Since the Covid pandemic, airframe parts shortages have been common in the private aircraft industry. This is an issue that has been ongoing despite the fact that most Covid restrictions have been removed for over three years, and the pandemic is now a distant memory for most people. While airframe parts shortages have been frequently written about, shortages have also arisen in one unexpected area: engines.
Engine parts shortages have had a series of consequences that have now created uncertainties with engine programs — programs that were once one of the most rock-solid services provided to aircraft owners.
Understanding Engine Maintenance
When engines go into an engine maintenance shop for mid-life inspections, overhauls or other general repairs, the engines are disassembled, and the condition of the internal parts assessed. Once assessed, parts are frequently replaced due to wear and tear and to ensure reliable performance until their next maintenance. Furthermore, many of the parts inside of the engine have a life-limit where it must be replaced within a certain number of engine hours, engine cycles or during the most recent shop visit to that replacement limit. As a result, as airframes mature and engines accrue more hours and cycles across the entirety of an aircraft model, the requirement for parts becomes greater across the whole fleet. Many aircraft fly a fairly similar number of hours per year, which means that when these life-limited parts come due, they often come due for replacement on a large number of aircraft simultaneously.
Why Parts are Scarce
Difficulties arise when there is a shortage of these parts. First and foremost, when parts are in high demand, program providers have to manufacture the part or source these scarcely available products from other places. Due to cost implications, program providers typically do not produce large quantities of these parts in advance. The downside is that sourcing or producing them is a time intensive process that is all the more time consuming for you as an owner if there is a large number of aircraft in the queue ahead of you. For certain engine manufacturers, shop visits of 4 – 8 months are not uncommon with the some models requiring time in the shop of over one year per engine per event. This means that once your engine comes off the airframe, you could be facing many months of time before you get it back.
The Knock-On Effects of Shortages
Shortages used to rarely be a problem as almost all engine manufacturers would provide rental engines as part of their engine programs. But this brings us to consequence number two – as the time required for shop visits has increased, each loaned engine is being borrowed for a longer length of time. This means that the demand on the rental fleet of engines is at all-time highs, and some of the manufacturers cannot provide rental engines for their customers as they are already in use on another aircraft. As a result, we are seeing that some engine programs who have always marketed themselves as providing rental engines are now finding loopholes in their program contracts to avoid this obligation. Owners who have been paying millions of dollars into the program over the years can find themselves with no rental engines and a grounded aircraft for many months.
To be clear – this is not a problem that affects all engine programs or engine models. Williams International, maker of the FJ44 series of engines installed on the Cessna Citation CJ series, is one of the best programs out there and is actively producing parts to keep their engines serviceable and downtimes minimal. They are not having issues with rental availability either. Rolls Royce is similarly proactive in ensuring a ready supply of rental engines to service their fleet of engines, and we hear from many clients that their experience with Rolls Royce is a very positive one.
Outside the manufacturer’s in-house programs, there are third party providers who offer engine programs for clients. The two biggest are Engine Assurance Program (EAP) and Jet Support Services International (JSSI). Both provide an alternative to the manufacturer’s programs and can offer nimble solutions that the legacy OEM programs cannot or will not offer.
Avoiding the pitfalls
Does this mean that you should forgo an engine program all together? Our answer is no and mainly because a person on a program will get priority over someone who is not, both in terms of rental and parts. With that in mind, Sean Lynch, Managing Director of EAP, recently shared helpful advice on choosing an engine program provider. “When beginning your due diligence for an aircraft search, start by calling the salespeople for the engine program you may be using, and ideally, some of the engine shops in your area. Ask them what they are seeing and if there are any weaknesses in the system of the engine type you are considering. Specifically ask them about the availability of rentals as well. Rentals are a weak spot for many OEMs, something our clients frequently mention when they sign up to our program. We have invested heavily in spare rental engine capacity to ensure availability for our clients and minimize downtime.” When asked about people who already have their aircraft on an engine program, he offered the following: “Start the conversation about any upcoming maintenance with your engine program provider as early as possible. Get to understand what lead times are required to arrange rentals, and what you can do to minimize downtime on your aircraft. Right now, you cannot plan far enough ahead when it comes to engine maintenance.”
Does this have an effect on resale value and overall desirability of an aircraft type?
The short answer is yes. One great example is the classic Falcon 2000 series (the non-EX or LX version). The downtime required for in-shop engine maintenance can exceed one year in some circumstances, and engine rentals are sparse. While the engines may be enrolled on a program, it does not guarantee that rentals will be provided. Some clients have decided that the risk of being grounded is not worth progressing with this type and have focused their search on other models. When a client is interested in a Falcon 2000, we make sure to discuss any considered aircraft’s engine status, upcoming shop visits to be aware of, and the timing of any potential pain points in their ownership. With most people flying 250 – 300 hours per year, we can forecast an idea of the time remaining on the engines before they need servicing, and if or when these shortages and time grounded could become an issue. An aircraft with five years remaining provides ample time before this could be a problem and is a very different decision point than an aircraft with one year or less remaining before its next engine shop visit. Demand for aircraft with pending engine maintenance is significantly softer than for an aircraft with many years remaining.
The old days of an engine program meaning that the engines were no longer a concern is, for many programs, a thing of the past. Engine times must be closely considered if you are looking at an aircraft that suffers from engine parts and rental engine shortages. As with all things – you can deal with a potential problem when you are aware of it, so being aware of engine shortages is a key item on the checklist these days. Your broker should be looking into this for you during your aircraft search. Airframes without engines are obviously ineffective at their stated purpose, so spending time in advance to understand these part shortage issues is well worth your investment of time.
– This article is taken from Fly-By Newsletter Issue 25.