Organization President Says Most Airlines do Not Understand Actual Maintenance Costs

Participating in the UBM Aviation 'Managing Aircraft Maintenance Costs Conference' in Zurich last week, International Bureau of Aviation (IBA) President and COO Phil Seymour presented a session on the options and considerations for 'in-house versus outsourcing' aircraft maintenance.

As well as providing the basic plan to follow in order to evaluate the in-house vs outsourcing decision, Seymour said that, in his opinion, most airlines still lack understanding of the full and actual costs of maintenance.  "After all it is pointless outsourcing if you don't know what your real costs are. However, outsourcing tends to provide the buyer with known costs so it does give simplicity and a form of fixed costs for the buyer."

Seymour said there is general consensus that as aircraft age there is a trade off between the higher maintenance cost versus the lower financing or leasing costs. But he also provided a graph which tracked maintenance cost alongside the aircraft financing/lease costs for a Boeing 737-800. The conclusion was that between 8 and 24 years the costs tend to offset each other creating an almost constant cost for the operator.  This was a bespoke study using a specific operator and aircraft utilisation - there will be variations according to airline and aircraft operational profiles.

FMI: www.ibagroup.com