Aviation Maintenance: Back Shop: Industry Insights

For as long as I’ve been in aviation maintenance, there has been an underlying feeling that we (the maintenance community) have to keep the costs down so the poor airplane owners can afford to keep their aircraft. Recently I came to a revelation, "I don’t make enough money to own an airplane, why should I worry about making it easy on someone that can afford it." Airplane ownership has responsibilities. It is the owner’s responsibility to maintain that airplane in an airworthy condition. There is value to our time and knowledge. It is not our responsibility to undervalue ourselves so someone else can afford to keep his or her airplane.

" If we brought our industry up to the level of the local [automotive] dealer, we might be able to make some money!"

The wages that a shop pays the mechanics is a function of the shop rate. Accounting is actually very simple math. Income is what the customer pays the shop for work performed. Expenses are all the costs associated with performing that work. Those expenses include your wages, rent on the building, the cost of parts, heat, lights, office staff, insurance, and all the other things that are necessary to conduct business. If you subtract the expenses from the income, you get net profit. There are still taxes to pay! The more income you can generate, the more room there is in the equation to increase your pay. Even with the low pay, most mechanics understand that payroll is still the largest expense the shop has.

There is another side of this equation that needs to be included. The customer needs to get a reasonable amount of work for the time he or she is charged. Since most shops work on an hourly basis, the more hours a company can bill for an employee’s time, the more profitable the company will become (and hopefully the more the employees will share in those profits). Every employer recognizes that he or she can’t bill eight hours for each eight-hour day worked, but it is not unreasonable for an employer to expect to be able to bill six to six-and-a-half hours for each eight hours. That comes out to 75-80 percent of an employee’s time that should be billable. I’ve managed shops with some employees working at an 80-90 percent rate and others working at below 50 percent. The shop manager should expect that his or her employees will produce at a reasonable level.

Each mechanic needs to look at their work practices and do a time study of their work. How can I do this same task and expend less time? Move my tool box closer to my work, not stop and talk to every other employee as I move from place to place, find a better tool for the task at hand. Plan ahead so I only make one trip to the parts room instead of 10. There are entire books written on this subject, yet in actuality it is a very simple concept. How can I reduce the time to complete this task, and improve the quality?

Quality and pride of workmanship is a whole other subject area, but for now let’s just say that we need to constantly strive to improve quality.

The customer base that a shop should try to keep is those that want the airplane fixed and fixed correctly. The customer that shops around to get the lowest price for his or her annual is the customer that will argue about the bill or end up not paying at all. Those are the customers that I would rather not have. For a customer to argue about making a repair to his or her airplane that is required to keep it airworthy just blows my mind. Yet this happens day in and day out in the typical general aviation shop.

I challenge every shop owner to survey the local car dealers and find out what they are charging on an hourly basis. If we brought our industry up to the level of the local Toyota or Honda dealer, we might be able to make some money! Here in the Mid-Atlantic region, that’s approximately $120 per hour. Now, put a plan in place to increase your rates to that level during the next year. As our rates go up, increase your employee’s wages accordingly, and rather than barely breaking even, you might actually show a profit. At the same time make it known that each employee is expected to perform and maintain quality so that the customer is getting a fair deal. For those worker bees out there, show this to your boss and challenge him or her to bring the rates up to where they should be and work with them to maintain a productivity level that makes good economic sense.