Computer integration among airlines, OEMs and FAA—positive, but risks?

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Computer integration is collecting data in flight

Data goes to airlines, MROs, OEMs and FAA

Reduces risks and lowers costs

Reliance on others risks loss of airline expertise

Guest authors add to the robustness of the Journal’s content and there is no one better than Ray Valeika whose experience, knowledge and insights into the airline technical operations are unequaled. Ray looks at the invasion of computers into the MX record-keeping, real time data collection, diagnostics PLUS preventative and predictive functions. His season vision focuses on the risks inherent in the increasing presence of the OEMs in these spheres and worries if that transition may cause deterioration of operator technical expertise, among other issues.

Thanks, Ray!!!

Opinion: How Connected Aircraft Are Changing Airline Ops And MRO

Ray Valeika January 09, 2020

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Ray Valeika advises airlines, OEMs, private equity firms and lessors. He was Delta Air Lines’ senior vice president for technical operations. Today’s aircraft and the power of advancing information and aircraft technologies are changing MRO and superseding yesterday’s processes.

As commercial aviation has evolved, many systems were adopted and regulated to create stable, balanced and controllable processes. Basic to this was the maintenance system, which is dependent on a balance between the regulators, manufacturers and operators. This balance could be seen in the way different 3 legged stoolstreams of information were controlled. The airlines were responsible for their operating data, the OEMs for their technical and certification data, and the regulators for their oversight data. It was often referred to as a three-legged stool. For the most part it is still that way today­—but for how long? Are we now at a tipping point where operational performance and maintenance requirements are slowly migrating away from the operators?

 

 

The more advanced the aircraft, the fewer the technical resources that need to be provided by the operators. What we are seeing is the ability of airlines to operate the latest-generation aircraft safely and reliably with much less internal technical capability than required for previous generations of aircraft. This has led to a transition from dependence on internal capabilities to reliance on external services.power-by-the-hour-1

 

 

The most obvious examples are power-by-the hour (PBH) engine maintenance agreements, which transfer engine maintenance as well as the record-keeping, operational data and real-time monitoring of operational performance away from airlines. This has given engine OEMs unprecedented insight into an airline’s operations, providing more control over pricing, engine maintenance and inventory. Let’s look at where else technology and business trends are further pushing this transition.aftermarket graphic

Both Boeing and Airbus have committed to major expansion in the aftermarket, which will give them more insight and control over activities that airlines perform.

The “connected” aircraft opens up huge benefits for rapid data transfer, easier record-keeping, improved diagnostics, off-aircraft analytics, training and predictive opportunities. But to which entities will they be connected, who will do the analysis, who will maintain operational data, and who will recommend corrective actions? Many of the major Tier 1 OEMs are engaged in sensor installation, predictive services and diagnostics. This will also allow them to provide PBH services across the aircraft component world. More important, like the engine OEMs, they will have significant control over many aspects of the aftermarket, particularly inventory.

 

 

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Business models and aircraft are all changing, but the most dramatic change is in information technology (IT) itself. Concepts like blockchain and other capabilities will transform aircraft lessors, which today make up nearly 50% of aircraft owners. Until recently, lessors have not committed fully to the benefits available from advanced IT. They have depended on operators for most of the maintenance while under lease and have used maintenance reserves as a revenue source. Today’s IT is sufficiently powerful to standardize aircraft maintenance and record-keeping so that aircraft transitions can become much more seamless. Maintenance records will become standardized and transparent. Return provisions will become much less of an issue. With such information more available, even lessors will provide all-inclusive one-stop shops.

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In today’s digital world, airlines are not the most efficient stewards of inventory. Billions of dollars of component inventory sits idly in airline warehouses, having turn times of less than twice a year. Clearly, this area is an obvious opportunity for big benefits, but who should control it? It’s not in the OEMs’ financial interest to sell fewer parts. An increase of turn times by one or so means billions less in parts sales. This area is ready for an infusion of technology and new ownership such as that already changing the supply chain in other industries.

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These are just a few snippets of how operational dependence is shifting from operators primarily to OEMs and in the future possibly to independent technical information and supply-chain ventures. This shift will  disrupt today’s aftermarket, seriously affecting independent MROs, parts distributors and airlines.

Perhaps the biggest challenges presented by this transition will be for regulators. As the analysis and monitoring of data moves away from airlines, how will the responsibility for airworthiness be regulated? My concern about this expansion of operational information is the issue of privacy: How do we preserve it? In our social media world and litigious society, will operational data become a source for news items, an opportunity to exploit incidents as a means to litigate or sensationalize? As always progress brings challenges.

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