Core charges

[bigflyingrob]

A friend of mine has asked me to put a note up about core charges. When a unit is replaced and goes back to be rebuilt the maintenace organisation get a sum paid to them by the rebuilders if the unit is suitable for recon. Now should this be refunded to the owner or does the maintenace organisation get to keep this? With cars if you have an exchange unit you get a reduced price if yours is rebuildable and you have to pay full wack if its knackered.
So how many owners have had their core charge passed on to them?

[CJ Driver]

In my experience, the price you are quoted assumes that you've got a viable core. So for example, you're replacing a $100,000 item on your aircraft, but the core is worth $40,000. Your maintenance organisation quotes $60,000 for the job. You ask them to go ahead, they do the work, and you get a bill for $60,000. Then, to your surprise, the core is rejected by the supplier of the replacement part - result is, you get a second bill, for the other $40,000. In other words, the GOOD core was already factored into the price, so the fact that the maintenance organisation collected the core value was already assumed in your price. They will generally NOT take on the risk that the core is rejected, so you may get the bad news of a further charge later.

(At risk of stating the obvious, these are made up numbers to explain the principle. As you should realise, there will be mark-ups on the parts, since your maintenance organisation is in business to make a profit. What's more, it is common for there to be a "rejected core handling charge" or equivalent, since they really did ship a lump of metal back to the overhaul shop, who did inspect it before rejecting it, and may also have shipped it back, so this isn't free, and the sums don't add up quite as tidily as this example. But, you knew all that )