Jetstar say 787 maintenance too expensive!
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Jetstar say 787 maintenance too expensive!
Jetstar airs concerns about Boeing 787 maitenance costs
Boeing 787 launch customer Jetstar is concerned that operating costs for its new fleet will be significantly higher than expected after receiving the first batch of bids for aftermarket support.
Speaking at the maintenance master class during last week's Asian Aerospace Congress in Hong Kong, Seb Mackinnon, acting general manager of procurement at the Qantas low-cost subsidiary, said that the figures Jetstar has calculated so far for 787 per hour operating cost is "quantum higher than what the Qantas Group was expecting and that's obviously pretty alarming".
Jetstar has received 787 maintenance bids from Boeing, all major suppliers and some third-party providers. This includes a bid for Boeing's GoldCare turnkey lifecycle support programme as well as bids covering individual systems. Mackinnon declines to disclose Jetstar's maintenance cost estimate but says it was calculated by slicing, dicing and combining various bids. He told the conference the higher than expected figure is likely the result of high risk premiums being levied by the original equipment manufacturers.
"We'd like to see less risk premium," he says. "We think OEMs should be carving out [part of] that given they know their product."
Boeing Commercial Aviation Services integrated materials management director Joe Brummit agrees risk premiums are currently being priced high but told the conference they should reduce as suppliers get a better understanding of the customer requirements and go through the request for proposals process. "People are trying to figure out what we're actually pricing," Brummit says.
Jetstar also expects the prices to come down as second and third bids are received. "It's early days," Mackinnon says.
He acknowledges the high risk premiums are not surprising given the technology on the 787 is new and the aircraft is not yet in service. But Jetstar is concerned the prices may not go down fast enough given the carrier needs to soon start awarding maintenance, spare parts and other support contracts to support the aircraft's August 2008 entry into service. Qantas, which has firm commitments for 65 787s, has so far allocated Jetstar the first 15 aircraft from this order.
Jetstar is also concerned it may be forced to pay more for maintenance because there are no or few third-party maintenance providers for many of the components and systems. "The lack of competition probably makes a difference," Mackinnon says.
Boeing launched GoldCare in mid-2006 but has not yet secured a launch customer and "continues to evolve" says Mackinnon. Boeing's Brummit concurs, saying: "Absolutely, it's still evolving. We continue to get inputs from customers. We won't get stuck on one model."
But Mackinnon says it is not only GoldCare which is priced too high but also the individual bids from the suppliers, most or all of whom are also partners in the GoldCare programme. "It's not just GoldCare. It's aggregate and it's rough numbers," Mackinnon says.
Boeing 787 launch customer Jetstar is concerned that operating costs for its new fleet will be significantly higher than expected after receiving the first batch of bids for aftermarket support.
Speaking at the maintenance master class during last week's Asian Aerospace Congress in Hong Kong, Seb Mackinnon, acting general manager of procurement at the Qantas low-cost subsidiary, said that the figures Jetstar has calculated so far for 787 per hour operating cost is "quantum higher than what the Qantas Group was expecting and that's obviously pretty alarming".
Jetstar has received 787 maintenance bids from Boeing, all major suppliers and some third-party providers. This includes a bid for Boeing's GoldCare turnkey lifecycle support programme as well as bids covering individual systems. Mackinnon declines to disclose Jetstar's maintenance cost estimate but says it was calculated by slicing, dicing and combining various bids. He told the conference the higher than expected figure is likely the result of high risk premiums being levied by the original equipment manufacturers.
"We'd like to see less risk premium," he says. "We think OEMs should be carving out [part of] that given they know their product."
Boeing Commercial Aviation Services integrated materials management director Joe Brummit agrees risk premiums are currently being priced high but told the conference they should reduce as suppliers get a better understanding of the customer requirements and go through the request for proposals process. "People are trying to figure out what we're actually pricing," Brummit says.
Jetstar also expects the prices to come down as second and third bids are received. "It's early days," Mackinnon says.
He acknowledges the high risk premiums are not surprising given the technology on the 787 is new and the aircraft is not yet in service. But Jetstar is concerned the prices may not go down fast enough given the carrier needs to soon start awarding maintenance, spare parts and other support contracts to support the aircraft's August 2008 entry into service. Qantas, which has firm commitments for 65 787s, has so far allocated Jetstar the first 15 aircraft from this order.
Jetstar is also concerned it may be forced to pay more for maintenance because there are no or few third-party maintenance providers for many of the components and systems. "The lack of competition probably makes a difference," Mackinnon says.
Boeing launched GoldCare in mid-2006 but has not yet secured a launch customer and "continues to evolve" says Mackinnon. Boeing's Brummit concurs, saying: "Absolutely, it's still evolving. We continue to get inputs from customers. We won't get stuck on one model."
But Mackinnon says it is not only GoldCare which is priced too high but also the individual bids from the suppliers, most or all of whom are also partners in the GoldCare programme. "It's not just GoldCare. It's aggregate and it's rough numbers," Mackinnon says.
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Hmmm... wonder if it might make economic/business sense to set up some sort of in-house (ie. within the "Qantas Group") heavy-maint organisation? 
Goodonya....
Goodonya....
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Pornstar was created to deflower the Virgin
So simply it is only rosemary's Baby coming back to haunt it's creator, a parasite attached to the host.
It would be great to see the creative accounting but it'll be cold day in hell before that'll occur I believe the leprechaun hid it with his pot of gold by the way it doubled this year
So simply it is only rosemary's Baby coming back to haunt it's creator, a parasite attached to the host.
It would be great to see the creative accounting but it'll be cold day in hell before that'll occur I believe the leprechaun hid it with his pot of gold by the way it doubled this year
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who cares?
Mmmm lots of yummy fail-hard carbon fibre with hard to detect cracking.
Oh so suddenly all those airlines who did not rush out to buy the 787 are rubbing their hands that their block hour costs will be lower.
Evertonian
"787 Launch customer"???
I don't think so Tim!
Gee, I'm really feeling my age now. When I first got in to Aviation, airlines never mentioned theirs or anyone else's "incidents" & airlines would never, ever raise questions about their maintenance in public! What would the average Jetstar punter think when they read this?
"If the maintenance is too costly, they're gonna try & save money! Lets try the other mob Ferrett"
"Awroit Raelene"
I don't think so Tim!
Gee, I'm really feeling my age now. When I first got in to Aviation, airlines never mentioned theirs or anyone else's "incidents" & airlines would never, ever raise questions about their maintenance in public! What would the average Jetstar punter think when they read this?
"If the maintenance is too costly, they're gonna try & save money! Lets try the other mob Ferrett"
"Awroit Raelene"
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I'm not a structures expert, so I don't know if it's a workable analogy, but the one tubular bit of carbon-fibre structure I've seen go - rowing oars - tend to hold together pretty well, but when weakened in any way - then they go with a bang. And they fail completely.
Actually I've also seen tubular carbon-fibre boat rigging go as well, and likewise any failure is catastrophic. And any damage to a monocoque carbon boat hull - get thee to port pronto and all hands to the pumps.
oneAustralia AUS35
From what I've seen (which is admittedly limited), carbon structures either hang together competely, or fail totally.
Actually I've also seen tubular carbon-fibre boat rigging go as well, and likewise any failure is catastrophic. And any damage to a monocoque carbon boat hull - get thee to port pronto and all hands to the pumps.
oneAustralia AUS35
From what I've seen (which is admittedly limited), carbon structures either hang together competely, or fail totally.
Last edited by Taildragger67; 14th Sep 2007 at 07:56.
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This is actually a very serious problem for jetstar. Increase the cost base beyond what the model can handle and watch the deck of cards fall. Unless it turns itself into a full service carrier 
Nunc est bibendum
Perhaps Jetstar and the QF group are seeing what occurs when we don't have our own in house heavy maintenance capability. We can't get the work done ourselves so we have to pay whatever the 'market' dictates. Given the tight slots for maintenance around the world it appears that we now don't have much choice.
I was speaking to one of our former heavy maintenance guys last night (he was part of the OJH rescue in BKK) and he's alarmed at the lack of corporate memory now in QF with respect to either rescuing aircraft or even being able to maintain them if required!
I was speaking to one of our former heavy maintenance guys last night (he was part of the OJH rescue in BKK) and he's alarmed at the lack of corporate memory now in QF with respect to either rescuing aircraft or even being able to maintain them if required!
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Failure to recognise the context of this post validates a fundamental concern that some engineers have no understanding at all about the significance of maintenance cost per operating hour.
Shake the head a bit guys, look up and lift yourselves out of your burrow, there is much more to an airline than just in-house heavy maintenance.
MP.
Shake the head a bit guys, look up and lift yourselves out of your burrow, there is much more to an airline than just in-house heavy maintenance.
MP.
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looks like you have shaken your head a bit to hard MP,their is also a bit more to running an airline than outsourcing ever bit of the organization you can get your hands on,it's called investing in your future,most good companies grow and accumulate knowledge and assets,not sell them off until there is nothing left to sell,sh!t then what
Last edited by employes perspective; 13th Sep 2007 at 10:08.
MP:
MP is stating the bleeding obvious yet again, and at the same time completely missing the point.
Without a heavy maintenace facility, and the associated experienced planners and support staff, there is simply no way Jetstar can even benchmark the 787 maintenance costs.
Furthermore, the quotations Jetstar receives from potential maintenance suppliers in future will recognise that:
(a) Jetstar has no in house heavy maintenace capability.
(b) Jetstar has no capability to calculate maintenance costs, except from what Boeing tells it - which of course are always "indicative" only.
The quotations Jetstar receives will take account of this, and be inflated accordingly.
To put it another way, Jetstar is just about to realise that it is going to be screwed.
And believe me when I say that I have had to calculate maintenance costs before entry into service of new aircraft types.
Failure to recognise the context of this post validates a fundamental concern that some engineers have no understanding at all about the significance of maintenance cost per operating hour.
Shake the head a bit guys, look up and lift yourselves out of your burrow, there is much more to an airline than just in-house heavy maintenance.
Shake the head a bit guys, look up and lift yourselves out of your burrow, there is much more to an airline than just in-house heavy maintenance.
MP is stating the bleeding obvious yet again, and at the same time completely missing the point.
Without a heavy maintenace facility, and the associated experienced planners and support staff, there is simply no way Jetstar can even benchmark the 787 maintenance costs.
Furthermore, the quotations Jetstar receives from potential maintenance suppliers in future will recognise that:
(a) Jetstar has no in house heavy maintenace capability.
(b) Jetstar has no capability to calculate maintenance costs, except from what Boeing tells it - which of course are always "indicative" only.
The quotations Jetstar receives will take account of this, and be inflated accordingly.
To put it another way, Jetstar is just about to realise that it is going to be screwed.
And believe me when I say that I have had to calculate maintenance costs before entry into service of new aircraft types.
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And there was me thinking it was just a standard negotiating tactic from Jetstar to try to talk the price down.
"Lovely product chaps, but the price.... "
"Lovely product chaps, but the price.... "