Establishing the true cost of maintenance has never been a straightforward affair, even within the most sophisticated of airlines. Attempts to make meaningful comparisons between different carriers and aircraft types has been a near impossibility. Yet a benchmarking study, run under the auspices of the International Air Transport Association (IATA) and signed up to by the main aircraft manufacturers, has quietly been building up just such data.
The IATA Production Performance Measurement (PPM) group has been established for a while, but the initiative appears to be gathering momentum. When the PPM meets for its next annual conference in Dubai at the beginning of October, 42 airlines are expected to attend - a third more than last year .
The PPM is made up of an international mix of airlines, which share detailed data on the costs of maintaining mainline aircraft, centred around the ranges of Airbus and Boeing, which have both taken turns to help push the project forward.
The group's main objective is to build up quality cost analyses which will give carriers a clearer understanding of how to budget for airframe and engine maintenance. The analyses not only allow an individual carrier to compare its own costs over time, but also to benchmark against other carriers over the same maintenance cycle.
"Being a member of the IATA PPM could help an airline learn most of its indicators through clear procedures and detailed definitions," explains the group's chairman and cost control manager at Tunisair, Khemaies Gasmi.
Airbus most recently has held the two-year tenor as author of the group's manufacturers' report, and in that time it believes that the programme has begun to make some clear advances. Notably, the data, which covers the past decade, but which is only available to full members of the group, has been transferred to a user friendly PC format published on compact disc. "Just five years ago, the IATA PPM reports were published in stacks of papers," says Jean Paul Genottin, the IATA PPM representative at Airbus in Toulouse.
Perhaps the only other broad source of comparable data has been the information published by the US Department of Transportation, which US carriers file as a matter of course. Airbus argues that the PPM data is not only more international, but gives the sort of precision that the "raw" DoT data lacks.
In the IATA procedure, the aircraft maintenance cost includes both direct and overhead costs, including hangar and shop repair and overhaul, but stopping short of routine line maintenance. Direct maintenance costs are split into three distinct areas:
manual labour costs; consisting of the salaries of the technical production team - technicians performing work on aircraft, engines auxiliary power units (APU) and components - but do not include the associated social charges which are accounted for as overheads.
material costs; subcontract costs; covering the repair and overhaul cost of any subcontracted aircraft work.
The second main division covers overhead costs, broken down as: social charges for technical production; salaries for technical support; including engineering, technical procurement, planning, quality control, training and general technical services; all the overhead costs for technical production and support.
The PPM data aims to be highly specific. The aircraft maintenance cost is specified in US dollars and detailed by aircraft type and by airborne flight hour (fh). Accordingly, the aircraft maintenance cost per hour is the total sum of: manual labour cost/fh + material cost/fh, subcontract cost/fh + overhead cost/fh.
Genottin says that simply by breaking down the varied maintenance costs into tangible subject areas, the PPM helps "build a common approach and methodology across an airline". This should help accounting procedures, for example, taking into account the complex nature of man hour definitions.
The participating airlines can use the 10 years' worth of data to track their own costs and eventually arrive at a clearer benchmark of where their budgets should stand.
However, all reported data is strictly confidential, not to be shared outside the group. Airlines can join the IATA PPM as observers, but will not gain access to the full package until they have submitted their own data to the group.
The annual Aircraft Maintenance Cost (AMC)figures provided direct by the airlines are then adjusted, via a programme devised by Airbus and Boeing, to reflect the true Direct Maintenance Cost (DMC). This second set of data, for example, excludes aircraft with less than 2000 cumulative flight hour, applies maturity factors and common flight length by aircraft type and adjusts sub-contract costs by removing contractor's profit and overheads.
Further enhancements to the figures are underway. The group is in the process of studying indicators for stock service levels, rotables and consumables. These will give each airline a clearer understanding of investment cost per aircraft type, says Gasmi. The group is also working on the repair cost per flight hour/aircraft type for the 10 most expensive components. Any new ideas, comments of advice are always welcome adds Gasmi.
Source: Airline Business
