Sunday, March 1, 2009
With cost the dominant driver, operators seek consistency of maintenance, repair expenses
Operators today — be they airline, business aviation, or military — are looking for known, predicable avionics costs, and this quest is driving industry maintenance trends. Avionics original equipment manufacturers (OEMs) are offering "avionics-by-the hour" packages that include leased spares, and major maintenance, repair and overhaul (MROs) companies are offering "nose-to-tail" warranties on upgrade and repair work.
Meanwhile, major airlines like Delta and American continue to accomplish a large portion of their maintenance work in-house, while seeking outside customers to generate revenue during these difficult financial times.
"Everybody is looking at trying to drive to known costs. Nobody wants to deal with variable costs anymore," said Craig Elliott, senior director of business development for Rockwell Collins Services.
Another major avionics OEM agrees. "We’re finding that across all aviation segments, customers want to understand what their avionics repair and maintenance costs are going to be so they can budget for them more consistently," said Carl Esposito, Honeywell Aerospace Platform Systems vice president of marketing.
Rockwell Collins believes that flexibility is the key to fulfilling its customers needs. "We are trying to maintain as much flexibility as we possibly can to meet those requirements," Elliott said. "We go out with package offerings, but then we customize and tailor that to the specific needs of each individual airline or corporate operator."
Dispatch programs, where the OEM provides and maintains a pool of spares at a guaranteed level for a given customer, have not been the norm in the air transport industry and "some customers are a little uncomfortable yet in this," Elliott said. "So we sit down and work out a specific list of assets the airline feels they must have control over. We’ll work out a deal and back that up with our own regional pool," he added.
Previously, airlines negotiated spares as part of the new aircraft buy. But as the marketplace changed to supplier furnished equipment (SFE), they have to manage the supportability of the equipment on board.
"It’s an opportunity to save a great deal of money," Elliott said. "They no longer have to have millions of dollars in assets, in spares. They can turn that over to someone like us who can manage and guarantee availability at a fixed cost per flight hour."
All Nippon Airways (ANA) of Japan, launch customer for the Boeing 787 Dreamliner, also will be the first to take advantage of the Rockwell Collins Dispatch Program in support of the aircraft. The 10-year, fixed price-per-flight hour agreement provides guaranteed dispatch levels through spares management, logistical support and component reliability improvements for Rockwell Collins’ suite of displays, communication, surveillance and pilot-control systems.
"The service program we’ve selected reflects a tailored solution that is sure to help us maximize the efficiency of our operation," stated Osamu Shinobe, ANA executive vice president.
A Rockwell Collins customized dispatch program also has been selected by Airbus to maintain Singapore Airlines’ future fleet of 19 leased A330s. The avionics OEM will have components stock located on-site at the airline’s main base, along with access to a pool of components located at the Rockwell Collins Singapore Service Center.
Also, in January, Rockwell Collins received a contract from Lockheed Martin to provide capability, training and integration support for the U.S. Air Force’s F-22 avionics suite at Warner Robins Air Logistics Center in Georgia.
Upgrades are a growing part of Rockwell Collins’ business, "whether it be through an exchange opportunity or a service bulletin upgrade," Elliott said. He cited displays, for example, that customers may want to upgrade for Required Navigation Performance (RNP) or other future airspace requirements.
Honeywell, borrowing from a maintenance service plan developed for its business aviation engines, offers a similar program for avionics on business aircraft based on annual usage. The Honeywell Avionics Protection Plan (HAPP) provides customers with "repeatable, predictable and dependable avionics maintenance cost for their aircraft, and we customize the coverage depending on the equipment on their aircraft," Esposito said. The avionics OEM supports its Primus Epic control display system/retrofit (CDS/R) with a two-year HAPP protection plan that can be extended if the customer chooses.
For business aircraft customers, Honeywell provides worldwide spares support as part of its Global Field Support Network, with 258 engineers in 32 countries. The company offers a similar plan for airline customers, with 24-hour technical support provided through its Technical Operations Center in Phoenix. The company operates avionics repair facilities near Seattle, in Wichita, Dallas, Singapore, Toulouse and the United Kingdom.
France’s Thales takes a holistic approach to supporting its equipment, involving avionics replacement, spares inventory and logistics.
"Like virtually every other business, our objective is to grow our aftermarket business," said Ed Senen, general manager of Aerospace Services Worldwide for Thales Aerospace Americas. "What we’re doing now is offering customers ‘repair by the hour,’ that covers the unit that came with the airplane, the spare equipment associated with the unit, and the spare unit that didn’t come with the airplane."
Instead of the customer having to buy a spare, the equipment is leased and the repair for the equipment Thales has on the airplane is provided at one hourly rate.
"From a trend point of view, more and more, operators are interested in suppliers like Thales taking on more risk-type of performance," Senen said. For "this performance-based logistics, we are providing not only the assets that are needed in terms of spare equipment in the repair, we’re managing the logistics to a fulfillment rate in terms of dispatch reliability and readiness."
Senen said military customers have taken the lead in this trend, though airlines also are taking advantage of logistics support.
Thales’s in-flight entertainment (IFE) customers receive an additional service, called "TopCare," that provides line maintenance as well. "We are providing meet-and-greet service to be able to troubleshoot the aircraft, fix the snags if there are any, and return the aircraft to service," Senen said.
Responding to a desire by customers to minimize their support transactions, Thales is collaborating with other major avionics partners on the Airbus A380 platform, including Diehl Aerospace, Liebherr Aerospace and Zodiac, in a joint venture company called OEM Services. Singapore Airlines is the launch customer for the service.
"OEM Services plays the role of aggregator in being able to manage to a service-level commitment the repair services, the logistics and the asset management of those companies under one contract with the customer, instead of dealing with four companies," Senen said.
Boeing offers its customers service, maintenance and retrofit engineering assistance on a 24-hour basis, and works closely with the avionics OEMs in answering questions through its Boeing Commercial Airplanes Operations Center in Seattle. The airframer provides around-the-clock response to urgent service requests from customers requiring response in fewer than 24 hours.
Boeing also is developing the ability to electronically distribute software and data to aircraft, eliminating the need to download using physical storage devices and data loaders on the aircraft. This enhances its ability to maintain and update avionics systems that use loadable software, according to Jack Trunnell, Boeing director of Fleet Support Engineering.
Operators can report and diagnose faults and plan for repairs before the aircraft reaches the gate. Boeing also provides a "maintenance performance toolbox," an online system with up-to-date fleet maintenance information designed to aid the technical operations staff responsible for aircraft troubleshooting.
Delta Air Lines has chosen to accomplish much of its maintenance, repair and overhaul in-house, operating as a profit center for the company. Its "outside" customers include World Airways, Airborne Express, Hawaiian Air, Iceland Air, Star Air, Ryan International and Miami Air.
Delta repairs most of the avionics components for its own fleet of Boeing, Bombardier and MD series aircraft, including Level 3 maintenance for itself and many customers. The Delta TechOps avionics operation in Atlanta employs some 200 technicians in instrument, electronics, audio/visual, ATE, radio, electrical assessory and precision measuring equipment and tooling (PMET) shops. Delta also partners with on-site avionics OEM representatives to incorporate the latest reliability standards and has support agreements in place with all the major avionics manufacturers.
The airline’s MRO strategy "has been and will always be driven by quality, cost and time," said Larry Hieber, Delta general manager of Component Operations. "The safety of our passengers is our number one priority, therefore the quality of our components will never be compromised, regardless of cost. That, coupled with the cost of repairs and the time it takes to accomplish, encompass our total cost of ownership. We constantly compare our total cost with the industry and, where it makes sense, we market these core competencies to existing and potential customers."
The carrier’s outside customers "realize we are an airline as well as an MRO, and thus understand their needs," Hieber said. "We support our customer’s aircraft in the same manner we support our own fleet."
Delta’s recent merger with Northwest Airlines has opened additional opportunities for MRO growth with the addition of Northwest’s Airbus A319, A320 and A330 aircraft. Northwest’s three avionics shops will be incorporated with Delta TechOps, with relocation packages offered to about 40 technicians.
"We will leverage this opportunity, where appropriate, to expand our capabilities, without deviating from our MRO strategy," Hieber said.
MROs Innovate To Support Upgrades, Maintenance
The increasing sophistication of avionics is challenging independent maintenance, repair and overhaul (MRO) companies. But they are finding innovative ways to deal with the challenges.
StandardAero, Tempe., Ariz., last year formed partnerships with avionics OEMs to promote new displays and engine monitoring equipment for business aircraft. The company said its Designated Alteration Station in Springfield, Ill., will generate the first supplemental type certificate for Honeywell’s DU-875 flight deck upgrade for the Falcon 900C and EX series aircraft. The upgrade replaces the existing Honeywell Primus 2000 DU-870 CRT displays with LCDs.
The new displays will include a built-in Advanced File Graphics Server supporting electronic charts, maps, XM graphical weather and video, a capability not available on the current CRTs.
"The DU-875 retrofit program for the Falcon 900 is an excellent example of the value-added, tip-to-tail business aircraft services StandardAero is creating for our customers," said Scott Taylor, StandardAero senior vice president for Sales, Strategy & Business Development. "Today we are much more than just a turbine-engine MRO company."
StandardAero also announced an agreement with Shadin Avionics, St. Louis Park, Minn., to jointly market the ETM-XL electronic trend sampling and exceedance monitoring system for Pratt & Whitney Canada PT6A turbine engines. The system records flight duration, engine cycles, trends and exceedances set by predetermined engine limits.
While Duncan Aviation, Lincoln, Neb., regularly "sells" major OEM avionics-by-the-hour dispatch programs on retrofit work it does, the company also repairs components.
"One thing is different," said Don Fiedler, Duncan Aviation avionics business development manager. "We provide ‘loaners’ (spares) to the customer, rather than exchanges that the OEMs provide. We give them a spare unit to use while we repair theirs, and once it is repaired, we send it back to them and they send the loaner back to us."
With major repair and overhaul facilities in Lincoln and in Battle Creek, Mich., Duncan Aviation operates 24 satellite facilities for corporate aircraft throughout the United States, including avionics installation and line maintenance facilities at 14 locations.
The company backs up avionics OEM warranties with extended agreements. "In both our Rockwell Collins Pro Line 21 Glass Box solutions and Honeywell’s Primus Epic CDS/R upgrades, the new equipment we install is covered by the manufacturer for two years," said Gary Harpster, who specializes in cockpit retrofits. "But if the customer wants a stronger ‘peace of mind,’ we work with the OEM to offer a nose-to-tail warranty as an option."
These programs are particularly attractive to first-time corporate aircraft buyers, Harpster said. "A first-time buyer knows what the aircraft cost and what the payments are going to be, but he doesn’t know what his maintenance costs are going to be. He wants a set number that he can at least manage for the first 12 months," he explained.
The retrofit business is very good, despite the bad economy, Harpster maintained.
"If people plan to keep their aircraft for the next three-to-five years, they know the one weak link is probably the avionics — possibly the displays or the FMS. We have a lot of people talking about WAAS (Wide Area Augmentation System) and LPV (localizer performance with vertical guidance). They want to know if they can add it to the airplane, and what needs to be done."
Smaller MROs are serving customers on a regional basis. U.S. Aviation Group, Denton, Texas, offers repair and maintenance of King Air turboprops. The company recently installed an Aspen Avionics EFD 1000 electronic flight display in a Beech Bonanza, "a big step up from the analog gauges it replaced," said Steve McGee, avionics manager. U.S. Aviation is a certified repair station for Honeywell and Bendix King radios as well as for Garmin systems. — James W. Ramsey