aircraft modernization project.