The Power-by-the-hour (PBH) market holds considerable industry share and is projected to continue to expand due to low-cost airline growth.
But with today’s geopolitics, market shifts, and a global service performance inconsistency, can Initial Provisioning provide peace of mind in areas where PBH faces challenges?
In this article, we will look at how ensuring parts availability is challenging if you are dealing with multiple uncontrollable external variables. We look at how power-by-the-hour solutions might seem lucrative in the initial investment but also put the responsibility of spares availability and reliable maintenance in the hands of OEM’s and lessors.
Geopolitics
The world has always been a tumultuous place. Global politics have waxed and waned since long before we took to the skies. Nations have risen and fallen, borders have opened and closed, and all of these factors create detrimental challenges to aircraft maintenance and operations.
For repair station and maintenance worker certification statuses to logistical bottlenecks due to import/export regulations, one need not look farther than last year's uncertainty towards Brexit to see how shifting borders can create uncertainty with regards to airlines operations.
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When bringing a new aircraft into operation, working with an Initial Provisioning solution has the advantage of circumventing the challenges that various geopolitical or legislative factors that can hinder or slow a logistical process. Thus indirectly causing a spare part not to be available specifically when it is needed.
This is mainly due to Initial Provisioning enabling the customer (or airline) to maintain complete stock control across multiple locations—even though, in many cases, it is often recommended that stock be centralised to one base.
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Service Performance Reliability
As power-by-the-hour solutions have grown, airlines have increasingly been relying on outsourcing options for all, or part of, their maintenance activities. This, of course, led to a significant increase in independent MRO’s globally.
According to a report by Global Market Insights, the “Lack of trained MRO maintenance professional and high manufacturing cost of parts & components are acting as major restraints for market growth. With the rising number of available seat miles, the demand for on-time performance is increasing. Airlines are now focusing on providing on-time services as any delay can cost a hefty amount of penalty. The lack of trained aircraft technicians is posing a major restraint for the PBH market growth.”
The growth in the independent MRO market also comes with its own challenges. We recently covered the enactment of the Safe Aircraft Maintenance Standards Act in November of 2019, a US bill that gives the FAA more oversight into the standards of international MRO’s. Powered by the tragic circumstance surrounding the Boeing 737 MAX cases, the contentious Bill states “the safety of the United States aviation system requires the highest standards for aircraft maintenance, repair, and overhaul work.”
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The Definitive Guide to Initial Provisioning of spare parts
In contrast to Power-by-the-hour solutions which are subject to these issues, Initial Provisioning offers more control with regards to maintenance activities—as it can be controlled by the airline itself, or negotiated within the initial provisioning processes. While the up-front investment is greater for IP, the airline can manage its own material and maintenance standards.
Resource shortage
Deeper in the GMI report mentioned earlier, it states that one of the major pitfalls, or challenges, to the PBH market is the looming threat of material resource shortage. Market unpredictability is a challenge in any industry, and because Power-by-the-hour solutions are more dependent on logistical processes, one slight bottle-neck can have detrimental ripple effects along the supply chain.
Predictive data analytics are vastly improving supply-side analytics, and we reported on in 5 things to consider about Big Data in the aviation aftermarket, but there will always be uncontrollable factors that could keep a spare part being available exactly when it is needed.
This is largely negated when an airline has invested in Initial Provisioning, as all spares material is owned and managed by the airline itself, which usually means faster replacement of failed parts as well as more independence in stock management.
Peace of Mind
Some might argue that the peace of mind that one can get from knowing that no unexpected or unforeseen factors will lead to downtime is aircraft operations is worth a steeper upfront investment. This is precisely what one can expect from entering into an Initial Provisioning partnership rather than relying purely on a Power-by-the-hour solution.
PBH may appear more economical in the short term, but the long-term investment divests the customer from maintaining absolute control of their aircraft and its operations.
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