All About Aircraft Life Cycle Management
As commercial air travel has increased in popularity over recent years due to a growing middle class, airlines should understand the importance of proper aircraft life cycle management to ensure their planes operate at maximum performance. According to The Oliver Wyman study Global Fleet & MRO Market Forecast Commentary 2019-2029, it is estimated that the global fleet will reach nearly 40,000 aircraft in the next ten years, so it is wise for those involved in the commercial aviation industry to take all measures possible to maintain a competitive edge. As such, this blog will examine some practical strategies and rules of thumb for maintenance, repair, and operating (MRO) practices. We will also briefly examine the costs and practices associated with aircraft at three overarching stages of the life cycle: fleet introduction, service life, and retirement.
With the growing demand for newer aircraft models including Boeing aircraft, Airbus helicopters, and more, comes an earlier average age of aircraft retirement as well as growth in the MRO market. These factors don’t just influence demand and alter airline fleet planning; they also can affect the delivery rate of new aircraft and the retirement rate of existing aircraft. As such, it is important for airlines to navigate the lifespan of their aircraft with strategic plans in order to maximize the performance and value of their fleets. The term aircraft life cycle refers to the frequency of flight, rather than the amount of time spent in the air. With this in mind, there are measures to be taken before, during, and after your aircraft is at peak performance.
At the beginning of your aircraft’s life cycle is its introduction to the fleet. Determining whether to purchase or lease your aircraft is one step in maximizing cost savings. Most fleets contain a mix of both depending on factors like the cost and depreciation of key components such as airframes, engines, modifications, heavy maintenance, and landing gear. It is wise to balance outsourcing with high-quality MRO solutions to ensure you are not sacrificing up front cost savings for long term cost savings. By choosing a high-quality integrated solutions provider for your fleet sales and leasing, you can reap the many benefits of a “one-stop source” approach.
Once your aircraft is assembled and ready for flight, you should make sure you have a proper service life strategy that balances performance and profitability. Certain MRO advancements like the introduction of tools such as the Internet of Things, Artificial Intelligence, Augmented Reality and big data analytics, call for existing aircraft to receive enhancements during their service lives. As such, it is wise for airlines to consider the long-term cost benefits of certain modifications as it will impact their fleet over time.
Lastly, it is important for airlines to call for retirement at the right time. With proper storage, maintenance, and MRO strategies, aircraft stay in service for an average of 25 years. However, low fuel prices have encouraged many airlines to push retirement. To ensure an optimal retirement strategy, it is wise for airlines to look into the residual value of your aircraft prior to retirement.
When maximizing the value of your aircraft at all stages of the life cycle, it is important to consider the costs breakdown of the following: acquisition, variable and fixed factors, and the residual value at the end of a lifespan. With all factors in mind, one can make more informed decisions regarding MRO procedures.
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