Helping Airlines Get the Warranty Dollars They’re Due

THE TAKEAWAY

Airlines, cargo carriers and other fleet operators can easily miss out on something rightfully theirs: reimbursement from repair vendors and OEMs for parts that are under warranty. The reasons can range from claims being inadvertently denied to the carrier not having the resources or expertise to successfully identify, justify, track and challenge denied claims.

No matter the cause, the consequences are the same. Operators spend more money than they should and suffer operational inefficiencies and impact. A partner with experience in aircraft maintenance, engineering and warranty adjudication can help airline supply chain and component repair teams identify warrantable items, issue and track claims, and ultimately deliver warranty claim value. A partner effectively holds repair vendors and OEMs more accountable to the obligations of their service-level agreements (SLAs). Savings involve both new and used parts and aircraft and come by avoiding costs including part exchanges or replacement, repairs and labor. Success is achieved through a value-share model where the partner makes money only when the carrier saves money.

THE PROBLEM

For airlines and other carriers, repairing aircraft and returning them to service is understandably the top priority. Take a part off, replace it, move on to the next problem. Amid day-to-day operational demands and lean staffing, warranty claim opportunities can be easily lost.

Big-ticket items such as air turbine starters or steering manifolds might catch the carrier’s attention, but smaller, regularly replaced warranty-eligible items such as exhaust fans and light assemblies slip by.

Many different factors come into play:

  • The airline doesn’t realize the part is eligible for coverage.
  • Vendors don’t realize a warranty claim has been made.
  • When a claim is rejected, the carrier accepts the denial or chooses not to dispute it.
  • Tracking claims to conclusion gets lost in the shuffle amid heavy workload and large claim volumes.
  • Warranty terms may be difficult to identify. For instance, a part bought outright from a vendor may have a one-year warranty. The same part, when pulled off a new aircraft, may have a multiyear warranty.
  • As preferred vendors change, an airline sends a part to their new preferred vendor instead of a former vendor who’s responsible for the warranty.
  • An airline’s existing component repair/warranty team lacks the technical expertise to properly diagnose an invoice or tear-down report.

Hard-to-diagnose issues involving OEM workmanship can be warranty matters, considering they can lead to costly groundings.

THE SOLUTION

SeaTec can apply its engineering, materials, maintenance and warranty adjudication expertise to help supply chain and component repair organizations maximize their cost avoidance.

With the customer’s consensus, our dedicated warranty team gets a first look at examining unserviceable parts coming off an aircraft. Ideally, we do this by gaining access to key maintenance system data feeds, causing minimal disruption to existing workflows.

If we determine the part may be covered, we file a claim on behalf of the airline, applying technical expertise beyond what a warranty/repair order clerk or other employee might. If the claim is denied without merit, we initiate an appeal based on relevant, technical evidence. If a part is slated to be sent to the wrong vendor, our team intervenes with the airline’s materials department to ensure it’s rerouted appropriately to gain coverage. We track each claim through to its conclusion, which we define as the repaired or replaced part being received back into inventory.

Some parts, such as batteries, wheels and brakes, are inherently not eligible for warranty, or not practical for warranty consideration. Other parts may not qualify due to customer-induced damage (CID) or no fault found (NFF). When this happens, our team carefully reviews the vendor or OEM response and tear-down report and performs our own internal assessment to validate.

Our team can also pursue aircraft out of service (AOS) events caused by OEM defects or quality escapes following a heavy maintenance visit (HMV) that impact the operation of both new and used aircraft. Claims like these can incur expenses across a wide spectrum of sources including on-call maintenance providers, specialized maintenance services and AOS cost.

It’s not only potential claims that our engineers identify. They also spot patterns such as parts with high rates of failure. Or they zero in on component parts that are repeatedly deemed by vendors to have NFF or CID. In such cases, visibility into this data allows the airline to reassess its part failure troubleshooting approach or handling procedures, while potentially reducing inventory as a result.

Overall, three simple principles apply when SeaTec manages the warranty process:

  1. We’re committed to defending the rights of our customers, while helping them gain dollars and efficiency.
  2. We’re committed to holding our customer’s repair vendors and OEMs accountable to the contractual SLAs.
  3. If our customers don’t save money, we don’t make money.

For more information about our engineering, technical services, MRO capabilities or related topics, please contact or the author and follow us on LinkedIn.