Aircraft phase-out: How digital solutions reduce costs of aircraft transfer
As global aviation will likely shrink in size in the wake of its recovery from the Corona pandemic, it's safe to assume that many airlines will be faced with rapid aircraft phase-outs / lease-returns within the next 18 months in order to trim their fleet down to smaller numbers. The ability of engineering departments to run an efficient and cost saving phase-out/re-delivery project will determine if this will save the airline on further capital expenditure or if it will be faced with additional penalty fees. A topic we have much elaborated on in previous articles. In the below item we will look at how a project infrastructure that centrally collects all the required aircraft data, aircraft records as well as performs automated validations assists in streamlining these processes and data.
One key exercise in the phasing in and phasing out of aircrafts is to assess the technical records, each and every time with the goal to check the airworthiness and in the end the value of it all. A similar process takes place when an airline on a migration process endeavours to transfer all the data to a new MRO software system. But let’s start at the beginning, why is it so important to have everything in place:
Delays in phase-out projects can shoot up penalty fee’s to 150%
As most of us know phasing-out/or lease-return of an aircraft back to the lessor is a cumbersome task by any proportion as those parties who had negoitated the lease in the first place would have moved on is a given. An increase in likelihood of information being lost in translation makes it imperative to get the fundamentals right: consolidating the records and ensuring that the required re-delivery conditions are met.
What data are we talking about?
A recent survey summarised that over 50% of the budget allocated towards phase-out/re-delivery of an aircraft is towards records consolidation. The records are the ultimate proof that the aircraft is in an airworthy condition and that it has satisfied the technical redelivery conditions negotiated. The source records (both paper and electronic) lie across very many sources and consolidation is a time-consuming phase.
The tech records data is the complete package of maintenance and operational data (work orders, work packages, maintenance slips, pilot reports, repair orders, shop reports, modifications, directives) created since the construction and during the operational life of the aircraft. In simple wording, if an action or event is not recorded or traceable the work is not performed, and the aircraft is not airworthy. Examples include:
Maintenance Status & Heavy Maintenance Check History
Operator Maintenance Program Report
Engine & APU Statuses: LLP, Maintenance Status
Landing Gear Statuses: Overhaul Reports, LLP, Maintenance Status
Reliability Report for the latest year (in some cases)
HT Component Statuses and deviations from Airline’s Maintenance Program
However when redelivering an aircraft it is not just about the completeness of the aircraft technical records. It is also around compliance with the contractual lease return conditions. A few sample technical re-delivery conditions include:SB / AD Compliance & MOD Statuses
Aircraft fresh off a “C” check with no major tasks due (SBs included) for the next 18 months
Engine not less than X Cycles away from next Shop Visit
Landing Gear not more than X Cycles off previous shop visit
LLP utilization not more than 105% of NHA
PMA part limitations
… etc.,
It is not for no reason that they say that you start planning for re-delivery the day you take the aircraft on lease.
What makes it complex?
Change of ownership (or operator) is a complex process where finance meets the technical state. ‘What is the remaining value?’, is a question often heard! This is where the complexity comes in and a lot of research and negotiations are taking place and the creation of technical and financial overviews. In some cases, the electronic records are often not being updated on time for review, for example during cases when an aircraft is returned to service after visiting a maintenance facility for a check. This is where the paper archives need to come up with that single piece of proof required. A labour-intensive process but worthwhile as the reward for finding it can be quite high in terms of finance and technical state.
Case Study Example:
Also facing some aircraft phase-outs or re-deliveries in the near future? Coming short in time and resources and want to save costs? Robotic Process Automation (RPA) can be the solution for you:
RPA can be used to perform a full record check during aircraft returns and deliveries / re-deliveries.
The task
Performing the aircraft technical records checks to ensure timely return delivery of 5 aircraft within 8 weeks.
Typically, any aircraft return delivery project within an airline could easily see anything between 100K to 200K USD budgeted for aircraft technical records inspections and can easily amount to weeks of work to complete. Under these circumstances returning 5 aircraft within 8 weeks would accumulate to an expensive and resource heavy undertaking with high margins for error and potentials for overshooting return delivery deadlines and accumulating late return penalty fees for the airline.
The software robot skills
In order to reduce the overall risk for airlines within this return delivery process, EXSYN decided to embed the skill of aircraft technical records verification within the RPA solution. Part of these learned skills included:
Automatically retrieving the required aircraft airworthiness reports from source MRO software’s
Digital recognition of physical aircraft records such as EASA form one’s, FAA form 8130, Certificate of Compliances, removal / installation labels, workorders, task cards and release statements
Automated verification of airworthiness reports with the digital recognized physical aircraft records
Provide outputs on records completion and gap lists (such as missing certificates for parts installed or missing compliance statements for AD’s)
Benefits
With the aid of this newly developed RPA skill, the engineers tasked with returning the aircraft could focus on resolving the gaps that were identified by the software robot. Thereby considerably reducing the required manhours and costs for record verification as part of the aircraft return delivery project. Finally, all 5 aircraft where returned in-time and according return conditions to the lessor and were directly transferred further to new operators.
The hidden risk
There is a thing that poses a certain threat to this system. All this data is kept track of in some sort of software system. Although we are living in the digital age there is still an enormous amount of manual labour associated with getting the right data into this software systems. Human interaction can lead to errors which in the end can result in errors in the remaining value or even worse the airworthiness state of the equipment. Ultimately this can cost the airline significant amounts of money in both late return fee’s as well as contractual penalty fee’s due to exceedance of lease agreements.
Overcoming the risk
Having a project infrastructure that centrally collects all the required aircraft data, records as well as automated validations assists in streamlining these processes and data to reduce time and effort during delivery, operations and redelivery.
Accelerate your journey towards Digital Redeliveries
The above processes can be made faster, and more importantly, more efficent by using a platform that offers the provision to consolidate, verify and redeliver the aircraft records.
1. Consolidate
Consolidation of records involves tapping into sources both paper and electronic and moving it into a centralised data warehouse. Given that this spans across multiple systems of varying nature (Maintenance & Engineering, Flight Operations, Quality & Safety, Supply Chain), the platform must be able to interface with these core Maintenane & Engineering and 3rd party systems.
2. Verify
The consolidated information needs to be verified for accuracy and verified against the agreed technical redelivery conditions to flag off any potential violations. When data is maintained in paper and electronic forms, sanity checks (using tools like smart OCR) can help audit and correct inconsistent data sets. The verified information is what is subsequently checked against the redelivery conditions.
3. Redeliver
IATA have established guidelines on best practices tailored towards creation of redelivery binders. Digital redeliveries can be made easy if they conform to this norm.
