WHAT IS MAINTENANCE VALUATION?

Simply put, it is the relationship between an aircraft’s value and its maintenance status.

“What is essential is invisible to the eyes”, quote The Little Prince

In the leasing world where the risk sharing aspect is predominant, finding the optimal balance between financial/operational flexibility on one hand, and the excessive cost/lack of capitalization on the other hand, is a game worthy of the Little Prince.

It is clear that the pandemic and the war has reshaped the leasing business. Lessors must calculate how to pass on the borrowing costs. 

Aircraft is an expensive asset that depreciate over time and Maintenance is a major factor to be considered.

This is where COLIBRY comes into play in both private and commercial market with a unique algorithm to data extract and make good use of the usage parameters data for both analysis, corrective and preventive measures. 

By leasing aircraft instead of purchasing, operators transfer the risk of depreciation to the leasing company, thus avoiding the risk of owning an aircraft that may depreciate rapidly or become obsolete. This is a false concept considering the decades of an aircraft design service goal.

Another drawback of aircraft leasing is the limited customization options. When leasing an aircraft, operators have limited control over the customization of the aircraft’s interior and equipment. This can be a disadvantage for operators who want to create a unique and branded experience for their customers. Purchasing an aircraft allows operators to have full control over the customization process and create a tailored experience for their passengers.

With the COLIBRY digital clone, you can think differently because you, not only can visualize, but cost estimate in real time.

Maintenance and Repair: Who is Responsible?

Maintenance and repair are critical aspects of aircraft leasing. Both the leasing company and the lessee have responsibilities when it comes to the maintenance and repair of the leased aircraft. The specific responsibilities are typically outlined in the lease agreement and may vary depending on the type of lease.

ONE SIZE NEVER FIT ALL.

In an operating lease, the leasing company is usually responsible for the maintenance and repair of the aircraft. This includes routine maintenance, such as inspections and servicing, as well as major repairs and overhauls. The lessee is responsible for ensuring that the aircraft is maintained in accordance with the leasing company’s requirements.

In a finance lease, the lessee is typically responsible for the maintenance and repair of the aircraft. The lessee may have the option to perform the maintenance and repair work themselves or may contract with third-party maintenance providers.

Regardless of the type of lease, maintenance and repair are critical for the safe and reliable operation of the leased aircraft.

It is also important for operators to have a clear understanding of the maintenance and repair costs associated with leasing an aircraft. While the leasing company may be responsible for the maintenance and repair work, the lessee may still be required to pay for certain costs, such as routine inspections or repairs due to operator-induced damage.

COLIBRY provides MessengAIR © commonly called the blackbox of aircraft maintenance, a tool used to decipher all communication carried out regarding the maintenance of the aircraft in order to carry out clear traceability, in addition to the inspections carried out, on everything that has been undertaken on the aircraft during its life cycle, including the associated costs.

Maintenance status is determined by the way an aircraft operates.

As mentioned in the PPI Protocol FAQ, Value, Cost and Price are different terms associated with an appraisal process. Like aircraft values, maintenance status values are highly influenced by market conditions: values naturally decline in a recession and rise again as the industry recovers.

The effects of both labor and material inflation are key drivers of escalating maintenance costs. In Colibry, costs are defined as a time factor times the MRO rate per hour. So, to understand costs, the rate per hour has to be multiplied by the time factor. Because time is invariable when achieving a maintenance task, unless additional findings are revealed, these being considered additional costs.

One other thing to consider is the strong relationship between the cost of conducting maintenance and value enhancement.

Cost and price indicate a relationship with value but not necessarily an equivalency to value.

Maintenance Utility

The maintenance utility profile for hard-time and on-condition/monitored events follows a conventional saw-tooth maintenance cycle.

Maintenance events that are subject to a hard-time interval (for e.g.: airframe heavy checks and landing gear overhauls) have their corresponding values decline to zero and subsequently recapitalized to full value after each check.

On the other hand, on-condition and condition-monitored maintenance events, such as engine shop visits, rarely have their maintenance value fully exhausted during a shop visit.

Maintenance Status

Maintenance status is used to assess, in whole or part, the value of maintenance utility remaining. The value of maintenance status can be assessed by analyzing data related to an aircraft’s maintenance condition at a specific point in time. Something relatively easily done with Colibry through the SDSDP.

Forecasting Maintenance Status

Developing fair and accurate assessments of an aircraft’s future maintenance status requires an understanding of the factors that influence the Direct Maintenance Costs (DMC) of each major maintenance event.  These influencing factors consist of the Aircraft operation, Aircraft age, and Maintenance inflation.

This COLIBRY’s functionality establishes itself within the relationship between age and value performance. After an aircraft reaches a certain age the main differentiator between specific aircraft of the same vintage will often be the value in their maintenance status. Thus, the position in the maintenance cycle is a source of value difference between aircraft of the same type and vintage, and consequently it is useful to quantify in monetary terms the value of maintenance status.

The SDSDP creates a solid skeleton to generate a clear, visual and complete review of the aircraft’s asset’s health status as well as its associated costs, its safety compliance or breach, at every moment in its life cycle.

A new way to be able to take the pulse of the aircraft on its maintenance and safety requirements and related costs, regardless of any approved maintenance plan. Based on structured data.