MRO 3 JULY21.qxp_Finance 22/06/2021 12:50 Page 1
MRO
Why and How to Cover Older Jet Engines With Business Aviation operators frequently warned that delaying enrollment on an engine maintenance program can be more costly than any savings realized in the short term, is there ever a point when it’s simply too late for operators of older jets to enroll? Dave Higdon explores... or operators of older jets with age-related issues, there are engine maintenance programs available to them. For example, Engine Assurance Program offers competitive coverage and rates for engines powering many older jets, including Falcon 50s and Falcon 900Bs, Citation Xs, and Hawker jet models. For operators flying on these and other models with older engines, coverage is “a very salient subject,” says Sean Lynch, EAP's Program Coordinator, “and one with significant financial impact.” He notes how he routinely sees operators removing their Falcon 50s and 900s, Citation Xs, Hawkers, and other types from the programs they were enrolled with. But according to Lynch, dropping coverage on even an older aircraft’s engines is not, in the long-term, a financially savvy move.
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24 Vol 25 Issue 7 2021 AVBUYER MAGAZINE
“In the short-term, those operators save thousands by dropping their coverage,” Lynch explains. “But it’s a short-term gain with a long-term penalty. When the engine is not on a program there’s a loss in equity that the sellers can't pass on to the next buyer. “The aircraft loses residual value on resale [as a result of not having engine coverage],” Lynch continued. “So it really doesn’t save the operator money, it costs them.” All of this assumes the owner’s aircraft survives long enough to be sold on. “When these engines get taken off of an engine program, within four to six years those engines (and most likely the airframes, too), will get parted out because it no longer makes sense to spend money on maintaining them.” Indeed, the financial benefits of enrolling in and staying on an engine-maintenance program can be extensive, with the costs of maintenance remaining more www.AVBUYER.com
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