From the minute a commercial airliner or freighter is delivered, it must remain in constant motion to generate revenue. Any downtime is an immediate cost to the operator, be it scheduled maintenance, unplanned repairs, an aircraft-on-ground situation or even a gate turn at an airport. To understand the cascading cost impact of fleet downtime, one need look no further than the 737 MAX 8/9 situation.
Although estimates vary, the direct cost to airlines for grounding the 737 MAX 8/9 fleet is
generally thought to be around $150,000 US per day per airplane. Other costs include:
- Finance and leasing charges: Flying or not, airlines must make their monthly airplane payments
- Personnel costs: Flight and cabin crews trained for one airplane type cannot easily or quickly be transferred to another
- Passenger re-routing and/or compensation: While cancelling some flights is an option (with concurrent refunds and loss of revenue), alternative flights, alternative fleet aircraft or short-term leasing may be necessary to maintain customer satisfaction and loyalty
- Parking fees: While a few airlines were able to consolidate their MAX fleets in one or two locations, others have airplanes stranded across multiple airports—each with their own parking rates
- Storage maintenance: Airplanes must be protected from the environmental conditions where they are parked and require constant care. Fuel must be monitored for contamination, engines must be run, flight computers booted up and control surfaces moved—all per the manufacturer’s storage protocols
Several airlines have publicly reported their specific MAX downtime costs:
- American Airlines - $350 million for 2019
- Norwegian Air - $58 million for 2019
- Southwest Airlines - $200 million for Q1 2019
- Tui Airways - $3.4 million per week
Granted, the MAX situation is an extreme example of potential downtime costs. However, the ripple effect of the global grounding is instructional at a macro level when estimating and examining the impact of pulling even a single airplane out of service.
Typically, an airplane’s maintenance schedule is planned far in advance to minimize downtime and expedite its return to service. Service bulletins and discretionary repairs are worked into the airplane’s operating rhythm of scheduled maintenance checks. This is simply good aviation fleet management. Although some airlines do part of this work in-house, it is often delegated to a trusted maintenance, repair, and overhaul (MRO) partner to provide full aircraft life cycle management and execution. This is where AerSale® excels.
So what is the ideal state for aviation life cycle support from a trusted MRO partner? The right answer is an integrated approach where processes, people (including OEMs, third-party providers, and vendors), and technology are connected, with each component of the whole process optimized and coordinated to achieve the highest reliability for the lowest possible cost.
As a full-service aviation company, AerSale is a vertically integrated, one-stop source able to maintain your aircraft from first flight to final flight and help you extract the maximum value from all of your aviation assets—all while offering solutions that can be consolidated or selected individually for maximum flexibility.
There are many clear advantages to using an integrated approach for every MRO activity:
- Processes are designed for the most rational flow of materials, tools, and ground support equipment (GSE) with the least possible human intervention
- People collaborate to ensure that everyone’s actions are appropriate for the greater good, which is fleet reliability at competitive costs, reduced downtime, and consistent turnaround time for scheduled maintenance
- Data is used analytically to enhance the flows of material and information
An integrated approach is extremely important because MRO is such a complex process. A small mistake in a single activity can travel through the entire maintenance stream, impacting each subsequent activity and creating costly delays. Through its broad portfolio of services, AerSale ensures nothing on your airplane is missed or left to chance.
- Aircraft leasing
- Aircraft sales
- Airframe material sales
- Component MRO
- Engine leasing and exchange
- Engine material sales
- Flight equipment acquisition
- MRO services and storage
- STC development and installation
Just a few missteps in any of these categories can lead to an unreliable fleet—and as the global MAX situation so clearly demonstrates—every day a plane is grounded equals lost revenue, increased costs, and customer dissatisfaction. For more information on how AerSale’s integrated solutions can keep your aviation assets working for you profitability from first flight to final flight, visit www.aersale.com.
A global aviation leader celebrating its 10-year anniversary, AerSale specializes in the sale, lease, and exchange of used aircraft, engines, and components, in addition to providing a broad range of maintenance, repair, and overhaul (MRO) services and engineering services for commercial aircraft and components. AerSale also offers asset management services to owners of end-of-life aircraft and engine portfolios. Headquartered in Coral Gables, Florida, AerSale maintains offices and operations in the United States, Europe, and Asia. For more information on how AerSale can exceed your MRO requirements and keep your aviation assets functional and profitable from first flight to final flight, visit www.aersale.com or contact us.