While the industry continues to grapple with supply shortages, hourly maintenance program provider Engine Assurance Program (EAP) has gradually accrued its own inventory and, as a result, is reaping the benefits in the growth of its customer base. This is particularly true in Europe, where engine supply shortages have remained acute, according to EAP managing director Sean Lynch.
EAP was founded in 2016 to fill what it saw as a gap in the market, supporting older engines with lower-cost maintenance programs. Since that time, EAP has captured 30% of the German market for Learjets alone, growth that has occurred as operators search for consistent support in the face of supply-chain constraints, Lynch said.
“There's not enough inventory over in Europe to support all the operators,” he noted, “and the operators that have signed up with us know that we maintain our own inventory. We’re not relying on the continuous excuses of the supply chain.”
He pointed to the complexities of the issue that were borne out of the Covid-19 pandemic. Some of the manufacturers have managed their supply chains well, Lynch maintained. They tend to be the ones that manufacture their own parts, he said. The ones that rely on outside vendors “are the ones with the worst supply chain issues,” he explained.
Not only did smaller vendors go out of business during the pandemic, but the industry has lost a level of craftsmanship, making repairs a more difficult option, he said.
“I think what has hurt the engine business the most is that we used to be better at repairing parts,” Lynch explained. “We are not anymore. A lot of small vendors that could take a combustor part and repair it folded. They went out of business…and no one's come up with another repair for it.”
This is also a problem on the manufacturer's side, Lynch added. “There were several manufacturers that laid a bunch of highly experienced people off right at the beginning of the pandemic.” This included people who may have specialized in a certain part repair, and now that expertise is gone.
“You immediately need more new parts because you're not repairing the old ones that you used to. Let's say 20% to 30% of the old parts could be repaired and reused. Now they're not, so you've got to come up with 30% more parts.”
But to manage this, EAP has developed its own supply chain. “We know that specific manufacturers don't have fuel control units twice a year. We know that they run out of blades twice a year,” he said. “So, we just stock the parts. It's not cheap, [but] we know we can't rely on the system. So we made our own system.”
He said the company applies a lot of “common sense” to its approach. It also makes sure it has rental engines ready to go. “I feel like everyone's falling back on this continuous supply chain excuse, and we've been talking about this for four years now. If it hasn't been fixed yet then, then it's just a crutch.”
During Covid, the support industry would frequently discover that parts that used to be readily available weren’t. “We just started buying an extra one every time that happened,” Lynch said. EAP also would stock up after they’d learn there would be extended lead times on parts. “Every time they said it was going to be a six-week lead time, we bought another one, and then we had one on the shelf ready to go. When we have it in our inventory, there's no relying on anyone else to hope that they get it shipped by the end of the day. We get it shipped by the end of the day because we have it.”
This is critical because EAP works directly with customers. “When you call any of these other vendors and ask them for a part, they don't have the urgency because they don't know the customer who's stressed out. We know our customers, and everyone that works for us has been in the business long enough to have personally experienced the stress that's involved with someone who's AOG.”
This is critical for customer service, he said, stressing the importance of treating customers like high-end clients.
“I think we've lost that touch on business aviation. I don't think these operators get treated like high-end clients anymore,” he said. “I think the whole hourly engine program [niche] has taken a beating in the last couple of years because people that were on programs were grounded without rental engines for months and months.”
He noted that six months ago, estimates were that 100 airplanes were grounded around the globe awaiting engine parts and without loaner options.
Lynch estimates that EAP, however, has been at 98% availability of rental engines. Much of it involves planning well in advance. Six months ahead, EAP is planning for a scheduled engine shop visit. It actively and continually scans the market to see who has engines available, “so that when we have the AOG, we're not searching, we already know who has it.”
As a result, EAP has started to see growth in a slow, steady fashion. “People are finally starting to hear about our customer service. We're eight years into this, and they're slowly starting to figure it out.”
In Europe, however, things are ramping up more quickly, including signing a large fleet operator. “Everyone's hearing how it's going, and things are starting to snowball because of that.” EAP has stocked parts in the region so they could be closer to the operators. It also recently formalized a relationship with Aero-Dienst for engine support as it builds its base of MRO partners and vendors.
In addition to building its inventory and its partnerships, EAP is also gradually adding the engines it supports. EAP plans to stay in its niche—"If they haven't been in service for at least 20 years, we don't even look at them,” Lynch said.
But it has recently added Rolls-Royce BR710 engines on Bombardier Globals and Gulfstreams. Customers have already lined up for those programs. EAP has also laid the groundwork to add Pratt & Whitney Canada 308Cs on Dassault Falcon 2000 EX/LX/DX models and Honeywell HTF7000s that power Challenger 300s.
“As they get to that about 20 years in service, that's when add that model to our offering, so we're just slowly increasing the models that we'll cover as they reach a certain maturity in the market.”
While the industry continues to grapple with supply shortages, hourly maintenance program provider Engine Assurance Program (EAP) has gradually accrued its own inventory and, as a result, is reaping the benefits in the growth of its customer base. This is particularly true in Europe, where engine supply shortages have remained acute, according to EAP managing director Sean Lynch.
EAP was founded in 2016 to fill what it saw as a gap in the market, supporting older engines with lower-cost maintenance programs. The company offers tiers of coverage for some of the most common business aviation engine platforms, including Honeywell’s TFE731, Rolls-Royce’s BR611-8, and Pratt & Whitney Canada’s PW300 and PW500 families.
Since its founding, EAP has captured 30% of the German market for Learjets alone, growth that has occurred as operators search for consistent support in the face of supply-chain constraints, Lynch said.
“There's not enough inventory over in Europe to support all the operators,” he noted, “and the operators that have signed up with us know that we maintain our own inventory. We’re not relying on the continuous excuses of the supply chain.”
He pointed to the complexities of the issue that were borne out of the Covid-19 pandemic. Not only did smaller vendors go out of business during the pandemic, but the industry has lost a level of craftsmanship, making repairs a more difficult option, he said.
“I think what has hurt the engine business the most is that we used to be better at repairing parts,” Lynch explained. “We are not anymore. A lot of small vendors that could take a combustor part and repair it folded.”
This is also a problem on the manufacturer's side, Lynch added. “There were several manufacturers that laid a bunch of highly experienced people off right at the beginning of the pandemic.” This included people who may have specialized in a certain part repair, and now that expertise is gone.
“You immediately need more new parts because you're not repairing the old ones that you used to.”
But to manage this, EAP has developed its own supply chain. “We know that specific manufacturers don't have fuel control units twice a year. We know that they run out of blades twice a year,” he said. “So, we just stock the parts. It's not cheap, [but] we know we can't rely on the system. We made our own system.”
He said the company applies a lot of “common sense” to its approach. It also makes sure it has rental engines ready to go. During Covid, the support industry would frequently discover that parts that used to be readily available weren’t. “We just started buying an extra one every time that happened,” Lynch said. EAP also would stock up after they’d learn there would be extended lead times on parts. “Every time they said it was going to be a six-week lead time, we bought another one, and then we had one on the shelf ready to go. When we have it in our inventory, there's no relying on anyone else to hope that they get it shipped by the end of the day. We get it shipped by the end of the day because we have it.”
This is critical because EAP works directly with customers. “When you call any of these other vendors and ask them for a part, they don't have the urgency because they don't know the customer who's stressed out. We know our customers, and everyone that works for us has been in the business long enough to have personally experienced the stress that's involved with someone who's AOG.”
He noted that six months ago, estimates were that 100 airplanes were grounded around the globe awaiting engine parts and without loaner options. Lynch estimates that EAP, however, has been at 98% availability of rental engines. Much of it involves planning well in advance. Six months ahead, EAP is planning for a scheduled engine shop visit. It actively and continually scans the market to see who has engines available, “so that when we have the AOG, we're not searching, we already know who has it.”
As a result, EAP has started to see growth in a slow, steady fashion. “People are finally starting to hear about our customer service.”
In Europe, however, things are ramping up more quickly, including signing a large fleet operator. EAP has stocked parts in the region so they could be closer to the operators. It also recently formalized a relationship with Aero-Dienst for engine support as it builds its base of MRO partners and vendors.
In addition to building its inventory and partnerships, EAP is also gradually adding the engines it supports. EAP plans to stay in its niche—"If they haven't been in service for at least 20 years, we don't even look at them,” Lynch said.
But it has recently added Rolls-Royce BR710 engines on Bombardier Globals and Gulfstreams. Customers have already lined up for those programs. EAP has also laid the groundwork to add Pratt & Whitney Canada 308Cs on Dassault Falcon 2000 EX/LX/DX models and Honeywell HTF7000s that power Challenger 300s.