The pull of ‘power by the hour’
Although nearly as rare as humble fighter pilots, catastrophic engine failures do occur. And when they do, there is a good reason for that adjective.
Assuming the pilots get the aircraft down safely, the failed engine will have to be removed and sent to a shop for repair. Meanwhile, a loaner will have to be found and installed to keep the aircraft in use. Once the failed mill is repaired, the process reverses. The cost of all that—the shipping, hangar work, repair, engine rental—can be breathtaking. And it is for that reason, among several, that many business aircraft operators embrace hourly-cost maintenance programs. Think of them as equipment service policies whose premiums are based upon aircraft value, age and usage.
The benefits of these “power-by-the-hour” programs are many, with the most prominent being that the cost to repair a blown engine is covered, they provide maintenance budget predictability, and if you are not in such a program, your airplane will be slower to sell and will fetch a lower price versus similar models that are enrolled.
While all new aircraft and engines come with warranties of various lengths—typically, airframes are covered for five years, for example—those are limited in their coverage.
Notes Anthony Kioussis, president and CEO of Asset Insight, a Chicago-based business aircraft valuation and aviation consultancy, “While a warranty is valuable, its coverage is limited to the cost of repairing the affected engine and [does not cover] all of the costs associated with unscheduled maintenance.”
Many hourly programs, intended to fill in some of those gaps, offer lower rates for aircraft and airframes still under warranty. And just about all airframers and engine-makers offer them.
“I am a big fan of maintenance protection programs,” says William Quinn, chairman of Aviation Management Systems, a Portsmouth, New Hampshire business aviation consultancy. “With them, costs become predictable. Without, you can be in for a shock.”
Among the best known and oldest hourly programs are those offered by Jet Support Services Inc. (JSSI) of Chicago. Founded in 1989, the company is something of an outlier, since it manufactures nothing and promotes that fact as being indicative of its brand impartiality and customer focus. It stresses that its services complement the work and warranties of the manufacturers, but the latter have been known to take a different view.