Cost Of New Components Makes Pooling Practically Inevitable

By Sean Broderick sean.broderick@aviationweek.com
Source: AWIN First
September 26, 2013
Credit: Air France KLM

Technologically advanced components may help drive down maintenance costs on the newest aircraft, but they also radically alter the cost-benefit calculation of whether an airline should stock its own spares or participate in a pool.

“It used to be very simple,” says Harmen Lanser, KLM Engineering & Maintenance’s (E&M) director-Component Management. Airlines used to rely on straightforward formulas, like stocking two shipsets of parts per aircraft, Lanser told attendees at MRO Europe here on Sept. 25. While that kept the fleet flying, such an approach also left thousands of dollars in spares out of service—and on an airline’s books.

Today, calculations are more complicated and involve much larger numbers. New, advanced components come with higher price tags, both due to technology advances and, in some cases, fewer choices of suppliers for a given component. Better reliability means fewer components are needed, driving production and acquisition costs up more. Add in logistical challenges that far-reaching networks operated by long-range aircraft like the Airbus A330 or Boeing 787 create—including a need for parts to be stocked in several locations—and it is easy to understand how provisioning for a fleet can be more costly, even as reliability improves.

“New aircraft types mean better reliability,” Lanser says. “But inventory still has to be in the right place, at the right time.”

Lanser says Air France KLM E&M has spent $50 million to stock spares for the combined fleet of 13 Boeing 787s flown by its two 787 component support customers, LOT Polish Airlines and Royal Brunei.

“Your value of the components is high, and inventory turnover is much lower,” Lanser explains. “[But] you still have to have it on your shelf.”

The new bottom-line economics mean that the more advanced an airliner is, the larger the fleet needed for an airline to justify stocking its own components, Lanser notes. For 747-400s, a fleet size of 20-25 aircraft would generate sufficiently low flight-hour costs. For the next generation of aircraft, like the Boeing 777 and Airbus A330, that fleet sizes jumps to 60-70, he says. On the 787, he calculates that figure at about 100.

The bottom-line economic reality: “You have to go to a pooling system to share the inventory with other operators,” Lanser says.


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