Hourly cost contracts

Hourly Cost Contracts A new-wave maintenance approach comes of age By Greg Napert February 1998 If you spend any time at all around turbine aircraft, you've probably heard the term "power-by-the-hour®" mentioned at least once over...


Current aircraft covered include the Citation II beginning with Serial Number 624, the Citation III/650 (which includes some of the oldest aircraft on the program), the Citation V and V-60, VIs and all the Citation VIIs.

If it's not enrolled when the aircraft is new, Cessna requires an aircraft survey be conducted by its Citation Service Center organization and charges an enrollment fee.

Cessna allows some flexibility as to where the operator has their maintenance performed, but they try to encourage the operator to bring the aircraft to a Cessna-authorized facility. Regardless of where the maintenance is being performed, the parts are covered in full. Parsons says, "If the customer has his own maintenance capability or if he goes into a service center or FBO, the parts coverage is always there."

Other key points of Cessna's program include:

• Parts must always come from Cessna. This ensures full compliance with all the regulatory issues and traceability of the parts and guarantees the customer is fully protected.
• The program focuses on material only and provides flexibility to the end user to use any qualified source of maintenance labor.
• An optional program is available for the Citation Jet called ProServicesm, which covers labor. The program is available only to new delivery Citation jets and is only offered in conjunction with using the Citation Service Center organizations.
• An optional program also available for engine parts coverage called PowerAdvantagesm. The company currently has two PowerAdvantagesm programs available, one to cover the Pratt & Whitney engines and the second to cover the Williams or Rolls-Royce engines. The program covers material only and does not cover labor. When the engine comes up for an overhaul, the overhaul is done by the engine manufacturer. This program does not include life-limited components for engines — a feature which Cessna says keeps the cost of the program significantly below any of the OEM engine programs.

Nose-to-tail coverage
One of the newest types of hourly maintenance programs in the industry involves what is referred to as "nose-to-tail" coverage.

James Lorentzen, Gulfstream Aerospace's ServiceCaresm sales manager, says the company is the first in the industry to offer such a comprehensive program.

The program is administered by Jet Support Services Inc., a company that had a history of providing these types of contracts on engines.

Lorentzen explains that Gulfstream's service plan is currently offered on new GIV-SPs and GIV-SPs delivered within the past year with less than 1,000 hours. The program will soon expand to include new Gulfstream Vs and existing GIV and GIV-SPs. The contracts term is 10 years with provisions to transfer if they sell the airplane before the 10-year anniversary date.

Lorentzen says these provisions allow the customer to either transfer the program with the aircraft on the pre-owned market, or they can transfer the remainder of the program to a subsequent Gulfstream purchase for themselves.

Gulfstream's plan calls for an approved Gulfstream maintenance facility to perform the major scheduled maintenance. "From a scheduled maintenance standpoint, the maintenance will principally be done at one of the three Gulfstream Service Centers: Savannah, GA.; Long Beach, CA.; or Brunswick, GA. We will use our authorized service centers such as Chrysler Pentastar in Michigan when the schedule allows," says Lorentzen.

"In order to maintain control over the program, Gulfstream determines where the aircraft gets maintained. However, we will accommodate the customer as much as possible. For instance, if a customer is based on the east coast, it would make sense to have the aircraft come to Savannah or Brunswick." The company also provides provisions for unscheduled maintenance. Lorentzen says, "You can't control where the aircraft breaks down, so we have to allow for maintenance at these facilities and then reimburse those repair facilities for the maintenance.

Other features of Gulfstream's program include:

We Recommend