If an airline orders more than 100 new aircraft—then, two months later says that 95% of its annual maintenance and engineering contracted work is up for re-tender by 2017, the industry should take note.
Whiledid exactly this in July and September, the news does not signal a seismic shift in its operations. Rather, the carrier is continuing to do what it does well—run a lean, low-cost operation.
EasyJet considered proposals from, and over a 20-month period, but Airbus’s final price seemed to clinch the deal.
The airline’s young fleet will grow in the next five years from 215 to 280, as it starts taking the 35 current-generation jets—all of which will be delivered during 2015-17. Airbus will deliver 100from 2017-22.
Although EasyJet is still evaluating engines for the NEOs, “our current expectation is to make a decision early next year, but we’re very focused on making sure we have the right evaluation process more than we are focused on the deadline,” says Gary Smith, the airline’s head of powerplant and fleet transition.
EasyJet is very process-driven and just held a supplier conference to educate vendors about its fleet changes, and encourage them to move beyond traditional maintenance approaches. “We want to leverage our fleet size in terms of technology and innovation” to gain operational efficiencies and costs, he says. Smith especially sees opportunities for logistics and prognostics.
“We fly 1,200-1,400 sectors per day,” so efficiency gains with those kinds of numbers multiply savings, he explains.
For Smith, this isn’t just a cost-cutting exercise; like EasyJet’s decade-old relationship with, he sees the steady volume of predictable maintenance work he brings as an opportunity for MROs to improve their processes and efficiencies simultaneously. Both sides benefit.
Waiting for the more-efficient NEOs, however, will drive the fleet’s average age of 5 years today up to about 8 years in 2018, when it will plateau, says Smith. The oldest aircraft will shift from 8-10 years to in excess of 12, which means more-costly heavy maintenance checks will be required over the next five years than previously planned, as the airline waits for the NEOs to arrive.
To put this in context, EasyJet’s maintenance costs represented 6% of its 2012 expenditures, compared to an industry average of 15-20%, according to TeamSAI figures.
Part of its efficiencies stem from the airline’s engineering team having made a big leap in 2010, when it finished a two-year project to bring its engineering management processes in-house. At the same time, it implemented Swiss Aviation Software’s AMOS maintenance system. Having this functionality in-house “gives us a deeper understanding of our aircraft and the performance of our suppliers,” says Smith. Placing EasyJet’s maintenance and operations control centers side-by-side at its Luton Airport headquarters west of London also gives it better control of the front line and on-time performance, which is one of EasyJet’s bedrock operating principles.
“We operate a complex jigsaw puzzle but try to make it as simple as possible by having standardized processes across maintenance bases and line stations,” says Smith.
Perhaps the jigsaw puzzle only has four pieces, which are EasyJet’s four goals: build number-one and number-two network positions in its markets; maintain cost advantages; drive demand, conversion and yields; and exercise capital discipline.
And really, the big aircraft order and maintenance vendor announcements fit in the puzzle.
But as Smith said during Aviation Week’s MRO Europe Conference in London, planning is more than just individual pieces: “You need to have a big radar.” This is part of the reason EasyJet is evaluating engine shop visit costs for 2025-28 even today.