Pooling Options Beyond Parts Are Expanding

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With passenger traffic largely shut down, few airlines are worried about spare parts stocks, as they can cannibalize grounded aircraft as needed. Indeed, when an aircraft-on-ground part need arises, the International Airline Technical Pool (IATP) often finds it harder to find airline staff—many of whom have been furloughed—than parts, according to Francesco Tetti, International Airlines Technical Pool senior business manager.

As traffic returns, airlines will need to pool parts and services. It is a smart way to achieve economies of scale in managing important activities, especially stocking parts for emergencies.

Some pools are straightforward part-sharing agreements, while others are just elements in packages of parts, repairs, logistics and technical support backed by an asset manager. For IATP, the extraordinary growth of pools is both confirmation of its original goals and a challenge to future usefulness. With so many pools available, will IATP’s approach remain important?

The organization thinks it will be and is already expanding multiple services to complement and exploit increased use of pooling options. As with leading airlines, manufacturers and MROs, IATP is learning new tricks to reduce costs, improve service and ensure safety.

Five years ago, IATP saw decreases in its pooling activities, remembers San Lucktong, director of technical marketing and sales at Thai Airways International and now in charge of IATP’s third-party pooling project. “It was because of new aircraft and the business model of OEMs and some MROs that offer power-by-the-hour programs, including support of spare parts,” Lucktong explains.

Power-by-the-hour programs establish a one-to-one contract between OEM or MRO and its airline customer and do not allow the airline to share the provider’s spare parts with other airlines. 

IATP leaders had to find a way to make OEM- or MRO-provided parts available to other airlines to maximize the benefits of its pool services. A project group was formed to help airlines share newly provided parts with other carriers at outstations, where parts from any one airline may be scarce.

IATP is now in discussions with OEMs such as Boeing, Airbus, Collins Aerospace, and global MROs such as Lufthansa Technik and AFI-KLM E&M about accessing their pool parts for IATP members to pool with each other. “They are willing to help,” Lucktong says. “But we have to find a way to do it.” Current power-by-the-hour contracts with OEM and MRO spare-part pools have limitations on sharing. The question is how to modify them or work within the limitations.

Lucktong expects that OEMs, MROs and IATP members will find a way to share parts with IATP pools. “It saves costs for everybody, and everyone gets more benefit,” he says.

IATP has identified five key airlines including British Airways, Delta Air Lines, Thai, United Airlines and Virgin Atlantic and the five major OEMs and MROs mentioned above to work on the challenge.

Some power-by-the-hour support providers have proposed that they supply parts directly to IATP airlines under IATP pooling. Selected Airbus A350 and Boeing 787 parts would be used in a pilot program at certain stations. Five IATP airlines would propose part numbers, previous usage and stations—and power-by-the-hour providers would evaluate and make recommendations.

How long might it take to set up this pool of pools? “We are trying to do it one year from now,” Lucktong says.

IATP offers more than just pooling of spare parts. It also offers pools for line maintenance, pools for aircraft recovery and pools of ground tools and equipment.

Line maintenance pooling, like parts pooling, offers the benefits of scale and local specialization. But it is limited by restrictions imposed by some local regulators. 

Restrictions can cause various problems. Some nations prohibit a carrier from pooling with another IATP member, requiring it to do its own line maintenance, which is inefficient and costly if the airline has few local flights. Other nations prohibit even self-handling. “Airlines have to use local maintenance organizations,” Lucktong explains.

In both cases, IATP attempts to explain to local regulators the advantages of line pooling. “It’s not about making money, but helping each other out,” Lucktong says. 

IATP has had some success in opening up airports for line pooling in recent years. For example, Saudi Arabia now allows it. But the issue is still open in other countries.

Overall, IATP’s most strongly growing pools are for line maintenance, despite local restrictions, and for spare parts, despite the flight-hour contracts. Lucktong notes flight-hour contracts mostly apply to new models like the Boeing 787 and Airbus A350 and can last for up to 12 years.

IATP has added six new airline members in the last 12 months, for a total of 118 airline members. The organization also has a select number of supplier members, with that number limited to one-fourth of its airline members.