Carriers weigh in-house vs. outsourced maintenance
Regional airlines are undergoing a period of change in everything from ownership and partner relationships to route systems and aircraft fleets, and this is helping trigger a shake-up of maintenance models.
The transformation in the regional industry has been substantial, starting with the mergers and acquisitions that are shifting the landscape for both regional and major airlines. The regional carriers also are securing new service contracts with majors that will bring new aircraft types into their fleets. And the continuing quest for efficiency means regional airline officials are reviewing maintenance needs and costs.
But to maintain aircraft internally involves large capital expenditure, both for physical facilities and parts inventory. It also requires training and maintaining the required workforce. On the other hand, to contract out maintenance a carrier must find the right MRO facilities to meet its needs.
SkyWest Airlines is always weighing those issues, says H. Michael Gibson, vice president of maintenance.
The carrier has substantial in-house capabilities but also outsources some significant work.
The St. George, Utah-based SkyWest operates a fleet of 323 aircraft—281, 700 and 900 regional jets and 42 EMB-120 Brasilias—on behalf of , , , and .
Gibson says the airline sends its CRJs out for C checks to Bombardier's Commercial Aircraft Service Center in Tucson, Ariz., and its major engine overhauls to StandardAero and. SkyWest does hot sections on its Embraer aircraft engines in-house.
The carrier conducts some component work inside, completes certain avionics repairs at its Palm Springs and Fresno, Calif., bases , performs its own interior work on its aircraft, and works on wheels and tires in its accessory shop.
When deciding between in-house and outside assignments, Gibson considers three criteria—reliability, cost and efficiency.
“Sometimes we can do it in-house and turn it much quicker than they can outside,” Gibson says. The turn-time is essential because it affects the requirement for spares.
The same three criteria will determine the maintenance plan when SkyWest brings the(MRJ) into its fleet, Gibson says. The airline has ordered 100 MRJ90s, with first deliveries set for 2017.
SkyWest has eight maintenance bases and eight line stations with more than 1,300 employees, including 758 A&P mechanics and inspectors.
Because of the widespread nature of SkyWest's network, having maintenance bases nationwide is important “to get the required touch times with the airplanes,” Gibson says. Nashville was added to its list of bases last year because some of the aircraft it operates on behalf of Delta were repositioned and it needed more touch times in that part of the country.
The line bases are in locations where there is a heavy flow of aircraft.
Although both SkyWest and its sister airline ExpressJet operate large numbers of CRJs, and to some of the same airports, Gibson says they are generally separate operations. For example, while both fly to Houston, ExpressJet offers ERJ 145s there while SkyWest uses CRJs.
Canadian regional airline Jazz Aviation performs its own heavy maintenance at Halifax, Nova Scotia, and London, Ontario, and at its component MRO facility in Calgary, Alberta, according to Richard Steer, vice president for maintenance and engineering.
The carrier, however, is transitioning all heavy maintenance activities to the Halifax base, where it will have increased its two lines of heavy maintenance to three by July.
Jazz has been taking new Bombardierinto its fleet over the past two years to replace 50-seat CRJs, and it currently operates 21 Q400s with options for nine more. Overall, Jazz runs a mixed fleet of 131 Bombardier jet and turboprop aircraft in two airline divisions: 126 aircraft operating flights as Express and five aircraft operating charters throughout North America under the Jazz banner.
When deciding whether to outsource maintenance on a new aircraft to its fleet, “Jazz evaluates its entire maintenance needs, based upon maintaining a competitive advantage against market rates,” Steer explains.
The carrier did sign up for Bombardier's Q400 Smart Parts program, which provides a carrier with access to a parts inventory. Steer says Jazz outsources all its engine overhauls as well as overhaul and repair of non-owned components that are covered under power-by-hour agreements where it pays for inventory access and repair.
Overall, Jazz has 1,165 maintenance and engineer professionals in its system, including the large bases and line bases in 10 locations across Canada.
In France,Group's three regional carriers—Brit Air, Regional and Airlinair—were consolidated this spring into HOP!, with a diverse fleet of 101 Embraer, Bombardier and aircraft. HOP! operates 530 daily flights to 136 destinations within France and to 15 European cities.
Besides their fleets and operations, a melding of maintenance organizations was required. Regional and Brit Air, the two larger carriers, have long been maintaining their own fleets at facilities in Clermont-Ferrand, Lille, Morlaix and Lyon. For the time being, that will not change.
In contrast, Airlinair was outsourcing maintenance of its ATR fleet to European MROs. That work has been brought in-house, with the maintenance work on Airlinair's ATR fleet split between Regional and Brit Air facilities.
For line maintenance activities, the three airlines will share capacity across the existing network.
All three carriers were sending out maintenance work on engines, landing gear, auxiliary power units and components to MROs, officials say, and will continue to do so in the near term.
Each of the three carriers, of course, had its own(EASA)-approved Maintenance Part M program, and those have been retained. But joint project teams are working on establishing ways to enhance the overall organization's performance and reduce costs through synergies within the Part M program.
Although it is difficult to read the tea leaves regarding the future of, American Airlines' regional airline affiliate, Eagle currently “does its own aircraft maintenance and always has,” an Eagle source says.
The carrier has heavy maintenance bases in Abilene, Texas, and Marquette, Mich., with extensive facilities. Both handle Eagle's current fleet of 213 Embraer regional jets and 59 CRJs. Eagle's nine ATRs are being phased out.
Eagle Aviation Services Inc. (EASI) in Abilene is a combined hangar/stores/office complex. In its four hangars, EASI operates five nose-to-tail dock lines which completed more than 76 heavy checks last year, an official says. It also handles overnight aircraft and drop-in work, and modification programs.
American Eagle's Marquette facility has three hangars, accommodating three nose-to-tail lines for heavy maintenance. The facility performed 65 heavy checks on Eagle'sand Bombardier CRJ700 aircraft last year, in addition to overnight and drop-in work, Eagle says. American also has 10 line stations across the U.S., and “four additional contract line bases” that only work on Embraer aircraft. Most major engine work is done by and General Electric.
In the past, American had the most restrictive of scope clauses with its pilots' union, dictating the size of aircraft American Eagle and regional partners could operate. This is why there are so many regional jets with 50 seats or less—225—in AMR Corp.'s regional fleet. With the carrier in bankruptcy protection, its pilots' union has agreed to a new pact allowing American to outsource the operation of aircraft with 76 seats or less to Eagle and other regionals. The change has potential implications for American Eagle's MRO services as well.
Some carriers with considerable in-house MRO capabilities have been changing course in the last few years.
Republic Airways has stepped-up its outsourcing. The carrier signed a long-term maintenance agreement last year with Bombardier Commercial Aircraft Services for support of Q400s. The nine-year contract covers all heavy maintenance for 32 Q400s it began operating on behalf of United Express.
With three large commercial aircraft service centers in the U.S.—a total of 25 lines of maintenance in Macon, Ga., Bridgeport, W.Va., and Tucson—Bombardier is finding receptive airlines, officials say.
Republic also signed a component support agreement with Embraer for its 145/170/175/190s, including those it will operate for American Airlines. Republic had done a lot of Embraer work internally.
Alaska Airlines' Horizon Air is another carrier that moved MRO work outside. In 2010, Horizon began outsourcing heavy maintenance of its Q400 fleet—now 48 aircraft—to Empire Aerospace in Hayden, Idaho. The move shaved Horizon's maintenance base staff by 100, although some moved to jobs at line bases.