Cost of Ownership

Introduction

The direct maintenance costs of operating aircraft of any type are a high proportion of the overall cost of operation. Whilst the findings of the reliability programme and developing the maintenance programme are both actions that can contribute to reducing the operating cost of the aircraft, a pure focus on cost reduction in all areas of aircraft operation is required to ensure ongoing profitability. Assessment of operating costs, identification of areas where savings can be made and monitoring of the results, is a fundamental process that requires constant attention but one that can be readily overlooked in the day to day operation.

Benefits

Once identified, cost reductions through modification, vendor negotiation and improved maintenance practice, can be difficult to obtain as these activities take time. Vector with its focus and links with vendors, can maintain contact and focus in order to push through beneficial changes. Knowledge and contacts with design organisations suited to particular modifications also benefits the operator where modifications are required to improve reliability, reduce cost and downtime.

Through effective monitoring of costs, the implementation of corrective actions and ongoing assessment of results, real aircraft cost reduction can be achieved.

Aim

By identifying the high cost drivers and the reason for that cost, actions can be identified that will result in significant cost savings by increasing on wing time, reducing repair costs and improving performance. Ongoing monitoring is then carried out to ensure these costs savings are realised. Development of a robust and effective system of cost identification, identification of cost drivers, implementation of corrective actions and ongoing monitoring will ensure operating cost reduction.

Tasks

• Identification of high costs failures and determination of the failure rate
• Identification of possible cause ie operating technique, internal fault etc
• Vendor liaison — Warranty negotiation /reconciliation
• Identification and implementation of corrective action
• Identification of costs and areas of savings
• Assessment of actions taken and cost reduction
• Ongoing monitoring of results

Vector Experience

Whilst operating a fleet of 13 aircraft on a power by the hour type contract for component repairs, the Vector team reduced the component removal rate by 5 units/1000hrs in one year, resulting in a cost reduction of $10/flying hour and a refund of payments of $190,000.