Question: Why should an owner/operator consider an Hourly Cost Maintenance Program (HCMP)
Answer: An HCMP has many different benefits depending on the owner/operators needs. In all cases an HCMP for the airframe and powerplant remains as one of the more savvy investments that helps plan for budget when confronting a major maintenance event. An HCMP evens out maintenance costs for routine, regular and preventative maintenance requirements that all owner/operators may have. There are various HCMPs to consider; these should be the minimum coverage.
- Hourly Cost Maintenance Program overhaul inspections (scheduled and unscheduled)
- Routine maintenance needs (to and including scheduled service points to deal with lubricants and any other rotable items)
- Periodic engine washes (if approved for the powerplant)
- Removal and replacement costs (should the engine have to come off-mount)
- Loner/rental engine(s) while a covered engine is off the aircraft for service (if available) Turbine Only!
- Overhaul at the proscribed time (TBO)
- Transferable coverage (making the program itself an asset that adds value to the aircraft at the time of a sale or trade)
- Renewable to the maximum extent possible
Many companies offer maintenance plans that cover powerplants, including virtually all the major engine manufacturers, airframe builders, often in concert with the engine maker, and several independent firms. Independent firms highlight their abilities to tailor coverage to clients and their abilities to provide proven service around the globe.
Engine makers stress their knowledge, expertise and experience servicing engines they made and their own networks of approved service providers, in-house and out. At the end of the day, however what best works for any individual operator must hinge on what best fits their operations, their needs and (the main point of it all) their finances. Here we’ll examine examples of plans available through an airframe OEM, an engine OEM and through an independent third party plan provider.
To mention just a few HCMPs would include;
- Rolls-Royce Corporate Care
- Honeywell Maintenance Service Plan (MSP)
- Bombardier Services
- Jet Support Services, Inc. (JSSI)
- Pratt & Whitney Eagle Service Plan (ESP)
- General Electric (On-Point)
- PistonPower (Unscheduled and Airframe)
- Williams International Total Assurance Plus (TAP)
- Diamond (PistonPower)
- Tecnam (PistonPower)
- Mooney (PistonPower)
- Astro Engine (PistonPower)
Aircraft brokers/dealers proclaim that an aircraft on an HCMP will sell quicker and at a higher price than on not on these programs. VREF Values for used aircraft represents many aircraft on an HCMP for turbines, the average overhaul price includes about half of the possible life limited parts, if more life limited parts (such as in 2nd run engines) need to be replaced, the overhaul will be much more costly. Engine insurance programs such as MSP, JSSI or TAP are included with many turbine aircraft in VRef. If the aircraft in question has Full MSP, Full JSSI or Power by the Hour considers that aircraft to have zero-time engines.
CAUTION: There are several variations to each of these programs which may result in lower coverage. For example, on some programs certain cycle limited parts may not be covered. Also, some programs allow deferred payment. Check the contract carefully for each engine. In VrefOnline.com click on Engine/Airframe Plans for more details.
Additionally, VRef indicates a value add for PistonPower Programs for reciprocating engines. Values have to be reduced if an aircraft are not on an HCMP.
Budget controls and service support are highlighted with an HCMP.
Support when you need it when you need loaner engines, or you have had an unscheduled engine removal. Part of most guaranteed turbine maintenance agreements is that loaner engines will be provided at no charge when your engine(s) are off the aircraft for repair or heavy maintenance.
The companies providing guaranteed maintenance programs have significant pools of spare engines to provide this support.
Also, the time after an engine has had an unscheduled failure is not the time to have to become an expert on deciding the best way to get the aircraft back in the air. With an HCMP, that expertise is one phone call away. And best of all, the advice and the repairs are all included in the hourly fee.
So, how can these guaranteed maintenance programs help your company? First, it makes budgeting and cash flow management much easier. Financial types really dislike huge expenditures of a variable size that occur on an infrequent basis. They dislike these because it makes their financial planning very difficult.
Second, guaranteed engine/airframe maintenance programs, by requiring pay-as-you-go monthly payments, give a much more realistic picture of the cost of operation of your aircraft and, if you are a commercial operator, a more realistic picture of your profitability. Remember, if you pay for engine heavy maintenance as incurred, you will be understating the real cost of operation for most years and overstating it in the year when the heavy maintenance is done.
Third, it is like an insurance policy that covers unexpected expenses such as expensive premature engine removals.
As an owner/operator, these are powerful arguments in favor of guaranteed maintenance programs.
The important tasks of aviation managers is to provide as much operational and financial stability and predictability for their departments as possible. That doesn’t mean that guaranteed engine maintenance is for everyone.
It does mean that the advantages and disadvantages for your operation should be subjected to very careful scrutiny.
Owner/Operators will have different requirements for their specific operations.
These are some of the benefits of an Airframe or Engine Maintenance Program;
- Offers predictable operational costs, budgeting and financial forecasting
- Stabilizes aircraft maintenance costs
- Lessens out of pocket expenses for major engine maintenance costs
- Enhances aircraft resale value and protects your investment
- Minimizes aircraft on ground (AOG) and maximizes aircraft dispatch ability
- Increases ability to sell the aircraft as buyers are often interested in HCM programs
- Provides access to 24/7 global support saving time and money
- Offers prospective buyers peace of mind with transferrable contracts when the aircraft is sold, transferred or leased
For additional information in reference to engine maintenance plans, questions or if we can assist you with valuing your engine maintenance plan or aircraft, contact:
Ken Dufour, ASA, MAM, ATP, CFI
VRef Publishing CEO
PistonPower, Member Board of Directors
The above article is intended to provide an explanation and augment in pilots or technicians language, topics to introduce aircraft owners and operators with supplemental information for our VREF subscribers. It is intended as guide. Contact your nearest FAA Flight Standards District Office (FSDO) or FAA.gov for additional information. The data/information is obtained from numerous FAA and other industry sources. It is edited and believed to be accurate. VREF does not warrant the accuracy or the source material and assumes no responsibility to any person in connection with the use of this VREF article. Permission to reprint this article is granted, so far as the context of the information remains intact and appropriate credit is given to VREF Publishing.