Taking an older aircraft off an engine program almost certainly seals its fate, guaranteeing that it will be parted out when the engines are due for a heavy inspection.
Background:
Of the four most recently parted out Falcon 50s, three were not on an engine program. Even high-pedigree, single-owner Falcon 900Bs are not immune. The two most recent 900Bs that were parted out also were not on an engine program. In fact, Falcon 50s and 900Bs are 75 percent more likely to be taken out of service and parted out if they do not have an engine program when the engines come due for heavy inspections.
The most expensive part of any aircraft is always the engines; a maxim becoming truer as the aircraft age and the airframes depreciate. If they are not enrolled on an engine program, then there is very little value left in the aircraft when one, two or all three engines are due for a major inspection or shop visit.
Here is a standard example: a 1988 model year Falcon 900B that would be worth $3.5m if on an engine program is now worth $1.8m because it is not on an engine program and has engines coming due for MPIs or CZIs. The aircraft also has a C check due, and needs paint, interior and avionics upgrades. When everything is added up, the inspections and modifications will cost more than the airplane is currently worth. Therefore, the decision is made to part it out. If it had been enrolled on an engine program, however, it would have made sense to make the investment and keep the aircraft flying.
Business Case:
In this scenario, an asset that may have kept flying for another eight to 10 years is now irreversibly taken out of service for preventable economic reasons. That means one less aircraft needing pilots, maintenance, fuel, parts, avionics and interiors upgrades. There is one less aircraft to keep a mechanic busy, and fewer engines to keep engine shops busy. Tenured pilots will even sometimes retire when their aircraft gets parted out. Every time an aircraft leaves the fleet, the revenue stream associated with it dries up, too.
On average, Falcon 50s and 900Bs for sale without an engine program tend to sit on the market longer and capture below wholesale pricing when they do sell. The major economic impact resulting from an aircraft being dismantled can be substantially reduced if the operator participates in an hourly engine program. When the aircraft is sold that equity is passed on to the next operator. Keeping these aircraft flying helps keep the entire industry healthy.
Proposed Solution(s):
While aircraft values have been declining for a decade, the cost of hourly engine maintenance programs has not. Using EAP’s oversight, the engines can be operated more economically.
EAP has developed a full-service engine program providing comprehensive coverage for up to 30 percent less than competing programs. With its lower costs and full service, aging aircraft can stay in the air longer and give life to these still highly versatile airframes.
Most operators are shocked when they realize the benefits and savings – ranging from $80-$100 per engine per hour less than the traditional options – available to them using EAP’s hourly maintenance plan. EAP covers scheduled and unscheduled maintenance, as well as the life-limited components, LRUs, rentals, shipping, R&R and 24-hour AOG service. Operators get full coverage with only 75 hours as the yearly minimum.
About EAP: The Engine Assurance Program (EAP) was formed to provide an affordable hourly engine maintenance program option for operators of TFE731-2, TFE731-3, TFE731-4, TFE731-5, JT15D-4 and JT15D-5 -powered aircraft. Using EAP’s oversight, the engines can be operated more economically. EAP is headquartered in Dallas, Texas.
For more information, contact Sean Lynch or Marco Cardenas at [email protected] or +1.214.350.0877 or visit www.eap.aero.
