Xavier Bethune, senior director of procurement and operations for Continental Airlines, has been less than thrilled with any and all of the pitches for similar bundled services. "I don't see how an outside organization can do the unique job we do of this."

The opinions of the two men, although at opposite extremes of the satisfaction spectrum, are typical of musings in the airline industry when it comes to the topic of integrated asset management (IAM), programs that in theory allow an airline to save money by shedding the inventory, planning and care for certain components or systems to third-party providers.

While IAM appears to be gaining in popularity, particularly with the rise in prominence of low-cost carrier business models, the concept is not all that well understood or trusted in the airline industry. As a result, the landscape is peppered with companies that have jumped head first, those that have dabbled, and those, like Continental, that are casting a wary glance on the action from the sidelines.

Experts say the bottom line is that IAM is good for an airline's bottom line. Various incantations of asset management programs are out there, with names like Performance-priced Product-maintenance Services (PPS), Total Component Support and Integrated Materials Management. The latter two are the branded offerings of Lufthansa Technik and Boeing, respectively. Programs also are often referred to generically as bundled service options.

The most obvious savings for participating airlines come from the reduction of just-in-case inventory -- a responsibility passed on to the third-party provider, also known as an integrator. Jonathan Berger, vice president of technical operations for consulting firm SH&E, said the commercial airline industry holds $45 billion in inventory on its shelves, but the demand for that material is only $14 billion. "There's a tremendous upside for improvements in this area," he said. Although more difficult to quantify, there's also the benefit for an airline of shedding the risk of having to build and maintain the parts pipelines to do certain types of maintenance work that alternatively could be outsourced. In 2002, AirTran signed a 15-year contract with Goodrich to supply nacelle systems for its growing fleet of 717s. The fixed-cost flight-hour-based agreement (FHA) includes inventory planning and MRO for the inlet cowls, fan cowls and thrust reversers. AirTran currently flies about 700 flights per day with 83 Boeing 717s and 34 Boeing 737s.

For nacelles, Goodrich provides AirTran with spare parts, rotables, program management with an on-site manager of MRO planning, repairs and field support (including an "away team"). Requa says the benefits of having the program include shorter maintenance turntimes, partially because there?s no queue time for the request-for-quote (RFQ) process, and 24.5 percent less nacelle inventory, resulting in a smaller tax bill to pay on the overall inventory as well.

'We weren't thinking we wanted a full-service FHA," said Requa. "We wanted the lowest life cycle cost for the aircraft." However in determining the lowest cost options, AirTran ran risk analyses and what-if scenarios, said Requa. Goodrich's offering turned out to be the best option, at least on paper. "We entered our first FHA with the Boeing 717 as much out of fear than anything else," he said. "We knew the aircraft was going out of production, and we wanted to secure MRO (for the nacelles) for 15 years."

That AirTran signed a second contract in 2004 for the same type of services for its planned fleet of 50 Boeing 737NGs was testament to how well IAM worked. "Good things started happening," said Requa, including the timely resolution of aircraft-on-ground (AOG) problems for nacelle parts that began shortly after the first contract. Requa said having a Goodrich representative on site made all the difference. "He saw what was happening and fixed the issues," he said.

The carrier later signed an asset management contract with Boeing to own and manage its inventory of expendable/consumable parts through Boeing's Integrated Materials Management (IMM) program, a service Boeing said can save more than $30 million over a 10-year period for a mid-sized airline with 100 to 200 aircraft. The same contract, from Goodrich's perspective, also appears to be win-win. "The traditional aftermarket model is an arrangement where everything's on retail," said Frank Wiedner, manager of FHA operations for Goodrich Aerostructures. "It's the lowest end of the value and commitment. It's buying a service when you need it. It's very reactive."