IBA delivers cost savings, improves efficiency and reduces exposure to regulatory risk. Whether as an outsourced resource, or as additional expertise around a key event, we deliver efficiency improvements across the whole cycle.
While low oil prices and the strong dollar are positive news for some US carriers, for many others margins remain tight. Efficient management of maintenance becomes even more critical as both a percentage of total costs and as a means of conserving asset value.
IBA has developed a series of methods for auditing and reducing costs that, when consolidated, can equate to millions of dollars. Working alongside fleet selection and transition management , IBA advises on the identification of maintenance cost savings, and on better management of warranties and provisions of contributions from lessors and OEMs.
We benchmark costs and prices against our own dataset of equivalent aircraft and OEM data. We also measure the gap between an operator’s data and OEM figures and advise if the gap is reasonable, or is there further work that can be done to improve efficiencies. For leased fleets there are also gaps between contractual maintenance and the MPD that can be exploited, or at least monitored and managed to ensure return conditions are met.
We have seen wide variations in how airlines handle the warranty process which, while well published and documented, are often complex given the large number of vendors associated with the aircraft and its systems. Many do not have formal processes and, as such, potentially leave millions of dollars unclaimed. The same accusation can be levelled at provisions in leases that allow airlines to claim for maintenance reserves and AD cost sharing. At IBA, again we conduct a robust audit to build a true picture of the scale of overlooked activity.
Recent projects include:
- Benchmarking costs across a peer group to identify areas of potential savings.
- Assessing where in Europe to base maintenance operations.
- Optimise maintenance schedules to ensure cost effective compliance with the MPD.
Example Case Study
Post restructuring, an airline was looking at ways of reducing cost across a fleet of 24 narrowbodies
Working closely with the airline's tech and finance team, IBA identified a number of areas where efficiency could be further improved. In particular, we:
1. Benchmarked the airline’s data against OEM claims and its own comprehensive data
2. Compared the MPD to the lease condition to identify mismatches in the timing of maintenance events
3. Reviewed processes around AD costs sharing and the claiming of warranties.
IBA identified an average of $2.2m per aircraft per annum