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Aging Is Not For The Faint-Hearted

Aging is not for the faint-hearted. This applies to people and it
applies to aircraft. As aircraft age, repairs become more frequent and
parts for these older aircraft become harder to find. The problems
multiply and the cost of maintenance increases rapidly. Our research
shows that a 25- to 30-year-old aircraft costs almost twice as much to
maintain as a five-year-old one. However, that is not the only place
where old aircraft impose a substantial cost burden. The other thing
that happens is that as the required maintenance effort increases, so
does the time required to accomplish the maintenance. As a result,
availability starts to decrease and in turn the revenue potential
decreases. Ultimately reliability also starts to decrease and finally,
when a particular aircraft is causing too many problems, the decision
is made to withdraw it from service and use it for parts.

Everyone
knows that this happens, but there is not much written about the
details or the impact of the aircraft aging process on availability,
reliability or how long aircraft stay in service. So, over the course
of the last five years, we have done some really interesting research
and thought we would it share with you.

The first question we
had was: How long do aircraft actually stay in service? By combining
data from several sources on the service status of individual serial
numbers and their year of manufacture, we were able to determine, by
make/model and year what percent of aircraft manufactured in a
particular year have been withdrawn from service. The accompanying
graph plots the answers. It shows that for some 5,500 turbine-powered
fixed- and rotary-wing aircraft, 10% of the 25-year-old, 20% of the
30-yearold and 50% of the 35-year-old aircraft have been retired from
service. That's the average. However, there are large variations
between particular makes/ models and the average.

Makes and
models that have strong support programs and are considered to be
‘money makers’ tend to stay in service longer, particularly if there is
no modern-day equivalent. On the other hand, aircraft that have poor
support programs, are ‘orphans’ (the original equipment manufacturer no
longer is in the aircraft business) or are not considered
cost-effective tend to get withdrawn from service much sooner.

The
next question then is: Why do aircraft get withdrawn from service?
Analysis and discussions with operators indicate there are four factors:

• Poor reliability

• Low availability

• High cost of labour

• High cost of parts

Reliability
is usually measured as a percentage of the number of departures that
occur within a specified number of minutes from the scheduled departure
time and is expressed as ‘dispatch reliability’. It is calculated by
dividing the number of departures in a month or a year that are delayed
by more than a certain amount of time by the total number of departures
for that aircraft during that period. Thus if on average one departure
in 50 is delayed, the dispatch reliability is calculated as 98%.
Airlines aim for and get a 98 to 99% mechanical dispatch reliability
rate. Limited data indicates that commercial operators of turbine
aircraft get the same sort of mechanical reliability. However, as the
aircraft ages, it takes more and more maintenance to achieve any kind
of acceptable on-time departure rate.

In other words, keeping
aircraft reliable as they age means more and more time spent in the
hangar and less and less time available for flight operations. The
accompanying graph shows what happens to availability as aircraft age.
This data covers some 200 fixed- and rotary-wing aircraft operated by
various government agencies and shows clearly that as aircraft get
older, it becomes more and more difficult to maintain a high degree of
availability. Each data point shows the availability for one aircraft
or fleet of similar aircraft at their actual or average age.

The
data show that even under the best of circumstances avail- ability
starts to decrease when the aircraft is 20 to 25 years old. On average,
at 30 to 35 years of age, availability is down to 50% – i.e., you need
two aircraft to have one available at any one time.

The impact
of this decrease in availability on the revenue-generating ability of
the aircraft is shown in an accompanying table. This shows that for a
typical operator flying an average of two hours per day, the loss of
revenue ($72,000 per year) is minimal with an aircraft less than 15 to
20 years old. Once the helicopter passes 20 years in age, the
availability starts to decrease rapidly and the lost revenue starts to
increase. Thus, when the aircraft is 30 to 35 years old, the lost
revenue equals $364,000 for this example and it probably becomes very
difficult to make money with such a helicopter.

As with any
theoretical analysis, there are exceptions and the helicopter business
is no different. There are operators that successfully operate old
equipment (such as 30/40-year-old Sikorsky S-58Ts, Hueys, Bell 205s and
S- 61s). They specialize in operating these machines because there are
no good modern replacements available. They also know that it takes two
or three helicopters of that vintage to serve a contract that
stipulates the availability of one aircraft and have geared their
operation to deal with this. And if their cost structure is set up
right, they can make good money.

For other operators, it may
well be worth keeping the cost of increased maintenance and the lost
revenue of decreased availability in mind as they contemplate their
fleet and its ability to make a good profit.