Rolls-Royce pioneered power-by-hour support in the aviation aftermarket, an approach now widely used well beyond engines. The OEM’s new LessorCare service got off to a good start in late January with three major lessors, Avolon, Dubai Aerospace Enterprise and AerCap signing up. Simon Goodson, senior VP for Rolls’ lessor sales, expects to expand both coverage and the services provided by LessorCare in coming years.
The program has been under development for three years and addresses a problem that frequently came up in Rolls’s relations with engine lessors, Goodson explains. While TotalCare gave engine operators thorough support every day, engine lessors would call for support only periodically, for example at lease-transition time. Rolls wanted to provide this support, but the OEM and the lessor would have in place no agreement on commercial terms, that is payments, for the support. It could take up to 18 months just to negotiate a commercial agreement, very frustrating for both Rolls and the lessor.
LessorCare sets up a commercial platform on which Rolls can provide three kinds of support for Trent engines, when and if a lessor needs support, on pre-agreed terms. “We can then just send in a purchase order,” Goodson says. “They pay for what they need when they need it, not when they don’t.” He compares LessorCare to an Amazon account for lessors.
Three kinds of support will initially be covered by LessorCare: customer support, transition services and asset management.
Customer support includes technical support, publications and training.
Transition services include maintenance and availability services to move engines fast and economically between operators. Goodson says there is often a spike in lessor needs when a leased aircraft transitions from operator A to operator B. “They may need on-wing technical support, training, emergency leases, spares or fixed-price overhauls.” With LessorCare, all these services will be quickly available on pre-agreed terms.
Asset management includes a number of services to maximize engine value, including LifeKey, an enhanced version of Rolls’s Operating Lessor Engine Restoration Agreement (OPERA) to increase engine portability and liquidity.
Toward the end of an engine’s life, a lessor must think of monetizing its investment. Goodson says OPERA has been hugely successful in assisting that monetization. OPERA ensures that, when a TotalCare life lease is terminated early, the restoration element of flight-hour payments is credited to the lessor toward the next shop visit. LessorCare’s LifeKey will enhance this successful program. Rolls will also be able to sell green-time parts on Trent engines under LessorCare’s pre-agreed terms.
The Rolls exec is already thinking how LessorCare might be expanded in the future. One option might be allowing lessors to buy maintenance from the OEM and lease a total package of engine and
maintenance to operators. “We are giving a lot of thought to the services lessors might want to buy. Airlines like Norwegian want to outsource all aircraft maintenance and financing and just sell tickets.”
There is also a possibility that LessorCare may eventually be extended beyond Trent engines.
But the immediate goal is to sign up more lessors to the current version of LessorCare. Goodson wants to get the top-30 lessors signed up in the next two years. By mid-February, he had three more about to sign, expected to sign another wave in time for Farnborough and a third wave by yearend. In all, Goodson expects to have 10 to 15 major lessors signed up for LessorCare by the end of 2018.