WHAT DIFFERENTIATES THE MOST SUCCESSFUL AIRCRAFT TRANSFERS – AN OPERATOR’S PERSPECTIVE
Aircraft transfers were increasing and are now at all-time highs due to COVID-19 as airlines right size their operation for the ‘new normal’.
The effectiveness with which aircraft transfers are executed impacts sellers, buyers, lessors, and regulators. Poorly executed transfers can be costly for all parties involved and can negatively impact the buyer’s operation for months after an aircraft enters into service.
Five factors differentiate the successful operators who quickly and effectively enter aircraft into service and have them generating revenue.
THE VOLUME OF USED AIRCRAFT TRANSFERS IS SURGING
Between 2010 and 2020, more than 1,000 aircraft were delivered annually by Original Equipment Manufacturers (OEM), roughly half of which were leased. Almost one in five were OEM financed. This volume, and the popularity of leasing, created a sizeable and active used aircraft market for opportunistic airline operators. Right sizing fleets because of COVID-19 has resulted in a record number of sales and lease returns.
BUYER BEWARE - CONSIDERATIONS AND CONSEQUENCES
Transfers (from contract execution to aircraft in service) can take between 5 and 11 months for a single aircraft. Packages of aircraft, or contracts which initiate the transfer of multiple aircraft, can stretch the timeline significantly further. Variation in elapsed time of transfer can be a function of many variables, not all of which are predictable or within the control of the buyer. This, coupled with the need to surge with dedicated specialist resources for a defined period, is why many airlines contract out the process or engage support.
Executing a transfer involves fleet planning, revenue management, and the engineering organizations of both the buyer and the seller. How well a transfer is executed can have significant regulatory compliance implications for the specific aircraft being transferred and, in some instances the buyer’s entire fleet.
The risk of an extended transfer (delays) is generally borne by the buyer, or in the case of a lease return the lessee, but it can be mitigated. Friction between buyers and sellers is common and often related to universal complexity and pain factors which can be managed with proper planning and resourcing.
Focusing on the engineering perspective of a transfer, 5 steps follow a purchase decision and culminate in an aircraft’s entry into service.
In our experience multiple complexity factors must be considered during planning for a transfer:
- Fleet type not currently operated
- Fleet age
- Condition (new or used, operational history)
- Number of previous operators and location (US domestic with FAA certification, or international with/without FAA certification)
- Physical condition of the aircraft
- The quality and the format of the aircraft records (format of the data (Spec 2500), language, and completeness of the records)
We also observe the following pain factors as consistently impacting aircraft transfers:
- Physical condition relative to the contracted condition
- Differences in configuration (mods/ICAWs/program differences) of the acquired aircraft relative to the existing fleet
- Ops Spec, pre-coordinating with FAA for acquiring a used aircraft; coordinating ferry requirements
- Differences in maintenance programs
- Setup of data, inventory, supply chain, manuals, task cards, maintenance agreements, etc. (a byproduct of config work)
Individually and collectively these factors determine the transfer timeline. Having the experience and ability to assess, plan for and mitigate the consequences of these factors determines seller and buyer satisfaction and how quickly the aircraft is available to begin generating revenue.
For inductions of multiple used aircraft, the level of effort can be reduced by streamlining repeatable tasks e.g., the incorporation of operator’s technical manuals and the revision of maintenance work instructions. The incorporation process can be labored and challenging. Streamlining with signature requirements and revision controls applied to a block of aircraft reduces the impact on the program.
The level of effort for inductions of multiple aircraft from the same previous operator or leasing company can be reduced by streamlining how aircraft records issues are discovered and solutioned. This process enables the lessee/lessor to establish precedents in transfer agreements for follow on aircraft reviews and transfers.
WHAT DIFFERENTIATES SUCCESSFUL OPERATORS
The core competencies required to execute aircraft transfers are well established and embedded in most airlines. However, aircraft transfer programs are typically infrequent, have uncertain timing, and require a dedicated program manager and technical subject matter experts.
In our experience five factors differentiate the most successful transfers:
- How well the process is planned, documented, and estimated
- Use of tools, checklists, and metrics to monitor progress and identify process acceleration opportunities
- Experience with electronic data transfer including Spec 2500 and capacity to manage, clean, and interpret large volumes of data
- The ability to surge with dedicated experienced resources
- Experience with pain factors, their solutions, and a diversity of aircraft types and conditions
Ultimately, organizational structure and size will determine whether investments into these differentiators are made. For most airlines the preferred approach is to outsource the activity entirely, in part, or augment the team with external resources. This approach is proven to deliver aircraft into service in a safe, effective and timely manner and enables the maintenance and engineering organization to remain focused on safety and reliability.
HOW TO MANAGE THE RISKS
A poorly executed transfer can debilitate an operation. Issues can take months to surface, disrupt the flight schedule, add costs for accelerated surplus and hangar space, and impact customer satisfaction and regulator confidence. Ensuring all issues are discovered and remedied before technical acceptance will protect the integrity of the operation.
Operators acquiring used aircraft must:
- Ensure the transfer processes address the complexities and pain factors described
- Consider whether the organization is capable and has resources for the sustained surge effort
- Assess, realistically, whether they have full command of the five factors which determine the success
Any operator buying, leasing, or selling used aircraft should consider whether it has the capabilities, tools, resources, and experience on hand to complete a transfer in the shortest possible time.
SeaTec is an industry leader in Aircraft Transfers, Entry into Service, Lease Returns, and Technical Records, and actively participates in the ATA Aircraft Transfer Records Working Group.
For more information about Aircraft Transfers or related topics contact or the authors and follow us on Linkedin.
MAINTENANCE PROGRAMS – HOW OPTIMIZATION CREATES VALUE
Maintenance programs have a material impact on how an airline operates, its costs, and its revenue.
Airlines have a choice with regards to Maintenance Programs – use the Original Equipment Manufacturer (OEM)’s MRBR/MPD or customize it and optimize for their unique operation and environment.
Maintenance Program optimization is a commonly employed strategy that has contributed to increased profitability without compromising safety.
Greater Customer Satisfaction
Improved on-time performance
Increased aircraft availability
Less maintenance hours and hangar time
- Take full advantage of planned maintenance events and schedule tasks for common access – reducing the frequency with which maintenance tasks require access to or removal by technicians of an assembly, part or panel
- Perform maintenance at its highest effective interval
- Adjust program requirements to address reliability drivers
- Move maintenance effort out of operational line stations and into controlled hangar environments
- Simplify maintenance packages to reduce the planning burden and take advantage of aircraft access
- Develop a lowest cost check structure for life of the unit, taking into account the fleet life cycle
Reducing the number of maintenance units (aircraft) on the ground or in the hangar results in more aircraft available to fly and earn revenue. A SeaTec optimized program for a regional airline brought 1 additional aircraft onto the flight schedule.
Optimized Maintenance Task content and check intervals reduces maintenance and engineering labor hours / costs. For another airline, the SeaTec optimized program reduced the number of C Checks which yielded a 20% maintenance cost saving per aircraft for the life of each aircraft.
Remaining compliant with ‘one size fits all’ MRB programs requires a significant investment in infrastructure and resources. Underinvestment can lead to overruns. Simplification reduces complexity and costs.
Robust data analysis informs program enhancements and reduces maintenance effort which improves aircraft reliability and availability.
Optimization of all checks reduces the utilization of scarce line and hangar resources and addresses bottlenecks in MRO maintenance execution.
Reductions in maintenance touch time directly reduces human factors risks.
FAA REQUIREMENTS AND EXPECTATIONS
For airlines regulated by the FAA, Advisory Circular No.120-16(X) Air Carrier Maintenance Programs describes the mandated scope and content of an air carrier’s aircraft maintenance programs.
Use of the Original Equipment Manufacturer (OEM)’s MRBR/MPD is mandated for the first year of operation for any new fleet added to an operators OpSpec. One year is specified to collect the minimum data required to support an operator’s Continuing Analysis and Surveillance System (CASS) program which amongst other things, ensures maintenance decisions are driven by a consistent baseline of data.
After one year, AC 120-16(X) Chapter 6 requires an operator to maintain an effective program customized to their unique operation using specific data analysis. This is often misinterpreted as meaning the MRBR/MPD and subsequent revisions are the most effective and optimized program, however, the exact opposite can be true.
…doing more maintenance is not necessarily a good thing as human factors risks are exposed every time maintenance is performed. Doing the right maintenance at the highest optimized effective interval based on a robust data analysis should be an operator’s ultimate goal to flying a safe, reliable and cost-effective fleet.”
– Federal Aviation Authority (FAA)
HOW CAN AN OPTIMIZED MAINTENANCE PROGRAM HELP YOUR AIRLINE?
Any aircraft operator – commercial passenger, private passenger, cargo, or defense – can benefit from an optimized maintenance program. The scale of the benefit varies and is typically a function of five factors:
- Fleet size
- Fleet configuration
- Fleet utilization
- Operational environment and conditions
- Experience of the Maintenance and Engineering teams with program optimization
Any operator that is not doing maintenance at the highest effective level or has flight operations constrained or otherwise negatively impacted by maintenance should consider maintenance program optimization.
SeaTec is an industry leader in developing and optimizing Maintenance, Reliability and Predictive Programs.
For more information about Maintenance Program Optimization or related topics contact or the authors and follow us on Linkedin.
WHY ELECTRICAL LOAD ANALYSIS MATTERS
Electrical Load Analysis (ELA) is a record of the current state of an aircraft’s electrical loads – that is the individual and cumulative load an aircraft’s systems place on the aircraft’s power sources (including engines, Ram Air Turbine (RAT), Auxillary Power Unit (APU), generators, and batteries) under various phases of flight and operational conditions.
HOW DOES ELECTRICAL LOAD ANALYSIS IMPACT AN AIRCRAFT OPERATOR?
A ‘baseline ELA’, unique to each aircraft ‘fleet or sub fleet type’ is delivered by the Original Equipment Manufacturer (OEM) with each aircraft. Any modifications made to an aircraft during its operational life which result in changes to electrical loads require the operator to perform analysis as prescribed by the OEM, update and produce a current ELA. Operators must be capable of producing, upon demand, a copy of the current ELA.
When aircraft are sold, transferred, leased, or returned to lessor’s the current ELA must be provided as part of the aircraft’s Bill of Sale / records package.
The FAA or an FAA DER (Designated Engineering Representative) can, without notice, demand operators provide the current aircraft ELA and demonstrate its currency and accuracy of the ELA maintenance process.
1. Variation in ELA format, structure, and calculations produced and required by OEMs between fleet types and between OEMs
Airbus, Boeing, Bombardier, Embraer, et al, each produce ELAs with different analyses and calculations for the thousands of electrical loads on each aircraft. Variation occurs between the OEMs (Original Equipment Manufacturers) , between fleet types and within subfleets. To illustrate: Using power factor (pf) as an example, Boeing uses pf for each component to detail the actual electrical efficiency of the loads being applied from each component / bus / transformer up to the generators. Alternatively, Airbus assumes the pf is always 1.0 and uses modes of operation to report unique electrical loads. With these and other variations, ELA maintenance demands specialist ELA knowledge.
2. Increasing aircraft and electrical system complexity
Mechanical systems, as the primary basis for aircraft operation are continuing to be replaced by Electrical Wiring Interconnect Systems (EWIS); the introduction of fly by wire flight controls on the Boeing 777, 787 and A320 etc.. in place of mechanical controls being one example. The rate of change in the EWIS is accelerating with more advanced flight control systems, passenger comfort and passenger entertainment systems. Increased generator output is often a result of the increased demand e.g. A350 generators produce 230 VAC not the 115-120 VAC typical on many aircraft.
We chose the number of spreadsheet sheets/tabs required to represent an ELA at the bus, sub bus and component level as a proxy for the increasing aircraft electrical system complexity. When we compare eleven different aircraft delivered into service since 1988 we can see that aircraft electrical loads have become substantially more complicated. The effort required to maintain and support these systems is increasing, placing greater demands on the engineering teams to support a fleet of aircraft.
As electrical systems become more complex, more resources are required to support and maintain systems and ensure the ELA is at all times current.
3. Hard copy documentation still prevails
Purchased aircraft are often accompanied by hard copy ELAs. For example, Boeing provides only PDF versions of the ELA for its aircraft and used aircraft are almost always accompanied by PDF or hard copy ELA documentation. Vendors / MROs doing mods typically revise the operators ELA and provide it back in PDF format, or provide hard copy documents back to the operator which are then used to update the ELA. Transformation from a hardcopy or PDF document into data is expensive, time consuming, and requires a robust quality assurance process.
THREE SOLUTIONS FOR ELA MAINTENANCE
1. Outsource – simple but not necessarily cost effective
Outsourcing all modifications delegates the effort to MROs and services firms with proven capabilities. For the airlines that use multiple mod vendors, especially STC mods, coordination between vendors can become an issue. The cost and effort for an MRO to revise a customers ELA can be material. Regardless, responsibility remains with the operator to verify the ELA .
2. Adopt the spreadsheet approach – ideal for some but complex, error prone and labor intensive
Using spreadsheets is a practical solution for operators with a single fleet type who do not modify the aircraft, or those with a large fleet with a dedicated Avionics team of Electrical Engineers. When an operator’s fleet includes hundreds of aircraft, control and accuracy of the data can be challenging. When an operators fleet includes multiple fleet types complexity multiplies the challenge. Spreadsheets, however well designed cannot validate and control for all types of errors that are made during ELA maintenance.
3. Use an industry solution – ideal for operators of any size
The ELA Manager, a software application developed by SeaTec in consultation with major airline operators consolidates, standardizes and simplifies the maintenance of ELAs for multiple OEMs, fleets, and configurations. It is the only software specifically designed for Electrical Load Analysis.
A REVOLUTION IN AIRCRAFT ELECTRICAL LOAD ANALYSIS
Airlines have an OEM/FAA compliance obligation to maintain a current electrical load analysis (ELA) for every aircraft in their respective fleets. A major airline client accomplished this by tracking every change to the electrical load using highly complex manual spreadsheets. A typical spreadsheet for a single aircraft held 100+ tabs each with hundreds of rows of data, project notes and OEM prescribed calculations. Multiply this by hundreds of aircraft and you can get a sense of the complexity at work.
Updates to an aircraft’s electrical load for changes made to an aircraft or a fleet – whether driven by Service Bulletins, Airworthiness Directives, Supplemental Type Certificates, and custom modifications (e.g. the addition of wifi, galley reconfigurations) took weeks or months to be reflected in the spreadsheets. When vendors were contracted to complete a modification, hard copy pdf documents had to be manually transposed into spreadsheets and resulted in engineering design rework. Change history was tracked but was problematic. Regular reviews were required by senior electrical engineers, specially trained in each OEM’s Electrical Load Analysis methodology.
The effort associated with managing spreadsheets represented a material cost to the business and the complexity of electrical load analysis required specialist skills and training. Other firms had been engaged to provide or develop a software application that managed ELA maintenance but failed, unable to deliver a solution that met the challenge of making ELA maintenance simple, intuitive, controlled, and transparent.
THE CLIENT BENEFIT
Realtime visibility of every aircraft in the fleet and a complete aircraft change history and confidence the airline is in compliance with regulators and the OEM.
Reduction in the time and effort to setup the ELA for an aircraft entering into service
Reduction in the cycle time for an ELA update. Documentation and meetings were made redundant by the application workflow. Accountability was delegated to Avionics and Interiors engineers and even potential vendors to author projects, test the impact of different designs and receive design approval.
Reduction in Engineering time spent updating ELAs, releasing Electrical Engineers who previously updated project ELAs for days and weeks to do more value-added work.
THE SEATEC SOLUTION
SeaTec was given the challenge of developing an application that could:
- Ingest large volumes of data (millions of individual electrical load values) from multiple OEM aircraft baselines and unique customer modified formats for newly inducted to decades old aircraft
- Codify the 1000’s of calculations unique to each OEM, fleet type and sub-fleet type
- Support individual configurations required to re produce OEM analysis
- Provide intelligent validation and error checking to enable continuous real time analysis of modifications being affected
- Ensure usability so that technicians and engineers not trained in OEM ELA could understand and use the application without reliance on wiring diagrams, spreadsheets and senior electrical engineer guidance
- Incorporate design guidance that simplified the design process and reduced the time taken to design review and approve a modification
A rigorous analysis of OEM and customer data, user experience, and customer processes was conducted. A plan encompassing development, testing, DER review, data migration, validation, and change management resulted in the successful adoption of the ELA Manager or ELAM by the airline customer.
OPTIMIZING INVENTORY FOR A MAINTENANCE PROGRAM
THE CUSTOMER PROBLEM
Inventory planning for a maintenance program schedule was difficult, resource intensive and causing delays to a program. Multiple systems for engineering design, engineering project planning and inventory built on 1980s technology were in use offering no or limited connectivity.
THE CUSTOMER BENEFIT
- A solution that optimized the system and avoided large capital expenditure– Domain expertise and strong alignment with stakeholders, including inventory suppliers enabled process deficiencies and systems to be optimized without a major systems investment.
- Improved inventory management – reduced the time to produce a project inventory report from 8 hours to 1 minute.
- Greater data integrity – introduced proven automation techniques to produce reliable, clean data that enabled improved data analysis.
THE SEATEC SOLUTION
Consultants with deep aerospace manufacturing expertise established a cross business program team with suppliers to ‘own the problem’. The teamIdentified business process opportunities with and without a technology solution and selected the highest value projects. Systems were connected by developing interfaces to pull and harmonize data from multiple sources. The team then automated data analysis, built exception based inventory alerting, and built inventory forecasts. A change management process was employed to engage and train the stakeholders with documentation that enabled the customer to independently operate the solution.
ACHIEVING NEW AIRCRAFT CERTIFICATION
THE CUSTOMER PROBLEM
An Aircraft manufacturer had planned certification and delivery of its new business class (Part 23) twin-jet aircraft. In the several years since the manufacturer had certified a new aircraft, FAA certification requirements had changed significantly. The impact of these changes in time and effort was underestimated, causing the certification date to be missed and preventing delivery into service, with resulting financial consequences.
SeaTec was engaged to support System Safety Analysis (SSA) for the Propulsion system as the customer worked to bring the aircraft certification process back on-track.
THE CUSTOMER BENEFIT
- Propulsion SSA Certification achieved – The propulsion SSA received FAA confirmation that it was acceptable to accomplish certification.
- Provisional Type Certification for the Aircraft achieved – Enabling operators to begin flight training.
- A reusable repeatable process that increases the probability of Certification and documentation shared – The Gold Standard documentation was provided, enabling the customer to reuse it across all aircraft systems (and future programs) to improve the probability of acceptance of all SSA sections for the other aircraft systems.
THE SEATEC SOLUTION
Aircraft system safety certification expertise was provided to complete portions of the propulsion system SSA, in accordance with the System Functional Hazard Assessment (SFHA), and the Safety Assessment Requirements (SAR).
A highly skilled team consisting of a team lead with deep knowledge in aircraft system safety, project manager, and specialized engineers.
The SeaTec team embedded with the manufacturer’s engineering and leadership team and quickly took on the assessment of a specific portion of propulsion functionality.
The manufacturer team had already developed safety requirements through identification of functional hazards and their severity levels. In addition, the functional failure modes of the system (as determined by the engine supplier) were available to the team. However, the manufacturer team was struggling to complete the system safety assessment, in particular the qualitative write-ups which provide technical substantiation that the system complies with the applicable safety requirements.
The SeaTec team saw that the large number of authors working on the assessment, combined with a complex requirements organization scheme, was impeding progress.
Using available mature content and SeaTec expertise, a set of ‘Gold Standard’ write-ups were established and used to generate content for the System Safety Assessment. These detailed examples were then reviewed with the manufacturer’s certification authorities in order to ensure they were adequate in detail, fidelity, and depth of analysis. The “Gold Standards” were then used to complete the System Safety Assessment and assure that it would be found acceptable to support certification.
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