Story ID: 385
UAC Creates Connected Aircraft Enterprise
By: Vladimir Karnozov
Caption: United Aircraft believes that acting as a one-stop solution will help it compete with the duopoly of Boeing and Airbus.
Word Count: 814
Russia's United Aircraft Corporation (UAC) is developing the Connected Aircraft Enterprise (CAE), an IT-based instrument to facilitate a move from a jetliner as an end-product to what it said is “service on manufacturer-guaranteed on-call delivery of a suitable aircraft to airline customers.” The respective concept has been under development and refinement for two years, according to Valery Okulov. Former Aeroflot chief (1997-2009) and then deputy transport minister (till 2017), he now serves a chancellor to the UAC president.

In Okulov’s view, the indigenous aircraft manufacturing industry has a bad reputation among airlines for deplorable aftersales support resulting in low utilization of locally made passenger jets. UAC can overcome this by offering the market “a completely new product” with most risks pertaining to aircraft—notably the MC-21 narrowbody and reworked Superjet regional jet—carried by the OEM. “This way is the one that shall lead [UAC] to a prominent place on the global market,” he said. Neither Airbus nor Boeing is interested in practical efforts on the materialization of such a radical concept because that duopoly has a seven- to nine-year backlog on the major types it produces, Okulov explained.

Under this concept, the manufacturer would act as “as a service provider that undertakes all obligations on aircraft availability and flight safety, including speedy provision of a replacement airplane” when necessary. “This is what shall truly become the Total Technical Support as we understand it today,” Okulov said. While this adds to the burden of issues the aircraft manufacturing industry has been carrying, he added, “we do not have much choice in the conditions of tough competition” with foreign OEMs.

Practical implementation of this concept requires the manufacturer to team with interested MRO organizations and other service providers. These may include financial institutions and leasing companies as well as purposely formed aircraft operators as providers of jetliners on wet (or dry) lease terms to airlines acting as end-users. While network fleet management has been successfully practiced for several years, including in Russia (for instance, Aeroflot managing commercial activities and fleets of Rossiya and Pobeda airlines in the group it leads), it needs further development to involve the aircraft OEM.

As part of this broader effort, UAC is developing CAE as a common IT platform that would unite the OEM, its vendors and suppliers, as well as financial institutions, lessors, and airlines. The platform employs advanced computer technologies as blockchain, predictive analytics, and others. After the software package is tested and cleared as being mature for commercial application, UAC will distribute it free of charge to airline partners, “since above 80 percent of those do not have the financial resources to buy it anyway,” said SCAC general manager Kamil Gayutdinov, who was a former Boeing employee. To make matters worse, many air carriers supply vital data in different formats and at different time intervals. “In most cases," he said, "they use Microsoft Excel as the only applied computer program to support their daily activities.”

CAE is meant to be a comprehensive software package that collects and processes big data volumes voluntarily provided by the aforementioned organizations involved in aircraft operations, so as to give a complete and clear picture of airplanes in operation as both technical and financial assets. Although similar IT efforts have been in the market for a while, few have delivered what was expected of them, and UAC intends that CAE prove different, through much more active involvement of the OEM and its industrial partners. Among other things, the OEM and its partners can add and verify vital information on authenticity and history of parts, their reliability in operation, and predictions for the need of spares.

The CAE software receives data from airplanes (parametric data, reports of onboard systems, failures) and airlines (technical departments, flight departments, and ground services) to perform real-time monitoring of the technical and financial condition of aviation assets. Through access to information on operational (technical) reserves remaining and status of rental payments under leasing contracts, CAE can enable the lessor or other aircraft owner to monitor the technical conditions of an asset and the status of rental payments, which is vital to ensure return on investment and remarketing capability. 

CAE is also viewed as an instrument to calculate direct operational expenses, depending on aircraft type, the number of years in operation, and maintenance procedures. The tool allows for the calculation of residual costs, facilitates audits, and helps achieve cost reduction through fewer personal meetings between aircraft owners and operators, according to Gayutdinov. Overall, CAE provides “a quality analysis of operational costs on an asset and advises an optimal service strategy.”

If successful, the Total Technical Support and CAE could give a boost to UAC’s reputation among airlines and a rise in income and profits from placement of MC-21 and SSJ100 airliners.