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Fixed fee
Fabion Beretta, head of Airbus customer services department, says a 'VIP Pass' airworthiness engineering service will be available from the Airbus Corporate Jet Centre (ACJC) from spring of this year. "Prices for the services related to VIP Pass will be charged with a monthly fixed fee for any range of utilisation up to 1,000 flight hours (FH). The only exception is for the engines where a price per engine FH will be applied."
This follows the choice by cabin completion specialist ACJC of AMOS for its maintenance services. The AMOS integrated maintenance information System (MIS) has been developed and distributed by Swiss AviationSoftware Ltd (Swiss-AS). "Such high end products are not easily accessible to ACJ operators and owners since they require an IT infrastructure and specific operating knowledge," Beretta adds. "ACJC takes care of the IT infrastructure, installation and configuration of AMOS in its facility. This gives its customers ease of use and a guarantee that their airworthiness data is in good hands. Specifically developed for executive and private operators of ACJs, VIP Pass includes cabin upgrades and refurbishment, airframe maintenance, cabin and airframe spares, as well as full engine support."
Beretta says that ACJC, based at Toulouse, France, has already contracted with prestigious customers in Asia, Europe and Middle East. Its 200 employees have now completed more than 15 vip Airbus cabins.
Price advantages
Big airlines use their economic muscle as large customers and bulk operators of relatively uniform fleets to gain low cost terms and conditions that tend to elude even the larger management fleets focused on a single type of aircraft. Consequently airlines have for years enjoyed price advantages in 'power by the hour' style contracts that effectively help fix, or at least contain, annual costs, according to Steven Markhoff, ceo of the US-based eJet Services, Ltd.
Markhoff, who comes from an airline background where cost-cutting is king, believes the global economic recession has further accelerated demand for maintenance plans that enable private aviation owners and operators to know, within certain parameters, what costs are likely to be.
He claims a joint product developed by eJet and Lufthansa Technik provides business jet operators true airline style 'power by the hour' programmes. "The joint product provides owners and operators of airliners converted to private luxury aircraft with lower, more predictable costs, fleet-based purchasing and efficiency, and 24/7/365 support through eJet's maintenance and engineering support centre. The Lufthansa Technik and eJet Services joint programme offers low-utilisation and small fleet airline operators a comprehensive, global package of nose-to-tail maintenance and operating support."
The programme addresses an identified niche and there are obviously vast numbers of owners and operators with a diverse make or single aircraft fleet who continue to face paying for maintenance on a individually assessed basis that invariably carries a price premium.
The eJet and Lufthansa Technik cost-per-flight-hour programme is for Bombardier CRJ and Challenger 850 aircraft and covers engines, avionics, rotables, landing gear, auxiliary power units, wheels and brakes. "All key systems are covered, including electrical, hydraulic, pneumatic and environmental components," Markhoff says.
Lufthansa Technik provides global maintenance, repair and overhaul capability and logistics while eJet provides 24/7 maintenance control, parts tracking and record keeping, maintenance planning tools, and a customised maintenance programme for individual operators. Markhoff says: "This can reduce inspection and heavy maintenance costs by up to 20 per cent. The joint programme is both JAR OPS and FAA Part 21 compliant."
The programme, he says, includes no 'buy-in' for engine and LLP coverage. "If no engine event or LLP replacement has occurred during the term of the agreement, customers are eligible to receive 66 per cent of the money paid in for engine and engine LLP coverage returned to them. In addition, shipping costs for parts to any commercial airport worldwide is included in the hourly rate. Unlike other programmes, the hourly rate is never adjusted from year to year and annual escalation is capped at a maximum of four per cent per year."
Markhoff says that these, and other advantages, mean that private owners and fleet operators, such as SolidAir, can for the first time use and aspire to a true 'power by the hour' support programme replicating the pricing, service and efficiencies enjoyed by large airlines and for the first time available to private owners and small fleet operators. eJet and Lufthansa Technik will soon be expanding the programme to include Boeing and Airbus aircraft. "Our programme for converted CJRs and Challenger 850s will be made available for Challenger 604s and 605s.
"Owners and operators should check whether standard worldwide shipping and logistics costs are included in fixed-cost pricing. The terms for engines are massively important. Our programme has terms that allow no buy-in for engines and full engine and LLP coverage from day one." Owners who delegate to management companies need to know whether 24/7 technical support and troubleshooting assistance is included and what is charged as extra.
Maintenance planning, optional heavy check management, record keeping, parts management and tracking and engine trend monitoring are important aspects. "It is critical to ascertain what can be transferred to subsequent owners and operators," Markhoff points out.
Owners and operators can only buy private aircraft with confidence (EBAN March 2010) if they address the aircraft and engine maintenance issues. Successful operation and maintenance, in turn, depends on good timing of the purchase and a strong operational set-up.
Timing issues
"We firmly believe that there has never been a better time to buy a corporate jet," says Stefan Ludwig, project manager of Switzerland's Avima Consult Ltd. "But as recovering aircraft values encourage owners and operators to trade up or move into private aircraft ownership, they will find it crucial to decide the right type of operation to implement a cost-effective maintenance structure."
He adds: "There are two basic options. The owner can set up a private operation or company flight department, possibly with its own AOC, or select an aircraft management company to take care of everything."
Ludwig points out that the technical operation of aircraft is a key aspect taken care of by an aircraft management company under contract. If owners choose to delegate such operations, Avima's preferred partner for aircraft management is International Jet Management GmbH (IJM) in Vienna, Austria, which manages some 20 aircraft.
IJM, which employs a team of highly qualified and experienced aircraft engineers, says many owners prefer to delegate the tasks involved in taking care of every technical aspect.
Chief engineer Markus Volk's advice is: "Owners need to check that the management company's engineers offer 24-7 on-site support and grant or arrange that support whenever this seems necessary. It is also important to check the training aspects. IJM's engineers are on a permanent ongoing programme of further courses that enable them to employ the latest maintenance know-how on behalf of clients. The best companies will always be able to guarantee that complex safety standards are met and exceeded. A key factor of an efficient main-tenance organisation is an excellent relations network with maintenance providers, aircraft manufacturers and maintenance programme providers. Fast, solid and cost efficient solutions result from this, generating the customer the highest possible aircraft availability."
The company says it is important to have optimal communication between aircraft owners, maintenance service providers and other involved internal departments such as dispatch and finance. "This creates truly additional value for the aircraft owner," Volk adds.
IJM also employs field engineers specialising in the Gulfstream V and Global 5000 who can directly work on site if required.
Ludwig says that owners looking at private aircraft purchase and maintenance can be heartened by a market recovery that started in the high end segment "and can be expected to continue top to bottom throughout the coming 12 to 18 months." He adds: "Long term prognoses are always extremely difficult. Avima thinks high quality, low age aircraft can see a recovery of their asset values over the next five years, which will allow the aircraft purchaser to generate a very good profit upon resale of the asset or looking at it from an operator's point of view, the value increase would cover the operating costs for the aircraft for a considerable period of time."
Therefore Ludwig believes that now is a good time to both buy an aircraft with confidence and sign up for specialist arrangements to smooth the cost.
IJM's engineers say that there has to be an evaluation as to the optimum timing for new contracts. "If a new maintenance programme for airframe or engines is needed the company should be skilled at identifying the perfect fit with regards to the service/cost ratio. The owner-operator should check whether the maintenance provider always screens the market to ascertain the best possible solution regarding important aspects such as cost, quality of work, downtime, otherwise the financial benefits could be seriously eroded."
Air ambulance
While it is financially imperative for executive charter aircraft to operate to maximum efficiency, it may be a matter of life and death where air ambulances are concerned. AirMed, which boasts the UK's largest air ambulance operations fleet of ten aircraft, undertakes critical missions around the world. "Reliability is exceedingly important to us," says ceo Rupert Dent. "In order to achieve the required level of reliability, AirMed has an integrated EASA part 145 maintenance facility based at Oxford airport and is also a keen supporter of manufacturer's engine maintenance programmes. These programmes provide AirMed with a significant number of benefits as well as ensuring back up if it is required."
AirMed, among other aircraft, owns and operates four turbine Cheyennes and two Learjet 35As. In late 2005, as the company progressively built its turbine fleet, AirMed analysed the benefits of Pratt and Whitney's Fleet Management Programme (FMP) for multiple engines and their Eagle Service Plan (ESP) that covers individual engines. Because at the time AirMed planned to increase the size of the fleet - it now owns and operates a total of nine PT6 turbines (there is one stock PT6-61 engine for quick changes if required) - the analysis indicated that the FMP fleet programme provided the most suitable cover. Dent says: "AirMed therefore decided to sign up for an initial five-year plan. This plan has proven to be invaluable, providing loaner engines when one is due an overhaul, operating advice based on Pratt and Whitney's continuous data gathering from engines in the field, excellent parts delivery arrangements for engines as they come in on their routine maintenance cycles, continuous engine trend monitoring which will help extend the Time Before Overhaul (TBO) and so on."
Dent adds: "The flexibility of the programme has also been beneficial, with progressive additions to the number of engines that are covered, as additional aircraft have been purchased. One of the key criteria for signing up to the programme was of course to gain cost improvements over time. During the past few years the fleet size has built to the current nine engines. However, because there has been only one full year where all nine engines have been operated continuously, the cost reductions will only be seen in a year or two's time, when year on year comparisons are able to be made.
"One additional financial benefit however is already clear and that is that the programme helps to smooth the cost of engine overhauls over its five year life. At potentially US$ 400,000 an overhaul, the benefit to cashflow is important. While the scale of AirMed's operation means that FMP is the right choice, operators with one or two aircraft may find the ESP alternative more beneficial."
AirMed's two Lear 35As are powered by Honeywell turbofans and the manufacturer programme that is made available is called MSP. AirMed has chosen the MSP Gold alternative for all four engines. Dent says: "While it proved a little difficult at the outset to get the focus that was required from Honeywell, AirMed is again very satisfied with the level of support that is now being provided. In particular, when the first aircraft began operations in July 2009, Honeywell positioned a spare engine to the UK specifically to provide the support and back up that AirMed required. As AirMed is the only UK-based operator of the Lear 35A and the TFE 731-2-2B is only used on this type of aircraft, it undoubtedly shows the commitment that Honeywell are prepared to give an operator, when they were prepared to position an engine in the UK, in the way that they did. The other benefits of MSP Gold are similar to those that apply to FMP."
Dent says AirMed will continue to use engine manufacturer engine maintenance programmes in the future and believes that other operators, particularly in the demanding air ambulance sector, should also look at the benefits, if they have not already done so.
Fractional ownership
Steve Hughes, director of main-tenance and engineering, NetJets Europe, points out that the company can bring economies of scale to bear on smoothing the cost of aircraft and engine maintenance.
He says: "A share in a NetJets aircraft offers companies and individuals access to an entire fleet for a tiny fraction of what it costs to buy and maintain a single aircraft. As a consequence of this, all maintenance costs, scheduled and unscheduled, are distributed evenly and managed and controlled by NetJets Europe: an owner will never be surprised by unscheduled maintenance downtime as we will manage the logistics of a repair and arrange an alternative jet to get them to their destination. Thanks to our relationships with the manufacturers and the scale of our operation, we are also able to source vital technical expertise as needed."
NetJets Europe's maintenance fleets are organised with a 'single point of contact' manager addressing all areas of the aircraft and liaising with the manufacturers, service centres, flight crew and pilot fleet management. "The manager is responsible for everything from the carpet to the engines, radar to rudder, tyres to lights," says Hughes.
The organisation is structured so that each manager has responsibility for ensuring that the aircraft required are safe, available and efficiently serviced to meet owner requirements.
As with all other operators, NetJets Europe's maintenance operation falls into two categories: scheduled and unscheduled. Hughes says: "Scheduled maintenance is deter-mined by our self-styled approved aircraft inspection programme, developed from the manufacturer's maintenance manual chapter 4 & 5 recommendations and are mandated. These maintenance sessions are arranged after a set amount of flight time or a predetermined time interval, and are managed and projected over a 12 month period."
Unscheduled maintenance obviously takes place when one of a number of unanticipated problems arise, which may develop on ground prior to a flight or while en-route.
"The biggest difference from a traditional airline maintenance service is that we operate from a far greater number of different airports, most of which do not have on-site engineers capable of working on our specific aircraft types," Hughes adds. "A lot of traditional airlines can get support from other operator engineers - Boeing and Airbus engineers are well-distributed - and in most cases engineering support is sub-contracted. In the event of unscheduled maintenance, to recover or investigate a problem, we need to move our teams to the relevant airport locations if local engineering support and parts are not available."
Both scheduled and unscheduled maintenance are managed using a maintenance tracking and control database. Hughes points out: "Safety and resale value are key drivers to maintaining the aircraft and accurate technical records are a vital element and are managed by NetJets Europe. The 'repair by replacement' policy for modification ensures that the value of the aircraft is retained, and the manufacturer liaison programme is used to promote product and safety improvements and allow traceability of parts purchased from the manu-facturer and approved suppliers."
He says the fractional ownership business model allows individuals and companies to enjoy the convenience and flexibility of owning a private jet without the direct associated responsibilities of maintenance, hangaring or hiring pilots. "A share in a NetJets aircraft offers companies and individuals access to an entire fleet for a tiny fraction of what it costs to buy and maintain a single aircraft."
All maintenance costs, scheduled and unscheduled, he says, are distributed evenly and managed and controlled by NetJets Europe. Hughes pledges: "An owner will never be surprised by unscheduled maintenance downtime as we will manage the logistics of a repair and arrange an alternative jet to get them to their destination. Thanks to our relationships with the manufacturers and the scale of our operation, we are also able to source vital technical expertise as needed."
Fractional arrangements may provide a route to smoothing the cost of maintenance as well as ownership but thousands of owners and operators in the Middle East and Europe face direct responsibility, at least in the legal sense, for the safe maintenance of their aircraft. The arrangements may be delegated to a management company but the owner should at least have a familiarity with what will be covered.
Contracts that smooth the cost of aircraft maintenance are not warranties that take care of all expenses provided only that the owner meets the terms and conditions. There may be "extras" or provision for annual inflation. And, when it comes to resale, so-called "savings" on monthly outgoings can translate to a loss on the selling price. 'Power by the hour' style programmes have to be seen in the context of preserving the aircraft's value as well as being price-efficient for what they do.
Questions to ask the providers
Owners and operators seeking to smooth the cost of aircraft and engine maintenance need to ask searching questions of their aircraft management companies, as intermediaries or the providers.
