Page 31 - AAA NOVEMBER - DECEMBER 2015 Online Magazine

FEATURE FUTURE MRO

(MRO) costs could rise significantly over market for maintenance, repair and million passengers annually. “There is no
the next years. The fact remains that in overhaul services,” said Tony Taylor, way that we are going to let engine costs
a competitive market, airlines still have a Director General and CEO of International per flight hour rise on the new generation
choice of airframes but engine options are Air Transport Association (IATA) in of jets on 777X or A350,” stressed Tim
now limited. Airlines do have the option of September. These airlines now have Clark President Emirates Airlines. “To
doing their own MRO work on airframes, little alternative but to agree to long-term say maintenance costs will rise is a real
but engine overhaul for new-generation Original Equipment Manufacturer (OEM) worry. We expect to see that the engine
engines could prove expensive as engine maintenance and parts agreements, with cost per flight hour, particularly on the
manufacturers cash in on their market price escalations that are often above power by the hour arrangements come
position and lack of competition. While the inflation rate. The International Air down by as much as 20 %,” he said at the
competition between engine suppliers Transport Association (IATA) is now IATA event.
as well as airframers, is an important looking at various options to cap runaway Aero-engine manufactures on the
feature of the industry and while engine aftermarket-related costs. other hand feel that the extent of the
manufacturers do spend a lot of money “As an industry we need to start concern is not justified. Engine makers
on Research & Development (R&D); it is taking action or our maintenance costs work very closely with the airlines to
important that a choice of aero-engines are definitely going to rise. If we don’t understand the life cycle costs (LCC) of
be made available, industry sources say. challenge the restrictive practises that the engine and there are a lots of features
Earlier this month, the Wall Street exist, we will be held captive and the costs of a jet engine that deal with maintenance
Journal reported that while the European as we have seen before, will rise well in costs and reliability. David Joyce President
Commission was yet to launch an official excess of anything that is justified,” Willie & CEO GE Aviation, speaking at the IATA
investigation, it was “closely monitoring Walsh CEO International Airline Group AGM said that companies like GE targeted
competitive conditions as regards (IAG) said in June at the IATA Annual reduced fuel burn and maintenance costs
maintenance of engines and components General Meeting (AGM) and World Air along with increased reliability, as their
of large commercial aircraft.” It added Transport Summit, which also featured three main areas of focus during new
that the Commission was particularly a large gathering of airline leaders. “Our engine development. “When designing a
interested in the CFM56 engine family, maintenance costs are a very significant new generation engine you are faced with
which is the dominant single-aisle part of the business …... In many cases the the daunting task of finding a 15-20 percent
jetliner powerplant as an option on the escalation of cost bears no relationship to fuel burn improvement, at the same time
A320 family and sole powerplant on the service you are getting or the parts that we cannot drive the life cycle cost over
Boeing’s 737 NG family. “Unfortunately, you are getting,” he said. With 523 aircraft, the charts,” he said. Commenting on
certain OEM business practices drive IAG is one of the world’s largest airline concerns that engine maintenance costs
up costs by blocking new entry into the groups and group airlines carry almost 97 would rise, he said, ‘First shop visit for
the CFM56 engine today is 20,000 cycles,
compared to the 5-7000 cycles for the
initial CFM56-3 variant.’ The reduced
engine time off-wing and longer interval
between shop visits is one aspect that will
reduce maintenance costs for new engine,
industry observers feel. However, with the
increasing emergence of only one engine
option and MRO activities being tightly
controlled, “Airlines will have to share
data with engine manufacturers, who use
that same data to sell MRO services to
them. This conflicting approach and lack
of third party MRO operators who can
provide services for new generation aero-
engines is an area of concern,” an industry
source told Asian Airlines & Airports.
According to IATA, while airlines
have substantially, ‘slimmed down and
restructured to squeeze unnecessary
costs out of their operations,’ aircraft
ownership costs (20 to 25 % of total
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