MRO Business
Week 1
HC 1.1 Corendon Engine Planning
A Bird strike will have effect on the airline, because the aircraft will be out of service for at least 72
hours, and will undergo heavy repairs that will cost up to $3.500.000, and when the engine needs to
be scrapped it will cost $11.000.000.
Engine Planning is necessary for:
- Lease contract and return conditions (Engine needs to be delivered with a certain remaining
life)
- Operational costs (High fuel burns due to inefficiency, FOD ingestion)
- Life Limits (Full performance Restoration, LLP’s module replacement)
Engines are next to airframe the most expensive assets.
New Engine is around $11.000.000
Overhaul costs $1.500.000/ $4.500.000
Major elements of the long-term engine planning are:
- Life Limited Parts (LLP)
- EGT Margin based on (Theoretical input manufacturer, Corrected actual results during
operation of the aircraft)
- Known risks for repairs after inspections (J-hook, Dilution holes around spray nozzles)
High Rating (use of the Engine): Will lead to a faster EGT deterioration and will go faster to the shop.
Low Rating (use of the Engine): Will lead to a slower EGT deterioration and the time on wing will be
longer.
Higher reduction of EGTm are caused by:
- Environment (China, India), (performing less Engine Washes).
A low EGTm will cause a high EGT, where the engine will have EGT exceedances when operating on
high power settings.
An FPR will enhance the performance and EGTm of an engine.
When in the planning EGTm due is better compared to full performance, savings are made.
Performing an Engine Wash does not mean you can advance the EGTm to the limits for a redelivery
of an engine/aircraft.
Saving money is the key to ensure to cover high costs of repairs and shop visits.
When leasing an aircraft, maintenance reserves are part of the lease contract.
When owning an aircraft, own maintenance reserves need to be built to cover the maintenance
costs.
Not all costs might be covered in the maintenance reserves at the lessor, therefore own additional
maintenance reserves are advised.
Maintenance reserves(lease): LLP at lessor – Modules at lessor – Airlines maintenance reserves.
, LLP is a cycle life related item (LLP $132 per engine cycle)
LLP’s increase every year. (shortages need to be paid by the operator when an engine goes to the
shop and all LLP’s are not fully replaced).
Used LLP’s:
- Costs are lower
- Good decision when engine is going to be phased out soon
- When the used LLP has sufficient life remaining until the next shop visit.
Module maintenance: Per engine hour $99.
Good engine maintenance causes longer time on-wing:
- Engine washes
- Environment it is operating in
The previous maintenance reserves don’t cover it all. Engine can come off wing early, due to a bird
strike:
- Damaged LLP’s needs to be replaced
- Shop limitations are more stringent compared to on-wing limitations
Additional costs:
- Manpower for engine change
- Hangar costs
- Sub-charters for aircraft out of service
Spare engine costs $11.000.000, most airline lease a spare engine for a short period.
Average costs of a lease engine: $155 per hour, $125 Per cycle, $65.000 per month.
HC 1.2 Leasing & Contract
An Agreement the existence of a contract requires the following factual elements:
- Offer
- Acceptance
- Adhere to the terms
- Payment
- Fixed time
- Terms/conditions for failure
- Performance audit
Airlines purchased their aircraft through capital, bank loans, investors or equipment sale.
Owner(lessor): equipment provides it to the user.
User(lessee): signs a contract which may be a fixed or flexible legal agreement and proceed to use it
for financial gains.
Type Aircraft Leasing:
- Dry Lease: arrangement whereby the lessor(owner) provides an aircraft to the lessee
WITHOUT insurance, crew, ground staff, supporting equipment, maintenance etc. Must be
registered under the airline’s AOC (tail registration identification). Short term: 1-4 years,
Long term: 4-12 years. Legally bounded by the contractual conditions: regular aircraft
maintenance, maintenance reserves payments, re-delivery conditions or lease extended and
hull and accidental insurances.
Week 1
HC 1.1 Corendon Engine Planning
A Bird strike will have effect on the airline, because the aircraft will be out of service for at least 72
hours, and will undergo heavy repairs that will cost up to $3.500.000, and when the engine needs to
be scrapped it will cost $11.000.000.
Engine Planning is necessary for:
- Lease contract and return conditions (Engine needs to be delivered with a certain remaining
life)
- Operational costs (High fuel burns due to inefficiency, FOD ingestion)
- Life Limits (Full performance Restoration, LLP’s module replacement)
Engines are next to airframe the most expensive assets.
New Engine is around $11.000.000
Overhaul costs $1.500.000/ $4.500.000
Major elements of the long-term engine planning are:
- Life Limited Parts (LLP)
- EGT Margin based on (Theoretical input manufacturer, Corrected actual results during
operation of the aircraft)
- Known risks for repairs after inspections (J-hook, Dilution holes around spray nozzles)
High Rating (use of the Engine): Will lead to a faster EGT deterioration and will go faster to the shop.
Low Rating (use of the Engine): Will lead to a slower EGT deterioration and the time on wing will be
longer.
Higher reduction of EGTm are caused by:
- Environment (China, India), (performing less Engine Washes).
A low EGTm will cause a high EGT, where the engine will have EGT exceedances when operating on
high power settings.
An FPR will enhance the performance and EGTm of an engine.
When in the planning EGTm due is better compared to full performance, savings are made.
Performing an Engine Wash does not mean you can advance the EGTm to the limits for a redelivery
of an engine/aircraft.
Saving money is the key to ensure to cover high costs of repairs and shop visits.
When leasing an aircraft, maintenance reserves are part of the lease contract.
When owning an aircraft, own maintenance reserves need to be built to cover the maintenance
costs.
Not all costs might be covered in the maintenance reserves at the lessor, therefore own additional
maintenance reserves are advised.
Maintenance reserves(lease): LLP at lessor – Modules at lessor – Airlines maintenance reserves.
, LLP is a cycle life related item (LLP $132 per engine cycle)
LLP’s increase every year. (shortages need to be paid by the operator when an engine goes to the
shop and all LLP’s are not fully replaced).
Used LLP’s:
- Costs are lower
- Good decision when engine is going to be phased out soon
- When the used LLP has sufficient life remaining until the next shop visit.
Module maintenance: Per engine hour $99.
Good engine maintenance causes longer time on-wing:
- Engine washes
- Environment it is operating in
The previous maintenance reserves don’t cover it all. Engine can come off wing early, due to a bird
strike:
- Damaged LLP’s needs to be replaced
- Shop limitations are more stringent compared to on-wing limitations
Additional costs:
- Manpower for engine change
- Hangar costs
- Sub-charters for aircraft out of service
Spare engine costs $11.000.000, most airline lease a spare engine for a short period.
Average costs of a lease engine: $155 per hour, $125 Per cycle, $65.000 per month.
HC 1.2 Leasing & Contract
An Agreement the existence of a contract requires the following factual elements:
- Offer
- Acceptance
- Adhere to the terms
- Payment
- Fixed time
- Terms/conditions for failure
- Performance audit
Airlines purchased their aircraft through capital, bank loans, investors or equipment sale.
Owner(lessor): equipment provides it to the user.
User(lessee): signs a contract which may be a fixed or flexible legal agreement and proceed to use it
for financial gains.
Type Aircraft Leasing:
- Dry Lease: arrangement whereby the lessor(owner) provides an aircraft to the lessee
WITHOUT insurance, crew, ground staff, supporting equipment, maintenance etc. Must be
registered under the airline’s AOC (tail registration identification). Short term: 1-4 years,
Long term: 4-12 years. Legally bounded by the contractual conditions: regular aircraft
maintenance, maintenance reserves payments, re-delivery conditions or lease extended and
hull and accidental insurances.
