David Caporali, Senior Vice President of Americas, and Phillip Dickerson, Vice President of Business Development for JSSI Maintenance Programs, recently spoke with AvBuyer on how operators should evaluate engine maintenance program options.
Read the full article below, or on AvBuyer’s website.
–
A quote attributed to Benjamin Franklin warns that “those who fail to prepare, prepare to fail”. The advice is as applicable to business jet operators today as to Franklin’s contemporaries.
Successful aircraft ownership depends on a string of well-made choices. A poorly planned move often comes at a heavy cost to the owner. One such decision centers on engine maintenance coverage selection.
Without understanding the options available, it’s difficult for operators to ensure they’re adequately prepared for scheduled and unscheduled maintenance. Properly knowing the options includes challenging the biases that cloud judgment.
In today’s increasingly sophisticated market, what could have been true a few years ago may no longer be accurate today. Failure to spot the misperceptions is a failure to plan.
Who Knows the Engine Best?
Fundamentally, aircraft owners have two engine maintenance program coverage options. They can select the engine OEM’s coverage or that of an independent program provider.
While it can seem reasonable to assume the OEM knows its product inside out and is – by default – the better option, aircraft operators need to remain objective.
“If you and I were to go into a commercial transaction requiring attorneys, we wouldn’t use the same attorneys to represent each side,” Phillip Dickerson, Vice President, Business Development, USA & Caribbean, JSSI argues. “Independent coverage and oversight provides customers with options they wouldn’t have otherwise.”
With JSSI’s focus squarely set on its customers’ benefit, those options arise from “greater flexibility, because we are able to offer our services from an independent angle,” David Caporali, Senior Vice President of Americas for HCM, JSSI, adds.
That flexibility, he says, gives JSSI the agility to adapt its programs and support and align to the operator’s priorities.
The important thing to understand is that the work covered under a JSSI program “gets done at the exact same place, by the exact same people [as it would under an engine OEM’s program],” Dickerson says.
As to who really knows the engine best, “let’s take a look at our engine technical team,” he offers. “Each one of those team members sees anywhere from 40 to 60 off-wing events per year, per person. Putting that in context, a Director of Maintenance might see five events in their entire career, our guys see that many events every month.
“Why’s that important? Our engine technical teams know the engine comprehensively – and they represent the client, not the OEM, MRO shop, engineering, or the insurance company. They give the client the benefit of their unique perspective, and the weight of their experience is unlike any other in the industry.”
Nor does ‘independent’ mean less strength and depth and a lesser support network. JSSI has close to 100 technical advisers positioned at all key Business Aviation hubs around the world. The team is built to provide comprehensive regional representation.
JSSI’s technical advisers focus hard on building relationships with all the MRO providers in their regions and territories, Caporali notes, meaning that, as an independent program provider, JSSI can work with a wide range of options, including OEM shops and independent MROs as well as supporting operators with in-house maintenance capabilities – all covered under JSSI’s program equally.
“We have a relationship with all the MROs, we know their capabilities, and we have accounts open with them enabling us to move fast when a customer needs it.”
In a real-life example, Caporali recalls a Brazilian operator who had negotiated a deal to enrol its jet with JSSI [Tip-to- Tail®] but had not formally signed the contract before making its first flight with the jet. En route to Switzerland the operator encountered an avionics squawk and flooding in the lavatory.
After the operator contacted the technical representative in Brazil, JSSI got its team involved at the Swiss destination. “On arrival, the MRO shop was ready to deplane the passengers, crew and luggage, and started work immediately,” Caporali says.
“Within two days the aircraft was returned to service” – even though the operator had not yet signed the contract. “We commissioned the MRO on our dime.” While the operator promptly signed the contract the next day, returning their jet to service was JSSI’s priority.
“We’re a service provider. Our program competitors manufacture and assemble incredible aircraft. We have the luxury of focusing exclusively on service. We have the luxury of investing our technology dollars in predictive maintenance and client response time,” Caporali argues. “Without our team on the ground, just setting up an account with the MRO and ordering the parts would have taken them at least three days on their own.”
The case study offers an insight into the culture of “speeding things up when the customer is in need, and cutting through the bureaucracy with precision.
“The flexibility we can offer is extremely powerful. We operate with a flat management structure, so many decisions can be made at field level, cutting out much of the red tape that delays customer service,” Dickerson adds.
Beyond global and local representation for aircraft owners/operators, the JSSI team includes an array of dedicated product line specialists who focus on specific engine and airframe types.
“If you go to the doctor about a heart problem, you’ll go to a specialist, not your family practice,” Dickerson asserts. “The purpose for how we’ve built our team is that we have specific technicians for specific product lines – their entire focus is on one specific product line.
“So, essentially, they’re able to take a deep dive into whatever is going on in that event – whether it’s troubleshooting or an off-wing event, they are the subject matter experts. They work hand-in-hand with the local technical team.”
Who Offers the Better Rental and Spares Pool?
A question that often comes up at enrollment, is what access JSSI has to rental engines and APUs, spare parts, and components.
“At JSSI, we’ve been heavily invested in analysing the fleet’s needs, and we’ve been investing in growing our pool of loaner engines and APUs,” Caporali says. “Today, we’ve got nearly 120 [rental] assets available to support our customers,” up sharply from around 30 rentals just a few years ago.
“This is something we’ve invested significantly into developing, analyzing the fleet’s needs and what we need to invest in,” he continues. “It’s a powerful statement on how we are preparing to support the aircraft, having rentals and components that save both cost and downtime for operators.”
Ultimately, those doing their homework on JSSI’s rental pool will find it ranks alongside several OEM program rental pools, while also remaining fluid. “JSSI continually adds to its engine pool and inventory strategically, ensuring we have the resources needed to satisfy operator requirements,” Dickerson adds.
He shares the predicament one customer found itself in. “We got a call on a Friday from a management company that was having a problem obtaining a part they needed. They’d been placed at the back of the line with 12 other customers waiting to receive the same part.
“I called a colleague to see what we could do, and within two hours he called back to say the part would ship out by 10:30 the next morning. We had a rental engine coming out of the test cell, so we pulled that part off and shipped it to the customer to install on their plane, JSSI not only absorbing the cost, but remaining focused on finding alternative solutions.”
Dickerson underlines that the other operators waiting in line for the part would all have been waiting for six weeks, but because JSSI was able and prepared to show flexibility and ingenuity in its approach to finding solutions, its customer was back flying within a day.
“Can we do that every time? No. But one of the main differentiators, we believe, is our attitude,” Dickerson summarizes. “When there’s a real problem – where there’s almost no solution – that is when the wheat and chaff are separated.”
Can Independent Programs Support Factory-New Jets?
Another misperception worth addressing is the assumption that factory-new business jets must be enrolled on engine OEM maintenance programs, while independent program providers like JSSI exist only to support pre-owned aircraft.
While that may have been an accurate reflection of the market around 15 years ago, the picture has changed significantly – yet some new aircraft buyers may not realize this. The reality, Caporali highlights, is that JSSI holds very strong market share in new-delivery business jets today.
“In certain aircraft models we have one-third of the market share,” he adds – and overall, today, JSSI says that about one in five new Mid-Size and larger aircraft coming off the production line are enrolled on its 100% coverage program.
”We’ve seen our share of enrollments in the new aircraft market increasing over the last few years,” Caporali says. “That’s only possible because the industry is recognizing JSSI’s value proposition and alignment with the operator, regardless of age or aircraft platform.”
So what does an operator gain by enrolling with JSSI at delivery? The team points to three key ingredients.
- The first is warranty management: warranty events carry their own complexity, often involving the OEM, the insurance company and the MRO, and JSSI’s technical team coordinates between those parties to ensure the client reaches a good solution.
- The second is coverage of the gaps a warranty leaves behind, with rental engines a prime example, keeping the operator flying while work is underway.
- Lastly, a typical warranty term runs around five years, while the largest maintenance events arrive well beyond it; enrolling at delivery means funding those events from the very first hour flown.
There’s a certain logic to JSSI’s ability to support new aircraft that buyers may overlook: the most complex, costly maintenance events tend to arrive as an aircraft ages, not when it’s fresh off the line. A provider that has spent decades solving the hardest problems on in-service and legacy aircraft is, by definition, well equipped to support an aircraft from day one.
Yet Caporali stresses the importance that more new aircraft buyers understand they have an alternative option. “Not having that option on the table is a bad thing for everyone – healthy competition is important for the market, it’s important for high service levels to continue, and it’s important for costs to stabilize.”
What are the Benefits of an Open Mind?
For those weighing up engine coverage programs, what are some of the most important considerations for avoiding bias, and choosing the best option?
“Do a deep dive,” says Dickerson, “Look at what you’re getting – pay attention to the signal, not the noise. What is the program actually providing? Who’s going to do the work? Who are you going to call when something happens – and, will they go the extra mile to find solutions when something happens?”
The underlying point is straightforward: a buyer who understands their options is in a stronger position than one who doesn’t. That’s true whichever way they ultimately choose.
Returning to Benjamin Franklin’s astute sentiment about preparation, establishing and understanding your options is critical. “You’re always better off knowing what your options are and then choosing – even if it’s not JSSI,” Caporali and Dickerson agree.
“Just compare – you’ll be better off and have more negotiation power having two choices instead of one.”
100% Coverage vs Pro-Rata Coverage: What’s the Difference?
Delving a little deeper into JSSI’s maintenance program options, aircraft owners/operators will find two coverage types: 100% Coverage and Pro-Rata Coverage.
JSSI has recently worked to brand and clarify the difference between these programs. In essence, it’s simple – and coverage is binary, either 100% or Pro-Rata:
- 100% Coverage is designed for new aircraft delivery enrollments and means the engine has been fully funded toward its upcoming major events, with contributions made for every hour flown. Buyers of new deliveries enroll this way from day one, and in-service enrolments have the option to pay an upfront buy-in to achieve 100% coverage. The residual value benefits match competing programs in the market.
- Pro-Rata Coverage lets an aircraft owner enroll an aircraft that wasn’t previously on a maintenance program, without paying a large lump sum up front to “catch up” on past hours. Instead, the owner pays in going forward and covers their share of the overhaul when it comes. Enroll at 60% of the way to overhaul, for example, and the owner covers that 60% while JSSI’s program covers the remaining 40% accrued during enrollment. It remains a popular choice for in-service enrolments; while sharing the cost of major events on a predictable basis, clients benefit from JSSI’s technical oversight and unscheduled protection from the day of enrolment, and have options to customize their coverage, for example by adding 100% LRU coverage, when they opt in for the program.
The key question is simply when the owner pays: up front with a buy-in to 100% coverage, or later at overhaul or resale with pro-rata.
Click here for a full breakdown of Pro-Rata coverage.
