Maintenance Programs: a Prerequisite for Pre-owned Aircraft Operators
By Pratt & Whitney Customer Service
Pay-per-hour engine maintenance programs can help aircraft operators manage maintenance costs, improve aircraft availability and protect resale value. That’s why for buyers of pre-owned aircraft, an engine maintenance program coverage can also be an important consideration when evaluating an asset.
Maintenance Programs Have Become an Important Consideration
Over the past decade, engine maintenance programs have become increasingly common among corporate aircraft operators. A review of Fortune 100 companies’ flight departments, for example, showed a significant increase in the number of operators using engine maintenance plans between 2009 and 2014—from one of the top five companies to four out of five.
The trend reflects a broader shift in how aircraft owners approach long-term engine maintenance and asset management. For aircraft owners concerned about the resale value and time on market of their assets, maintenance plans like P&WC’s Eagle Service™ Plan (ESP™) program have become a must. Large business jets which are not on an engine program may languish on the market for year. Even the biggest companies with the best-kept aircraft are at a disadvantage when they try to sell aircraft without coverage.Engine Plans Minimize Buyer Risk
The value of an engine maintenance program extends beyond the scheduled maintenance costs. For prospective buyers, an enrolled engine can provide greater peace of mind in the maintenance and predictability of future operating costs.
As a result, an ESP maintenance program can become part of the overall value proposition of a pre-owned aircraft.
ESP Program Offers Flexibility, Incentives
In a nutshell, P&WC’s ESP program makes maintenance expenses easier to predict and manage by covering the cost of overhauls, inspections, unscheduled engine and accessory repairs and more on a pay-per-hour basis. Various levels of coverage are available to suit the needs and budgets of different operators. Plans can be transferred to the new owner when an aircraft is sold and there are no minimum annual flying hours. When P&WC dropped the annual minimums in 2012, many low utilization operators moved to enroll as they could now only pay for the hours they flew.
In keeping with the general market trend, more and more P&WC customers are recognizing the value of these plans. This is reflected in fast-growing enrolment numbers. P&WC now has over 10,000 engines on a pay-per-hour program. In 2018, there were a record 350 new ESP enrollments, along with 370 transfers thanks to a very active pre-owned market.
What’s more, while other programs on the market have not changed significantly in 20 years, P&WC has proactively developed incentives and enhanced coverage and financing options tailored to different missions and operating environments as well as to help customers enroll in-service engines onto a plan.
One example is the ESP Flex enrolment option. While the long-term benefit of an engine program is clear, the up-front cost may deter so operators. Flex addresses this by providing financing options that eliminate the need for a large initial lump-sum payment by deferring part of the cost. This is a great way to get all full coverage immediately while deferring a major capital outlay for more than 10 years, in some cases.
The ESP™ecially for Your PT6 program, meanwhile, is helping drive uptake of engine plans in the turboprop world. In this market, operators have been more reluctant to enroll in engine programs, since overhaul costs are not as variable as they are for larger aircraft. The ESP™ecially program addresses this by offering 400 hours or two years of free coverage.
For advice on choosing an engine plan, see our article on Calculating the Value of the Right Aircraft Maintenance Program.
