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Aircraft Maintenance Management Module

Aircraft Maintenance Costs Factors

Maintenance Costs influencing factors

Aircraft Maintenance in General There are many factors impacts aircraft maintenance cost

that must be understood, reviewed and managed properly as the DMC is a key indicator required for assessing incurred costs when for example validating OEM/MRO maintenance proposals.

These factors are almost standardised in the industry and are best described by the two major Aircraft OEMs Boeing and Airbus. These factors were listed as shown in figure (2) below in a detailed manner as part of Boeing presentation in Dubai (Boeing, 2008).

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Maintenance Costs influencing factors Cont’d These factors are divided into two main categories where: a) Airlines influence the costs of: - Airline operations and Maintenance practices - Accounting and Support practices b) Airframe and Engine manufacturer designs influence

the costs of: - Product support - Airplane reliability and Maintainability

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Airline policy factors

For a better understanding of those factors, further elaboration is itemized below : 2009).

i- Airline Policy a) Maintenance Policy: - Maintenance programs, In-house and Outsourcing, b) Modifications and reliability improvement c) Cabin standards based on Commercial Policy d) Outstation Aircraft handling e) Human resources efficiency f) Inventory and operation service levels

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Aircraft design related factors

ii-Aircraft Technical Specification a) Engines thrust b) On board maintenance and troubleshooting system (e.g.

A380 NSS/OIS) c) Standardisation of Aircraft systems d) Electrical distribution and In Flight Entertainment

systems e) Technology evolution- On board Mobile Telephone and

SATCOM. f) New components and systems design with less

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Aircraft Operation factors

iii- Aircraft Operations

a) Utilisation and stage length

b) Average Take-off and landing weight

c) Average load factors

a) Environment – Dusty, sandy and hot

b) Runway conditions

c) Maintenance Facilities distance from Aircraft Ramp.

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Aircraft Age/Quality factors

iv-Aircraft Quality and Maturity-Aging During the initial five years, we have new induction

aircraft with lower maintenance costs considering the warranty effect. As shown in figure 2.3, from 5-15 year, the aircraft maturity period of almost steady maintenance high costs. Thereafter 15 years and beyond aging period of the aircraft starts where corrosion would be found more often on the airframe, structural fatigue inspections will commence and engines will require LLP replacements and higher shop visit rates.

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Power Plant Maintenance Costs Influencing factors The Power plant consists of Engines, APU, Cowlings, and

thrust reverser. The maintenance costs of these items have

been historically high. The main Engine Cost drivers are

Off/ON Wing where the influencing factors are similar to

those of the aircraft such as design, materials properties,

flight length, de-rate and aging. These are best described

by Airbus extracted slides below from a maintenance cost

presentation report below figures 2.4 – 2.6.(Airbus, 2009).

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Maintenance costs Benchmarking

Highlights Benchmarking is the process of comparing the cost, cycle

time, productivity, or quality of a specific process or method to another that is widely considered to be an industry standard or best practice. (Six Sigma: 2009).

In the airline industry benchmarking becomes vital due to the continuous improvement in the maintenance processes and modifications by the OEMS for the purpose of enhancing safety and performance of the aircraft and that is why Airlines do benchmarking exercise to themselves first at an envelop of two or more periods in different years or with others in the industry.

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Boeing states that Airlines must define the reporting and accounting standards that are needed to benchmark and enable an airline to more fully understand, control, and optimize those key performance indicators and financial metrics. Benchmarking reports are generated to assist airlines in understanding their technical operation performance to give visibility of areas for potential maintenance cost reduction. Within the context of benchmarking, the maintenance cost data and KPIs (Key Performance Indicators) are used regularly to specify high cost areas, identify gaps for possible investigation and induction of potential solutions or improvements to existing processes, review progress and outcomes.

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Benefits of benchmarking

The benchmarking exercise would achieve the following benefits:

1. Assist the airline to pin point the inefficiencies in its processes and introduce corrective measures in a timely manner.

2. Identify cost optimization opportunities when compared to other best in class.

3. Work in groups or forums together with OEMs(Original Equipment Manufacturers), MROs( Maintenance & Repair Organizations ) and other airlines to jointly arrive at the most effective solution towards industry known technical problems.

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Benefits of benchmarking cont’d

4. The airline can review the structural organization of other airlines and MROs in order to apply the most efficient structure to its own departments.

5. Analyze the airline KPIs so as to alter or amend based on latest industry trends.

6. When compared to others’ maintenance practices in industry, an airline works aggressively to reduce the waste in terms of labor and materials used.

7. A Regular benchmarking exercise helps the airline to gain and sustain competitive advantage and match the best in class.

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Elements of Benchmarking

In the airline industry these elements are used in the benchmarking exercise:

1. Incurred DMC per flight hour (FH).

2. Man-hours consumed per FH.

3. Material per FH.

4. Overhead Cost per FH.

5. Line & Base Maintenance events cost per FH.

6. Engine cost per FH.

7. The top 25 components cost per FH. Major cost drivers

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Implications of Benchmarking

Despite the abovementioned benchmarking benefits,

airlines must be cautious while conducting benchmarking

review as there are many implications associated with

benchmarking such as:

- It can affect the airline competitive edge.

- It can breach the contractual Non disclosure Agreements

(NDA).

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- It can give provide false results if comparing airlines have different fleet sizes and or unique maintenance or on board service standards. We cannot for example compare Emirates that have high cabin and maintenance standards with perhaps Air Arabia which is a low cost carrier with no frills.

- If the benchmarking results or recommendations are not taken into consideration, then the whole exercise would be a waste of time and effort.

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This whole chapter is aimed to have a better understanding on the maintenance cost elements and breakdown in terms of direct or indirect and significance of such costs implications on overall airline Direct Operating Costs (DOC). The Maintenance costs se are further analysed to understand the ON/OFF maintenance elements with regard to Line, Base and Shops activities.

Furthermore, we have reasonably touched on the influencing factors on the maintenance costs mainly from Aircraft and Airline operations aspects.

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The maintenance costs optimisation is with no

doubt a primary goal of airline community where

they ought to understand their processes and KPIs

very well in order to reduce inefficiencies where

possible, hence effects of optimisation on the

Airline maintenance practices was reviewed.

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Benchmarking examples- Aircraft and LRUs Reliability Operators need to collect, organize and report

reliability data to many different organizations : Manufacturers, suppliers, regulatory authorities.

Some of the benefits of reliability data : Assist operators and manufacturers to attain and

maintain higherreliability through trend monitoring. Facilitate maintenance program development,

escalation and de-escalation.

Determine which modification has a better payback by comparing

removal and failure rates of operators incorporating various Service

Bulletins/modifications. Determine if certain problem areas are unique to an

operator or ifothers are experiencing the same problems. Assist the Operator to obtain remedies from suppliers due

to the shortfall in achieving contractual MTBUR targets. $$ Millions annual savings from reduced delays and

cancellations, reduced non-routine maintenance.

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Benchmarking- ATA SPEC 2000 chapter 11ATA Chapter 11 has 9 records :1. LRU Removal recordPurpose : Collect details of the components removed

from an aircraftas well as reasons for removal and details of

component being installed.Fields include elements such as the manufacturer

part and serial numbers, the operator’s unique part and serial numbers if applicable,

hours and cycles data for the removed and installed components.

2. Shop Findings recordPurpose: Collect detailed component tear down

reports from an airline’s shop or other repair facilities.

Fields include elements such as fault found, part numbers of the

piece parts that are replaced, modifications incorporated in the shop visit.

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ATA SPEC 2000 chapter 11 cont’d

3. Aircraft Hours and Landings recordPurpose: Collect detailed hours, cycles and utilization data fromoperators. This data can also be used as the basis for MTBURcalculations, etc.Fields include elements such as days out of service counts and

ETOPS specific hours and cycles, etc.4. Aircraft Event recordPurpose : To capture aircraft event data such as delays,cancellations, incidents, etc.Fields are very comprehensive and can capture all elements of aschedule interruption tracking system. Attributes specific to

ETOPS operations are also captured with specific data elements.

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ATA SPEC 2000 chapter 11 cont’d

5. Aircraft Logbook recordPurpose : Collect technical/journey log entries such as pilot

reports, maintenance corrective action, etc.Fields include elements such as discrepancy symptom code,corrective action codes, findings code.

6. Scheduled Maintenance recordPurpose : Collect scheduled (heavy and line) maintenance data,findings and corrective action, and provide reference ability

back to the operator’s maintenance program.Fields include elements such as OEM MPD task number,

operatorunique task number if applicable, task inspection method andassociated findings.

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ATA SPEC 2000 chapter 11 cont’d

7. Service Bulletin/Modification recordPurpose : Provide data on service bulletin/modincorporation and un-incorporation.

8. Aircraft Status Change recordPurpose : Capture changes in aircraft ownership,operator, long term storage disposition, engine modelchanges, etc.

9. Summary Counts recordPurpose : Collect summarized rate and count

informationon an operator's fleet, e.g. schedule interruption

counts by ATA, etc.

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