Engine 

Maintenance Management

Managing Technical 
Aspects of Leased Assets
Madrid, Spain /  May 12th, 2015 

Presented By:
Shannon Ackert
SVP, Commercial Operations
Jackson Square Aviation
Agenda

 Technical Drivers of Off‐Wing Maintenance
 Commercial Considerations of Off‐Wing Maintenance
 Lessor & Lessee Considerations of Off‐Wing Maintenance
 Flight Hour Agreement (FHA) Programs

Appendix A Engine Maintenance Costs & Reserve Rates 

A modern engine often

operates 25,000 hours
between major overhauls;
equivalent to 13,500,000
miles or flying to the moon
and back over 27 times.

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 Engine Maintenance Management

Technical Drivers of Off‐Wing 
Maintenance

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Technical Drivers of Off‐Wing Maintenance

Technical drivers of off‐wing engine maintenance can be

broadly categorized into four areas:

1. EGT Margin Deterioration
2. Expiry of Life‐Limited Parts (LLPs)
3. Hardware Deterioration
4. Other Removal Causes

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Technical Drivers of Off‐Wing Maintenance
1. EGT Margin Deterioration
Exhaust Gas Temperature ‐ EGT is a measure of the
temperature of the gas as it leaves the turbine unit.

Engines are certified with temperature limits enforced via a limit

on maximum take‐off EGT, referred to as the redline EGT.

EGT
EGT 
850 °C  Redline

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Technical Drivers of Off‐Wing Maintenance
1. EGT Margin Deterioration
EGT Margin (EGTM) is the difference between the peak EGT
incurred during take‐off and the certified redline EGT. It is used
to evaluate and track engine time on‐wing & health.
TO = 850 °C 
EGT Margin °C = EGT Redline – EGT Take‐off EGT RL = 950 °C 

850 °C 
EGT Redline

EGT Margin = 950 °C  ‐ 850 °C = 100°C 
EGT °C 

Full Take‐off Power

Time Since Initiation of Take‐off

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Technical Drivers of Off‐Wing Maintenance
1. EGT Margin Deterioration
EGT margins (EGTM) are at their highest levels when the engines
are new or just following refurbishment.
Example ‐ EGT Margins for new CFM56‐7B Engines

Red Line = 950 °C
135 110 100 85 55

EGT Margin °C

EGT Take‐off °C

815 840 850 865 895

Engine Model 7B20 7B22 7B24 7B26 7B27

Takeoff Thrust 20,600 22,700 24,200 26,300 27,300

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Technical Drivers of Off‐Wing Maintenance
1. EGT Margin Deterioration
As the engine deteriorates, the EGT margin will rise until it
reaches Redline EGT, or the absolute temperature limit which
cannot be exceeded without damaging the engine

EGT Margin Deterioration

EGT Redline
EGT Margin
EGT °C

Deteriorated Engine

New Engine

Time Since Initiation of Take‐off

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Technical Drivers of Off‐Wing Maintenance
1. EGT Margin Deterioration
EGT Margin Deterioration largely results from hardware distress
(e.g. gradual increase in clearance between turbine blade tips &
surrounding static seals or shrouds, and combustor distress)

EGT Margin Deterioration Cycle 
Compressor
Fouling Increased Tip Increasing Gas 
Clearances Airfoil  Path Flow Losses
Erosion

Increases EGTM
Deterioration

Seal Increasing 
Leakage Fuel Burn

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Technical Drivers of Off‐Wing Maintenance
1. EGT Margin Deterioration
Rates of EGTM deterioration are highest during initial operation
& subsequently stabilize to reach a steady state level.
Relationship Between EGTM Deterioration & Engine FC

80
EGT Deterioration °C 

60

Steady Sate Loss
40 Per 1,000 FC
(e.g. 5 °C / 1,000 FC )

20 Installation Loss  
(e.g. 25 °C first 2,000 FC) 
0 2,000 4,000 6,000 8,000 10,000
Engine Flight Cycles

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Technical Drivers of Off‐Wing Maintenance
1. EGT Margin Deterioration

Rate of EGTM deterioration is influenced by:

Flight Operations ‐ rate of EGTM deterioration increases as: 
• Engine thrust rating increases
• Engine derate decreases
• Average flight leg decreases
• Operating environment becomes more severe

Engine Age (Maturity)
• First‐run engines traditionally have higher EGTM and lower 
EGTM deterioration rates relative to mature engines

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Technical Drivers of Off‐Wing Maintenance
1. EGT Margin Deterioration
EGTM trend monitoring ‐ trend monitoring of EGTM looks at
successive snapshots to help analyze the wear trend of engines.

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Technical Drivers of Off‐Wing Maintenance
2. Expiry of Life‐Limited Parts (LLPs)
Within engine modules are certain parts that cannot be
contained if they fail, and as such are governed by the number of
flight cycles operated.
These parts are known as Life‐Limited Parts (LLP) and generally
consist of disks, seals, spools, and shafts. LLPs are discarded
once their useful lives are reached.

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 Technical Drivers of Off‐Wing Maintenance
2. Expiry of Life‐Limited Parts (LLPs)
LLPs account for a high proportion of mx costs on short‐haul
missions due to lower avg. flight legs & higher cycle accumulation
    CFM567B ‐ SHOP VISIT FORECASTER ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ SHOP VISIT 1  ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ SHOP VISIT 2  ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ SHOP VISIT 3  ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
 RATING ‐7B26/E TOW (FH)  25,495 TOW (FH)  12,600 TOW (FH)  16,200
 FLIGHT LEG 1.80 TOW (FC)  14,164 TOW (FC)  7,000 TOW (FC)  9,000
 DERATE 10% BUILD GOAL (FC) 7,000 BUILD GOAL (FC) 9,000 BUILD GOAL (FC) 9,000
 REGION Temperate WORKSCOPE LEVEL PR WORKSCOPE LEVEL PR+ WORKSCOPE LEVEL PR
  SUMMARY DATA
  PR :   $10.26 M PR :   $2.53 M PR :   $2.60 M PR :   $2.54 M
SUMMARY

  LLP :  $4.87 M LLP :  $1.40 M LLP :  $1.31 M LLP :  $1.40 M

36% 33% 36%
  SV :    $15.13 M SV :       $3.93 M SV :       $3.91 M SV :       $3.94 M
  PR ($/FH) :  145.60 PR ($/FH) :  99.20 64% PR ($/FH) :  206.30 67% PR ($/FH) :  156.50 64%
  Stub Loss :  10.9% Stub Loss :  15.1% Stub Loss :  10.3% Stub Loss :  10.3%

LLPs account for a low proportion of mx costs on long‐haul

missions due to higher avg. flight legs & lower cycle accumulation

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Technical Drivers of Off‐Wing Maintenance
3. Hardware Deterioration
All engine components are exposed to different kinds of
deterioration mechanisms. These include amongst others:
• Low and high cycle fatigue,
• Thermo‐mechanical fatigue,
• Erosion / Corrosion / Oxidation

4. Other Removal Causes
Other removal causes include amongst others:
• Foreign Object Damage (FOD),
• Oil Leak / High Oil Consumption,
• Vibration,
• Airworthiness Directives
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Technical Drivers of Off‐Wing Maintenance

 Engines operating on short‐haul flights experience higher

removals due to: a.) EGTM deterioration & b.) LLP expiry.

 Engines operating on medium‐to‐long haul flights experience

higher removals due to deteriorating: a.) hardware & b.) EGTM.
Technical Drivers of Engine Removals by Operation

Short‐haul Operation Medium/Long‐haul Operation
Shop Visit Removals %

EGTM

Hardware

Hardware

EGTM
Other

Other
LLP

LLP
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 Engine Maintenance Management

Commercial Considerations of 
Off‐Wing Maintenance

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Commercial Considerations of Off‐Wing Maintenance

Commercial considerations are often influenced based on where

an engine is in its economic lifecycle

Phase 1 Phase 2 Phase 3

Growth Stabilization Dispersion
0‐8 Yrs. 8‐20 Yrs. > 20 Yrs.
EIS
 Entry Into Service (EIS) ‐ engine first enters into service.
 Growth – engine gaining acceptance & orders are increasing,
 Stabilization – engine sales are at a consistent, steady level.
 Dispersion ‐ engine sales drop to a low level & are being sold for
spare parts or scrap.

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Commercial Considerations of Off‐Wing Maintenance

Phase 1 – Phase 2
Growth   +   Stabilization
EIS

Workscope Considerations : Phase 1–2 (Growth + Stabilization)

• Build for minimum number of SVs, which allows one to achieve
lower shop DMC ($ / FH) but higher SV costs.
• Use OEM parts & repairs,
• Invest / Benefit from latest SB modifications & technology
• Build to maximize EGTM recovery and time on‐wing

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Commercial Considerations of Off‐Wing Maintenance

Phase 3
Dispersion
EIS

Workscope Considerations : Phase 3 (Dispersion)

 Maximizing usage of LLPs, which often leads to lower SV costs but
higher DMC ($ / FH)
 Weigh benefits of purchasing replacement engine in lieu of
performing a shop visit
 Weigh benefits of PMA parts and DER repairs

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Commercial Considerations of Off‐Wing Maintenance

Example Workscope Consideration:
LLP Stub‐lives remaining

Engine Enters Shop  13 3 3 8

Growth & Stabilization Dispersion

Workscope Full Overhaul Core Restoration
LLP Replacement Fan + Core + LPT Core Modules
Build‐Goal 20,000 FC  8,000 FC 
Restoration Cost $ $2.50M $2.0M
LLP Cost $ $2.50M $1.5M
Total Shop Visit Cost $ $5.0M $3.5M
Restoration $ / FH @ 1.5 FL $83.33 / FH $102.50 / FH

Engine Exits Shop 30 20 20 25 13 20 20 8

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 Engine Maintenance Management

Lessor & Lessee  Considerations of 
Off‐Wing Maintenance

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Lessor & Lessee Considerations of Off‐Wing Maintenance

Engines installed on leased aircraft often times have more

constraints and will depend on the:

 Delivery conditions
 Term of the lease
 Redelivery conditions

Commercial considerations within a lease factor the mirror‐in‐

mirror‐out philosophy whereby the status of engine redelivery
conditions are used to establish delivery conditions.

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Lessor & Lessee Considerations of Off‐Wing Maintenance

Mirror‐in‐Mirror‐out Philosophy:

Redelivery Delivery

Lessor 
Lessee 1 Accepts & Lessee 2
Returns Delivers Accepts

Lessee 1 returns & lessor Lessor delivers & lessee 2

accepts engines meeting accepts engines meeting
defined minimums per the defined minimums per the
lease (e.g. 6,000 FH / 4,000 FC) lease (e.g. 6,000 FH / 4,000 FC)

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Lessor & Lessee Considerations of Off‐Wing Maintenance

Lessors depend on transferability & liquidity, and residual

value protection of their engines.

So parts and repairs installed during maintenance events have

to be acceptable to all operators and regulatory jurisdictions.

That is why most lessors do not allow for:

• PMA parts to be installed , &
• DER repairs

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 Engine Maintenance Management

Flight Hour Agreement (FHA) Programs

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Flight Hour Agreement (FHA) Programs

Under an FHA an operator pays a service provider an hourly rate

based on the number of engine hours flown & the engine OEM
covers all product upgrades & shop visits during the FHA term.

Advantages:
Advantages
 Cost Visibility ‐ Smoothing of expenditure designed principally to
address the cost and timing uncertainties inherent in traditional
time and material contracts

 Greater Value ‐ Overhauled to the latest standards; all ADs and

target Service Bulletins (SBs) issued for the life of the program are
incorporated at shop visit at OEM’s expense

 Reduced Infrastructure ‐ Relieves the operator of the need to

purchase stocks of engines and accessories

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Flight Hour Agreement (FHA) Programs

Disadvantages:
Disadvantages
 Access to Cash – some packages don’t allow for any cash to be
refunded at any point, only credits for future maintenance work will
be provided

 Reduces Aftermarket Competition – creating a situation where

there is no aftermarket competition on any level ; where the OEM
controls all commercial aspects – spares, materials, repairs, etc.

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Flight Hour Agreement (FHA) Programs

FHA Payment Options:

Payment Options
1. Pay‐as‐you‐go – Payments are made to the service provider as the
engines accrue time ………. most FHA contracts are PAYG
2. Pay‐at‐shop visit – Payments are made at shop visit based on a
hourly rate provided by the service provider.

Term Options
FHA Term Options:
1. Per Fleet Cumulative Term ‐ Fixed period of time for the fleet: e.g.
12 years from entry into service of first aircraft,
2. Per Engine Term ‐ Fixed period of time for each engine: e.g. 12
years from EIS of each engine.
3. Per Shop Visit Term ‐ Fixed number of Restoration Shop Visits per
engine, e.g. term finishes for each engine after 1st SV.

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 Appendix A ‐ Maintenance Costs & Reserve Rates

Engine Thrust Phase  Fl Leg Time On‐Wing (FC) Costs 2015 $ Rate ($ / FH)

CFM56‐5B6/3 23,500 First‐Run 1.7 16,000 ‐ 17,000 $2.25M ‐ $2.5M $80‐ $88
CFM56‐5B4/3 27,000 First‐Run 2.0 11,500 ‐ 12,500 $2.25M ‐ $2.5M $95 ‐ $105
CFM56‐5B3/3 33,000 First‐Run 2.0 8,000 ‐ 9,000 $2.25M ‐ $2.5M $140 ‐ $155
CFM56‐7B24E 24,000 First‐Run 1.7 16,000 ‐ 17,000 $2.25M ‐ $2.5M $80‐ $88
CFM56‐7B26E 26,300 First‐Run 2.0 12,500 ‐ 13,500 $2.25M ‐ $2.5M $90‐ $100
CFM56‐7B27E 27,300 First‐Run 2.0 11,000 ‐ 12,000 $2.25M ‐ $2.5M $105 ‐ $115
V2524‐A5 S1 24,000 First‐Run 1.7 15,500 ‐ 16,500 $2.25M ‐ $2.5M $80 ‐ $88
V2527‐A5 S1 27,000 First‐Run 2.0 11,000 ‐ 12,000 $2.25M ‐ $2.5M $105 ‐ $115
V2533‐A5 S1 33,000 First‐Run 2.0 8,500 ‐ 9,500 $2.25M ‐ $2.5M $140 ‐ $150
Trent 772 71,200 First‐Run 6.0 3,500 ‐ 4,000 $5.5M ‐ $6.0M $230 ‐ $250
PW4068 68,000 First‐Run 6.0 3,250 ‐ 3,750 $5.0M ‐ $5.5M $230 ‐ $250
CF6‐80E1A4 70,000 First‐Run 6.0 3,250 ‐ 3,750 $4.5M ‐ $5.5M $230 ‐ $250
GE90‐115B 115,000 First‐Run 8.0 2,500 – 3,000 $6.5 ‐ $7.5M $280 ‐ $300

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Appendix A ‐ Maintenance Costs & Reserve Rates

Engine Thrust Phase  Fl Leg Time On‐Wing (FC) Costs 2015 $ Rate ($ / FH)

CFM56‐5B6/3 23,500 Mature‐Run 1.7 12,800 ‐ 13,800 $2.5M ‐ $3.0M $125‐ $145
CFM56‐5B4/3 27,000 Mature‐Run 2.0 9,500 ‐ 10,500 $2.5M ‐ $3.0M $135 ‐ $155
CFM56‐5B3/3 33,000 Mature‐Run 2.0 6,500 ‐ 7,500 $2.5M ‐ $3.0M $190 ‐ $210
CFM56‐7B24E 24,000 Mature‐Run 1.7 12,800 ‐ 13,800 $2.5M ‐ $3.0M $125 ‐ $145
CFM56‐7B26E 26,300 Mature‐Run 2.0 10,000 ‐ 11,000 $2.5M ‐ $3.0M $130 ‐ $150
CFM56‐7B27E 27,300 Mature‐Run 2.0 8,800 ‐ 9,800 $2.5M ‐ $3.0M $135 ‐ $155
V2524‐A5 S1 24,000 Mature‐Run 1.7 12,500 ‐ 13,500 $2.5M ‐ $3.0M $125 ‐ $145
V2527‐A5 S1 27,000 Mature‐Run 2.0 8,800 ‐ 9,800 $2.5M ‐ $3.0M $135 ‐ $155
V2533‐A5 S1 33,000 Mature‐Run 2.0 7,000 ‐ 8,000 $2.5M ‐ $3.0M $190 ‐ $210
Trent 772 71,200 Mature‐Run 6.0 2,500 ‐ 3,000 $7.0M ‐ $8.0M $380 ‐ $440
PW4068 68,000 Mature‐Run 6.0 2,500 ‐ 3,000 $6.5M ‐ $7.5M $360 ‐ $420
CF6‐80E1A4 70,000 Mature‐Run 6.0 2,500 – 3,000 $7.0M ‐ $8.0M $380 ‐ $440
GE90‐115B 115,000 Mature‐Run 8.0 1,800 ‐ 2,200 $10.5 ‐ $11.5M $480 ‐ $560

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