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Managing Engine MRO Under Uncertainty And Market Stress

How airlines can avoid expensive mistakes in planning engine maintenance while maximizing performance and controlling costs.

Printed headline: Smart Engine MRO Planning


Propulsion engines are the most expensive components on aircraft and by far the most expensive and complex assets to maintain. Managing engine MRO over the appropriate time horizon is crucial to both efficient flying and wise cost-control.

This challenge can be approached from three perspectives: how to manage engine MRO assuming perfect certainty about the future, how to recognize and plan for uncertainty in future conditions, and how to deal with market stress such as current tightness in shop capacity, spares and parts.

Engine operators are generally concerned not with the entire life cycle of an engine but with only their own operational horizon for it, notes Rudy Bryce, who leads GE Aviation’s engine life-cycle programs.

Of course, if an engine is leased, operators must plan to meet required lease-return conditions, since lessors are very concerned with engine value and marketability. This may mean “maintaining engines in the OEM-prescribed way, with OEM parts,” Bryce explains. For GE, failure to maintain an engine in OEM configuration can cut engine value in half. “I’m not saying that is true for all buyers, but that is the way we look at it,” he explains.

But apart from meeting lease-return conditions, operators generally do not care about residual engine value. Because residual value is affected by so many factors—including traffic trends, interest rates, popularity of the models the engines power—it is an uncertain guide for airlines that own engines.

Instead, over its own operational horizon for the engine an operator wants to strike the best balance between minimizing maintenance cost and maximizing engine reliability. There are tradeoffs between spending more money on engines and keeping them reliably on-wing, minimizing unscheduled repairs or downtime for scheduled overhauls.

Both sides of this balance can be expressed in monetary terms—for example, maintenance dollars per flight hour versus revenue dollars lost to reliability problems or shop time. “If an engine has 99.8% reliability versus 99.7%, that difference is equal to a flight per year,” Bryce estimates.

So for each engine, managers first figure how much longer they plan to fly the engine before removing it from the fleet. “If they plan to fly it for the next 12 years, they will invest in more new parts to make it last longer,” Bryce explains.

Engine phases

Planning also differs by engine phase. First, there is entry into service, the Leap engine’s current phase. The midlife phase includes CFM56-5Bs and -7Bs. And mature engines include 40-year-old CF6-80C2s.

For entry-into-service engines, operators want that cost-reliability balance to be predictable, but they have insufficient experience to figure out the best approach themselves. So flight-hour support from OEMs is popular.

Operators usually have enough experience with mature engines to do their own balancing. These decisions will be important in the near future, because 60% of CFM56s have not had their first shop visit yet.

For mature engines, the big decision may be whether to pay for one more shop visit. “If an engine becomes unserviceable, they may find an engine with some green time left, and just replace it,” Bryce explains. Old engines can then be sold for parts.

Operators always seek to do as much on-wing maintenance—the least expensive option—as possible. Borescope inspections are useful. And engine washes at intervals recommended for operating conditions can restore exhaust gas temperature margins and save fuel.

Usually the toughest decision is how much to invest in shop visits. The aim is always to strike the best balance between lowering costs versus increasing reliability for the remaining operational horizon, plus sometimes meeting lease-return conditions. So planners ask themselves, “Do I have enough time to recoup my investment?” Bryce says.

Randy Mengel, vice president and general manager of Standard Aero’s Maryville, Tennessee, engine shop, agrees that operators look to optimize cost and reliability only over the expected operational horizon of their aircraft and engines, with attention to lease terms in some cases. When an engine enters a shop, managers first try to determine how many cycles it has left and seek to build for that usage. The aim is “not too little or too much,” he explains.

One decision is what sort of life-limited parts (LLP) will be added in the shop. For example, managers might choose used LLPs that will be good for the additional 5,000 cycles they plan to operate the engine, rather than new LLPs good for 10,000 cycles.

Another decision is when to make repairs rather than replace old parts with new parts. Mengel argues sometimes repairs can be just as good as or even better than new parts. Repairs can be applied to parts like vanes, combustion liners and engine cases, although typically not to LLPs.

Then there is workscope and which service bulletins (SB) to implement. Some SBs are mandatory, others are optional. On workscope, Mengel says it is important to know what levels of access to which components will be sought for inspection and possible parts replacement. Will mechanics access just the compressor or go deeper into the engine to restore or improve margins?

Mengel says some operators mistakenly focus just on minimizing the cost of one shop visit but pay for this mistake in the future. He agrees with Bryce that it sometimes makes sense to buy a mature engine with green time, rather than pay for a final shop visit on the operator’s existing powerplant.

For entry-into-service engines, some operators install new LLPs early to avoid price escalation. “It’s not uncommon,” Bryce says. “If it’s already in the shop for something other than LLPs, they use the opportunity to pull LLPs out. If a $5,000 part escalates at 5% per year, they can save a lot of money. We do it, too, under our flight-hour programs.”

Uncertainty And Market Stress

Smart engine maintenance planning has several benefits: reduced shop visits, reduced engine leasing to cover visits and reduced spares for short-notice backup, says Mark Wilken, Lufthansa Technik’s senior director of product sales and engine leases. He agrees with Mengel and Bryce that, for a single visit, money can be saved by building the engine for a specific time on wing.

But performance also matters. Within that metric, Wilken includes the flexibility to deal with surprises, such as foreign object damage. Managers may want to delay the engine’s retirement beyond its planned date, or may want to increase the engine’s utilization rate.

As a result, “the inherent tension between planning stability and flexibility requires a well-balanced approach to avoid ripple effects when changes occur [while minimizing cost per flight-hour] or overall expenditure,” Wilken states.

He says some carriers try to save money by optimizing for an estimated operational goal, but then lose more money when plans change for routes or retirements. Wilken says carriers must recognize upcoming modifications and the possibility of route changes.

Worst of all, some cash-strapped airlines plan for only a single budget cycle, not the engine’s whole operational horizon, wasting both money and engine life.

But even good plans for the whole operational horizon should not be one-off plans. Wilken says engine life-cycle management must continually evolve to meet new conditions.

For example, the current tight parts markets may prohibit finding an LLP with just the right remaining life for a specific engine. Or tight markets may extend turnaround time. Wilken urges airlines to study alternative scenarios to cover these possibilities. “Alternative scenarios may trade engine life against earlier shop visits, so fewer engines are in the shop at the same time,” he says.

Finally, expanding in-house repair capabilities, expediting subcontracted repairs and using tailored workscopes can reduce parts requirements. Also useful in times of scarcity is sourcing used parts through multiple channels.

Three Common Mistakes

AFI KLM E&M Executive Vice President Michael Grootenboer looks at engine MRO in similar fashion. He says it must continually balance time on wing, engine performance and extracting value from LLPs. But he sees three common mistakes.

First, carriers do not properly match projected performance deterioration with remaining stub life—the shortest life left for any of the LLPs on the engine. This failure can cause premature removal and force a future choice between an extra shop visit versus losing useful life on LLPs.

Second, airlines fail to anticipate parts needs well ahead of engine retirements or lease returns, costing an extra shop visit.

Third, some carriers fail to consider different thrust ratings for the engines in their fleets, wasting remaining LLP time.

Grootenboer admits that current tight supplies and lengthened turnaround times pose additional challenges even for careful planners. To deal with this stress, AFI KLM E&M tries to extract maximum value from LLPs it can control, order other parts well in advance and monitor vendor performance and contract agreements. When possible, the MRO taps used-parts markets.

Bryce says GE tries to prepare for parts requirements by forecasting shop visits and constantly communicating with operators. Adequate part supplies help with both parts and shop capacity, shortening turnaround times and  boosting the annual capacity of a shop. On current market stresses, Bryce says only, “there has been some easing lately in part and spare availability.” 

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