Locatory.com: On-call maintenance as a way to solve AOG situations

Aircraft is a sophisticated technological object made of thousands of different units. Everyday aircraft engineers and technicians toil in order to minimize the possibility of a sudden component breakdown. But despite their efforts AOG situations still occur. Operators are lucky if the malfunction happens in the base airport where they have their maintenance team at hand and their spare parts’ stock ready. But what are the alternatives if an airline begins operating a flight to a new destination and the AOG situation occurs there?

Prior to opening new destinations, air carriers seek to develop partnerships with companies, which would assist them in aircraft maintenance services in the airports they are planning on flying to.

‘Usually these are the airlines which are already based in the destination airport. Potential partners should also share similar aircraft fleet, meaning that they have maintenance specialists for the same aircraft type,’ says the CEO of Locatory.com Zilvinas Sadauskas.

The carrier and its partner sign an On-Call Maintenance Agreement, according to which the partner’s specialists will provide all the necessary technical support in case of the carrier’s aircraft malfunction. The financial terms of such agreement include: the summoned price for the technicians (depends on an airport and the subcontractor’s capabilities); the price for every consecutive work hour (usually significantly lower than the initial price summoned by the technicians); the interest rates for the subcontractor’s services.

Table 1. The financial terms of an On-Call Maintenance Agreement.

The majority of the On-Call Maintenance agreements imply regular/service subscription payments, charged in order to maintain proper technical infrastructure and personnel of the service provider. The terms of arranging such payments may vary: monthly payments (from several hundred to several thousand Euros); minimal monthly service volume (if the company orders the minimum amount of works than it is exempted from the monthly payment altogether); charges per every single flight (40-80 Euros per landing, regardless if an aircraft is serviced or not).

Depending on the payment plan chosen, it is possible to calculate the cost of such agreement for the carrier. If the monthly payment reaches 2000 Euro and on assumption that an AOG situation (which may be handled within 5 hours) occurs only once per year, the overall price will exceed 27 000 Euro. This includes monthly payments for 12 months, initial and consecutive technicians’ fees and a 12% interest rate for acquiring spare parts.

Table 2. An approximate cost of solving a single AOG situation.

Should an air company decide not to sign an On-Call Maintenance Agreement, it will be forced to handle the aircraft malfunction on its own. This will require the shipment of the required spare components and the transportation of the technical team to the destination airport, meaning extra time loss for the airlines and thus additional expenditure on accommodating the passengers during aircraft maintenance works.

‘The advantages of an On-Call Maintenance Contract are primarily subject to the type of the subscription agreement between an air carrier and its partner. In any case, such agreements serve as insurance for the airlines and are likely to minimize the AOG-related expenses. But there is always an alternative – airlines may rely on keeping the aircraft in good technical condition and ensure consistent maintenance of its fleet in their base airport,’ says Zilvinas Sadauskas.