What is the True Cost of Your Dream Trip? How Airlines are Achieving New Levels of Efficiency

In today’s competitive era of globalization, airlines are encountering increasing pressure to reduce one of their biggest costs: aircraft maintenance.

However, in their quest to do so, they face a major challenge—keeping costs to a minimum while safeguarding passenger safety and wellbeing at all times.

Like many industries, airlines are focusing more and more on the bottom line. However, while changes to core businesses processes have been observed across many operators, it is imperative that safety remains a top priority.

Setting a brand apart from the rest involves offering safe and reliable services at the expected quality without charging more.

But how is that possible?

For my dear readers who are not fully au fait with the main concepts that underpin aircraft maintenance and logistics: OEMs are the original equipment manufacturers, while MROs are the maintenance and repair operations.

For this article, I had a great opportunity to meet with Mr. Didier Granger, President of OEMServices, a company founded by OEMs (Diehl Aerospace, Liebherr Aerospace, Thales Avionics and Zodiac Aerospace). OEMServices is dedicated to the after-sales support of the aerospace market and offers a range of services to this effect including supplying spare parts, maintaining equipment, and repairing equipment. OEMServices also supports OEMs through global logistics management processes.

Mr. Granger graciously allowed us to visit his company premises, where we met with him and learned more about the world of aircraft maintenance and logistics. He informed us about some of the OEMs challenges that contemporary airlines are encountering and shared his vision of how airlines can become more efficient in the future.

As the new reliable aircraft are more expensive than their older counterparts, the inventories are more and more expensive, and the barriers to independent stations become of increasing significance because the OEMs no longer offer their repair capabilities and expertise to all market players.

The main challenges associated with the maintenance of aircraft and logistics involves supporting the airlines to achieve a consistently high aircraft dispatch performance.

The costs of entry to this market are immense and have an influence on how the market as a whole functions. To try and enter the market, some players differentiate themselves purely on the basis of price. For example, there are brokers who specialize in dealing with the parts from older aircraft models. However, while these options are lower cost, they are also of a lower quality and there is a fundamental difference in the end result.

One of the challenges involves helping the end user understand that low price can also mean low quality. The old adage is true: You get what you pay for: If leverage is based purely on price, which is the case for certain fleets, the level of quality falls.

Let’s look at things from a different perspective. Let’s say you have just purchased a brand new Ferrari. Would you be happy to take it to a local mechanic for servicing and maintenance?

It’s highly likely that the answer to this question is a resounding “no!”

You will want to protect your investment by ensuring it is properly looked after.

You may be tempted by the lower price charged by the local mechanic. However, if there was a risk the overall safety of the car would be jeopardized, wouldn’t you rather shell out a few extra books to ensure your comfort.

After all, what’s your life worth?

So, the question is: How can we actually put a price on the difference in quality in a market that is driven by the customer?

This question is front and center of many airlines’ operational strategies. Airlines are operating in a consumer-driven market, and there is a strong focus on costs and prices.

But what is really most important?

Price?

Quality?

Reputation?  

The way we answer this question will ultimately shape the future of air.

The OEMs are in a unique position in that they can use extensive data analysis to refine the original maintenance program that was crafted for each aircraft. By asserting full control, from design and manufacture through to maintenance and analysis, OEMs can paint a complete picture of the asset and use the data they have available at their fingertips to analyze performance. As a stakeholder, OEMs can gather enough reliability data to change maintenance plans and eradicate any ineffective or unnecessary maintenance processes.

OEMServices firmly differentiate themselves from other market players on the basis that they follow a very specific approach by which they integrate the OEM and MRO processes.

Additional services are emerging as a new trend and an important area of differentiation.

In the future, OEM providers will employ predictive maintenance to keep costs to a minimum by proactively addressing potential faults before they become a problem and removing any ineffective and unnecessary maintenance steps.

Despite all the back-end planning and strenuous work aircraft engineers and technicians invest in aircraft, aircraft on ground (AOG) situations occur all the time. Improving predictive maintenance processes represents a viable means of addressing these areas. However, at present, they are limited to a certain number of components. In the future, the data that is available will be harnessed to anticipate needs and engage in ongoing learning.

One of the key roles of the OEM business is to organize the AOG and optimize the resources that are available in the best possible way. However, the ultimate objective is to eradicate the phenomenon of AOG for good; by better anticipating needs and taking proactive action, aircraft with will be fully utilized and the concept of AOG will disappear.

And significant strides forward have already been made. A variety of systems are in use that have improved flight dispatch performance and regularity. Less and less aircraft sit idle awaiting repairs.

However, there is still much to achieve. In the future, there will be a need to identify the different levels of support that are required and refine the services in response to the data that is available.

Efficiency is key to maintaining customer relationships and establishing a competitive advantage – especially in a heavily saturated and competitive aftermarket service environment. Airlines are in the pilot seat, and their demands and expectations increase on an annual basis. They want faster maintenance and improved cost control; the challenge for the OEM business is to make this a reality.

The airline industry is no place for “weak or indecisive professionals.” Its volatility is affected by a range of variables, including regional and global economies, government actions, regulations, and stability. However, one thing that is certain is that the airline companies will continue to seek advantages to conquer new markets, acquire more customers, and provide a quality service at a cost-effective rate.

For these companies, there can be no doubt that keeping the plane flying as much as possible represents a very important goal and the key to long-term business success. We should not forget that, in the aerospace industry, an aircraft consists of thousands of parts. These parts are provided by hundreds of suppliers with one main goal: to transport people while safeguarding their lives.

Cheers!

Ana Paula Araujo Mendes

Many thanks to: 

Didier Granger

President of OEMServices, a company founded by OEMs (Diehl Aerospace, Liebherr Aerospace, Thales Avionics and Zodiac Aerospace). OEMServices is dedicated to the after-sales support of the aerospace market and offers a range of services to this effect including supplying spare parts, maintaining equipment, and repairing equipment. OEMServices also supports OEMs through global logistics management processes.

Didier Granger is a graduate of the ICN and holds an MBA from HEC Executive Education. He has spent most of his career in the air transport and MRO industries, successively leading operational support and logistics activities, purchasing department and integrated service business units.

Interview photos: Nadjim Ait-Meddour 

 

Ana Paula

I am entrepreneur, highly motivated, love working; enjoy helping people and keeping myself healthy.

One thought on “What is the True Cost of Your Dream Trip? How Airlines are Achieving New Levels of Efficiency

  • November 3, 2018 at 5:25 pm
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    Excelente post. Abordagem real da aviação global hoje. Parabéns

    Reply

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