THE JOURNAL FOR COMMERCIAL AIRCRAFT BUSINESS • ISSUE 130 • JUNE/JULY 2020

AIRCRAFT COMMERCE
THE JOURNAL FOR COMMERCIAL AIRCRAFT BUSINESS
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UNPARALLELED ADVANTAGE
OPENING ROUTES & EXPLORING
POTENTIAL MARKETS

CFM56-3, RB211-535, PW2000, PW4000-94 & CF6-80C2 aftermarket I RM techniques for post Covid-19
Cabin & airport solutions to encourage passenger return I A220 MPD & base maintenance analysis
The initial uses of blockchain in maintenance I Build costs 767 freighters - new assessment
ISSUE 130 • JUNE/JULY 2020

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Editor’s Comment
JUNE/JULY 2020

EDITOR There is no doubt that 2020 is a year the industry will want to put behind it and forget.
CHARLES WILLIAMS (+44 1403 230 302)
charles@aircraft-commerce.com Despite all the records of parked and retired aircraft, financial losses and slumps in traffic
STAFF WRITER there at last now some encouraging signs of an emerging recovery.
ROB HALL (+44 1403 213 112)
rob@aircraft-commerce.com

China was the first nation to impose a lockdown on its population, and hence experience a
PRODUCTION EDITOR drop in passenger numbers, and thus witness an industry slump. Being one of the first
GEORGIA BIRRI
countries to emerge from lockdown, it has naturally also been one of the first to experience
SALES DIRECTOR
KAT RONALDSON (+44 1403 213 117) a recovery in passenger numbers. Domestic passenger numbers dropped from normal
kat@aircraft-commerce.com
levels to 13.5% of normal in just two months.
SUBSCRIPTIONS
ANNE AHIER (+44 1403 213 110)
anne@aircraft-commerce.com
Having started to emerge from lockdown in March, domestic passenger numbers had
DISTRIBUTION
ANNE AHIER (+44 1403 213 110)
already recovered to 30.7% of normal levels in that month, and had further increased to
anne@aircraft-commerce.com
33.5% in April, 49.6% in May, and up to 60.4% in June. China’s domestic traffic therefore
PHOTOGRAPHY appears to been at a rate of recovery of between 10 and 15 percentage points per month for
AIRTEAMIMAGES
www.airteamimages.com the first three months, indicating it may be close to being fully covered after another three
AVIATION IMAGES to four. This could be by September or October 2020, provided there are no further
www.aviation-images.com
significant lockdowns or restrictions.

\
As the Covid-19 virus spread from country to country, and from continent to continent; from
January to February and on into March, so did the effect of lockdown and
travel restrictions on passenger numbers in other parts in the world. Being between
one-and-a-half to two months behind China, the US experienced a similar rapid fall in
passenger numbers of more than 97% in just six weeks.
Aircraft Commerce (ISSN 1463-1873, USPS No: 023-
327) is published bi-monthly by Nimrod Publications
Ltd and distributed in the USA by Asendia USA, 17B
South Middlesex Avenue, Monroe, NJ and additional Although the industry in the US fell virtually silent in mid-April, daily TSA data shows that a
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A one-year subscription to Aircraft Commerce is £197
including postage within the UK, Euro 290 for
countries in the Eurozone, and US$325 for all other The steady rise in passenger numbers in China, the US, and in the majority of other global
countries.
regions, can only be good news for all sectors of the industry. A full picture of the extent of
Publication
Aircraft Commerce is a trade publication published
the recovery is not yet available. Aircraft and engine lessors, aircraft brokers and traders,
every two months and distributed globally. The next
publication date is 15th September 2020.
and maintenance providers will be some that welcome these signs of a re-emergence in
passenger demand.
Copyright
Aircraft Commerce is the copyright of Nimrod
Publications Limited. This magazine may not be
reproduced, transmitted or stored by any means in Hopefully these recent developments will see a reactivation of parked aircraft, increased
whole or in part without written permission from the
publisher. airport and aircraft activity, and so eventually a return to profitability.
Readers should make independent enquiries before
entering into any financial arrangement on the basis of
information found in this magazine. All care is taken
with facts and figures, but no responsibility can be
taken for information contained in Aircraft
Commerce. Charles Williams
Editor
Contents
MAIN FEATURES
Old generation engine aftermarket

5I
DEVELOPMENTS
Covid-19 has grounded 12,600 passenger jets,
4 China and US domestic markets increasing the supply of engines for the 737 Classics,
make initial traffic recovery 757-200, 767-300ER and 747-400 freighters. Engine
market values, lease rates and prospects are examined.
AIRCRAFT TRADING
5 Aftermarket activity of CFM56-3, The market for turboprops

14 I
RB211-535, PW2000, PW4000-94 & While RJs have gained the majority of attention,
CF6-80C2 turboprops have continued to sell steadily. Moreover,
they have cultured new markets. The prospects for
continued orders and sales are analysed.
FLEET PLANNING
14 What market is there for
RM techniques post-Covid-19

20 I
turboprops?
Covid-19 has challenged revenue management. Low
passenger confidence and unpredictable passenger
numbers mean that RM has had to embrace new
REVENUES methods to accurately forecast passenger demand.
20 Revenue management techniques
post-Covid-19

Cabin systems: Covid-19

27 I
AIRLINE OPERATIONS
27 Cabin & airport solutions to
encourage passengers to return
Substantial numbers of passengers are reluctant to
fly because of Covid-19. Solutions that mitigate against
the possible transmission of Covid-19 onboard and in
the airport terminal are examined.

MAINTENANCE & ENGINEERING

A220 MPD & maintenance analysis

34 I
34 A220 MPD analysis & airframe
maintenance requirements
41 The first uses of blockchain
technology in maintenance and
Analysis of the A220’s maintenance planning
document, maintenance tasks and base check
programmes reveal that it has low airframe
maintenance requirements and a small number of
tasks compared to competing narrowbodies.
Initial uses of blockchain technology

41 I
aircraft management Blockchain technology is being applied to aircraft
management, engineering, and aircraft and rotable
maintenance. Through creating an encrypted digital
FREIGHT BUSINESS ledger, blockchain makes it is possible to collate and
seamlessly transfer detailed data.
48 Update on 767-300ER freighter
build costs
Build costs of 767-300ER freighters

48 I
Many older legacy aircraft have been parked and
retired. This is good news for potential freighter
converters, with 767 airframe and associated engine
values under pressure. Total build costs have declined.
 3 I DEVELOPMENTS

China domestic & US airline traffic

recovery underway
Analysis of Chinese domestic and international passenger numbers indicate a steady recovery of the
domestic market, while international route networks and operations are prohibited by international
lockdowns. Chinese domestic passenger volumes could fully recover before the end of 2020. Meanwhile,
total US passenger numbers had recovered to close to 30% of pre-Covid-19 levels. Like China, this climb
back in passenger numbers is led by the domestic market, with international traffic kept to almost zero.
The US market is on a path to near-complete recovery by the first quarter of 2021.

T
he Covid-19 pandemic has saw US domestic travel rapidly decline the same months in 2018. This clearly
clearly had a global effect on air over a period of about three weeks. indicates strong international traffic
traffic. Most countries around growth before Covid-19.
the world have had to impose As China announced lockdown
lockdown policies on their populations to China measures in late January, regional and
slow the spread of the virus, and have As China began to lift restrictions in domestic year-over-year passenger levels
also imposed a degree of restrictions on March, it is possible to use its passenger dropped to 95.0% of the previous year’s
air travel on domestic and data from the months of April, May and volumes. Despite this initial indication of
intracontinental air traffic networks, and June 2020 to illustrate the rate of a problem, international year-over-year
bigger limitations on passenger travel on recovery of passenger numbers. This will passenger figures in January were
their intercontinental air route networks. provide an indication of when passenger 105.7% compared to the previous year.
In some countries the travel numbers and therefore operations will There was a significant decline in
restrictions have been so severe as to have approach pre-Covid-19 levels. passenger traffic volumes during the
had a catastrophic effect on regional, Monthly traffic reports for China’s month of February, however. Total
domestic and international passenger big three carriers Air China, China regional and domestic passenger numbers
numbers. Airlines and operators have Eastern and China Southern for fell from 25.88 million in January to 3.75
ceased most or even all of their November and December 2019 show that million in February. Total domestic
operations, grounded and retired entire total passengers for regional and passenger numbers in February were
fleets of aircraft, and have had to accept domestic operations were 105.8% and therefore just 13.5% the level of February
government subsidies and bailouts to 104.0% compared to the previous year 2019 (see chart, this page), representing a
survive. (see chart, this page). That is, domestic drop of 86.5%.
In many cases airlines saw passenger traffic had increased year-on-year by International passenger numbers
volumes drop to less than 5% of the 4.0% and 5.8%. decreased by more than 4.03 million to
levels seen during the same period in The same airlines recorded 0.83 million from January to February
2019. Airlines clearly want to see international passenger volumes that 2020. International passenger numbers in
passenger numbers increase again from were 12.0% and 9.9% higher in February 2020 were just 18.7% of 2019
these levels, and are anxious as to what November and December 2019 than in levels.
rate of increase they can expect. Traffic
results and passenger numbers in the
China and the US are the first to provide
an indication of the pattern of recovery.
China was the first country to impose
a severe lockdown on its population.
Travel and quarantine restrictions in and
out of Wuhan were introduced in late
January 2020, and these restrictions were
implemented a few days and weeks later
across the whole of China. These
restrictions therefore reached their peak
during January and February 2020.
The Covid-19 pandemic spread
globally from China, first affecting many
countries in the Asia Pacific, then west to
Europe in late February and early March,
with the US closely following in late
March. The US government announced a
travel ban on 26 European nations on
12th March, as well as to China, the Asia
Pacific and South America. This therefore
reduced all intercontinental passenger
volumes to almost zero over a period of
just a few weeks. Local travel restrictions
and lockdown by individual states also

ISSUE NO. 130 • JUNE/JULY 2020 AIRCRAFT COMMERCE

4 I DEVELOPMENTS
China Eastern reported the biggest
fall in year-over-year passenger volumes
across its network. Its February 2020
domestic passenger numbers were 1.0
million compared to 8.73 million a year
before; representing a drop of 88.5% to
just 11.5% of the level a year before. It
was followed by China Southern at
13.6% and Air China at 16.6%.
Road to recovery
Monthly major Chinese airline
domestic and regional passenger numbers
in March 2020 showed an increase, both
relative to the same month in the
previous year and compared to February
2020.
Domestic passenger numbers in
March 2020 were 8.52 million, 30.7% of
the levels of March 2019. This was more
than double the passenger numbers in
February, and a rise of 4.77 million.
Domestic passenger numbers had been
27.75 million in March 2019, and were
26.2-27.1 million per month in the first
half of 2019.
In April China regional and domestic
passenger volumes recorded a more
modest increase, with numbers at 33.5%
compared to April 2019. Between March
and April total regional and domestic
passenger numbers increased by 0.63
million from 8.52 million to 9.13 million.
Chinese Eastern’s domestic passenger
numbers increased by about 0.5 million
over the previous month.
Many Chinese regional and domestic
passenger traffic reports show a
continued increase in May 2020, with
13.98 million carried, equal to 49.6% of
the previous year’s volumes (see chart,
page 3). Passenger numbers therefore
increased by 4.85 million from April, and
AIRCRAFT COMMERCE
domestic traffic recovered by 16.1
percentage points in the month.
China Southern reported the highest
increase in recovery in passenger volumes
at 47.7% compared to May 2019, which
was followed levels of 42.4% and 38.3%
by Air China and China Eastern.
Chinese airlines domestic traffic
volumes for June were 16.68 million
passengers, an increase of 2.7 million
during the month and up another 11
percentage points, being 60.4% the level
of June 2019 (see chart, page 3).
This pattern of traffic development
indicates domestic traffic in China
recovering at a rate of 10-15 percentage
points per month. A simplistic projection
would therefore indicate a full recovery in
domestic passenger volumes in China by
October or November 2020.
While the recovery in domestic
passenger numbers has been steady for
Chinese airlines, there is been no
noticeable recovery in international
traffic. China’s three main international
markets are from the Asia Pacific area,
Europe and North America. International
passenger numbers in June 2020 were
just 2.6% of the previous year.
Other airlines in the Asia Pacific
began to experience a similar reduction in
passenger traffic volumes early in the
year. In February 2020 All Nippon
Airways (ANA) reported that year-over-
year passenger volumes across its
network were 90.5%, while Japan
Airlines (JAL) reported volumes at
93.3%, and Singapore Airlines (SIA) and
Cathay Pacific were at 78.2% and 35.6%
of February 2019 levels. Covid-19 was
clearly causing a rapid drop in intra- and
intercontinental traffic volumes for
carriers in the Asia Pacific in early 2020.
During March 2020 Cathay Pacific
recorded year-over-year passenger
numbers of just 10.0%, while JAL’s
numbers were at 39.5%. A large portion
of JAL’s traffic is domestic, while all of
Cathay’s operation is international, so all
its traffic was affected.
In April JAL’s passenger numbers
dropped further as year-over-year
passenger volumes were 10.2% compared
to a year before. ANA’s passenger
numbers were similarly down to 7.8%
compared to 2019.
Far Eastern carriers ANA and JAL
recorded their lowest year-over-year
traffic numbers since the start of the
pandemic in May, these were 4.2% and
6.7% of 2019 levels.
US passenger numbers
US airport TSA passenger numbers
are shown for each Sunday from 1st
March to 19th July 2020 as a percentage
of the same day in 2019 (see chart, this
page). Daily passenger numbers had been
in the 2.3-2.7 million range over the same
period in 2019.
Passenger numbers were 99.1% of
previous year levels at the start of March
2020. Passenger numbers had quickly
declined to their lowest point of 3.7%
relative to 2019 on 12th April 2020 (see
chart, this page). On this day passenger
numbers were recorded at 90,510.
By the end of March, however, daily
passenger numbers had already shown an
improvement to 128,875, equal to 5.12%
of the 2.50 million passengers reported
on the same day in 2019.
Between early and mid-May, in the
US more than half of states had eased
lockdown restrictions. This led to
recovery in passenger numbers.
By 17th May TSA daily passenger
traffic volumes had improved further to
253,807 passengers, up to 9.7% of the
previous year. This initial period indicates
an increase in passenger volumes of about
1.5 percentage points per week at this
stage.
By 31st May TSA daily passenger
numbers were reported to be 352,947,
equal to 13.8% of 2019 levels.
TSA data recorded improvements in
daily passenger numbers during June.
They reached 633,810 on the 28th, equal
to 24.1% of 2019 levels. By 12th July
they had recovered to 28.3% of 2019
levels. The last weeks of the period
showed passenger numbers were
increasing by about two percentage
points per week. Extrapolating this
recovery indicates passenger numbers
may recover to pre-Covid-19 levels by
February or March 2021, domestic being
ahead of international.
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ISSUE NO. 130 • JUNE/JULY 2020

The parking of large numbers of 1980s and early 1990s aircraft has
increased the supply of engines used for the 737 Classic, 757-200,
767-300ER & 747-400 freighters. The effect on engine lease rates and
market values, and their market prospects are all discussed.
Aftermarket activity
for older generation
engines
T
he result of airline capacity
reductions in response to the
Covid-19 crisis has been the
parking and storage of 12,600
jetliners. The effect of this has been to
increase the supply of used and time-
continued or ‘green time’ engines on the
market. Some estimates are that as many
as 2,000-2,500 of these aircraft will never
return to service if the industry’s recovery
is as slow as expected. How has this
situation affected the used engine market?
Aircraft & engine types
There are more than 20 main aircraft
types so more than 25 main engine types
are affected by the crisis. The types that
are most affected, and have the most
influence on the engine aftermarket are
current and previous generation aircraft.
There are two main groups of aircraft
and engine types to consider. The first is
older 1980s generation aircraft, many of
which are converted to freighters. The
most important types in this group are
the 737 Classics, the 757-200, 767-
300ER and 747-400. The market for the
engine types powering these aircraft is
much affected by the supply of engines
with remaining maintenance life. These
aircraft and their respective engines are
considered here.
The second group is younger
generation narrowbody aircraft types: the
737NG, A320 current engine option
(ceo) family and A320 new engine option
(neo) family. The 737 MAX, although
officially in service, has not been directly
affected by the crisis because it was
already grounded and all aircraft were
put into storage. Moreover, they will be
returned to passenger service in the
shortest time possible. The second group
AIRCRAFT COMMERCE
5 I AIRCRAFT TRADING & THE AFTERMARKET
includes younger generation widebodies
from the 777 and A330 families.
The two older generation
narrowbodies most affected are the 737
Classic -300 and -400 series, and the 757-
200/-300. About 215 737-300s and -400s
have been parked, more than half the
remaining active fleet. This has affected
the availability of CFM56-3 engines.
Also, more than 275 757-200s and
-300s have been parked over the same
period, and fewer than 70 aircraft are left
in passenger service. This has clearly
increased the supply of RB211-535 and
PW2000 engines on the used market.
The widebodies most affected by the
pandemic are 1980s and early 1990s
aircraft. The types parked in the largest
numbers and fleet percentages are the
767-300ER, the A330-200/-300, 777-
200/-200ER, 747-400 and A380.
The 767-300ER and 747-400 are two
of five aircraft types that share the same
basic PW4000-94 and CF6-80C2 engines
along with the A300-600, A310-200/-
300, and the MD-11. The latter three had
already been retired and parked in large
numbers before 2020, thereby releasing
many PW4000-94 and CF6-80C2 engines
on to the aftermarket.
Many passenger-configured 747-400s
had already been retired and parked
before 2020, but the Covid-19 crisis saw
90% of the remaining 147 aircraft in the
fleet parked from March to May 2020.
Also, 68% of the remaining fleet of 410
passenger-configured 767s were parked.
It is clear from airlines that virtually
all of these 747-400s and most 767-
300ERs will not return to passenger
service. The parking of so many aircraft
has released a large number of CF6-80C2
and PW4000-94, as well as RB211-
524G/H, engines onto the market.
Used engine markets
There are several markets that owners
or prospective owners of used engines can
investigate. In a normal market there are
two categories of engines: those that are
still in relatively high demand and being
operated in an active fleet, and whose
remaining maintenance life is equivalent
to several years of operation; or engines
with only a limited amount of
maintenance and operational life
remaining, and fewer potential market
opportunities to exploit.
Remaining maintenance life that is
equal to several years of operational life
is determined by several factors. The first
of these is remaining life limited part
(LLP) lives. Most of the main engine
types discussed have LLP lives of 12,000-
20,000 engine flight cycles (EFC) in the
high pressure compressor (HPC) and high
pressure turbine (HPT). LLPs in the fan
and low pressure compressor (LPC) and
low pressure turbine (LPT) have longer
lives. In many cases the full life limits are
20,000-25,000EFC, although some
higher-thrust rated variants of an engine
type are lower at 15,000EFC or similar.
Other main factors determining
remaining maintenance life, when the
engine is operated at typical engine flight
hour (EFH) to engine flight cycle ratios
(EFC) and in particular operating
conditions, are the engine’s remaining
exhaust gas temperature (EGT) margins
and the likely or probable EGT margin
erosion rate. Another major factor is the
condition of the engine’s airfoil hardware,
especially in the HPT and combustor.
Probable maintenance life to the next
shop visit (SV), the SV workscope pattern
that the engine usually follows, and the
probable workscope that will be required
ISSUE NO. 130 • JUNE/JULY 2020
6 I AIRCRAFT TRADING & THE AFTERMARKET
at the next SV combine as the factors that
determine an engine’s maintenance status.
Several years of ‘maintenance life’ on
an engine is equal to at least three or four
years of operation. Engines used on
short-haul operations operate at relatively
short EFC times and EFH:EFC ratios, so
the factor relating to years of
maintenance life will be the rate of EGT
margin loss per 1,000EFC, and the
remaining EGT margin and LLP lives.
Most short-haul aircraft accumulate
2,000-2,500 FCs per year, so engines will
need at least 6,000-8,000EFC remaining,
and the commensurate exhaust gas
temperature (EGT) margin, to have three
to four years of maintenance life.
Most engines operated on long-haul
missions will have average EFC times of
7.0-9.0EFH. Engines accumulate 4,500-
5,000EFH per year, and so 500-750EFC
per year in most cases. Engine
deterioration here is driven more by
hardware degradation and erosion and
EFH time, and less by accumulated EFC
and EGT margin erosion. Full SV
intervals are typically 15,000-
20,000EFH, equal to 1,500-3,000EFC.
Remaining LLP life will therefore be less
of an issue for engines that power
widebodies and long-haul aircraft.
Engines with this level of maintenance
condition and life will have three or four
main markets available to them.
The first has always been supplying
airlines with spare engines via short- and
medium-term lease contracts that allow
airlines to avoid investing in engine
inventory. This is particularly attractive
to airlines operating older aircraft types
as passenger aircraft for a short period, or
as converted freighters where airlines are
sensitive to the capital cost of aircraft.
Engines with this level of maintenance
AIRCRAFT COMMERCE
life remaining can also be used by traders,
specialist brokers and lessors for sale and
leaseback transactions. Airlines planning
to phase out fleets can use such
mechanisms to release the capital in
engines and pay lease rentals for a few
remaining years of operation. This leaves
the engine broker, trader or lessor with an
engine that can be torn down for parts.
The other two main markets for
engines with appreciable remaining
maintenance life are selling whole engines
or engine modules with some remaining
maintenance life or ‘green time’. Airlines
can use such engines and modules as an
economic alternative to putting engines
through expensive maintenance SVs,
usually when operating aircraft for the
last few years of service, and where the
market value of green-time modules or
engines produces a lower cost per EFH
and EFC than a full SV. Engine and
module values therefore have to be
depressed for this to be economic.
“The way that the market values
engines with these maintenance
conditions and potential markets is first
the supply of engines versus the demand
for them,” says Chris Grey, principal at
AerAuster. “There are a range of other
factors. These are issues, such as whether
the engine is on its first or second SV
interval, and the time remaining to its
next SV. This is determined by remaining
LLP life, hardware status, EGT margin,
and the cost of the next SV. There is also
the issue of the likely residual value as the
alternative of a part-out engine.”
Engines with insufficient maintenance
life remaining to be attractive to airlines
for any of these options are those with up
to three years’ remaining life. These make
the best candidates for teardown and
disassembly into parts and components.
The COVID-19 pandemic has led to 215
passenger 737 Classics being parked and retired
in 2020, releasing large numbers of CFM56-3s
onto the market. The market value of ‘green
time’ engines are estimated to be up to about
$1.25 million.
Some can be sold direct, while others will
first have to be repaired, and then sold as
used serviceable material (USM).
The exception may be an airline that
is operating old aircraft, usually as
freighters, for the last two years or less of
operation and is seeking a cheaper
alternative to putting an engine through
an SV. This is one last possible use.
Engines like this are valued on the
basis of the inventory of all parts in the
engine; the value is the sum of the market
value of all the parts, plus the pro-rated
value of the remaining LLP life. The value
of LLPs is the LLP shipset cost adjusted
for the percentage of full life remaining.
So a shipset of LLPs at $6 million, with
just 15% of life remaining will be valued
at $0.9 million. This is adjusted by a pro-
rate factor, which is determined by the
level of market demand. This is 50% for
an older type like the CFM56-3, but 90-
100% for a more popular type like the
CFM56-7B or V2500-A5.
“The pro-rate factor for LLPs in a
widebody and long-haul engine is
generally smaller than on a narrowbody
engine,” explains Grey. “This is mainly
because the LLPs have less of an influence
on remaining life, and their replacement
can also be avoided in many cases.”
CFM56-3
The CFM56-3 is still active, with a
few shops still providing SV capability,
and GE and Safran both still providing
technical support and new parts.
There were 1,988 commercial
variants of the 737-300/-400/-500 family
aircraft built in 1984-1999. Of these,
more than 1,300 had been retired, stored,
parked or written off by the end of 2019.
This left almost 680 aircraft in service at
the start of 2020, split between 301
freighter, combi and quick change (QC)
aircraft, and 378 passenger variants.
A large portion of the original fleet,
totalling about 280 737 Classics, has
been converted to freighter, the feedstock
being available at low market values. The
plentiful supply of 737-300s and -400s
meant values had dropped to $2.0-3.5
million, significantly reducing the total
build cost of a 737 Classic freighter.
The old age of 737-300s and -400s
had reduced freight operators’ interests in
acquiring them for conversion, since
737NGs were available in large enough
numbers and at low enough values to
ISSUE NO. 130 • JUNE/JULY 2020
8 I AIRCRAFT TRADING & THE AFTERMARKET
make them attractive conversion
candidates. This situation was reversed,
however, by the grounding of the 737
MAX in February 2019, since all airlines
operating passenger-configured 737NGs
needed their capacity, and had to delay
retirement or lease returns.
This situation re-ignited interest in the
737-300 and -400 for freighter
conversion by cargo operators. Values of
-300s and -400s that came available, with
engines with maintenance life remaining,
climbed up to $5 million, and some were
even advertised at more than $5.5
million. The 737 MAX grounding meant
that some Classics were being retained
for passenger operations.
The Covid-19 pandemic reversed the
situation again, with more than 230 of
the 680 operational aircraft being parked
during the first five months of 2020. This
includes more than 215 of the 378
passenger-configured aircraft, and
another 16 aircraft.
The 737-300 and -400 are still sought
after for freighter conversions. Of the
aircraft still in service and parked during
2020, 105 aircraft are 737-500s. Most of
these are equipped with -3C1 engines, the
most popular CFM56-3 variant.
The 737-500 is not popular with
freight carriers as a conversion candidate,
but its appeal is the supply of engines to
the aftermarket. Most of these are -3C1s.
The remaining 152 parked 737-300s
and -400s are potential freighter
conversion candidates, so the prospect of
most of these aircraft returning to
passenger service is virtually nil. There
has been an increase in demand for
freight capacity since the Covid-19
pandemic started, but the time taken to
acquire and modify aircraft means only a
limited number could be converted before
AIRCRAFT COMMERCE
the pandemic is over.
There are also 69 active 737-300
passenger aircraft, 43 with -3C1 engines;
and 42 active -400s, 38 with -3C1
engines. The retirement of all remaining
passenger-configured 737 Classics is
likely to be accelerated. There are
therefore up to 268 active and parked
737-300s and -400s equipped with -3C1
engines. This large supply has
implications for market values.
Aero Norway provides maintenance
capability for the CFM56-3, -5B and -7B
series. “We have reduced our engine shop
activity from eight or nine SVs per month
to six or seven because of the pandemic,”
says Glenford Marston, chief executive
officer at Aero Norway. “The actual
activity in recent months has been about
five SVs per month, and -5B and -7B
activity has dropped off because so many
A320ceos and 737NGs have been parked
and stored. We fortunately kept our
CFM56-3 maintenance capability. The
freight airlines are very busy operating
737 Classics. There is actually a big void
in the supply of -3 engines, because there
are several -3s coming into the shop for
maintenance, and it is perhaps surprising
there are fewer green time -3s available.
“We have seen few engines parted
out, and I think people are waiting to see
how the industry reacts. I expect it to re-
size, but this will depend on the type and
level of recovery,” adds Marston. “For
example, many specialist traders and
brokers are not yet buying engines
because they are expecting the values of
most types to drop, and to make big
savings. We are looking to buy engines,
and expect values to drop further.”
Marston points out that many
operators, lessors and brokers have yet to
release their assets on to the market, but
The availability of 737 Classics has led to a drop
in market values, reducing the total build cost of
freighters to record low levels. There was
resurgence in 737-300/-400 conversion activity
in late 2019 and early 2020.
that they may be forced to in the future.
In relation to engine values, Marston
says that before the Covid-19 outbreak
there was a shortage of -3 engines on the
market. This is partly explained by the
resurgence in interest in the 737 Classics
for freighter conversions, as well as a
longer-than-expected operation of
passenger aircraft following the 737
MAX grounding.
The value of most -3 engines was
based primarily on remaining LLP life
and the pro-rate factor, which had gone
up before the pandemic because of the
shortage of engines. Buying a -3 on the
market to perform maintenance on it and
put it into service had become too
expensive. “Values have become
reasonable again following the pandemic,
and some engines have been sold because
owners need the cash. The lack of engines
with remaining maintenance life has
forced customers to perform engine SVs,”
says Marston. “No one pays more than
50-60% for the pro-rate adjustment
factor for an engine that is a teardown or
part-out candidate. That is an engine
with little or no remaining maintenance
life left, but whose parts could be
repaired to supply USM. This would be
used to reduce the cost of SVs.”
A shipset of -3 LLPs has a list price of
$3.5 million, so an engine with up to
30% of LLP lives remaining would have
an adjusted value of $1.2 million.
However, with the pro-rate factor
applied, the engine’s market value would
be $0.6 million. Engines with less time
remaining would have a value as low as
$200,000.
“An engine in ‘green time’ condition,
with 4,000-6,000EFC of maintenance life
remaining, might have a current market
value of $850,000 to $1.25 million. An
engine fresh from an SV would be higher
at $1.2-1.65 million,” says Marston.
The pandemic and the need to save all
possible costs has seen an increase in the
number of airlines interested in acquiring
green-time engines and modules. “There
was a ready market for this,” says
Marston. “Many airlines are performing
light SVs and repairs where possible, and
this will provide 4,000-5,000EFC. We are
not getting airlines performing convenient
SVs, which can often be performed
during extended base checks and on
engines with just a few thousand EFC
left. Another change is that there is a lot
more interest in the use of USM in SVs.”
ISSUE NO. 130 • JUNE/JULY 2020
 9 I AIRCRAFT TRADING & THE AFTERMARKET
This can save several hundred thousands 1990s- and early 2000s-built airframes larger number of aircraft and time-
of dollars per SV, but is only possible and 58 RB211-535E4 engines from continued engines left on the market.
when engines are available at low American, all of which are regarded as The 757-200’s popularity as a
teardown values. The supply of -3 good quality conversion candidates. freighter means that the LLP and SV costs
engines was tight, but this has now There will also be large numbers from on both its engine types are high. At
improved to an extent. With owners still other parked fleets. usual rates of utilisation and the usual
hesitant to release their assets, the supply These parked aircraft are a major removal intervals between SVs, the
of teardown engines remains limited. source of engines for the freighter fleet resulting engine maintenance reserves per
that is still in operation, and is likely to EFH and per EFC have generally been
continue growing as more aircraft are acceptable to passenger operators.
RB211-535 & PW2000 converted. The large number of parked Freight carriers with lower rates of
The RB211-535 and PW2037/40 are aircraft means there are potentially a aircraft utilisation and revenues can only
used only on the 757-200/-300. There
were 984 757-200s and 55 -300s built.
Most -200s and all -300s were built in
passenger configuration.
The 757-200 was in particular used in
large numbers by American Airlines,
Delta and United. The RB211-535
powered more than half the fleet.
At the start of 2020 just over 600
757-200s were in operation in passenger
and combi configuration, and all 55
passenger -300s were still in operation.
More than 300 757-200s in passenger
configuration had been parked, retired or
written off before mid-2019.
There were also 314 757-200
freighters in service at the start of 2020,
with 42 older freighters retired or put in
storage. Three freighters have been
parked since the Covid-19 outbreak,
leaving 311 in service.
These 311 freighters are divided
between 212 aircraft with RB211
engines, and 99 powered by PW2037/40
engines. The 311 aircraft are a mix of
229 factory-built aircraft, most of which
are used by FedEx and UPS, and 82
converted aircraft.
Precision Conversions expects at least
17 more conversions from the relatively
small number of parked and stored
aircraft that are now available. Most
parked aircraft have yet to be sold.
Larger numbers may be sold later in
2020, after various government stimulus
and support packages stop, and airlines
have a clearer indication of what aircraft
they will need to put back into service.
Aircraft without any financial
commitments will be the first to be sold.
The total number of additional
conversions may be about 25, and will
take place over the next two years or so.
The global lockdown and drop in
passenger traffic has seen a large portion
of the passenger fleet parked or retired in
a period of just two months. This
includes 124 RB211-powered aircraft
with the largest fleets from American (34
aircraft), Icelandair (12), Jet2.com (9),
Tui (8) and United Airlines (39).
There were also 105 PW2000-
powered aircraft parked or stored during
this period, including 81 from Delta
Airlines and 11 from United Airlines.
As these aircraft have been retired,
they and their engines have become
available on the market. This includes 24

ISSUE NO. 130 • JUNE/JULY 2020 AIRCRAFT COMMERCE

10 I AIRCRAFT TRADING & THE AFTERMARKET
justify full SV costs if the engine will
subsequently be used for a long period.
The PW2000 is rated at 37,000lbs or
40,000lbs on the 757-200, and so
designated the PW2037 and PW2040.
The PW2000 had a reduced temperature
configuration (RTC) modification,
resulting in longer removal intervals.
The RTC-modified PW2037/40
engines are capable of removal intervals
of 5,500-7,000EFC at an EFH:EFC ratio
of 2.0:1, provided the engines are not
restricted by remaining LLP lives. Life
limits in the PW2000’s LLPs are
15,000EFC and 20,000EFC.
The intervals will be shorter when
operating at a shorter average EFC time.
Many freight operators are flying at FC
times of 2.5-3.0FH. Engine removals are
therefore up to 14,000-20,000EFH in the
case of RTC engines.
Non-RTC engines have shorter
intervals of 3,400-4,000EFC, equal to
8,500-12,000EFH.
RB211-535 engines generally have
slightly longer removal intervals, and
reach 7,500-8,000EFC in many cases.
This will be equal to 19,000-24,000EFH
for aircraft operating at 2.5-3.0EFH per
EFC. LLP life limits are determined by
the engine’s operating profile. Parts with
the shortest lives are in the HPC and HPT
and they can be as short as 12,600EFC.
Parts with the longest lives are in the LPT,
and are up to 27,000EFC.
What should generally be considered
is that because of low-density payloads,
freighters are likely to have a higher
degree of engine take-off de-rate than
passenger aircraft, and so could achieve
the longer removals intervals on average.
These engines are capable of removal
intervals equal to several years of
AIRCRAFT COMMERCE
operation. Most 757-200 freighter
operators are achieving annual rates of
utilisation of up to 2,000FH and 800FC.
In the case of RTC-modified PW2000
engines, an interval of 5,500-7,000EFC
and 14,000-20,000EFH is equal to 7-11
years of operation. Similarly, the 7,500-
8,000EFC and 19,000-24,000EFH
removal interval of RB211-535E4 engines
will be equal to 9-13 years of operation.
Full SVs can therefore only be
justified if the aircraft are already being
operated as freighters, or will be acquired
and converted to freighters, and can be
expected to operate for at least this many
years, given their age and accumulated
FH and FC. The same applies to a new
shipset of LLPs.
SV costs for the PW2000 are $4.0-4.5
million for a performance restoration and
$5.5-6.0 million for an overhaul. RB211-
535E4 engines will typically have a Level
3 SV costing $5.4-6.0 million, or a
heavier Level 4 SV at $5.8-6.5 million.
A new shipset of LLPs for the
PW2000 has a list price of $6.5 million,
while a shipset for the RB211-535E4 is
$6.0 million. Clearly the cost of buying
new LLPs cannot be justified given the
usual rates of aircraft utilisation and the
number of likely remaining years in
service.
Freight carriers operating 757-200s
will therefore do everything they can to
acquire engines with green time and
remaining maintenance life, as well as
sourcing used material for use in SVs. It
may be economic for airlines to acquire
modules with little remaining
maintenance life, but with the equivalent
of several years of LLP life.
Engines and modules with at least
sufficient remaining LLP life for the
There have been about 230 passenger-
configured 757-200s with both main engine
types parked and retired since early 2020. This
includes large batches from single operators.
Demand for the 757-200 freighter remains
strong, but engine availability and the high
costs of engine shop visits continues to present
challenges.
forecast period of operation need to have
8,000-10,000EFC for aircraft intended to
operate for 10-12 years, if they are to
completely avoid engine SVs. This will
clearly not be possible for all engines in
the fleet over such an extended period.
The main issue therefore facing 757-
200 freighter operators is what supply
there is of PW2000 and RB211-535
engines in the market with the right
amount of green time or maintenance life
remaining.
Airlines have to weigh the costs of the
two options of acquiring engines with
low maintenance life and a value equal
for a teardown engine and performing an
SV, or acquiring an engine with green
time remaining. Acquiring an engine that
requires both LLP replacement and an SV
is too expensive to be a consideration.
RB211-535E4 engines with up to
3,000EFC maintenance life remaining
could be valued at a rate of $1,000 per
EFC. That is, an engine with 3,000EFC
left would have a market value of $3.0
million (see Factors affecting the supply
of PW2000 & RB211-535 engines in the
aftermarket, Aircraft Commerce,
June/July 2019, page 4).
RB211-535E4 engines with a longer
maintenance life will have a higher value,
and can sell for $6 million or more. These
values would, however, come close to the
total cost of acquiring part-out and
teardown engines plus the cost of an SV.
Despite the large number of aircraft
parked at short notice in the first half of
2020, many engines are expected to have
little remaining maintenance life.
A third option, which may work out
more cheaply on a per EFC basis, is to
temporarily take advantage of low short-
term lease rates of $40,000-60,000 per
month, plus maintenance reserves.
Maintenance reserves are charged per
EFH for SVs, and per EFC for LLPs, so
the lease rate for rental is equal to $600-
900 per EFC. Clearly only lower lease
rentals make economic sense.
Airlines may be forced to accept an
uneconomic option during the aircraft’s
whole operational life. The current
demand for acquiring green-time engines
to avoid SV maintenance will inevitably
lead to a shortage of engines, and so push
a large number through SVs in future.
It could prove prudent for freight
operators to buy and warehouse engines
if they have the cash available.
ISSUE NO. 130 • JUNE/JULY 2020

747 & 767 fleets
Most 767 variants were equipped
with CF6-80C2 and PW4000-94 engines.
The 767 was one of five 1980s widebody
families powered by these two main
engine types. The other four were the
A300-600, A310, MD-11 and 747-400.
Most aircraft in the fleets of these four
types were retired before 2020. These
retirements provided a large number of
engines on the used market that has made
it possible for many airlines to avoid the
high cost of putting engines through SVs
by acquiring green-time engines.
At the start of 2020 there were still
124 MD-11 freighters in service. These
were operated mainly in large fleets with
FedEx and UPS, plus smaller fleets with
Lufthansa Cargo and Western Global. In
the first few months of the pandemic, 19
MD-11Fs were parked or retired.
At the start of 2020 a large number of
747-400s were in operation as passenger,
combi and freighter aircraft. This
included 77 CF6-80C2F-powered and 39
PW4000-94-powered aircraft.
Most of these were parked or stored
shortly after the Covid-19 outbreak,
leaving just three CF6-powered combis in
service with KLM, and three PW4000-
powered passenger aircraft with Wamos
Air and Air China.
There were 65 CF6-equipped 747-
ISSUE NO. 130 • JUNE/JULY 2020
11 I AIRCRAFT TRADING & THE AFTERMARKET
400s parked, and a further nine retired,
in late 2019 and the first half of 2020.
These came from fleets operated by KLM,
Lufthansa, Qantas, China Airlines,
Qantas and Thai International. Taking
into account spare engine inventories held
by these airlines, these 74 aircraft could
potentially put at least 300 CF6-80C2F
engines onto the market. However, there
are almost no markets for used 747-400s,
and passenger-to-freighter conversions
have ceased.
There were also 19 PW4000-powered
parked and a further 17 aircraft retired in
late 2019 and early 2020 by Air India,
Corsair, Delta Airlines, El Al, Korean Air
and Max Air. These aircraft will bring up
to 160 PW4000-94s onto the market.
The 767 is the largest fleet of the five
1980s generation widebodies. At the start
of 2020 there were almost 450 767s in
passenger service, plus 346 freighters.
There are five main engine types: Pratt &
Whitney’s JT9D-7R4 and PW4000-94;
and General Electric’s CF6-80A, CF6-
80C2 and CF6-80C2F. The PW4000-94
and CF6-80C2F have full authority
digital engine control (FADEC) units.
Most 767 passenger aircraft in
operation at the start of 2020 are
powered by the PW4000-94 (149), CF6-
80C2 (47) and CF6-80C2 (243).
Most 767 freighters (285 units) are
-300ER series. Nine are equipped with
PW4000-94 and 246 with CF6-80C2F
engines. There are also 30 freighters with
CF6-80C2 engines; those with power
management control (PMC) throttle
controls.
The CF6-80C2F is clearly the most
important engine type in terms of
securing a supply of engines to support
future freighter operations. The 767-
300ER is one of the most popular types
for conversion programmes, and forecasts
are for many more to be modified.
The CF6-80C2F has clearly been
preferred by freight operators when
choosing engine variants, because
PW4000-powered converted aircraft were
originally unable to get certified at the
highest maximum landing weight (MLW).
When aircraft are modified to freighter
their MLW is increased to 326,000lbs.
This provides a difference of 17,000lbs
between the MLW and the maximum
zero fuel weight (MZFW); the highest
possible MZFW is 309,000lbs.
The converted PW4000-94-powered
aircraft could not initially have its MLW
upgraded to 326,000lbs during freighter
conversion, so the PW4000-powered
aircraft suffered a payload restriction
compared to the CF6-80C2-equipped
aircraft. The CF6-80C2 therefore became
the engine of choice. The PW4000-
equipped aircraft has since had its MLW
upgraded to 326,000lbs during freighter
AIRCRAFT COMMERCE
12 I AIRCRAFT TRADING & THE AFTERMARKET
conversion, so it can have almost the
same payload as aircraft with CF6
engines. The PW4000-equipped 767-
300ER fleet could therefore see a larger
number of aircraft being converted,
especially as the number of suitable CF6-
powered examples declines.
At least 30 converted 767-300ERs are
operated by Prime Air on behalf of
Amazon. More aircraft are being
converted, all with CF6-80C2F engines.
There are up to 100 parked 767-
300ERs with CF6-80C2F engines that
could provide conversion platforms.
There are also, however, more than 110
parked 767-300ERs with PW4000-94
engines, plus 30 that are still in active
service. With the MLW weight penalty on
PW4000-powered aircraft overcome, this
fleet could provide suitable conversion
candidates.
There are just over 200 A300-600,
A310 and 767-200ER freighters in
service, of which 90 are operated by UPS
and FedEx. The remaining 110 are all
ageing, and the converted 767-300ER is
the best replacement candidate, having
the closest structural and volumetric
payload.
The conversion of 747-400s to
freighters has ceased, but the 767-300ER
conversion market should remain strong
for several more years. The main market
for PW4000-94 and CF6-80C2 engines
from parked and retired aircraft will
therefore be to continue supporting 747-
400 freighters in service, and to support
an increasing number of 767-300ER
converted freighters.
PW4000-94
“The demand for PW4000-94 engines
to support freighter fleets, the 747-400 in
AIRCRAFT COMMERCE
particular, is doing well,” explains Bill
Polyi, president and chief executive
officer at Magellan Aviation Group.
“There is strong demand from airlines to
lease every available engine with a decent
amount of maintenance life. Airlines are
clearly doing everything they can in the
current climate to avoid SV costs of
several million dollars. They are not even
buying green-time engines with
maintenance life remaining. Instead they
are taking out short-term leases.”
This is likely to only be a short-term
market bounce, since the lack of long-
haul and intercontinental flying
operations has severely reduced the
amount of belly space available. Freight
operators are therefore busy serving
short-term demand and high-yield freight
for a period that may only last for
another six to nine months.
“The main demand for PW4000-94s
is for PW4056s to support 747-400s, and
to a lesser extent PW4060s to support
767 freighters,” says Polyi. “There is a
temporary shortage of PW4060s for
767s.”
There is a large number of serviceable
aircraft with PW4000-94s that have
plenty of maintenance life left, and these
will be the first to return to service when
international travel starts to recover. This
will still leave a large number of aircraft
with little airframe maintenance life left.
They can therefore be used as a source of
engines that can be acquired by lessors
and leased to carriers.
Polyi estimates market values for
PW4000-94s with green-time
maintenance condition of 1,500-
3,000EFC to the next SV at $1.5-3.0
million. “The base rent for PW4000-94
has now come down to $20,000 per
month, and a full lease rental with
The conversion of 747-400 passenger aircraft to
freighters has ceased. All exisiting freighters
have continued to operate at high rates of
utilisation. The retirement of large numbers of
passenger-configured 747-400s has released
PW4000-94s and CF6-80C2s onto the market,
depressing their values.
maintenance reserves included is
$65,000-70,000 per month at typical
rates of utilisation,” says Polyi. “The
availability of engines is high because of
the large number of aircraft that were
parked this year. In the meantime, the
market value of teardown engines has
fallen to $200,000-500,000. There are
only five to 10 major parts in the engine
worth salvaging from the point of view of
repairing and selling them as USM.”
CF6-80C2
The main demand for whole CF6-
80C2 engines, modules and serviceable
materials is for 747-400 and 767-300ER
freighters. As the 767-300ER freighter
fleet is dominated by the CF6-80C2, there
is a larger number of aircraft to be
potentially supported compared to the
PW4000-94. Most passenger-configured
747-400s and 767-300ERs are inactive.
“We have seen consistent demand for
parts and materials to support SVs,” says
Stratton Borchers, president at TrueAero.
“There has, however, been an increase in
the number of whole engines that are
serviceable, with maintenance life
remaining; and teardown engines to
provide parts for repair.
“The long-term effect of the crisis is
not year clear, and it may take several
years to see the full impact,” continues
Borchers. “One major factor affecting the
availability of engines and the activity of
airline operations is the US Government
CARES act to support US airlines, which
is due to end in September. If this is not
extended or traffic is not sufficiently
recovered by then a large number of the
parked aircraft will become available.”
It is already known that a large
number of CF6-powered 747-400s has
been parked and will not go back into
operation, making their engines available
on the market. The situation with the
parked 767-300ER fleet is not as clear.
Some aircraft could go back into service if
there is a relatively strong recovery.
“Lease rates for CF6-80C2s have
come under pressure during the crisis,”
says Borchers. “Rates have probably
fallen by 15% to begin with, but the
actual rate commanded by a lessee will
depend on their credit rating.
The CF6-80C2 and -80C2F are in a
strong position, since they power about
50% of 747-400 freighters, but more
ISSUE NO. 130 • JUNE/JULY 2020

Demand for 767-300ER freighter conversions is
strong. The majority of more than 300 aircraft is
powered by CF6-80C2 and -80C2F engines. This
has increased the difference in market value
between ‘green time’ PW4000-94s and
CF6-80C2s.
than 90% of 767-300ER freighters. “The
freighter market is clearly less impacted,
and while people are sourcing engines for
freight operations, those with engines are
not yet in a rush to sell them,” continues
Borchers. “Few trades are happening, and
it seems many sellers are sitting on the
fence because of the Covid-19 crisis.”
Airlines will be doing everything to
avoid the high cost of SVs and LLP
replacements. A shipset of CF6-80C2
LLPs has a list price of $8 million. Parts
in the HPT module have uniform lives of
15,000EFC, while all other LLPs have
lives of 20,000EFC.
Most 747-400s and 767-300ERs will
have operated at long average EFC times,
which increases the likelihood that many
engines on parked aircraft are close to
using the full life of their original LLPs,
or will have used some of their second set
of LLPs. Engines in the latter group will
have green time remaining, and so be in
demand.
Most CF6-powered 747-400s have
accumulated a total time of more than
15,000FC but have not exceeded
20,000FC. This will indicate accumulated
time on their engines, although engine-
swapping must be taken into account.
A large number of parked passenger-
configured 767-300ERs have an
accumulated total time of 10,000-
29,000FC. Retired 767-300s, with CF6-
80C2F engines, have reached total times
of 23,500-44,600FC. This indicates that
most engines will have their second set of
LLPs, and some are likely to be on their
third set.
Finally, there are 137 parked 767-
300ERs and -400ERs, all with -80C2F
engines. These aircraft have total
accumulated times of 10,000-44,000FC.
United Airlines’ 767-400ERs in particular
all have low total times of 11,000-
15,400FC. The quality of these aircraft
and their engines of course raises the issue
of how likely it is that these aircraft will
go back into service or become available
on the market.
“Some CF6-80C2s have been torn
down for parts to be repaired and used in
SVs,” say Konrad Walter, managing
partner at TMSaero and Dean Morgan,
president of ASI Group. “Engines from
aircraft that were taken out of service in
2019 or earlier should not be overlooked.
There were kits to convert the QEC on an
engine from an A or D configuration (to
ISSUE NO. 130 • JUNE/JULY 2020
13 I AIRCRAFT TRADING & THE AFTERMARKET
power an A300-600 or A310, or an MD-
11) to a B configuration (to power a
Boeing aircraft). These kits plus labour
could cost $1 million or more depending
on many factors. In fact, this service
bulletin (SB) is no longer recommended
or supported by GE.
“The simpler and cheaper alternative
is for A and D engines, for example, to be
broken down to acquire parts to be used
in the SVs of B engines,” continue Walter,
and Mark Tipton, vice president of
engine services at ASI Group. “The
challenge is finding suitable surplus
engines that provide serviceable modules
and 767 QEC material. The 747-400
engines can support the module
requirements. Parts and materials can be
used for the SVs of 767-300ER engines.”
Despite the cost, there are some good
quality D engines from MD-11 freighters.
“We have hired TMSaero to convert
some D engines for use on 767-300ER
freighters,” says Morgan. “There is also
significant interest in A engines. For
example, the core of A engines can be
mated with the low pressure modules and
QECs of B engines to make complete
powerplants. This is a relatively easy
conversion, and cheaper than converting
the QEC kit. This mating of A and B
modules is done on the basis that there is
little or no market remaining for the
A300-600 and A310. The cost of buying
a donor B engine for the fan and QEC
modules and mating it with the core of an
A engine is about $0.75 million.”
There is also another consideration.
Many operators will need higher thrust
variants of CF6-80C2 engines: the
-80C2B6 and -80C2B7 variants rated at
60,030lbs for the 767-300ER. This
compares to the -B1 or A1 or A8 engines
rated at 57,160lbs for the 747-400ER, or
rated at 57,860lbs for the A300-600 and
A310-300. A thrust upgrade can be
applied to a lower-rated engine, provided
it has the correct internal hardware, but
this will incur an extra cost.
Walter thinks the values of green-time
CF6-80C2s are too high, considering the
market. “We have not bought any in the
current market, but we have been offered
-80C2A engines with less than 2,000EFC
remaining for $2 million. Another engine
with 4,000EFC left had an asking price of
$4 million. Values are staying high,” says
Walter. “Before Covid-19, the value of
parted-out -80C2s ranged from $650,000
to $1.1 million. Some buyers are still
paying these prices. The QEC kit and all
other externals would cost another
$400,000-600,000.”
There is a long-term market
supporting the CF6-80C2 for the 767-
300ER. There are, however, bidders
outbidding specialist engine buyers, and
this is pushing values up too high. This
will start to change, however. There are
also airlines buying direct themselves, and
freight carriers are asking TMSaero to
build engines from modules or acquire
engines direct. Freight airlines tend to
look for engines with 1,500-3,000EFC of
maintenance life. This will give them up
to six or seven years of operation.
“The values of CF6-80C2s have been
changing almost daily recently, generally
downwards,” says Walter. “While values
of serviceable engines are at $1,000 per
EFC of remaining maintenance life, they
average about $2.5 million. The values of
-80C2s should not change much because
it is a popular freighter engine.”
To download more than 1,200
articles like this, visit:
www.aircraft-commerce.com
AIRCRAFT COMMERCE
14 I AIRCRAFT ANALYSIS & FLEET PLANNING
While regional jets have accounted for the majority of market share in
North America and Europe, the turboprop market has steadily developed
in most other global regions. Analysis reveals that turboprops have
opened a large number of new routes over the past 10 years, and there are
many more new markets for them to explore.
What is the remaining
market for turboprops?
B
efore the global Covid-19 crisis,
the market for turboprops had
been steadily growing for 14-15
years. Deliveries of ATR 42s and
72s, and Bombardier/de Havilland Q400s
had exceeded 100 units per year for the
past decade, reaching a new peak in 2015.
Turboprops clearly serve specific market
types that are either impractical or
uneconomic for similar-sized jets, so there
should always be a readily available
market for them. This raises the issue of
what might be the remaining market for
turboprops when normality returns.
Historical market
Turboprops have several key
characteristics: an inherent trip cost and
economic advantage over jets, especially on
shorter routes; the ability to operate to and
from shorter airfields; and providing
economic feeder services to larger
operations, while also being able to make
short, low-traffic density and remote routes
and city-pairs economic.
The organisation of clearly defined
feeder services for mainline carriers in
North America and Europe during the
1980s, and the creation of franchise
agreements between majors and regional
operators, stimulated most of the demand
for turboprops. Up to 2004 there were
nine manufacturers providing turboprops
in the 18-65-seat range in addition to the
current ATR and deHavilland, which now
markets the Q400 previously provided by
Bombardier. These nine have all since
ceased manufacturing civil turboprops.
Aircraft sizes for commercial aircraft
operations started with 18-20-seat
turboprops, including the Fairchild
Swearingen Metroliner, the Dornier Do
228, the BAE Jetstream 31 (J31), the Beech
1900, the Embraer EMB-110 and the de
Havilland DHC-6 Twin Otter. The
AIRCRAFT COMMERCE
production of all civil versions of these
aircraft ceased from 1997 to 2004. The
production of the Dash 6 Twin Otter has
been re-started by Viking Air in Canada.
Production of the Do 228 is now
continued by Ruag in Germany.
Seven types were available in the 29-
39-seat category: the smaller BAE jetstream
41; and six other types that included the
Bombardier Dash 8-100/-300, the Saab
340, the Shorts SD-360, the Do 328, and
the EMB-120.
These two groups of turboprops gained
a large number of orders in the 1980s and
into the 1990s, mainly for the provision of
regional feeder services to mainline
carriers. The lower-cost environment of the
US saw larger numbers of aircraft in the
smaller 18-20-seat bracket being used
there. The Do 228, J31 and Metroliner
won some orders to serve a small number
of low-density routes in Europe.
Large orders were achieved by the 29-
39-seat aircraft, especially in the case of the
Dash 8-100/-300, the Saab 340 and EMB-
120. A larger portion of these types was
acquired by European carriers, as well as
some in the Asia Pacific, in comparison to
the 18-20-seat turboprops. The high-cost
European environment saw airlines
favouring larger types that offered lower
total costs per available seat-mile (ASM).
The provision of organised regional
feeder services stimulated traffic and
demand for an increased number of
services and an improvement of existing
services. Regional feeder carriers in North
America transitioned from 18-20-seat
turboprops to 28-35-seat turboprops, then
to 50-seat turboprops, and then on to 35-
50-seat regional jets (RJs) during the 1980s
and through to the late 1990s. Demand for
most turboprop categories subsequently
declined over a relatively short period
between the late 1990s and early 2000s in
North America. A similar trend followed in
Europe, with traffic growth and the need
for lower costs per ASM leading to more
interest in larger types.
The production of most 29-35-seat
turboprops began to cease in 1991 with
the SD-360, and then in 1997 with the J41.
This trend continued with the last Saab
340s, EMB-120s and Do 328s being
delivered in 1999 and 2000.
ATR, Fokker, Saab, Bombardier and
Casa of Spain were offering 48-50-seat
turboprops as well as the 28-35-seat types
from the late 1980s and into the 1990s.
These included the Fokker 50, Saab 2000
and CN-235.
The 48-seat ATR 42 and 50-seat Dash
8-200 in particular won large numbers of
orders, but these types were also made
almost obsolete by the continued growth
of regional traffic, which led to airlines’
need for larger turboprops and a switch to
50-seat RJs.
Large turboprops
Meanwhile, European airlines
expressed a clear need for larger
turboprops to operate economically in a
high-cost environment. A small number of
large turboprops emerged, first with the
64-/68-seat BAE ATP in 1988, and the 70-
seat ATR 72 in 1989. The BAE ATP failed
to win large orders, and production ceased
in 1995. The ATR 72 has been successful,
however, and to date has won almost
1,300 orders. It was followed by the 82-
seat Bombardier Dash 8-400, or Q400,
with the first being delivered in 1998. The
Q400 has since won 645 firm orders.
The fall in demand for turboprops and
the general increase in interest in RJs,
particularly in North America and Europe,
from the late 1990s saw all manufacturers
cease turboprop production during the late
1990s and early 2000s, with the exception
of ATR and Bombardier. The last Dash 8-
ISSUE NO. 130 • JUNE/JULY 2020

200s and -300s were delivered in 2009,
leaving Bombardier with just the Q400.
Only the ATR 42 and 72, and Q400
remain in production. Bombardier has left
civil aircraft production, and the Q400 is
continued by De Havilland Aircraft of
Canada at the Downsview factory.
Production of civil versions of the Do
328 ceased in 2000, and it was superseded
by the Do 328 JET with the same seat
capacity, although it production ceased in
2002. Technical support for the Do 328 is
now provided by 328 Support Services
GmbH in Germany. A re-introduction of
the type was being considered.
ATR 42/72 & Q400
The ATR 42 and 72, and Q400 are the
only turboprops available to passenger
carriers (see table, this page), so the ATR
42 is the only type left in the 48-50-seat
category.
The ATR 42 has been produced as
three main variants: the -300, -500 and
-600 series. The -300 was built from 1985
to 1997, and 284 were delivered. The -500
series followed, and was produced from
1994 to 2020. A total of 192 were
delivered. The -500 has been delivered at a
rate of four to 11 units per year over the
past decade. The first delivery of a -600
series aircraft was due in early 2020, and
there are 47 outstanding orders.
Similarly, there are three variants of the
ATR 72: the -200 series with 187 built
from 1989 to 1997; the -500 series with
353 manufactured from 1997 to 2011; and
the -600 series, which has been built since
2011. To date 559 ATR 72-600s have been
built and there are 181 outstanding orders.
The Q400 is the largest turboprop
available, and also the fastest. It has a
cruise speed of up to 360 knots, while the
ATR 72-600 has a cruise speed of 280
knots. The Q400 has won more than 630
firm orders, with 24 orders outstanding,
and deliveries have continued since 1998.
This is almost the same period as the ATR
72-500 and -600.
Three other main markets for the
Q400 were Europe, the Asia Pacific, and
the Middle East and Africa. The number of
Q400s delivered to these regions from
2010 was 57, 89 and 61. Main European
customers were airBaltic (12), Flybe (5),
Olympic Air (5), Luxair (11) and LOT
Polish (10). The largest Q400 customers in
the Asia Pacific were All Nippon Airways
regional feeder ANA Wings (11), Nok Air
(8), Philippine Airlines regional carrier PAL
Express (12), Indian carrier Spicejet (34),
and Sunstate Airlines of Australia (13). The
main airline customers in the Middle East
and Africa were Ethiopian (21), Jambjet
(6), Qazaq Air (5) and South African
Airways’ regional partner SA Express (4).
Ethiopian Airlines is significant, since it
was a large ATR customer.
The Asia Pacific has been the Q400’s
ISSUE NO. 130 • JUNE/JULY 2020
15 I AIRCRAFT ANALYSIS & FLEET PLANNING
ATR 42-600, ATR 72-600 & Q400 SPECIFICATIONS
Aircraft
type ATR 42-600
Length - feet 74 feet 5 inches/
22.67 metres
Passenger seats 48
MTOW - lbs 41,005
Structural payload - lbs 12,015
Fuel capacity - USG 1,481
Range - nm 716
Powerplant PW127E/M
Cruise speed - kts 300
second largest market over the past 10
years, accounting for 28% of deliveries,
while the Middle East and Africa
accounted for 19% and 18% of deliveries
for the Q400.
Current turboprop market
The main market drivers in the past
were the needs of North American and
European carriers. These were mostly for
mainline feeder services, with specialised
point-to-point services accounting for just a
minority of the demand. With demand
from most airlines in these two regions
falling due to the preference for RJs, new
markets have had to be found by
turboprop manufacturers.
Most turboprop manufacturers did not
develop new products to meet the needs of
North American and European regional
carriers, or failed to find new markets for
their existing turboprop products, or new
markets were not sufficiently mature to
provide them a market.
While there have been three main series
of the ATR 42, it has maintained the same
seat capacity and so has always met the
same market requirement. The same
applies to the ATR 72. The main
advantage of the -600 series over earlier
versions is the faster cruise speed, and the
take-off performance in some cases.
The Q400 meets a similar market need
to the ATR 72, although the Q400’s larger
size and faster cruise speed means the two
will not compete directly in many cases.
Annual deliveries of the three main
types over the past 10 years numbered
100-117 from 2010 to 2017. They
declined slightly to 84 in 2018 and 73 in
2019, with deliveries of the Q400 notably
halving from 30 in 2017 to 15 in 2018 and
ATR 72-600 Q400
89 feet 2 inches/ 107 feet 9 inches/
27.17 metres 32.8 metres
68 - 78 82
50,706 67,200
16,500 18,716
1,641 1,724
825 1,100
PW127M PW150
280 300-360
2019. There are just 24 Q400 orders
outstanding, versus 181 for the ATR 72-
600.
Total deliveries for these three main
types since 2010 have been 1,032 units: 65
for the ATR 42, 647 for the ATR 72, and
320 for the Q400. The Q400 has therefore
declined against the ATR 72 in recent
years, whereas the Q400’s deliveries
exceeded the ATR 72’s in the previous
decade.
The Asia Pacific accounts for the
largest share of deliveries over the past
decade, with 484 aircraft; equal to 47.5%.
The second largest market was Europe,
with 194 aircraft and 18.8% of deliveries.
Most of these were for the ATR 72 with
131 aircraft, and six for the ATR 42.
The third largest market was North
America and the Caribbean, with 150
deliveries and a 14.5% share. Most of
these deliveries were 113 Q400s. The four
main Q400 recipients were independent
Canadian regional carrier Porter Airlines
(10 aircraft) and three feeder airlines: US
carrier Horizon Air (14), and Canadian
regionals Jazz (35) and WestJet Encore
(47). The last deliveries of large numbers of
Q400s to these airlines were made in 2017.
The Middle East and Africa, and Latin
America were the fourth and fifth largest
markets, taking 112 and 86 deliveries. The
Q400 and ATR 72 proved equally popular
in the Middle East and Africa over this
period, whereas the ATR 72 dominated the
market in Latin America.
The most notable change from 2010 to
2020 is the relative importance of global
regions compared to the previous 10 years.
While Europe has continued to be a
strong market for the ATR 72, the share of
scheduled deliveries for turboprops
indicates that the Asia Pacific will be the
AIRCRAFT COMMERCE
16 I AIRCRAFT ANALYSIS & FLEET PLANNING
prime market in the future. Although small
and less developed, the Latin American,
Middle Eastern and African markets will
also account for a growing percentage of
orders and deliveries.
Europe will continue to be a strong
market, with few signs that its share of
deliveries will decline over the next decade.
North America is a gradually declining
market, or at least it is for turboprops in
this size category. The only airline with a
large number of outstanding orders is US
regional Silver Airways, based in Florida. It
has ATR 42 orders to replace smaller Saab
340s.
Besides the passenger market, FedEx
has provided ATR with an important order
for 30 ATR 72 freighters.
Market demand
Past deliveries and future orders
provide some indication of the size and
market for turboprops. Further market
analysis indicates the factors stimulating
demand for turboprops, and suggests the
number of aircraft required in the future.
There are generally more categories of
markets for turboprops than jetliners,
including: the replacement of ageing
turboprops; the substitution of other
categories of aircraft with turboprops;
traffic growth and a need to replace smaller
turboprops with larger types on existing
routes; and the introduction of new
regional routes.
Analysis shows that a large portion of
turboprop orders are either to serve new
routes or place other types of aircraft on
regional routes.
The growing importance of Latin
America, Africa, the Middle East and the
Asia Pacific indicates the degree to which
turboprops are used to open new routes.
AIRCRAFT COMMERCE
This is reflected by the fact that many ATR
and Q400 customers have either had
smaller fleets of regional aircraft in the
past, or are all-new operations.
Turboprops have the clear advantages
of being able to operate from shorter
airfields, and operate with lower total trip
costs and costs per ASM. Macro analysis
of the world’s passenger airline route
network reveals that just over 4,000
commercial airports are served by airlines.
Some of these are major hubs, while many
are point destinations. The route networks
of all airlines combine to form hundreds of
thousands of city- or airport-pairs. Not
every city- and airport-pair is served, due
ultimately to insufficient passenger
demand, or the appropriate aircraft being
unavailable to serve the route.
Further analysis reveals that
turboprops are used almost exclusively on
routes up to 600nm. Most turboprop
capacity is in fact deployed on routes up to
350nm, with a larger portion of capacity
provided by RJs and jetliners on longer
routes up to 600nm. About 1,500 airports
are served with just regional aircraft,
categorised as being larger than 30 seats
and up to the largest turboprops and RJs.
Of these 1,500 airports, more than 1,100
are served purely with turboprops. Most of
these are in the Asia Pacific, Australasia
and North America.
The existing routes that serve these
1,500 airports clearly provide potential
markets for turboprops, including
upgauging to larger types due to traffic
growth, replacing older turboprops, and
replacing aircraft in other categories.
In the case of the latter category, large
turboprops like the ATR 72 and Q400
have replaced older, smaller jets such as the
F.28 over the past 20-25 years. The
replacement of aircraft in other categories
One market for the ATR 42/72 and Q400
turboprops still in production is the replacement
of older aircraft. Silver Airways in Florida is an
example, with it replacing older Saab 340s with
ATR 42-600s.
can include 50-90-seat RJs and even
smaller variants of the 737 and A320
families that have become unsuitable for
certain routes in an airline’s route network.
Analysis reveals that there are many
older, 25-50-seat turboprops that will need
to be replaced over the next 10-20 years.
Unlike other categories of aircraft,
turboprops have consistently been retired
at an average age of 26 years. There are
more than 500 ageing Saab 340s, EMB-
120s, Dash 8-100/-200s, and Do 328s in
the 29-35-seat category that are still in
passenger operation.
A total of 170 larger Fokker 50s, Saab
2000s, Dash 8-200s, and CN-235s in the
50-seat category remain in service, as well
as 130 older ATR 42s in operation.
New routes
The opening of new routes has
consistently been a significant market for
turboprops. Analysis by ATR shows that
they allow many small airlines to operate
small routes and adapt quickly to serve
new markets, and there is a consistent
pattern in the deployment of newly-
delivered aircraft.
In 2019 41% of routes and airport-
pairs operated with ATR aircraft had not
previously been served 10 years before
with any airline service, and second that a
further 23% of airport-pairs operated by
ATR aircraft in 2019 had been operated by
other aircraft types 10 years before. That
is, 64% of routes operated by ATR types in
2019 were not operated by them in 2009
and 2010.
This indicates two strong markets for
turboprops: the opening of new routes,
and switching to new and more
appropriate types as they come available.
This development of a large number of
new routes being opened by turboprops
over a 10-year period reflects the pattern of
aircraft orders. Most of the routes that
could possibly be served by turboprops in
the US have already been open for many
years. The market has evolved in the
meantime to using RJs and larger
turboprops. The only main market left in
Canada and the US is to replace the
relatively small number of turboprops that
remain on regional routes; for example,
Silver Airways replacing Saab 340s with
ATR 42s.
Most new routes that have been
opened with turboprops over the past 10
ISSUE NO. 130 • JUNE/JULY 2020

Indonesia has been a large market for
turboprops in recent years. Large numbers of
new routes have been opened on airport- and
city-pairs with just turboprops providing the
capacity. There is the potential for more new
regional and domestic routes to be opened.
years are in Europe, the Asia Pacific, Latin
America, and Africa. The route network
has been steadily developing in the Asia
Pacific over the past 20 years, and more
carriers have gradually increased the size of
their regional operations, route networks
and fleets. Examples are Malindo Air,
Bangkok Airways and Uni Air.
Africa and Latin America have always
had small regional and intra-continental
route networks. They have had a limited
number of airport-pair services for an
extended period, and have only begun to
expand these in recent years. The large
numbers of ATRs and Q400s being
delivered in recent years to carriers such as
Aeromar, Air Algerie, Air Botswana, Air
Senegal, Avianca, Azul, Easyfly, Ethiopian,
Air Tanzania, Precision Air and Royal Air
Maroc Express reflect this. Many of the
deliveries to these airlines have been used
on new and enlarged route networks.
Africa
Africa has become an interesting
market in recent years, with a large
number of new regional routes being
opened. Macro data shows that 124
airports in Africa have been served with
just turboprops since 2015. The countries
with the largest number of these airports
are The Democratic Republic of the Congo
(8 airports), Ethiopia (13), Kenya (13),
Madagascar (8), South Africa (9), Tanzania
(17) and Zambia (17).
Ethiopia and Morocco are two
countries where new routes were
developed and opened from 2009 to 2019.
Ethiopian Airlines has taken delivery of
more than 25 Q400s that replaced older
turboprops, and opened new routes.
Examination of new routes opened
since 2009 that are shorter than 600nm
reveals that most are operated with the
Q400. Moreover, these are routes with
average aircraft size up to 80 seats, and
with a significant number of services per
year. This is at least 150-160 flights per
year, and in many cases equal to two or
three daily frequencies.
In particular eight new routes have
been opened from the capital and
Ethiopian’s main hub Addis Ababa. The
destinations include Asosa (ASO), Awasa
(AWA), Jinka (BCO), Dessie (DSE),
Gambela (GMB) and Semera (SZE).
Ethiopian has also opened five or more
point-to-point routes between these
ISSUE NO. 130 • JUNE/JULY 2020
17 I AIRCRAFT ANALYSIS & FLEET PLANNING
outstations, at relatively low frequencies of
up to 156 flights per year.
Royal Air Maroc (RAM) Express’s
operation and route network in Morocco
and to neighbouring states has changed
over the past 10 years. Many routes have
been dropped, and several new ones
opened. The new routes shorter than
600nm, and those operated by regional
aircraft are flown with its fleet of six ATR
72-600s.
Four of these new routes originate
from RAM’s main hub at Casablanca.
There are also two new routes from
Agadir, two from Al Hoceima and two
from Tetouan, including domestic services
to Tangier and Fez.
Latin America
Central and South America have
historically had a small number of
intracontinental and domestic routes. A
large number of new routes has opened in
recent years. More than 100 airports on
the continent are served purely with
turboprops, plus another 11 airports in
Mexico and 37 in the Caribbean. The
countries in Latin America with the largest
number of airports with turboprop-only
operations are Brazil (65), Argentina (6)
and Colombia (22).
The Colombian route network is useful
to analyse the development of new regional
and turboprop-served routes in the region.
Avianca Express and Easyfly both
operate turboprops. Avianca Express
operates a fleet of ATR 72-600s, while
Easyfly operates a mixed fleet of ATR 42s
and 72s.
Analysis of new regional routes shorter
than 600nm and served with turboprops
over the past 10 years shows how these
aircraft are being used to open low-density,
short-distance markets.
Colombia has several main airport
hubs that include Bogota, Cali and
Medellin. Five new routes have been
opened with turboprops from Bogota, six
new routes from Cali, and two new sectors
from Medellin. Many of these have
relatively low service frequencies, at fewer
than 365 flights per year.
Four new routes have also been opened
from Bucaramanga, with frequencies
varying from 260 to 777 per year. There is
also a number of new point-to-point routes
between secondary airports.
Europe
Europe is clearly still a major market
for turboprops, with 120 airports served
purely with turboprops, plus more than 60
in the Russian Federation.
The European countries with the
largest number of airports served purely by
turboprops are France (8), Greece (11),
Portugal (9), Sweden (9), Norway (29) and
the United Kingdom (27). Most of the 27
airports served in the UK only with
turboprops includes many that were served
by Flybe until March 2020. The large
number of airports in Norway is served by
regional carrier Wideroe.
The fact that new routes have been
opened over the past 10 years indicates
there is still growth potential for the
turboprop market on the continent.
Several countries provide evidence that
new regional routes are being opened with
turboprops. Countries analysed include
Germany, Poland, Ukraine and Turkey.
Analysis of the new routes opened
from Turkish airports and that are less
than 600nm reveals that all have been
AIRCRAFT COMMERCE
18 I AIRCRAFT ANALYSIS & FLEET PLANNING
EXAMPLES OF NEW ROUTES OPENED WITH TURBOPROPS 12 Q400s plus a fleet of almost 40 RJs.
The origin points include Bydgoszcz,
Origin Annual Ave seats Gdansk, Krakow, Warsaw and Wroclaw.
Country city Destinations flights per flight These routes are all up to 550nm, and have
average aircraft seat sizes of up to 90. The
routes are either domestic Polish city-pairs
or regional routes to neighbouring states
Ethiopia ADD ASO, AWA, BCO, DSE, GMB & SZE 150-888 76 such as Ukraine, Denmark, Estonia,
Finland, Germany, Latvia, Lithuania,
Morocco CMN OZG, TTU, UAR & BEM 61-104 70 Hungary, Romania, Russia and the
AHU TTU, TNG 105 70, 72 Netherlands.
The service frequencies in these routes
are low in a few cases, but most, especially
Colombia BOG PTX, APO, TCO, IPI & MVP 156-512 47-72 from Warsaw, have one to four single daily
BGA BAQ, CLO, PEI & CTG 263-777 48, 53 services. The frequencies on some of the
CLO IBE, NVA, FLA, IPI, PTX & BGA 115-321 45-48 routes from Poland’s secondary airports
MDE PEI 272 49 need to be developed to daily services as
traffic grows.
Ukraine is another example of a small
Germany DUS FDH, NTE, FLR & GLA 196-428 32-81
number of new routes up to 600mm being
FRA JKG, BZG 93, 357 49, 90 opened with turboprops. The main hubs in
NUE LYS, WAW 230, 597 71, 80 Ukraine are Kiev, Lviv and Simferopol.
Kharkiv also has an extensive network.
Ukraine LWO UDJ, RIX, BZG, SZY, POZ 41-119 44, 76 There are two main hubs at Kiev: the
main airport KBP and Kiev Metro, IEV.
SIP BZK, URS, LPK, VOZ, AER 12-408 59, 95
Two new regional routes have been opened
to domestic destinations from each of these
Malaysia BKI KUD, LMN, MZV 110-365 19, 68 airports with turboprops and small RJs
LGK MKZ, HKT 110-210 72 during the past few years. These are all less
LMN KCH, MYY 145, 1,095 68 than 300nm and have relatively low
frequencies of a single daily service, except
for Kiev-Kherson which is operated twice
The Philippines CRK ENI, SWL, BSO, USU, IAO & CRM 290-1,825 48-73
daily.
CGY BCD, DGT & TAG 73-220 68 Five new routes have been opened
CEB ENI, CYP, PAG, CGM & USU 180-875 48-72 from Lviv: one domestic, one to Latvia and
three to Poland. Similarly, five new short
Indonesia BDO TKG, BWX, BKS, SOC & SRG 115-1,510 72, 77 routes have been opened from Simferopol
to Russian destinations, all ranging from
BDJ PNK, AAP, SMQ, SOC & BTW 240-763 70
325nm to 585nm. Most, however, are
UPG KSR, LLO, BTW, BMU, PUM & PSJ 212-730 72 operated at low frequencies; only the route
to Sochi provides a daily service.
India AMD ISK, JSA, JLR, KQH & UDR 180-550 70-89
BLR KLH, MYQ, TIR, RJA, TRZ & SAG 180-660 70-77
MAA CDP, MYQ, IXE & VGA 365-1,022 71-75 The Asia Pacific
The Asia Pacific is the largest potential
DEL BKB, AIP, KNU & KQH 330-365 70, 78
market for turboprops and services with
HYD CDP, NDC, KLH, IXE, SAG, IXM, 365-1,280 71-77 regional aircraft. More than 560 airports
JLR & BHO in the region have been served purely with
turboprops over the past five years. The
countries with the largest number of
airports served only with turboprops
served with narrowbody aircraft types. from Munich. The new regional routes include Indonesia (58), The Philippines
This not only applies to the country’s from Duesseldorf are to Friedrichschafen, (18), Malaysia (15), The Maldives (12),
major airports, including the two hubs at Nantes, Florence and Glasgow. These have French Polynesia (33), The Marshall
Istanbul and other major cities, but also all been served with turboprops and Islands (22), Vanuatu (25) and Australia
routes serving smaller airports. smaller RJs in the first few years since (106).
Analysis of capacity data for routes being opened. Large numbers of turboprops have
serving Germany shows that a small Single new regional routes have been been delivered to airlines in the Asia Pacific
number of new regional routes served with opened from Dresden, Hannover, Munich region over the same period. Similarly,
turboprops has been opened over the past and Muenster. These are secondary many have been deployed on new routes
10 years. This indicates a strong potential airports and the new routes are mainly to and enlarged networks. A large number of
market for turboprops, since the German major hubs in neighbouring states. For new routes has opened in India over the
economy is strong and the market is example, the new route from Dresden past 10 years. Traffic growth and rate of
generally well served and developed. There serves Amsterdam, the new route from network development has been fast.
is nevertheless a large number of secondary Hannover serves Warsaw, and the new Large numbers of turboprops have
airports, both in Germany and in sector from Munich is Rijeka in Croatia. been delivered to airlines in Indonesia, The
neighbouring states. Almost 30 new routes have been Philippines, Malaysia, Vietnam and
New regional routes opened and served opened with turboprops from main cities Thailand. These include Cebgo, Citilink
with turboprops include four from in Poland over the past 10 years. LOT Indonesia, Garuda, Wings Air, Bangkok
Duesseldorf, two from Frankfurt, and two Polish is the main carrier, which operates Air and Nok Air.

AIRCRAFT COMMERCE ISSUE NO. 130 • JUNE/JULY 2020


India has experienced high rates of passenger
growth and network development for most of
the past 10 years. A large number of new routes
have been opened each year, and this includes
regional and short distance domestic routes
with turboprops and small RJs.
Analysis of the routes already operated
and the cities and airports served, provides
some indication of the number of routes
that could potentially be opened in the
future. The routes analysed are those up to
600nm, since turboprops are unlikely to
serve city-pairs longer than this.
A small number of new regional routes
has been opened from Malaysian airports
in recent years. Most are domestic routes,
but there is also a small number to
Singapore, Thailand and Indonesia. These
are all shorter than 200nm.
Malaysia’s main hubs are Kota
Kinabalu, Kuala Lumpur and Langkawi.
One new regional route has been
opened from Kuala Lumpur, to Singapore’s
secondary airport Seletar (XSP). This is
operated as four daily services with ATR
72s. Other new routes are point-to-point
services between secondary cities, including
operations from Kota Bharu, Limbang
Sarawak, Malacca, Sandakan and Tawau.
Many were operated with a less than a
daily service.
The Philippines is a large archipelago.
It has more than 45 airports, and is more
than 900nm from its northernmost airport
to the southernmost airfield on one of its
small islands. The large number of airports
means there are almost 2,000 domestic
routes that could theoretically be served.
There are several major airports that
include Angeles, Cagayan de Oro, Cebu,
Davao and Manila. Large numbers of new
regional routes have been opened from
these airports in recent years.
The largest group of new regional
routes has been opened from the northern
city of Angeles to 13 new destinations, all
served with turboprops. While some are
operated at low frequency, about half are
at frequencies of one to five daily flights.
Four new routes have been opened
from Cagayan de Oro, and seven new
regional services have been started from
Cebu, a hub on one of the southern
Philippine islands. These are all domestic
services.
Five new domestic routes have been
opened from Davao, the main hub on the
southernmost island of Mondanao. Six
new regional routes have also been opened
from the capital Manila.
In addition small numbers of new
routes have been opened from Puerto
Princesa, Zamboanga, Panglao, El Nido
and Busuanga.
Indonesia has seen by far the largest
ISSUE NO. 130 • JUNE/JULY 2020
19 I AIRCRAFT ANALYSIS & FLEET PLANNING
number of new regional routes opened
with turboprop types with seat capacities
up to 78 seats over the past few years.
Indonesia is also an archipelago, with
several major airports, including Ambon,
Balikpapan, Bandar Lampung, Bandung,
Benjarmasin, Batam, Batu Licin, Jakarta,
Jambi, Jayapura, Ktapang, Kotaburu,
Labuan Bajo, Majalengka, Makassar,
Manado, Padang, Palangkaraya,
Palembang, Pekanbaru, Pomntianak,
Samarinda, Surabaya, Surakarta and
Tarakan.
More than 180 new regional routes
have been opened with turboprops from
these hubs, and several other secondary
airports in recent years (see table, page 18).
India
India was one of the largest growing
air transport markets before the Covid-19
outbreak. With a high rate of traffic
growth, a large number of new routes is
opened each year. This includes both
regional and longer-distance routes, and
those operated by turboprops, RJs, and
larger types.
Alliance Air, Indigo and Spicejet have
all taken delivery of 18 ATR 72-600s, 25
ATR 72-600s, and 34 Q400s over the past
10 years. This large increase in fleet
capacity is reflected in the large number of
new regional routes opened since 2009,
being served purely with turboprops or a
mixture of turboprops and RJs.
More than 150 regional routes have
been opened, most of them from India’s
growing number of main hub airports,
including Ahmedabad, Amritsar,
Bengaluru, Bhopal, Chennai, Delhi,
Hyderabad, Jaipur, Kochi, Kolkata,
Mumbai, Mysore, Thiruvananthapuram
and Vijayawada. The number of new
routes opened from these main hubs is
summarised (see table, page 18). The new
routes from these hubs and major airports
are a growing number of secondary and
tertiary cities.
Many of these new routes have
frequencies of at least a single daily service
and some as many as three or four daily
flights, clearly indicating the high growth
rate and demand for local, regional
services. This is on a large number of
routes, most of which are less than 400nm.
In addition, a large number of new
point-to-point routes has also been opened
between secondary and tertiary airports.
Summary
The large number of airports that are
served with just turboprops, and airports
that are yet not served by any airline,
shows that there is potential for further
development of the global turboprop fleet.
The low frequency levels on some of the
routes operated, in particular new routes,
indicate that more aircraft will be required
to serve these new city- and airport-pairs as
traffic develops and service frequencies are
added.
Some of the best opportunities for the
growth and expansion of turboprop
operations are found in parts of Europe,
the Asia Pacific and Australasia, Africa and
Latin America.
This also clearly raises the issue of a
market requirement and global potential
for a new generation of turboprop aircraft
smaller than the ATR 42.
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AIRCRAFT COMMERCE
20 I AIRLINE REVENUES
Revenue management is as important as ever, and is adapting to stay
ahead of the unpredictable passenger volumes caused by the Coronavirus.
The challenges of successful revenue management during the Covid-19 era
and the restart are examined.
How Covid-19 has
altered revenue
management
R
evenue management (RM) has
evolved since the 1970s to the
point that it now requires
significant automation and data
science to be done successfully. The high
number of variables, data points and
transactions within this dynamic market
place includes competition and
environmental factors. Successful revenue
management is therefore both a science
and an art.
Occasionally, severe disruptions in the
industry, such as the aftermath of 9/11,
the 2010 Icelandic volcanic ash-cloud
and, in some cases, SARS and H1N1
viruses had an impact on passenger
behaviour and airline forecasting.
Many experts believed they
understood data disruption, and typically
tried to remedy it by eliminating and
adjusting against bad data. Alternative
revenue management methods have been
created that can refocus more on business
intelligence and heuristics. The problem,
however, is there has never been an event
like Covid-19 before, with such far-
reaching consequences.
Consultant to more than 80 airlines,
Don Garvett has been the executive vice
president to four major airlines, with
responsibility for capacity-planning, fleet
and network and alliances. “The H1N1
virus affected Mexico terribly. The
epidemic had a four to five month peak,
but the economic effect lasted for six to 9
months after the virus had peaked. H1N1
was over more quickly than Covid-19,
and there was more certainty about its
duration and magnitude.”
The Covid-19 pandemic means that
traditional adaptations in RM will be far
less effective than in the past.
AIRCRAFT COMMERCE
Overview
Part of the value from RM is derived
from optimising logic and analytics,
including business intelligence and
heuristics, in conjunction with business
rules. Its more significant functions are
overbooking management, the allocation
of discounts and fare availability, as well
as itinerary flow control.
Fundamentally, itinerary flow control
is the benefit of selling a scarce, point-to-
point fare, at a high yield compared to
selling the same fare at a lower rate to a
passenger that needs the flight to connect
to a much higher yielding one.
Heuristic techniques are typically used
in RM to solve a problem by
implementing practical methodology that
is not guaranteed to be optimal or
perfect, but is sufficient for reaching an
immediate short-term goal. In other cases,
revenue managers might consider
sacrificing optimisation because of the
challenges and inefficiencies to fully
optimise. This means they will be
sufficiently satisfied with near
optimisation levels as the best alternative.
RM relies on both historical and
current data. A key requirement for
optimising is to have a good or reliable
forecast with minimal statistical
variation. This is difficult because the
airline’s capacity or the price environment
or competitors can change because of
factors such as recessions, economic
downturns, and global pandemics.
The challenge
The reason for this is that the models
are imperfect in their ability to forecast,
and include factors that may not be easily
mathematically captured. There are also
strategic choices to make. For instance it
could be sensible to say that an airline
will want to optimise or maximise for
short-term revenue to position itself
competitively in a manner that will have
a longer-term value, instead of simply
optimising flights for the next year.
There are technical, strategic and
qualitative reasons why human input is
essential. Adaptations to successfully
overcome major disruptions as a global
pandemic mean that accurate forecasting
and RM will become inherently more
difficult, so airlines will struggle to
forecast passenger demand and calculate
fares.
In addition to the difficulties Covid-
19 is creating for forecasting demand, it is
also radically impacting the elasticity of
demand for travellers in a way that is
difficult to understand and quantify.
“During the 9/11 crisis I was revenue
manager at Pan Am, and we discovered
that assessments of the elasticity of
demand did not mean much, because if
someone was afraid that their life was in
danger because of such events, they were
not going to fly, no matter what the price
was. This applied only to a certain
percentage of people,” explains Garvett.
With the pandemic, passenger no-
show rates are now different. The
booking curves, and when passengers
book their tickets, including their
willingness to pay, have changed.
Moreover, understanding what the
competition is doing and the ability to
determine these factors for the near and
long term is less certain. This means the
quality of forecasting is significantly
ISSUE NO. 130 • JUNE/JULY 2020

The SABRE platform was first conceived by
American Airlines and IBM in the 1950s to
optimise passenger bookings. Prior to this,
administrators manually sorted through a
rotating file with cards for each flight. When a
seat was booked, they would mark the card to
illustrate when the flight was full.
reduced.
Because of these factors, a robust set
of processes and systems will be needed,
including the ability to use these systems’
differently.
Airlines will need to adjust schedules
and monitor competitors’ schedules more
frequently. To understand their
passengers better, operators will need to
frequently complete analysis and
passenger surveys, and do this differently
to past practices.
“On one hand airlines will rely less on
the traditional RM systems, and on the
other they will have a greater need for the
data logic that can be embedded in these
systems,” adds Garvett. “I expect
additional focus on strategic and tactical
aspects of RM, and also to have a greater
reliance on the human element to guide,
rather than simply operate, the systems.”
PROS
PROS launched its first RM solution
in 1985 and Southwest Airlines was its
launch customer.
To begin with, the focus was on an
overbooking module. The system would
forecast how many passengers would not
turn up for a flight, making it possible to
sell a larger number of seats and generate
more revenue. Using such a system means
it is conceivable to maximise the number
of seat sales in relation to the number of
passengers who turn up for the flight.
For example, if 90 travellers show up
for a flight that has a maximum capacity
of 100 passengers, it will be feasible to
sell 110 tickets because of the 10
passengers that do not turn up. Such a
flight will be operating at a 90% load
factor.
However, there are some risks
associated when doing this, so PROS
developed an economic model that
includes a risk assessment enabling the
system to learn the optimum load factors
for any given route. As the RM solution
evolved it was possible to develop the
idea further and incorporate the value of
the passenger to the airline or the cost of
having to turn a passenger away.
“Passengers believe that airlines are
selling a single product because they are
sitting in the same type of seat as the
person next to them. The reality is the
product that the passenger is buying is
derived from when they purchase the
ISSUE NO. 130 • JUNE/JULY 2020
ticket, and the conditions that are
included within the price they pay,”
explains Jander. “While the seat is the
same, the question is what does the
passenger need to get out of that seat?”
Booking curve
The booking curve starts when
passengers can start making reservations
for a flight. Typically, this is about 300
days before departure when flights enter
the reservation window. From then it is
possible to begin forecasting the number
of bookings made each day before the
departure. The PROS models are all
populated with the history that shows the
level of demand for each day on each
route.
Part of the concept involves
segmenting the market between leisure
travel and business travel. For example,
Orlando is mainly a leisure passenger
destination and it is possible to
individually ticket a flight from Houston
to Orlando for $100 per seat. It is also
likely that the flight will sell out 300 days
before departure.
If the airline could take a booking for
$5,000 for a seat on the day of departure,
however, it is in the airline’s best interest
to leave that one seat available for that
sale. Therefore, PROS developed the
system to forecast how many people will
turn up on the day of departure, how
much are they willing to pay, and if the
airline should hold out selling all its
inventory and wait for this passenger or
passengers.
“The system was initially developed
for the Houston to Orlando leg. Then we
21 I AIRLINE REVENUES
started to realise that aircraft fly legs, yet
most passengers fly origin and destination
(O&D), starting the concept of O&D
revenue management,” says Justin Jander,
director of product management for
travel, at PROS. “This is how passengers
travel, and it is how airlines optimise
their network.”
If there was a choice on the Houston
to Orlando flight, between a passenger
that originated from San Antonio, and
another passenger that originated from
London, the operator would prefer the
latter, because their total value to the
airline is higher. Furthermore, the
traveller originating from London will be
more willing to pay because of the higher
long-haul fare than the passenger who
has travelled the relatively short distance
from San Antonio.
Demand
RM was influenced by the
deregulation of airlines in the US.
Deregulation gave operators the freedom
to price their fares to maximise revenues,
while not being restricted by government
processes.
Originally, American Airlines and the
semi-automated business research
environment (SABRE) booking system
sold tickets at a single price point. By
adding two prices, one for what the
airline knows it is going to sell for charter
services, and a second price for the excess
capacity on the aircraft, the concept of
pricing points evolved. Today a typical
airline might have up to 25 price points
(or more) in any given market.
Therefore, one of the main
AIRCRAFT COMMERCE
22 I AIRLINE REVENUES
components of any RM system is how
much demand the flight should expect at
each price point, and determining the
value of this demand to the airline.
Fare valuation will use those many
price points to determine the value that
each passenger is worth to the airline.
The PROS system will forecast the
number of bookings passengers will make
at each price point on each day before
departure. This data segments the
demand of passengers that book early,
against those that book much later.
Typically, leisure passengers book a
reservation much further in advance than
business travellers. Capacity constraints
are then applied to determine the airline
inventory that is available. Prices will rise
as the day of departure approaches.
Data science modelling determines the
probability of a passenger turning up for
a flight on the departure date, and the
number of passengers that are likely to
book a ticket.
“For many RM systems, the goal
could be just to fill the aircraft. Low-cost
carriers (LCC) are more focused on
tempting passengers with low fares, and
then selling them ancillary revenue
products,” explains Jander. “More
traditional carriers will want to maximise
their ticket revenue, because they operate
to a full-service model and have less
reliance on ancillary revenues and last-
minute travellers.”
The Covid-19 situation has been
tumultuous for RM. This is because,
while forecasts of passenger demand from
the start of 2020 to the middle of the year
were based on passenger behaviour over
the preceding months, the pandemic
disrupted all the passenger demand. This
AIRCRAFT COMMERCE
means it is now hard to predict passenger
demand.
Adaptive learning
PROS has developed an adaptive
learning model within its platform that
aggregates more recent information and
data to drive its forecasts for upcoming
departure dates. The solution takes
booking information and adapts it to
accommodate changes.
“We are receiving many calls from
our customers right now, who are all
dealing with schedule changes. They are
dealing with blocking the middle seat,
and then they are dealing with cancelled
flights and their schedule for the next one
to two months,” says Jander.
Many airlines are focusing on the two
months before departure to get whatever
revenue they can. Forecasting beyond
that is not their priority now.
By partnering with 10 airlines, PROS
has created a data science task force for
COVID-19. The partnered airlines allow
PROS to access their data and combine it
with that of the other airlines to increase
the number of available data points that
forecasters can use. Doing so makes
forecasting more accurate.
PROS protects and anonymises this
data to maintain airline integrity and
focus on O&D statistics, such as
passenger booking and shopping
information. Shopping data gives an
indication of what markets and dates that
passengers are looking at, but may not be
booking. The data is very summarised,
and it does not include demographics,
such as name, age and sex. Essentially the
data will show that there are several
Southwest airlines reset its network forecasts at
the start of the pandemic. Having a
comprehensive inventory of leisure demand
history initially helped the airline make arbitrary
decisions relating to passenger volumes until
more data became available. After a couple of
weeks of a route being opened, it become easier
to accurately forecast.
requests for the O&D, although there is a
direct correlation between this and the
number of bookings the airline receives.
This relationship changes over time and
can be an indicator of where passengers
are interested in flying and where
bookings may eventually happen.
Therefore, specifics like destinations
and date searches are used to get a
holistic picture of passenger demand. The
more data that can be combined, the
better the market insights.
This data is then paired with John
Hopkins COVID-19 data, border closure
information and other sources to indicate
recovering demand in the market place.
“We are amalgamating all this data
from different airlines and piecing it
together in a way that gives us greater
understanding of the current market,”
says Jander. “There could be a dip in the
number of COVID-19 cases, then two
weeks after that there is an increase in
bookings. We can pass this along to the
airlines and say, ‘the same thing happened
in a domestic market’, meaning if it
happened in one region it is possible to
infer the same trend for another market,
for example.”
PROS is translating data relating to
the recovery, and applying it to different
regions to show what the recovery looks
like. It is advising its customers how to
adjust forecasts to accommodate the
shape of the recovery.
Each airline can take this information
and customise it to its recovery strategy.
For example, the data harvested is useful
for LCCs and full-service carriers,
because it can be adapted to the different
complexities and individual RM
requirements.
The number of datapoints does vary,
depending on the airline and its
conditions. There are many booking
websites that potential travellers view on
a regular basis without any intention of
booking a ticket. Typically, data
references from these sites are used as a
guideline.
Southwest Airlines
According to Southwest Airlines,
passenger demand is still below pre-
Covid-19 levels, but it is returning much
faster than was forecast. US airport
passenger data shows that while
passenger numbers in mid-April 2020
ISSUE NO. 130 • JUNE/JULY 2020

Revenue management anticipates the number of
passengers that are likely to turn up for a flight.
Solutions minimise the potential for
overbooking and predict passenger willingness
to pay for a flight at a given price point as well
as segmenting leisure and business travellers.
had dropped to just 4% of the same day
the year before, passenger numbers have
been increasing at about two percentage
points per week. This would take all
passenger numbers to about 30% of the
previous year’s levels by the end of July
2020.
The airline reports that the key to the
changing situation is to be dynamic and
adaptable, and its first step in the
recovery process was to reset the network
for the rest of the year. By doing so it was
possible to set a new baseline, and to
adjust up or down according to passenger
numbers and then evaluate for a future
period.
According to Southwest Airlines chief
commercial officer, Andrew Watterson:
“Now the normal course of business is to
evaluate load factors and make decisions
each week. You cannot get paralysed
about ‘what if?’, and you have to manage
what is in front of you each week,
observe and then make adjustments.”
In the US lockdown restrictions vary
between states. When states impose a
stay-at-home order, bookings for that
region decline, although Southwest has
not noticed a fall in demand for
destinations that report an increase in
Covid-19 cases.
Southwest reset its network, with the
focus of placing capacity in cities that had
a combination of leisure and business
demand. At that time, the airline was
unsure about the effect on business
demand, so it sought to open networks
that historically profited from a strong
mix of business and leisure travellers to
mitigate against a potential shortfall in
business demand.
“Denver, Phoenix, Las Vegas and
Nashville are all cities that fit this model,
so we aligned the capacity to cities like
this, and away from New York and San
Francisco, and plan to do so throughout
the year,” explains Watterson.
Having a comprehensive inventory of
leisure demand history helped Southwest
facilitate an arbitrary assumption to
reduce demand for this sector by 50%
against pre-Covid levels. Using this
assumption as a starting point, each day
capacity numbers were analysed so that
adjustments to capacity, schedules and
pricing could be made.
“When we reworked the network and
the schedule, we had June capacity scaled
down to 50% of its pre-Covid levels, and
ISSUE NO. 130 • JUNE/JULY 2020
by July this number had improved to
40%,” explains Watterson. “When we
transitioned from late May to early June,
it was interesting to see how quickly
demand returned to destinations that had
eased restrictions. As a result, we had to
add back and short order thousands of
flights to accommodate the uptake.”
Once the airline has a couple of weeks
of booking data available, it can start
forecasting on where demand will be,
with a strong emphasis on the
categorisation between business and
leisure bookings.
The business
Since the pandemic, business demand
has reduced dramatically. Most business
travellers during this time have comprised
employees for essential services such as
government, transportation, and health
care. Other business travellers are
typically employed by smaller
organisations that do not have formal
travel programmes, because many large
corporations are still forbidding their
employees to travel while the number of
Covid-19 cases remains high.
“We have looked at our corporate
clients and their travel policies, and we
believe that a quarter of them will be re-
evaluating their position on corporate
travel around the third quarter of this
year,” says Watterson. “However, because
of the pending global economic
downturn, we do not know how severely
corporate travel budgets will be affected.”
Historically, September and October
are excellent months for business traveller
bookings, and forecasters are expecting
to have a clearer picture about the status
23 I AIRLINE REVENUES
of business travel nearer that time.
The lack of business travel demand is
affecting fares because business travellers
pay a higher fare for premium flight times
with enhanced flexible booking options.
Therefore, the ‘Monday and Friday’
flights full of business travellers no longer
exist, and have now transformed into a
predominantly leisure traveller operation.
This means there are lower fares available
at peak times.
However, if there are one or two
flights just for essential service, then fares
are going to be high. Once there is an
opening up and an increase in flight
activity then prices will be good.
Ultimately when capacity is full, and if
operators still have the middle seats
blocked, fares will increase, but demand
is far from that level now.
Domestic US travel has become a low
fare environment, and there are many
bargains to be had for passengers that
feel comfortable travelling.
The middle seat
To return to prosperity Southwest
Airlines and revenue managers agree that
most passengers must be comfortable
flying. To understand passenger concerns
better, airlines are surveying passengers
regularly and asking them questions
about air travel during the pandemic.
According to surveys completed by
Southwest Airlines, its passengers’ top
three concerns are clean surfaces, cabin
air quality and masks. To help drive
booking demand and to further address
passenger concerns, Southwest Airlines
has adjusted its passenger load factors by
one-third by blocking off the middle seat.
AIRCRAFT COMMERCE
24 I AIRLINE REVENUES
Blocking the middle seat will increase
social distancing between passengers, and
is therefore an added stimulus for
passengers that are concerned about
crowded cabins and personal space to
book with the airline.
“While we are in the recovery phase,
it is reasonable to block middle seats to
get people more comfortable flying, drive
demand and help build the network. In
the interim it makes more sense for the
customer and the airlines,” says
Watterson. “We have said that we are
going to have the middle seat blocked
until the end of October, and after that
we will re-evaluate the situation.”
Ultimately, to get back to prosperity
airlines cannot have the middle seats
blocked. IATA has not mandated
blocking middle seats, based on the loss
of revenue that will incurred.
“Now in some cases we are
preventing boarding passes from being
issued, because this will exceed the
capacity levels that make blocking the
middle seat possible. Therefore in the
Short-term their is sufficient demand
where blocking the middle seats does turn
passengers away.” says Watterson.
While blocking the middle seat is
expensive for the airline, it is possible that
without doing it load factors would be
lower because many passengers would
not have the confidence to fly. (See Fright
or flight: aircraft systems to encourage
passengers post-Covid-19, page 27).
AIRCRAFT COMMERCE
airBaltic
Traditionally the LCC basic fare had
little or no provision to change the time
and date of travel. The pandemic has
created many uncertainties relating to
travel, and passengers are unlikely to
make a booking if there is a chance that
their circumstances change, and they
must pay the operator to reschedule.
To increase consumer confidence and
leverage bookings, many LCCs are now
offering a degree of flexibility against all
their fare options. In addition, airBaltic
does not put flights in the system when it
is in doubt that the flight will occur. This
means airBaltic gets more certainty that
the flights that passengers are booking
will take place.
According to airBaltic chief executive
officer Martin Gauss: “In the beginning
this was difficult. We restarted with four
aircraft, and we are now adding one
aircraft per week. We can change our
schedule on a weekly basis, and this gives
us and our passengers more certainty.
This is reflected by an increasing number
of daily bookings.”
Before the pandemic, airBaltic
experienced a no-show rate of 4% for
passengers that did not turn up for a
flight. Before it suspended its services on
17 March, on some routes airBaltic had a
60% no-show rate. Now it has stabilised
at 8%, which is more passengers than the
airline forecasters thought, despite
The nature of the global pandemic means that
passenger forecasting is difficult. Because 80%
of its bookings are for flights within two months,
airBaltic has increased the level of monitoring of
bookings and can re-opening routes within four
days it the demand is there.
travellers being able to reschedule.
Martin Gauss believes it will be some
time before this number returns to its pre-
pandemic figure of 4%.
According to airBaltic, 80% of its
bookings are for flights within the next
two months This has a lot to do with the
uncertainty, especially in the business
sector, because many companies have
restricted corporate travel.
Leisure
On the leisure side, there is much
focus on the summer of 2021. Many
families are not planning an overseas
holiday in 2020, but there is speculation
that these travellers may be planning a
more extensive vacation in 2021.
Forecasts are not yet reliable, so
airBaltic is monitoring capacity levels on
a weekly basis and releasing new flights
to match the demand.
“We are careful and add capacity
week over week. For example, we have
started with daily flights from all three
Baltic states to London, and we intend to
increase the frequency to double-daily
flights. However, if we do not see sales
coming back then we will keep single
daily flights. Where we had routes of up
to four flights per day, we are starting
with one and incrementally adding the
second and third only if the demand is
there,” says Gauss.
The dynamic situation is new for
airBaltic’s revenue managers and network
planners because the airline is quickly
transposing capacity to where the
demand is. Sometimes airBaltic is opening
closed destinations within four days of
deciding to restart that route.
For such flights, the airline is
accepting exceptionally low load factors,
because initially these flights will not fill
up, but once the route is open it is
possible to start forecasting the future
demand. If a route is developing more
strongly than others then the plans for its
growth will be moved forward.
“If we are planning to open a route in
August, and the forward bookings for
August, September and October are so
good, we will open the route now. This is
how we take a decision every week on all
of our routes,” explains Gauss.
Some historical data is now irrelevant,
but what is not irrelevant is the data
ISSUE NO. 130 • JUNE/JULY 2020

It is expected that AI and machine learning will
play a big part in the future of revenue
management. Throughout the restart airlines
have manually analysed data on a daily basis. As
the dynamics of passenger booking behaviour
and demand have now changed, revenue
management systems need to be flexible and
not be solely reliant on historical data.
relating to traffic flows. A route that has
traditionally been strong, such as
London, will still equate to a lot of
passenger demand. When a country
opens it is possible to use past data
relating to that route, and start with a
capacity reduction of 60%.
Once a route opens it is possible to
forecast within days by using the
methodology that was used before the
pandemic. “We use RM systems and
competitive pricing tools that illustrate
competitors’ fares. There has been an
increased reliance on manual analysis for
the RM team, although its IT systems still
produce many valuable insights,” adds
Gauss.
When airBaltic suspended operations,
the total number of bookings was fewer
than 100 per day. Since it restarted its
operations, this has risen to more than
10,000 bookings per day. This vastly
increases the number of data points the
airline can analyse.
Social media
AirBaltic has not stopped posting on
its social media sites throughout the
crisis, and it has managed to increase its
number of followers. The airline’s
successful social media campaigns have
also increased the number of useful data
points it has at its disposal.
“From the number of reactions and
comments we see on Facebook and
Instagram after we post a picture of a
destination that is opening, we can
immediately tell what is going to happen
to that route,” says Gauss. “By analysing
the social media response, we know
whether to open a route now or later,
because there is a direct correlation
between social media interactions and
bookings.”
The airline reports it has one of the
highest proportional engagement ratios
on social media compared to its size in
the world. Social media engagement
provides many insights to what the
passenger wants from the airline. Use of
interactive games allows airBaltic to
recognise where its passengers would like
to travel to next.
Dedicated offers on social media
immediately create hundreds and
thousands of interactions, and this can
signify what will happen if the route was
put into the system for bookings.
ISSUE NO. 130 • JUNE/JULY 2020
Lufthansa Systems
Changing booking behaviour leads to
flexible RM solutions.
All airlines know that RM is
extremely important, but it is not always
clear how airlines should price their
flights during the restart phase and going
forward. Fundamentally the ticket is the
product that airlines are selling, meaning
RM has always been a critical part of its
commercial strategy.
Throughout the restart, airlines have
been manually analysing data on a day-
to-day basis for each of their routes, and
the traditional methods of RM do not
apply. If there has been a dip in demand
in the past, then it is the revenue
manager’s prerogative to adjust fare
values in an effort to stimulate it.
As travellers are now frequently
changing their bookings, RM solutions
need to become more flexible and
intuitive to booking behaviour.
One reason it has been extremely
difficult to forecast passenger demand
during the restart and recovery period is
because RM systems routinely rely on
historical data. To optimise RM an airline
now needs a system that can aggregate a
diversified assortment of data from an
immense number of sources. In addition,
it needs to quantify this information
before it is of any use to revenue
managers in their decision-making.
Data
According to Lufthansa Systems
management consultant, James Liu: “We
have developed an IT solution with the
revenue manager and analyst in mind.
25 I AIRLINE REVENUES
The solution benefits from many
contemporary data sources to make flight
forecasts as accurate as possible, enabling
revenue mangers to adjust their booking
parameters to optimise flight
performance.”
The system has a simulation
environment to make it possible for
revenue managers to visualise any
permutational change and its outcome.
Therefore, revenue managers can trial
different scenarios and see how each
change will influence the booking curve.
It is then possible to simulate variations
within the market, and to visualise their
impact.
If the airline has a need to aggregate
data from a specific source, Lufthansa
Systems can configure the solution to the
airline’s requirements. Moreover, the
solution is looking at the potential of
interfacing with a number of popular
social media platforms.
“Many airlines have built up a
sizeable social media team, and social
media interaction is becoming a more
effective means to communicate with its
customers,” explains Liu. “Going
forward it is expected that social media
will play a much bigger role in
forecasting and understanding the
booking behaviours of passengers.”
As it is now almost impossible to rely
on past performance to predict future
performance, it is imperative for airlines
to quantify contemporary data and
indicators to forecast demand on a route-
by-route basis. During the restart it is
essential that this data incorporates
boarder closures and flight restrictions
that include a mix of additional sources
to help predict passenger demand.
AIRCRAFT COMMERCE
26 I AIRLINE REVENUES
“Borders will be open for destination
flights one day, meaning the airline can
re-start the flights to that region. Yet the
next day there is the potential for the
same borders to be closed because of an
increase in cases of Covid-19,” says
Lufthansa Systems, head of revenue
management innovations, Kurt Schroeder.
For successful RM it is imperative for
the airline to be able to access reliable
daily information, thereby allowing it to
plan its activities better and more
efficiently.
Scoot
According to Scoot chief commercial
officer, Calvin Chan: “The bookings we
have seen so far are likely to be mainly
essential travel, such as for repatriation.
Being flexible and agile is how Scoot has
been able to effectively compete as a
budget carrier.”
The operator is using social media
platforms primarily to engage and
communicate with its customers, from
customer servicing and sharing relevant
Scoot updates, to brand-building and
creation of content that inspire travel.
“When there are special destination
promotions, we use our platforms to
drive interest and conversions through
content and targeting,” explains Chan.
“When Coved hit, we had to review our
brand efforts. We started by focusing on
responding to the increasing number of
flight refund requests and customer
service queries that we were receiving due
to the pandemic.”
AIRCRAFT COMMERCE
Brand building
Scoot has now shifted from creating
content for travel or brand-building, to
developing genuine, simple and
substantive content to address the needs
of its customers in a clear innovative way.
For example, the airline launched a
campaign to help people understand the
additional precautionary safety measures
that Scoot has implemented to safeguard
their wellbeing against Covid-19. This
was aimed at restoring passenger
confidence about travelling by air when
entry restrictions have lifted.
Scoot also employs regular social
listening, along with other metrics, such
as online searches to our site, to gauge
consumer sentiments and their propensity
to travel. “These insights serve to indicate
how ready consumers are in terms of
flying, and when we should kickstart
different parts of our media strategies,”
explains Chan.
Scoot will still access data from recent
flights. It will make its projections based
on an assessment of the current market
and regulatory conditions, competitor
movements, consumer readiness. “We
keep an eye on a wide variety of data to
drive decisions surrounding pricing or
route resumption. The original premise
still remains, where fares are a function of
demand and supply,” says Chan.
AI & machine learning
Machine learning and AI have started
to play a big part in principle within RM,
Scoot has been using many contemporary data
sources such as social media data to gauge
passenger demand. The airline has created
social media content to communicate with its
customers to help increase confidence in air
travel and to reduce the number of booking
cancellations.
enabling optimisation tools to exist in the
market. It is not yet clear if they will
become the primary tool.
“I believe this is the intention, but I
feel that what has happened with
Coronavirus will mean pricing managers
will need to monitor the situation more
than usual, at least in the short term,”
says Liu. “If they do not, it will be
difficult to know which route is going to
come back, and how it will perform. This
is because machine learning is based on
human intelligence and humans must
understand the situation to allow them to
instruct the AI what it should do.”
Border restrictions and flight
cancellations mean there is a lot of travel
anxiety, so passengers will wait until the
last possible moment to book or cancel
their tickets. In the short term, revenue
managers may need to increase the
number of manual interventions and
monitor booking levels more closely.
Therefore, airlines need to observe
and adjust fares for flights that sell a
number of seats over a period of an hour,
against selling a higher number of seats
over a protracted period of time. These
circumstances have to be monitored
closely, because a flight could easily
depart full of passengers paying
extremely low fares, or it could depart at
10% load factor with only very high-
fares available.
Fares are going to have to stay low
until almost departure time, and it is
almost impossible to know what the
demand for the last three days is going to
look like, and when it could increase.
Summary
Now is the right time to review past
RM practices and procedures, because
those that were successful in the past may
not work in the post-pandemic era. Now
is the time for airlines to rethink how
they do RM, because many operators
have merely conformed to past protocols.
Coronavirus has forced a huge change
in the aviation industry and the airlines
first need to figure out what works in the
short term. Operators who do well will
be those that secure the rewards of better
revenue results.
To download more than 1,200
articles like this, visit:
www.aircraft-commerce.com
ISSUE NO. 130 • JUNE/JULY 2020

Providing solutions to increase passenger confidence and mitigate against
the transmission of Covid-19: because of the Coronavirus many people are
reluctant to fly. The industry must implement new measures to reassure
travellers and keep them safe.
Fright or Flight: aircraft
systems to encourage
passengers post Covid-19
T
he International Air Transport
Association (IATA) recently
surveyed 4,700 air travellers to
understand their main concerns
and expectations about air travel and
Covid-19. Of those surveyed, 97% were
concerned about contracting the virus, and
58% have avoided air travel as a
precaution.
The top concerns about contracting the
virus while travelling are queueing at
check-in desks, security and boarding the
aircraft. The biggest concerns on board the
aircraft are sitting next to an infected
passenger, using the restroom, and the air
quality in the aircraft cabin.
The industry as a whole will have to
think seriously about passenger concerns
and act swiftly to address them if it is to
increase confidence in air travel.
Virus transmission
Airborne transmission of Covid-19 is
one of the main things that virologists are
concerned about. According to the Center
for Disease Control and Prevention (CDC),
it is quite difficult to transmit the virus
indirectly, and transmission is caused by
larger respiratory droplets.
Airborne transmission or direct
transmission is when a person exhales a
sufficient viral load directly towards
another person, who then inhales it into
the lungs. Human exhalation consists of
water droplets that have a certain weight
to them. Some of these droplets are heavier
than air, while some are lighter.
Essentially an airborne virus has a high
viral load presence in droplets of water
smaller than five microns. These float in
the air, while larger droplets will travel
about three to six feet before they land.
The theory is that the larger water
vapour droplets can carry a higher viral
load, increasing the likelihood of
transferring Covid-19.
ISSUE NO. 130 • JUNE/JULY 2020
Wearing a mask will help to lower the
risk of transmitting airborne viruses and
maintaining distances more than two
metres (six feet) apart will significantly
reduce the likelihood of the direct
transmission of the larger droplets that can
contain a high viral load.
Airflow
Airflow affects the range of these water
vapour droplets, meaning the two-metre
social distancing ruling only applies if the
effects of airflow are not considered.
Lateral airflow is an enabler that can make
the virus droplets travel further, and
vertical airflow drastically less.
It has been reported that in China one
passenger on a bus managed to infect
passengers seated 4.5 metres (15 feet) away
because of the lateral airflow induced by
open windows on the bus.
Design company Teague has studied
airflow, and its potential to transmit viruses
within the aircraft cabin. There are
typically four points where the air enters
the cabin. From the ceiling this air
converges, travels towards the aisle, and is
then pulled back towards the cabin sides,
before being expelled though grilles in the
floor.
Studies have found that there is a small
amount of dynamic airflow between the
heads of passengers that could increase the
risk of viral transfer, but the size of this risk
is unclear.
AirShield
To help mitigate this risk, IATA and
aircraft manufacturers advise passengers to
open the air conditioning nozzles, called
gaspers, on overhead passenger service
units (PSUs). This turns any lateral airflow
into vertical airflow downwards towards
the passenger and floor.
Having a gasper blowing in passengers’
27 I AIRLINE & AIRCRAFT OPERATIONS
faces for a prolonged period is unpleasant,
and it will be difficult to enforce a rule that
all cabin gaspers to be open. A gasper
could be positioned towards another
passenger and not directly downwards.
To this end, Teague has optimised the
way that air is to come out of the gaspers
and to protect passengers in the maximum
way possible without irritating them.
Called AirShield, the system uses the
existing cabin infrastructure along with
high-efficiency particulate air (HEPA)
filters to create a safer environment for
passengers and crew.
The solution is a simple kit that will fit
over the gaspers to direct the airflow
vertically to ensure that expelled breath is
diverted downwards, and away from
neighbouring passengers.
According to Teague senior director,
Anthony Harcup: “AirShield will produce
an invisible cloak of air coming down from
the ceiling. The airflow will articulate at
face level, and then start to diffuse away at
around chest level. This will reduce the rate
of viral transmission and make passengers
more comfortable so that their knees or
feet are not uncomfortably cold.”
Computational fluid dynamics (CFD) is
used to model what a cough, breath or
sneeze in the cabin will look like, including
the trajectory of exhaled water vapour
droplets, and what happens when these are
released into that environment.
AirShield will require two levels of
certification. The first is the product
certification, and the second is the
configuration certification for each aircraft
type. Aircraft have different airflow rates
and overhead PSU rails, so there may be
four to five different designs, each slightly
customised to fit individual cabin
configurations.
“The important thing about AirShield
is that by clipping it to the overhead PSU
rail, one product will facilitate a triple row
of seats. Some other Covid-19 solutions
AIRCRAFT COMMERCE
28 I AIRLINE & AIRCRAFT OPERATIONS
such as partition screens require one
product per seat. Unlike these solutions
AirShield does not require any seat
recertification,” explains Harcup.
Fitting will be slightly different between
aircraft, depending on what mounting
provisions are available and the provisions
of each PSU rail. Installation can be
completed during an overnight stop, and it
will simply be a case of setting the gaspers
to ‘full’, and then placing the AirShield
over them.
The solution does not require
maintenance, but periodic cleaning will be
needed to remove accumulated residue
caused by the continuous airflow within
the module.
According to Harcup the system will
set a new standard in cabin airflow that
will help ensure the wellbeing of all
passengers, especially the young, elderly
and those with pre-existing health
conditions.
It is believed that AirShield will have a
post-Covid-19 value because it will be
effective against the transmission of other
viruses like common colds and flu.
Furthermore, there is a real possibility that
another pandemic might surface, meaning
airlines will need effective cabin solutions
that can be immediately implemented.
CTT Systems
Lack of air moisture content and its
effect on the mucous membrane (or
mucosa) is one of the main reasons why
many passengers become susceptible to
viruses during and after a long flight. While
the air that enters an aircraft’s cabin at
altitude is exceptionally clean, it is also
extremely dry.
Most aircraft air recirculation systems
use HEPA filters to capture 99.97% of
AIRCRAFT COMMERCE
airborne microbes and viruses, and the
cabin air is recycled every two to four
minutes. Fresh air enters the aircraft from
its engine compressors to replenish the air
that is expelled, and the filters purify the
air recirculated inside the cabin.
The high air recirculation rate
combined with a HEPA filter means the air
in the cabin is clean. Because of the high
altitudes airliners fly, the relative air
humidity inside the cabin is low, especially
on long haul flights. This is because cold
air has relatively low moisture content, and
the subsequent warming of the cold air
lowers its relative humidity further.
When the internal relative humidity
levels in a cabin are less than 20%, this
causes discomfort such as sore eyes, dry
skin, including dehydration of the mucosa.
The mucous membrane lines various
cavities in the body and covers the surface
of internal organs. Dehydration reduces the
effectiveness of the oral mucosa, which
compromises its effectiveness against
pathogenic viral infections.
According to Peter Landquist, vice
president sales and marketing, CTT
Systems AB: “The mucous membrane is a
natural protection system that transports
viruses and bacteria from the mouth into
the stomach, where they are then killed by
natural acids. This prevents them from
reaching the body’s respiratory system.”
According to studies the mucous
membrane’s effectiveness is significantly
reduced at humidity levels of 10% and
below. Exposure to extremely dry
environments slows down the body’s viral
protection system making it less effective.
The main source of humidity within
the cabin environment is the number of
passengers and the recirculation rate in the
air within it. The moisture content within a
confined dry space is improved by the
Lateral airflow can increase viral transmission
whilst vertical airflow will reduce it. The AirShield
solution uses existing cabin architecture to
optimise the vertical airflow rate within the cabin
without making passengers uncomfortable.
exhalation of breath, so the more
passengers in the cabin, the higher the
moisture content in the air.
The humidity levels within an
economy-class cabin are 15-16%. Lower
passenger densification in the business-class
area means its occupants will experience
typical humidity levels of 7-10%. It is not
uncommon for levels in the first-class cabin
to be as low as 6-7%, which is lower than
any place on earth.
“We do believe that our system can
help, and it will reduce the risk of catching
a viral infection by creating humidity levels
in the cabin that are more like those on the
ground,” explains Landquist.
By installing a humidification system, it
is possible to increase moisture content
levels in the aircraft’s cabin to lower
passenger dehydration. This will maintain
the mucous membrane’s ability to function
at its optimal level, reducing the possibility
of passengers catching an infection.
The humidification system is better
suited for long-haul aircraft, since relative
humidity levels are typically lower on
longer flights than short-haul operations.
“We believe that increasing humidity
will help lower the risk of contracting a
virus. On a long-distance flight your
mucous membrane will completely dry out,
which increases the risk of catching an
infection on board,” says Landquist.
Furthermore, it has been reported that
once the mucous membrane has been
dehydrated it can take 48 hours before it
regains its optimal level of effectiveness.
This increases passengers’ risk, especially as
they go through the airport terminal
building, typically coming into close
contact with many other travellers from
across the world.
“Business travellers want assurances
that it is safe to travel. Those travelling on
a daily weekly or even weekly basis would
invariably have a dehydrated mucous
membrane. It is important for them and
their company that they are healthy,
without the risk of catching a virus,” says
Landquist.
During a short-haul flight of three
hours the mucous membrane will not
dehydrate as much, so it is difficult to
justify humidifiers for these operations.
The relative humidity level within the cabin
for an aircraft on the ground is 40-60%.
Once the aircraft takes off, after one hour
moisture content falls to about 20%, and
decreases as the flight progresses. Once the
ISSUE NO. 130 • JUNE/JULY 2020

There are a number of travellers who want
increased passenger screening levels at
airports. The TAMAR solutions can monitor
travellers’ vital signs from two meters distance
in seconds to detect for possible symptoms of
Covid-19.
aircraft descends, humidity levels in the
cabin will increase again.
It is possible to install CTT
humidification solutions as part of a service
bulletin (SB). They are typically installed in
first- and business-class cabins because of
the inherently lower humidity in them. It is
possible to retrofit CTT humidifiers during
the aircraft’s C Check, or to choose the
system as an option from Airbus and
Boeing.
TAMAR
When given a choice of three measures
for creating a feeling of safety, 37% of
people surveyed chose ‘the screening of all
passengers for Coronavirus at departure’,
while 26% selected ‘temperature testing of
all passengers at departure’.
It has been reported that London
Heathrow airport could start offering a
£140 Coronavirus test to enable travellers
to avoid statutory quarantine on arrival in
the UK. The cost is a main reason why
mass testing of passengers for Covid-19 at
airports is impractical.
TAMAR is a portable solution that can
check passenger temperature and other
Covid-19 symptoms to identify possible
carriers of the virus.
TAMAR was developed to meet the
need for reading vital signs from a person
without touching them. Many people,
including medical staff in Israel’s hospitals,
were catching Covid-19. To help minimise
the spread, ELTA, a division of Israel
Aerospace Industries (IAI), developed a
lightweight and easy-to-use solution that
helps identify carriers of the virus.
The TAMAR solution can be used by
airlines and airports to reduce the spread of
pathogens by taking measurements of the
body and its vital functions to assess the
general physical health of a person to see if
they have Covid-19. Undergoing
temperature checks at departure and
arrival is a popular choice for travellers.
Many organisations are using thermal
cameras to read a person’s temperature to
determine if they have a fever. Many cases
of Covid-19, SARs and MERs among
others, affect the lungs and the ability to
breathe. A carrier of Covid-19 may not
have a temperature, but could have
breathing difficulties.
TAMAR uses a radar system and
unique software combined with a thermal
ISSUE NO. 130• JUNE/JULY 2020
camera to scan a person from one to two
meters away. It can be used at the entrance
to an airport or aircraft and will produce
results for travellers’ temperature,
respiratory rate, and heartbeat in seconds.
According to ELTA regional director
marketing and sales, Ilan Bublil: “The
revolution is that we can read both a
person’s heart rate and respiratory rate
from a distance. Typically to check for
these vital signs in the past a medical
specialist would attach various pieces of
equipment to a person, and now of course
they must put on personal protective
equipment (PPE) first. TAMAR simply
requires a person to be in front of it for a
few seconds.”
The system is compact, and its
radiation levels are lower than those of a
mobile phone, so the whole system can be
placed in a kiosk or an airport booth. As
the system is portable it can be set up
within a matter of minutes, and it can also
be interfaced with other airport systems.
Data protection
The system will not require personal
information to function, nor will it save it.
It is possible to connect the system to a
cloud-based server, but this will not save
any personal information so it will not
trigger any privacy issues.
Parameters are set within TAMAR to
enable it to make the comparison between
vital signs that are good and bad. When a
person has been scanned by TAMAR, the
operator is alerted by either a green or red
notification to inform them whether the
passenger is healthy enough to enter the
terminal, departure lounge and aircraft.
“The airport is a non-medical
environment, so TAMAR operators are not
doctors, and the system does not need to
29 I AIRLINE & AIRCRAFT OPERATIONS
go into detailed specifics relating to a
traveller’s health. TAMAR simply displays
a ‘pass’ or ‘fail’ in green or red, making it
simple to use,” says Bublil.
It is widely believed that carriers of the
Coronavirus will usually have one or more
of a temperature, cough and shortness of
breath. TAMAR is designed to highlight
irregularities relating to a traveller’s health.
Once an anomaly is detected, more Covid-
19-centric testing can be completed to
determine if they are safe to travel.
“If you want to take these readings, the
only systems available are typically medical
devices. This means you would have to
stop the person and connect them to a
machine, which be inefficient as well as
intrusive,” says Bublil. “For example, it is
customary for the patient to remove their
shirt to enable a doctor to record their
heartbeat. The TAMAR system is able to
record this information remotely.”
Before the 9/11 terrorist attacks it was
hard to imagine that passengers would be
asked to remove their shoes to satisfy
security concerns, but it is now expected
that increased emphasis on health
screening passengers before boarding a
flight will be perceived as a normal part of
post Covid-19 travel.
Furthermore, the TAMAR solution will
reassure passengers that the airline and
airport are doing everything possible to
ensure that travelling by air is as safe as it
possibly can be. If passengers feel that the
technology is being used to ensure their
safety, then it is believed they will not mind
the extra seconds taken to be screened.
Unobtrusive health screening will soon be
perceived as a normal airline security
measure that adheres to, and upholds, the
high standards expected of its passengers.
“TAMAR is an additional safety net
and I think that passengers will get used to
AIRCRAFT COMMERCE
30 I AIRLINE & AIRCRAFT OPERATIONS
it, as they did to the safety measures
introduced after 9/11,” says Bublil. “Many
ELTA and IAI systems use artificial
intelligence (AI), and TAMAR uses
advanced algorithms to get the most
reliable information as quickly as
possible.”
Other measures that score highly in
traveller surveys during the Covid-era are
having hand sanitiser readily available and
better hygienic solutions in restrooms.
HAECO
Coronavirus is accelerating a culture of
no touching, as people are becoming
increasingly cautious about handling
everyday items. The longer the epidemic
persists, the higher the anxiety levels and
the association between touch and an
underlying sense of negativity.
When you visit the restroom in the
airport, the toilet usually has a sensor to
make it flush touch-free. When you wash
your hands at the sink, technology makes it
possible for you to wave your hands
beneath the soap dispenser and for it to
dispense the soap. Even the paper towel
dispensers can be automatic.
In contrast, when you visit the lavatory
on board a typical aircraft, you must
physically press, pull and touch everything
for it to function. If many touchless devices
can be installed in an airport terminal, then
why not on board an aircraft?
According to HAECO Cabin Solutions,
vice president marketing and strategy,
David Kelly: “We have found that it is
simple to do. A foot-flush mechanism
already exists and is flying, plus we have
developed an automatic hands-free trash
bin. We noticed that there is not a problem
if you use the restroom early on in the
flight, but later, especially on a long-haul
AIRCRAFT COMMERCE
flight, the trash bin will be overflowing
with tissue. You would not have wanted to
touch it even before the pandemic.”
HAECO has developed a trash bin
solution that incorporates a small sensor. If
you wave your hand over it then it will
open. HAECO’s trash bin solution requires
few electrical modifications so it is simple
to install.
The system has been developed in
accordance with Federal Aviation
Adminstration (FAA) / European Union
Aviation Safety Agency (EASA)
regulations. Specific national aviation
authorities’ requirements can be addressed
on a project basis.
The automatic wastebasket kit uses the
existing trash bin and will require a small
amount of wiring. It is possible that line
mechanics will be able to install the kit
during an overnight maintenance check. If
the pre-existing wastebasket has a fault,
such as a broken spring, then the system
will have to be overhauled before the kit
can be installed.
Wiring the automatic wastebasket is
simple because of the easy access to
existing wiring looms used for lavatory
lights and other low voltage applications.
The toilet foot-flush links to the
existing push button switch, so only minor
wiring updates are needed that do not
impact the lavatory’s power requirements.
As the toilets already have a push-button
flush, the foot-flush easy to install.
“If there is a failure on foot-flush, the
normal button will still work. This also
applies to the wastebasket, because it is still
operable by manually pressing the spring-
loaded door,” explains Kelly. “As these
systems are new, some passengers may
instinctively operate them the old way.
They can still put their rubbish into the
automatic wastebasket without breaking
Because of Covid-19 people have become
increasing anxious to touch things. People are
now expecting more and more everyday items to
become touch-free and operators are expected
to implement more of these solutions on board
the aircraft.
the mechanism.”
HAECO has developed a touchless
hand-sanitiser station that can be used by
passengers and crew to increase on-board
hygiene.
Since much of the aircraft’s cabin
architecture does not have any wires
running through it, HAECO decided to
adopt a wire-free battery-operated solution
that can be mounted to most cabin
surfaces. The high-capacity battery will
remain charged for many thousands of
flight hours, so it only needs to be
recharged once a year..
“We wanted to produce a hand-
sanitiser solution that could be used in
both the cabin and the lavatory,” says
Kelly. “The only servicing the dispenser
requires is that sufficient levels of sanitiser
are maintained.”
HAECO’s touchless wastebasket, toilet
foot-flush and hand sanitiser solutions are
simple products that address a complicated
situation. They are both cost-effective and
easily implemented and will address
passengers’ anxieties about touching
everyday amenities in the cabin.
Furthermore, as touchless technology
becomes increasingly common in everyday
life, it is reasonable for passengers to
expect it on board an aircraft.
In addition, HAECO has developed a
touchless lavatory door solution. By
waving your hand on a door sensor, it is
possible to lock, unlock and open the
lavatory door. Once the system is activated,
actuators will operate the lock and door
mechanism, so that the passenger does not
need to touch it.
Social distancing
The Eclipse Premium seating solution
developed by HAECO facilitates increased
social distance within a twin-aisle premium
economy and single-aisle first-class cabin.
The seating arrangement’s staggered design
can increase both social distancing and the
number of passengers in a cabin.
The flexible cabin layout can
accommodate up to 25% more passengers
against typical cabin configurations in the
same area for several aircraft types and
designed for premium economy.
“HAECO announced a launch
customer for the solution last year, so this
is already something that exists and is not a
wild idea that has been thrown together at
the last minute,” says Kelly. “It is getting a
lot more interest now, because the solution
ISSUE NO. 130 • JUNE/JULY 2020
32 I AIRLINE & AIRCRAFT OPERATIONS
inherently promotes social distancing
thanks to the way that we have designed
the seats.”
Premium economy on a 787 is typically
seven-abreast with a 2-3-2 configuration.
Angling the seats makes it possible for the
same cabin to have a 2-4-2 layout and so
become eight-abreast.
Increasing densification while spacing
passengers out is achieved by the offset
spacing of the seats. Passengers are not
sitting in a straight row or line, which
increases the passenger count as well as the
distancing between each other. As the seats
are installed with a fixed outer shell it is
possible to get in and out of your seat
without disturbing others. In addition, an
adjacent passenger when reclining would
not be encroaching personal space at any
point during the flight.
Therefore, based on Eclipse’s unique
geometry it is possible to have the same
number of rows forward-aft orientation,
and then increase the number of people
left-right, thereby increasing the passenger
count.
Aircraft disinfection
According to the IATA Medical
Advisory Group, more stringent cleaning
and disinfection procedures are likely to
form part of the measures required in a
restart process. The benefits to the airline
industry are two-fold. Improved cleaning
procedures will reduce the rate of viral
transmission, and improve passengers’
confidence and willingness to fly.
During the early days of the pandemic,
governments around the world were
preparing for the worst. During this
period, the Israeli authorities approached
AIRCRAFT COMMERCE
IAI and asked them to develop technical
initiatives to better handle the spread and
reduce the risks from Covid-19.
One of the solutions that IAI developed
is Ultraviolet (UV) disinfection apparatus.
The system uses UVC radiation which is a
short energetic UV wavelength that is good
at destroying genetic material,
microorganisms, and viral particles. UVC
technology is a proven method for the
sterilisation of hospitals and public spaces.
It is also a failsafe method for sanitising
drinking water because of some parasites’
resistance to chemical disinfectants.
IAI has developed many robotic and
autonomous systems as part of its space
and defence programmes. To enhance its
practicality, IAI is combining UVC
disinfection technology with advanced
robotic systems to increase mobility and to
minimise human exposure to the harmful
ultraviolet rays.
Since its discovery, UVC has been
found to be a destructive energy with the
potential to be harmful to objects within its
environment. Its effectiveness in destroying
bacteria and viruses means that if it is used
incorrectly it can damage aircraft materials
and degrade plastics.
Because of this, IAI first had to verify
the exact quantities of UVC to be used to
create the necessary effect when used
against viruses. They then had to develop
methods to enable the implementation of
UVC technology to suit the confines of an
aircraft.
According to IAI, project business lead
and marketing director, Eyal Katz: “The
system has to deliver a service that benefits
the customer. Our end game is to bring
value to the customer to allow them to
start operations as quickly as possible. We
UVA accounts for approximately 95% of the UV
radiation reaching the Earth’s surface and is
responsible for skin tanning and ageing. UVB
can penetrate skin layers and can cause the
development of skin cancer. UVC radiation kills
viruses and bacteria and can be used to disinfect
airports and aircraft interiors.
have the labs to test and fully understand
the possible effects of UVC. This has
allowed us to harness the technology and
develop a safe system that will not damage
the operator or harm its environment.”
IAI has collaborated with medical
centres and research faculties so that they
have quantifiable academic references that
prove the solution’s effectiveness.
Furthermore, there were significant
improvements to hygiene levels when the
technology was implemented in Tel Aviv’s
medical centres and operating theatres,
among other high-risk areas.
Historically aircraft interiors have been
cleaned regularly, but they are not
necessarily disinfected. The typical low-cost
carrier (LCC) will fly many flight cycles
(FC) per day, and often will not have the
time to disinfect the cabin space
thoroughly during a turnaround. The fact
that many aircraft are infrequently
disinfected is becoming a concern for
travellers, who are now putting a higher
emphasis on operators’ biosecurity
measures.
IAI aims to perform a complete UVC
disinfection that will have the smallest
possible impact on the airline’s routine
operation.
“There may be a slight time penalty to
disinfect the aircraft properly, but the
impact on an aircraft’s turnaround time
will be as small as possible,” says Katz.
The practice of spraying high-grade
disinfectant into the cabin is called
‘fogging’, and it is possible that this may be
a quicker way to eliminate bacteria.
However, once the ‘fogging’ procedure has
been completed, the cabin must be
ventilated for a period before passengers
can enter it.
Disinfecting the cabin with UVC does
not release any toxins in the air, so a
prolonged ventilation period is not needed.
Additionally, many disinfectants tend
to be oxidizers, and the interior of an
aircraft contains many materials that are
susceptible to damage from cleaning
products and disinfectants. Metals used in
the construction of the aircraft may
corrode upon exposure to such products.
Furthermore, the fire-resistant properties of
fabrics and furnishings may be reduced.
Commentators on UVC disinfection
techniques claim that the ultraviolet rays
cannot reach all the many cavities in an
aircraft’s interior. It is therefore expected
that the implementation of other methods
ISSUE NO. 130 • JUNE/JULY 2020

IAI is combining UVC technology with advance
robotic systems developed for its military and
space programmes. Its UVC technology has
been successfully used in Israel medical centres
and operating theatres with quantifiable results.
of disinfection will be required to reach any
inaccessible areas, and that UVC is part of
a holistic solution. Because of this, IAI is
developing related products, procedures
and practices to address the issue.
IAI is looking at UVC technology and
its ability to disinfect various segments
within the airport’s ecosystem. Together
with its partners, IAI has identified areas
that are high risk to passengers and airport
staff. IAI is therefore implementing ways to
enable UV technology to be used to
disinfect other key areas, such as baggage
and security, as well as disinfect passports,
tickets, and many widely used touchpoints.
“We are evaluating the possibilities to
disinfect travel documents, and hand
luggage as part of the checking-in process
at airports,” explains Katz. “Robotic
systems are used to disinfect airport halls,
because it is important to us not to harm
any passengers or personnel. Many other
UVC systems that do not use robotics
could harm the operator.”
The solution is not just designed to deal
with Covid-19. Part of the design is to be
effective against possible future strains of
the virus. “We want our customers to be
ready to fight against the next threat, and
we want to deliver a system that will be
capable of doing this,” says Katz.
According to Katz there is a lot of noise
about UV technology and how to
implement it within the industry. However,
care must be taken to ensure that the UV
solutions is safe to operate.
Screens
Many travellers believe that wearing
masks helps reduce the transmission of
Covid-19. Because of the lack of social
distancing opportunities on board an
aircraft, a multitude of different
partitioning screen options have been
developed.
One of the main benefits of passenger
screens is the effect they have on passenger
confidence. They create a belief that the
airline is thinking seriously about
passengers’ health and wellbeing.
Furthermore a correctly designed partition,
used together with masks, can limit the
lateral and direct spread of airborne
viruses.
According to RAS interiors, business
development manager, Roger Patron: “It is
a simple system. Primarily our concern is
that if everybody on the flight is wearing
ISSUE NO. 130 • JUNE/JULY 2020
masks, then there is the potential for
exhaled air to be expelled out of the side of
the mask. Essentially the screen will stop
this. With people sitting so close to each
other, the system will give people more
comfort that the passenger next to them is
not blasting air out of the side of the mask
on to them.”
RAS Interiors looked at competitor
solutions where the middle seat is blocked
with a screen, although these solutions will
reduce passenger load factors and are likely
to be uneconomical for most airlines.
One of the challenges in developing
any seating and screen solution is to ensure
that passenger safety in an emergency is
not compromised. RAS Interiors has
successfully completed video analysis of
passenger egress to illustrate the minimal
impact its screens have during an aircraft
emergency.
The material used means the screens
can flex and lie flat when they are pushed
against with sufficient force.
“We have been developing the screen
for more than a couple of months, and
have been completing tests in house to
tailor the solution for different sizes of
people. We feel confident that the screens
will satisfy both airline and passenger
requirements. It is simple because it does
not obstruct the egress of passengers,” says
Patron.
It is not permitted to install screens by
the emergency exist or in designated
disabled seating areas. The system can
restrict the arm rest movement, but it does
not make the rest inoperable.
RAS Interiors is developing a full STC
for the screens and subsequent
modifications will be certified under a
minor modification. The system has
generated a lot of interest; RAS Interiors
has initial orders and has started to
33 I AIRLINE & AIRCRAFT OPERATIONS
manufacture the product. The product will
be certified with an EASA STC, and it will
be possible to arrange a bilateral agreement
for airlines registered to other jurisdictions,
such as the US.
Each screen weights 1.13 Kg (2.5lbs)
per position. “We believe it is the simplest
and the most effective screen on the
market,” explains Patron. “The solution
costs less than 100 Euros per screen, so it is
affordable for many airlines.”
Adjustable straps fix the screen in
position, and give it the rigidity needed so
that it will not rotate around the seat and
instead uses its framework as a support.
The straps do not restrict the passenger’s
view of the in-flight entertainment (IFE)
seatback screen, and it has about six inches
of adjustability, so it can be adapted to fit
most seats.
The only routine maintenance required
is the cleaning of the screen and checking
the tautness of the retaining straps.
“The system has been tested to 180 Kg
(400lbs) of pulling pressure. When the
system is first fitted, it is then tie-wrapped
to prevent any tampering,” says Patron
“We designed the system to be as simple as
possible, so it does not need tools to fit the
system. Furthermore, it will take less than
one minute per pair to install, meaning
screens could be fitted throughout an entire
aircraft during an overnight stop.”
RAS Interiors is investigating the use of
antibacterial coatings for the screens to
save time during the cleaning process. It is
expected that screens coated by nano
technology materials will reduce their
propensity to be scratched by passengers as
well as increase hygiene levels.
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AIRCRAFT COMMERCE
34 I MAINTENANCE & ENGINEERING
The A220 has already proven to have superior fuel burn performance over
competitors. Analysis of the A220’s maintenance planning document,
maintenance tasks and base check programme reveals that it has low
airframe maintenance requirements with easy access.
A220 MPD analysis &
base maintenance
requirements
A
irbus acquired the A220,
previously known as the
CSeries, from Bombardier
Aerospace in 2017. The A220 is
known to have a fuel burn advantage over
similar-sized aircraft. This advantage is as
high as a 22-25% lower fuel burn per
available seat-mile compared to the
A319ceo and 737-700, and 14-15% lower
than the 737-800 (See CS300 fuel burn
and operating performance, Aircraft
Commerce, October/November 2017,
page 27). A second main feature that
affects the A220’s overall economic
performance and appeal, and hence its
position relative to competing aircraft, are
its airframe-related maintenance costs.
The A220 is an all-new aircraft, so it
has a maintenance-efficient design that is
expected to result in lower airframe-related
maintenance costs than earlier generation
types. The first A220s entered service in
late 2016, and so have not completed a full
cycle of base checks. An analysis of the
aircraft’s maintenance planning document
(MPD) gives an indication of the A220’s
airframe maintenance requirements.
Maintenance philosophy
Bombardier designed the CSeries to
have a maintenance programme with the
simplest system for grouping tasks into
checks, minimising both line and base
check requirements, minimising the
number of out-of-phase (OOP) or ‘drop
out’ tasks, and requiring the least amount
of access when performing the heaviest
checks.
In addition, Bombardier produced a
lifecycle operating cost model for
prospective operators and airlines. This
took into account the aircraft’s fuel burn
and crew costs, maintenance requirements
and costs, reliability of components and
systems, time spent out of service for
maintenance, and the list prices of rotable
AIRCRAFT COMMERCE
and repairable components.
Bombardier achieved more than 99%
commonality of rotable and repairable
components between the CS100 and
CS300, now referred to as the A220-100
and A220-300.
A220 in service
The two main A220 variants are the
-100 series, with a nominal seat capacity of
125; and the longer -300 series, with a
nominal seat capacity of 145.
The A220 family has to date gained
firm orders for more than 640 aircraft,
split between 94 for the -100 series, and
548 for the larger -300 series. The A220-
300 was the first to enter service in
December 2016 with airBaltic, and to date
more than 70 aircraft are operational. The
main operators are Korean Air, Air
Canada, Egyptair and SWISS International
Airlines. The -100 series entered service in
June 2016 with SWISS International
Airlines. Delta Airlines is the largest A220-
100 customer, with 40 aircraft in service.
Big fleets in the future will be Delta (45
aircraft), SWISS (30), airBaltic (50), Air
Canada (45), Air France (60) and jetBlue
(70).
The A220-100 and -300 have been
acquired by many customers to replace
older narrowbodies and large regional jets
(RJs). Air Canada, for example, has used
the A220-300 to replace E-190s and older
A320s, Air France is replacing its A318s
and A319s with the A220-300, SWISS will
use the A220 to replace Avro RJs, and
Egyptair will use the -300 series to replace
its E-170s.
The first A220-300 operator airBaltic
has used it mainly to replace its ageing
737-300s on European routes. It has also
used the A220-300’s range to open a long-
haul route to Dubai from Riga.
Typical rates of aircraft utilisation are
similar in many cases to the aircraft types
the A220 has replaced. These are typical
rates for narrowbodies mainly used for
short-haul operations with most missions
at one to two hours.
These rates of utilisation affect how
various groups of maintenance tasks are
organised into airframe checks.
A220 MPD
There have been 45 revisions of the
A220’s MPD. Some tasks have been
removed from the initial revision of the
MPD.
The most recent MPD revision has
almost 1,300 tasks listed, compared to
more than 3,400 tasks in the A320 family’s
MPD (see A320 base check maintenance
inputs, Aircraft Commerce, April/May
2017, page 69).
The A220 has been designed to be
maintenance-friendly, with a relatively
simple maintenance programme. “There
were several main aims to achieve this,”
says Rob Dewar, senior vice president for
customer services & satisfaction and
product policy at Airbus Canada. “The
first of these was to have no routine tasks
with intervals that are on a per flight or
daily basis. This was achieved by having a
tyre pressure indicating system (TPIS) and
a larger oil tank mounted on the engine.
These two features removed the need for
tyre pressure testing and oil level
inspections. The CSeries was the first
aircraft certified without daily tasks in its
maintenance programme.”
The first interval for routine line
maintenance tasks is in fact 72 hours
elapsed time, for a visual tyre check.
A second main aim with the A220’s
maintenance programme was to have a
maximum number of tasks with
harmonised intervals. The initial ‘A’ and
‘C’ or base check intervals are 850 flight
hours (FH) and 8,500FH. There are large
numbers of tasks with multiples of these
ISSUE NO. 130 • JUNE/JULY 2020

The A220’s MPD has relatively few tasks
compared to other aircraft types. The majority of
tasks have intervals that are multiples of base
checks intervals, and so they conveniently align
for ease of check planning.
intervals, such as 1,700FH, 17,000FH,
25,500FH and 34,000FH. The A checks
could be arranged into a cycle of 10 checks
for each C check interval, bringing a larger
number of tasks into phase.
There is also a large number of FC and
calendar tasks with intervals that coincide
with these 8,500FH multiples, given the
typical rates of utilisation.
There are two heavy base checks, the
first at 72 months (MO) and the second at
144MO. These will be at the second base
interval of 17,000FH and the fourth base
check at 34,000FH, given that the rate of
aircraft utilisation will be close to 3,000FH
per year for most operators. The second C
check will require the partial removal of
the aircraft interior, while the fourth C
check will require its complete removal.
A minimum number of OOP tasks are
not in phase with the interval multiples.
“There are two tasks at an interval of
750FH, and these relate to the air turbine
starter, and the oil quantity and quality
validation system,” says Rob Dewar, senior
vice president for customer services &
satisfaction and product policy at Airbus
Canada. “We are trying to extend these to
850FH so that they are in phase with the A
check tasks. We are trying to bring as
many other OOP tasks as possible into
phase with the A and C checks, mainly by
extending the intervals of tasks with
shorter intervals. We also plan to increase
these two main intervals to 1,000FH and
10,000FH to have 13 fewer A checks and
two fewer base checks in the aircraft’s
operational lifetime.”
There are eight main chapters in three
main MPD groups, each with tasks listed.
The first main group is the systems and
powerplant programme. This includes the
systems- and engine-related inspections, the
certification requirements (CMR)
programme, and the fuel system limitations
(FSL) inspections (see table, page 38).
The second main group comprises the
aircraft structures programme. This
includes two main groups of tasks: the
structures programme tasks, and the
airworthiness limitation inspection (ALI)
tasks (see table, page 38).
The third group is the zonal tasks, with
three main groups of inspections. The first
is the zonal inspection programme (ZIP),
the electrical wiring interconnection system
(EWIS) programme, and the lightning/high
intensity radiated field (L/HIRF) protection
programme (see table, page 38).
There are several intervals in each of
ISSUE NO. 130 • JUNE/JULY 2020
these eight chapters, although most tasks
are accounted for by a relatively small
number of intervals.
System tasks
The systems and powerplant tasks total
259 inspections. Most have flight hour
(FH) intervals of 850-34,000FH. The
shortest interval of 850FH is the basic
interval for the main line maintenance
check that may be referred to by operators
as the ‘A’ check. This group of tasks could
therefore be referred to as 1A tasks.
Similar to other aircraft types, there are
groups of tasks with multiples of this basic
interval, such as ‘2A’ tasks at 1,700FH,
‘3A’ tasks at 2,550FH, and ‘5A’ tasks at
4,250FH. There are only a small number
of tasks at these intervals, however (see
table, page 39).
There is, however, a large number of
other FH task intervals between 850FH
and the next large group of 34 tasks at
8,500FH. The 8,500FH interval is the
basic interval for the base or ‘C’ check.
The small groups of tasks between the
‘1A’ group at 850FH and the ‘C’ check at
8,500FH only have a small number of
inspections at each interval, ranging from a
single task up to four inspections (see table,
page 39). The tasks that do not have
intervals that are multiples of the main
850FH and 8,500FH intervals are OOP
tasks, and have to be planned into line, A
or base checks. This is often by performing
them earlier than their full interval.
As described, the base or ‘C’ check
interval is 8,500FH. There are 34 tasks at
this interval, and these could be described
as ‘1C’ tasks.
There are three other main groups of
tasks with intervals that are a multiple of
this basic interval. There are 20 tasks at
35 I MAINTENANCE & ENGINEERING
17,000FH, which could be regarded as
‘2C’ tasks, two tasks at 25,500FH that
could be referred to as ‘3C’ tasks, and a
single task at 34,000FH that could be
regarded as the ‘4C’ task.
Both ‘A’ and ‘C’ check tasks over this
range of FH intervals are functional and
operational checks comprising: visual and
detailed visual inspections; discarding and
replacing small components; and
restoration and servicing checks. In
addition, there is a range of inspections
related to some of the aircraft’s main
systems, including: hydraulics; electrics; the
auxiliary power unit (APU); air
conditioning and oxygen; fuel inerting;
avionics; and pressurisation. Other
inspections relate to the emergency and
safety systems, such as smoke and fire;
flight controls and flaps; and the galleys
and lavatories.
The highest interval for FH-related
tasks in the group of system tasks is
34,000FH. There is a large number of
other FH task intervals between 8,500FH
and 34,000FH. These have a small number
of tasks per interval between a single
inspection and seven tasks. These can also
be regarded as OOP tasks.
There are a total 151 FH tasks in the
system- and powerplant-related tasks.
There are seven other groups of tasks
within the system and powerplant
inspections, with different task interval
criteria.
There are 20 tasks with FC-based
intervals between 18FC and 30,000FC (see
table, page 38). This is a relatively small
group of inspections. Tasks with intervals
of up to a few hundred FC are visual
inspections of landing gear doors. Tasks
with higher intervals are functional checks
for landing-gear doors, and detailed
inspections of thrust reversers and flaps.
AIRCRAFT COMMERCE
36 I MAINTENANCE & ENGINEERING
There are 53 tasks with calendar
intervals, including two with a 72-hour
interval, and a further 51 with intervals of
six to 180MO. The two largest groups of
tasks are 12 with a 72MO interval, and 14
with a 120MO interval. There are also five
tasks with a 144MO interval, and two
with a 180MO interval.
These tasks all relate to passenger seats,
galleys and lavatories, flaps and slats,
hydraulics, cargo and fuel tank fire
suppression, pressurisation, emergency
equipment, and safety oxygen systems. The
tasks are lubrication, functional and
operational checks, and restore and discard.
There are just three tasks with
combined FH and FC intervals, and 14
tasks with FH and calendar intervals.
These are mainly related to safety and
emergency equipment, and the lubrication
of ailerons and flight controls.
There are 13 tasks with FC and
calendar intervals. These are confined to
three intervals of 12MO, 36MO and
144MO. The first two groups are
lubrication tasks for the landing gear
components, and flaps and slats. These can
easily be combined with a line check, such
as an ‘A’ check, and a ‘base’ check. The
third group is at 25,000FC/144MO, and
relates to landing gear removal for
overhaul. Given typical rates of utilisation,
this task, which requires the aircraft to be
raised on jacks and so necessitates several
days’ downtime, is more likely to occur
once every 10 years.
There are also 25 NOTE tasks, split
between 12 engine-related line
maintenance tasks, three black box tasks,
and 10 discard and restore tasks for safety
equipment. All of these can be included in
line and light airframe checks.
AIRCRAFT COMMERCE
Finally, there are five APU-related
discard and inspection tasks. These mainly
relate to APU shop visit maintenance,
which first requires the removal and
replacement of the APU. This can be done
during a line or light airframe check.
CMR & FSL tasks
There are a total of 52 CMR tasks, 41
of which have FH intervals of 100-
55,000FH. There are also six tasks with
FC intervals, a single task with a calendar
interval, and four tasks with combined FH
and FC intervals.
The 41 tasks with FH intervals are
mainly light inspections relating to
operational or functional checks, and
restore or discard tasks on some systems.
These can all be included in line and light
checks. There are a few that have base
check intervals.
There are also three FSL tasks, at
intervals of 8,500FH, 20,000FH and
49,000FH. These are light tasks.
The six tasks with FC intervals are
inspections for the slats and flaps, and can
be performed during light or ‘A’ checks.
There is a single task at 12MO relating
to the emergency exits.
There are four tasks at 36,000FH and
34,000FC that require the extension of the
flaps and slats. The interval means these
would be conveniently combined with the
‘4C’ tasks at 34,000FH, and therefore
performed as part of a large base check.
Structures tasks
There are 415 MPD tasks in this
section. The first 51 are FC-based tasks,
with three groups of intervals at 7,500FC,
The A220’s base check programme is four
checks at a standard interval of close to three
years. The cycle is four checks and thus has a full
interval of close to 12 years. The second and
fourth checks are heavy visits with a large
number of structures and airworthiness
limitations tasks.
15,000FC and 30,000FC. These three
intervals mean these tasks could be
grouped relatively easily together with the
‘1C’, ‘2C’ and ‘4C’ tasks at 8,500FH,
17,000FH and 34,000FH. The FC
intervals would not be compromised for an
aircraft operating at an average FC time of
1.13FH or higher.
The 7,500FC interval has six tasks.
These are visual inspections of some flight
control components.
The 15,000FC has nine tasks. These
are a mix of visual and special visual
inspections, that require special borescope
equipment to provide access.
The largest group is at 30,000FC,
which has 36 tasks. These are a mix of
general visual inspections (GVIs), together
with detailed and special visual inspections.
The tasks all relate to structural
components and aircraft structures, such as
parts of the empennage and wings.
The largest group of structures tasks,
and one of the largest task groups in the
MPD, are the 356 calendar-based tasks.
There are three groups: 91 tasks with a
72MO interval, a single task with an initial
144MO and repeat 72MO interval; and
264 tasks with a 144MO interval.
Most of the 91 tasks at 72MO are
corrosion prevention and control
programme (CPCP) tasks. These are
mainly visual and special detailed
inspection tasks. The main areas of the
aircraft affected are the skin, wing and
stabiliser spars, door structures, landing
gear wells, floor beams and seat tracks,
fuselage frames, the rear pressure
bulkhead, and the wing pylon attachments.
Many of these tasks provide the
opportunity the inspect for corrosion as a
preventative process. This requires a partial
cabin interior access, and many inspections
are below floor level.
The single task at 144MO, and
repeated at 72MO, relates to inspections
on the wing trailing edge.
The 264 tasks at 144MO are similar to
the 72MO tasks. They are visual and
special detailed inspections, and many
tasks are part of the CPCP programme.
They mainly affect all main sections of the
fuselage. This requires the removal of the
entire interior, since the tasks involve access
to the forward, mid and aft cabin fuselage,
as well as the fuel tank. They also relate to
the aircraft’s nose, the wing, and the
vertical and horizontal stabilisers.
There are also eight tasks with FC and
ISSUE NO. 130 • JUNE/JULY 2020

calendar intervals: a single task at
7,500FC/72MO, and two at
15,000FC/144 MO, all related to the
vertical and horizontal stabilisers. There
are also five tasks at 25,000FC/144MO,
related to the removal and overhaul of the
landing gear components as is the case
with the two tasks in the system
programme.
ALI tasks
The 395 tasks in the airworthiness
limitation item (ALI) section make it the
largest of the MPD’s eight sections. All 395
tasks have FC-based intervals of 7,500-
30,000FC. The tasks relate to inspections
of the aircraft’s structures, and to the effect
of aircraft utilisation and age on fatigue.
The ALI tasks have initial and repeat
intervals. Of the 395 tasks, 383 have initial
intervals of 7,500FC, 12,000FC, 15,000FC
and 30,000FC. As with the main groups of
FC tasks in the structures programme,
these four intervals mean the tasks could
be grouped with the ‘1C’, ‘2C’, ‘3C’ and
‘4C’ tasks without compromising the FC
intervals if the aircraft operates at an
average FC time of at least 1.13FH.
There are in fact five main interval
groups, and four of them have equal
initial/threshold and repeat intervals. These
are the 7,500FC/7,500FC,
12,000FC/12,000FC, 15,000FC/15,000FC
ISSUE NO. 130 • JUNE/JULY 2020
and 30,000FC/30,000FC tasks. These have
six, 19, 12 and 14 tasks. Many of these
tasks require extensive access to perform.
The fifth group is initially problematic
for the aircraft’s maintenance requirements.
This is because while the initial interval is
12,000FC, meaning they will probably be
combined with the ‘2C’ tasks and included
in the second base check, they have a short
repeat interval of just 1,200FC. Moreover,
eight of the 12 other tasks also have a
repeat interval of 1,200FC.
There are therefore 340 tasks that have
to be performed every 1,200FC after the
aircraft has performed them at 12,000FC
for the first time in the second base check.
This will probably be performed at about
six years of age.
A 1,200FC interval at typical rates of
utilisation will be equal to a period of six
to eight months. “These tasks with this
short repeat interval of 1,200FC are the
fatigue tasks, and the ALI incorporates
structural parts of the aircraft that are
susceptible to fatigue during an operational
life,” explains Dewar. “We have recently
finished fatigue-testing on two aircraft, and
have completed the teardown and the
structural inspections. The first main point
is that no new fatigue tasks will be added
to the A220’s maintenance programme, as
is the case with the supplemental structural
inspection document (SSID) that has been
added to the MPDs of many other Airbus
37 I MAINTENANCE & ENGINEERING
types.
“The second main point on the fatigue-
testing is that we have recently reviewed
the data, and it is very encouraging,”
continues Dewar. “We will therefore be
able to make large extensions to this
original repeat interval of 1,200FC. While
the repeat interval is yet to be determined,
we expect it to be at least half the initial
12,000FC, and preferably the same
12,000FC interval. These inspections
would therefore be performed every second
base check; the heavy checks every 72MO.”
In addition, the initial interval for
many of these tasks has been extended
from 12,000FC to 16,000FC.
“The performance of these fatigue
tasks was another design consideration in
relation to ease of access,” continues
Dewar. “The first issue of fatigue-related
structures is protection from corrosion,
and it ultimately depends on the materials
used. About 50% of the A220’s structure is
built with carbon fibre reinforced plastic
(CFRP). There is also the issue of access
and inspectability, given that a large
number of tasks may have to be performed
relatively frequently. We therefore designed
95% of the structure so that it can be
inspected from the exterior, to reduce
access requirements. Far more man-hours
(MH) would be used to perform them if
they had to be made from the interior, and
therefore required its removal.”
AIRCRAFT COMMERCE
38 I MAINTENANCE & ENGINEERING
SUMMARY OF MAIN A220 MPD TASK GROUPS

Task gp
interval System CMR FSL Structure ALI Zonal EWIS L/HIRF Total
A check tasks

850FH 7 3 10
1,700FH 4 4
2,550FH 2 2
4,250FH 2 1 3

Total 15 3 1 19

Base check tasks

8,500FH 34 3 1 23 2 15 78
12,000FH 17 4 21
17,000FH 20 1 31 13 8 73
25,500FH 2 1 5 1 1 10
34,000FH 1 1
42,500FH 1 1

Total 74 10 1 59 16 24 184

7,500FC 1 6 6 13
12,000FC 1 19 20
12,000/1,200FC 332 332
15,000FC 9 12 21
30,000FC 1 36 14 51

Total 3 51 383 437

72MO 12 91 10 8 3 124
120MO 14 14
144MO/72MO 1 1
144MO 5 264 13 3 2 287
180MO 2 2

Total 33 356 23 11 5 428

Base check total 110 10 1 407 383 82 27 29 1,049

removing panels, and removing insulation

Zonal tasks
The zonal programme has 82 tasks.
There are two main groups of 59 with FH
intervals and 23 with calendar intervals.
The 59 tasks with FH intervals are split
between three main base check intervals of
8,500FH, 17,000FH and 22,500FH.
There are 23 tasks at 8,500FH which
are all GVIs of mainly external parts of the
aircraft, and require relatively easy access.
There are 31 tasks at 17,000FH. These
relate to external parts of the aircraft and
door structures. Some of these tasks have
more extensive access requirements.
There are five tasks at 22,500FH,
which are similar to those at 8,500FH, and
are GVIs of the aircraft’s main external
parts.
The other 23 tasks in the zonal
programme are calendar-based tasks: 10 at
72MO, and 13 at 144MO. As with other
MPD sections, these tasks are in the main
groups of tasks that form the main
inspections at six and 12 years. The tasks
at 72MO affect various parts of the
fuselage, and require the cleaning and
inspection of EWIS components. These
inspections therefore require additional
MH for gaining access by opening and
blankets. The 13 tasks at 144MO are
similar inspections with similar access
requirements.
EWIS tasks
There are 28 tasks in the EWIS
programme: 17 with FH intervals and 11
with calendar-based intervals.
The 17 FH-based tasks have intervals
of the first three base checks: 8,500FH,
17,000FH and 25,500FH. Except for one,
all are general, visual or detailed visual
inspections. They mainly relate to sections
of the fuselage and wing. They mainly
involve the inspection and cleaning of
EWIS components, and so require the
removal of some panels to gain access.
There are also 11 tasks at 72MO and
144MO. The eight tasks at 72MO relate to
the avionics and cargo compartments, the
environmental control system and below
the floor of the lower mid-fuselage. All
eight tasks involve the inspection and
cleaning of EWIS components, and so
require some access to be gained.
The three tasks at 144MO are similar
types of inspections for the lower mid-
fuselage and the internal fuselage.
L/HIRF tasks
There are 29 tasks in the L/HIRF
programme. As with the EWIS tasks they
are split between FH- and calendar-based
tasks.
There are 24 FH tasks at 8,500FH,
17,000FH and 25,500FH (see table, this
page). These are similar to the FH-based
tasks in the EWIS programme.
There are five calendar tasks: three at
72MO and two at 144MO. As with the
FH tasks, many are related to cleaning and
inspecting EWIS equipment and hardware,
and so require a degree of access.
Summary of tasks
As described, there are several sets of
task intervals that are the main intervals
for ‘A’ checks and ‘Base’ checks.
There are four main ‘A’ check intervals
of 850FH, 1,700FH, 2,550FH and
4,250FH for the ‘1A’, ‘2A’, ‘3A’ and ‘5A’
tasks (see table, this page). There are a
total of 19 tasks for these four intervals.
There are three main interval groups
for the base checks: FH, FC and MO. As
described, the main base check intervals
are 8,500FH, 17,000FH, 25,500FH and

AIRCRAFT COMMERCE ISSUE NO. 130 • JUNE/JULY 2020


34,000FH. These relate to the ‘1C’, ‘2C’,
‘3C’ and ‘4C’ tasks. The eight sections of
the MPD have 183 of these tasks, and they
comprise a large portion of base check
contents.
There are also four main FC task
intervals of 7,500FC, 12,000FC, 15,000FC
and 30,000FC. These closely match the
base check FH intervals if the aircraft is
operated at typical FH:FC ratios for short-
haul aircraft. There are a total of 437 tasks
with these intervals in the eight sections of
the MPD (see table, this page).
There are two main calendar intervals
of 72MO and 144MO that coincide with
the ‘2C’ and ‘4C’ intervals for aircraft
operated at annual rates of utilisation of
2,800-3,100FH. There are 412 tasks in the
eight sections of the MPD with these two
tasks, plus 16 with intervals of 120MO
and 180MO.
There are therefore a total of 1,048
base check tasks with these main intervals,
plus 19 ‘A’ check tasks. This totals 1,067 of
the 1,263 tasks in the MPD. These are
summarised (see table, page 39).
The remaining 196 tasks are either ‘A’
and ‘base’ check tasks with OOP intervals,
or other smaller groups of tasks with
intervals based on a combination of FH
and FC, or FC and calendar intervals, or
NOTE and APU-related tasks.
Check grouping
As described, the A220’s maintenance
programme was originally conceived so
that as many tasks as possible would have
intervals that were multiples of the basic A
and C/base check intervals of 850FH and
8,500FH. The number of tasks for each
main interval multiple from the eight main
MPD chapters is summarised (see table,
page 38). There is one group of A check
multiples, with FH intervals. There are
three main groups of multiples with FH,
FC and MO intervals that are grouped into
base checks. There are almost 1,100 tasks
in these four interval groups, comprising
most of the almost 1,300 tasks in the
MPD.
A check grouping
The A checks are largely formed from
tasks with intervals of 850FH (7 tasks),
1,700FH (4), 2,550FH (2), and 4,250FH
(2). These groups could be described as 1A,
2A, 3A and 5A tasks, with the prefix
indicating the multiple of the basic 850FH
interval. In addition, there are four other
groups of tasks with intervals close to the
6A, 7A, 8A and 9A multiples. These are at
5,200FH, 6,000FH, 7,500FH and
8,000FH, and so in fact are OOP tasks.
These tasks would have to be brought
forward a small number of FH to be
included in the A checks.
While the task group nomenclature
indicates the multiple of the basic A
ISSUE NO. 130 • JUNE/JULY 2020
ARRANGEMENT OF BASE CHECK TASKS
Task group interval Number of
tasks
8,500FH
7,500FC
17,000FH
12,000FC/1,200FC - extended to
16,000FC/12,000FC
15,000FC
72MO
25,500FH
34,000FH
30,000FC
144MO
ARRANGEMENT OF BASE CHECK TASK GROUPS INTO CHECKS
Base check
Base check task groups
C1
C2
C3
C4 1C + 2C + 4C
interval, the number of the A check in
sequence is indicated by a suffix. That is
the A checks will be performed in sequence
of A1, A2, A3 and at a maximum interval
of every 850FH. The A10 check would
then coincide with the first base check, the
C1 check at 8,500FH.
“We expect to perform an A check
every 850FH, so there are some tasks with
a 700FC interval,” says Ralph Rouah,
overall project manager for the A220 at
Air France Industries AFI KLM
Engineering &Maintenance. “We may
therefore have to perform the A checks
early, depending on the FH:FC ratio. The
A check will be equal to about once every
four months, and three times per year.”
The 1A tasks would be included in
every check, the 2A tasks in every second
check, the 3A tasks in every third check,
and the 5A tasks would be in every fifth A
check: the 5A and 10A check/C check (see
table, this page). The number of tasks that
would be included in each of the first 10 A
checks in the cycle is summarised (see
table, this page). The A10 check would
also be incorporated into every C check at
8,500FH intervals.
C check grouping
There are three main groups of 163
tasks with multiples of a 8,500FH interval,
437 tasks with multiples of a 7,500FC
interval, and 412 tasks with 72MO and
144MO intervals (see table, this page).
Given typical rates of utilisation of up
to 3,000FH per year, an 8,500FH interval
is equal to 34 months of operation. The
actual maximum interval will be equal to
39 I MAINTENANCE & ENGINEERING
Base check
task group
78 1C
13 1C
73 2C
332 2C
21 2C
124 2C
10 3C
1 4C
51 4C
288 4C
Total number
of tasks
1C 91
1C + 2C 91 + 550 = 641
1C + 3C 91 + 10 = 101
91 + 550 + 10 + 340 = 991
36 months or even more for aircraft
operated at relatively short average FC
times. “We expect to use the aircraft at a
rate of 2,500FH per year, so the 8,500FH
interval will clearly not be exceeded by the
36MO interval that is half the first heavy
check interval of 72MO,” says Rouah.
A 36MO interval would mean that the
7,500FC interval multiple of most tasks
would be equal to an aircraft utilisation of
up to 2,500FC per year. Moreover, the
aircraft would operate at a relatively short
ratio of 1.13FH per FC. Aircraft operating
longer average FC times would therefore
not fully utilise the 7,500FC interval when
performing base checks at 8,500FH
intervals.
Actual rates of aircraft utilisation are
closer to 2,000FC per year, with aircraft
operating at average FC times of 1.4-
1.5FH.
The 7,500FC group of 13 tasks would
therefore be performed every C/base check,
after an actual utilisation close to 6,000FC.
As described, there is a large group of
352 tasks with an initial interval of
12,000FC in the ALI chapter of the MPD.
At an annual rate of utilisation of
2,000FC, these would be performed at a
six-year interval for the first time. These
would add a substantial maintenance
burden on the second base or C2 check
(see table, this page).
It is assumed here that the 332 ALI
tasks with an initial interval of 12,000FC,
will have their repeat interval escalated to
12,000FC to allow them to be performed
every second base check at 72MO
intervals.
There are also 21 tasks at the
AIRCRAFT COMMERCE
40 I MAINTENANCE & ENGINEERING
15,000FC interval. These would come
close to maximum interval utilisation at
the second base check, after about six years
of operation, for aircraft performing
2,300FC or more per year; but would
utilise 12,000FC of their 15,000FC interval
when operating at 2,000FC per year.
The group of 51 tasks at the 30,000FC
interval would thus be most easily grouped
with the fourth base check, the C4 check,
that comes due at a maximum of
34,000FH and about every 12 years (see
table, page 38).
The third main group of tasks are the
72MO and 144MO tasks, most of which
are listed in the system, structural, zonal,
EWIS, and L/HIRF programmes. There are
124 tasks with an interval of 72MO, and
288 tasks with an interval of 144MO.
These two large groups clearly come
due every six and 12 years, and comprise
the structural and main content of the two
heavy checks in the base check cycle. These
require a partial removal of the aircraft’s
interior at the first heavy check at 72MO,
and a full removal of the interior at
144MO at the second heavy check.
There are also 14 system tasks with an
interval of 120MO, and just two system
tasks at 180MO. Until these tasks have
their intervals escalated or changed, it is
probably most convenient to bring them
forward to the 72MO and 144MO checks,
the C2 and C4 checks, or group them into
the closest base check as they come due.
Most MPD base check tasks therefore
conveniently fall into the four multiples of
the base check interval. The arrangement
of these task groups into the first four
C/base checks and the number of MPD
routine tasks in each check are summarised
(see table, page 39). The C2 and C4 checks
are clearly larger in tasks due to the large
number of structures and ALI tasks.
AIRCRAFT COMMERCE
Maintenance burden
The routine tasks are the first element
of A and base checks. A planning
escalation factor applied to MPD MH
estimates will estimate actual MH
consumed to prepare the aircraft for a
check and to gain the necessary access, and
to execute and perform routine tasks in
each check.
The other major elements of a check
will include cleaning and light
refurbishment work, performing non-
routine rectifications, performing any
required airworthiness directives (ADs) and
service bulletins (SBs) and modifications,
changing components, interior
refurbishment, and any stripping and
repainting.
The routine and non-routine (NR)
portions of the check will account for a
large percentage of MH. Moreover, the
ratio of NR MH to routine labour used in
inspections has a larger impact on the size
of downtime to perform the check. The rise
in the NR ratio with successive checks and
base check cycles will also determine the
labour maintenance burden during the
aircraft’s lifetime, and the rate at which
airframe-related maintenance costs
increase.
Bombardier used several technologies
to minimise the NR ratio and rate at which
this rises. These include coatings and
sealants for parts of the aircraft’s structure,
having a metallic wing and a composite
material wing, and designing the airframe
and maintenance programme with reduced
frequency of access. The metallic fuselage
makes it easier to repair, considering the
likelihood of frequent damage to it.
Reduced access minimises maintenance-
induced damage and contamination.
To date, 420 A checks and 18 C checks
The A220 was designed to have minimal
scheduled labour tasks for line maintenance.
The aircraft’s design provides automated
monitoring of tyre pressures and engine oil
levels. It is the first aircraft to be certified
without daily tasks in its MPD.
have been performed on the global fleet
that is in service. Most A checks have so
far been performed as overnight events,
with 10-15 MH used. The lighter C checks
so far performed have used 600-700MH,
and these have been completed in two-and-
a-half days downtime.
Line maintenance
As described, the A220’s MPD was
conceived so that the routine line
maintenance tasks with the shortest
interval are at 72 hours elapsed time. These
are visual inspections of aircraft tyres.
There is only a small number of tasks
with intervals between this and 850FH.
There are therefore few routine
maintenance tasks, and operators only
need to be concerned with NR
maintenance as defects and faults arise
with the aircraft’s components and
systems. Rouah says that Air France may
add some of its own cabin tasks. “We do in
fact have a ‘daily check’ at a maximum of
every 48 hours in our maintenance
programme when we introduce the A220
into service,” says Rouah. “We will then
later extend this to the MPD interval of 72
hours. We do not expect to have a weekly
check. Also, we do not expect to have any
routine line check performed by the
flightcrew at outstations.”
The main consideration for line
maintenance will be NR work. “The A220
has a leading fault detection and reporting
system. The troubleshooting manual
(TSM) and electronic fault isolation
manual (eFIM) are built into the aircraft’s
capabilities,” says Dewar. “The onboard
aircraft health monitoring (AHM) system
monitors more than 50,000 parameters,
and samples every 50 milliseconds. The
aircraft is therefore fully digital, so no
paper is required for logging faults and
flightdeck effects.
“An element of making the aircraft
maintenance-friendly was that we also
designed it so that any line replaceable unit
(LRU), or rotable/repairable component,
on the aircraft could be replaced within 15
minutes,” continues Dewar. “This means
the aircraft can return to service quickly in
the event of the need to replace
components between flights.”
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ISSUE NO. 130 • JUNE/JULY 2020

Blockchain technology has just started to be used in maintenance and
engineering, and related aerospace activities. The technology’s simplicity
and its advantages means there are several uses in the industry for
multiple party activities based around the transfer of reliable data.
Blockchain technology
in maintenance: the
initial applications
B
lockchain (BC) is a technology
that is being applied to aircraft
management, engineering, and
aircraft maintenance. The main
characteristic of BC technology is that it
provides a digital ledger of encrypted data.
Blocks of data are added to an existing
chain of encrypted data blocks, and each
new block is added to the chain in
chronological order as events take place
and new data is created. The digital ledger
is held in the Cloud, and can only be
accessed via cyber keys. The data can be
shared and transferred via distribution
ledger technology (DLT).
An example of the type of data that
can be held in the BC is information
relating to all the events in a rotable
component’s lifetime. The encryption of
data each time some is added to the data
ledger means that it can be shared between
several parties, and is known by all to be
authentic, and therefore trustworthy.
BC basics
The feature that makes the data
authentic is the encryption process by
hashing as soon as a new group or block of
data, information and text is added to the
ledger. This hashed information is no
longer readable by a human, and can only
be interpreted by a computer. The data is
scrambled and encrypted, and requires a
key to read it. Each event, which is a block
of new data and information, is date- and
time-stamped.
An example, in the case of aircraft
maintenance, would be the information
relating to all the rotable components
installed on an aircraft. This would include
the data, time, location, aircraft
ISSUE NO. 130 • JUNE/JULY 2020
registration number, airline operator, the
component’s part number (P/N) and serial
number (S/N), the aircraft’s total flight
hours (FH) and flight cycles (FC) at the
time of installation, and the technician that
performed the task.
Knowing that this data is authentic and
cannot have been tampered with is part of
the information later required to calculate
the reliability of a component part number
(P/N) and the individual serial numbers
(S/N) as more data gets recorded and then
collated and analysed. This will provide the
calendar time and number of flight hours
(FH) and flight cycles (FC) the component
recorded while installed on the aircraft.
This will allow the airline’s engineering
department to calculate the reliability data
for that P/N and S/N, since all removals
and intervals can be recorded throughout
the component’s life if BC is used.
The installation and removal
information will be used by the airline
operator, but also by the repair agency to
which the component is subsequently sent
for testing and repair.
There are several applications to which
BC technology can be extended on the
overall management and operation of
commercial aircraft. These include:
collecting and recording the full life history
and pedigree of individual aircraft
components; providing authentic aircraft
maintenance and technical records, which
are similar to individual components and
be a full life history; aircraft configuration
data; full records of employees and
maintenance tools and equipment life
history; and the transfer of aircraft data
between operators and owners at events
such as lease returns and aircraft sales.
BC technology has only recently been
41 I MAINTENANCE & ENGINEERING
applied in a few applications to date. One
particular factor of BC technology is that
there is no need to use the technology
when just a single party requires a full set
of data, such as a component’s life history.
BC technology benefits when there are
multiple parties involved, and all need to
share at least some of the data. A
component’s life history is a relevant
example, since removing a component for
declining performance and for testing and
possible repair often involves transporting
it across borders to a specialist repair
agency. The full process of removal,
packing, transportation, testing and repair,
and re-transportation and receiving will
involve several parties, and departments
within each party’s organisation. The
repair agency will require specific
information from the airline, particularly
removal interval and fault data. Findings,
repair records and invoicing will have to be
sent to the operator, so the airline will need
to share appropriate information with the
repair shop. There will be other
information in the component’s entire
ledger, however, that the airline does not
need to share with the repair shop.
“All parties involved in a particular
issue where BC is being used need to share
a common initiative, and they all need to
agree to use the same BC technology,” says
Doctor Lars Schwabe, head of the data
insight lab at Lufthansa Industry Solutions.
“By sharing all relevant data using BC this
completely changes the method by which
data is transferred between all relevant and
interested parties. One example will be the
transfer of information between an airline
and a third-party maintenance provider. If
all the data is authentic, and the digital
ledger can be transferred instantaneously,
AIRCRAFT COMMERCE
42 I MAINTENANCE & ENGINEERING
planning the check and verifying all
relevant data can be done in a fraction of
the usual time. It also means the data can
be 100% trusted.”
Aircraft configuration
A major problem in the engineering
management of aircraft relates to
configuration management. This involves
tracking the S/N and P/N of every
assembly, component and sub-component
installed on an aircraft during its lifetime. If
all components and every S/N are tracked
correctly, then at any time a full list of the
components installed on an aircraft can be
produced. Configuration management is
performed by the airline’s maintenance and
engineering (M&E) system.
For this to be performed without any
complication, it requires the airline’s M&E
system to have complete knowledge of the
components installed on an aircraft when
the new aircraft is delivered to the operator
by the original equipment manufacturer
(OEM). Simultaneously, the relevant data
will be transferred to the airline’s M&E
system; along with other information such
as the maintenance programme, status of
each maintenance task in the programme,
and the aircraft’s accumulated FH and FC.
The main issue complicating this
process from the initial aircraft delivery by
an OEM to an airline is that OEMs have
historically been unable to provide airlines
with every single P/N installed on an
aircraft. In the case of aircraft
manufacturing, an OEM will receive
assemblies from a large number of different
subcontractors. An assembly can, for
example, be a section of fuselage, a landing
gear leg, or a complex rotable component.
The assembly will be built by the
AIRCRAFT COMMERCE
subcontractor from a large number of
components, some of which will have S/Ns
and require maintenance actions on them
when the aircraft has been in operation.
The transfer of the assembly, or asset, is
accompanied by a form called a DD250.
This is known as a Material Receiving and
Inspection Report, and it is provided to the
organisation, the OEM, receiving the asset.
This report includes all significant S/Ns and
the maintenance inspections on every
maintenance significant item (MSI) on the
asset. The S/N and MSI information on the
DD250 is transferred by each
subcontractor to the main OEM’s
manufacturing execution system.
A main problem with aircraft
manufacturing is that while subcontractors
know the S/Ns they have installed on an
assembly, and provide this information on
the DD250 form, a major OEM that has
installed the assembly on a particular
aircraft line number (L/N), is unable to
transfer the S/Ns of the installed
components to the new airline operator
and its M&E system when the aircraft is
delivered.
This problem is explained by the
OEM’s manufacturing execution system
not being interfaced or being able to share
any data with airlines’ M&E systems. This
can be resolved if all parties involved in the
sub-contracting process, aircraft assembly
and delivery, and aircraft receiving and
preparation for operation processes, are
using BC software, and the information is
being shared between all related parties in
a digital ledger. The IT systems used by
each party can differ, and all that is
required is that a common transactions
schema is used. The main issue with
solving data interchange is not a technical
problem, but an issue of participation
A particular issue faced in aircraft and aerospace
manufacturing is the seamless transfer of
individual component serial number (S/N) and
maintenance significant item (MSI) information
from sub-contractor to main OEM, and then on
to final customer. AIA and Cap Gemini are
developing a solution to use blockchain to
overcome this issue.
between all affected and related parties.
Every organisation that participates
benefits from the system.
At the back-end of all IT systems, the
BC is integrated with the manufacturing
execution system and airline’s M&E
system. The concept is to have every S/N
and MSI of an assembly and complex
component and structure provided by a
subcontractor to a major OEM transferred
via BC to the OEM. This means that when
the aircraft is delivered to the airline
customer, S/N and MSI data is further
seamlessly passed on to its M&E system.
Cyber security can also be applied to
such a data transfer system. The main
party on the data-sharing group, such as
the airline operating the asset, can control
what information in the digital ledger can
be seen by each of the other parties. Also,
each party is unaware of which other
parties can see the rest of the data. The
digital ledger can be built up over years as
the aircraft is operated. When the asset is
sold, the data does not even have to be
transferred to the new owner. The airline
simply provides the new owner with the
keys to the cyber data so that it can be
accessed and read.
The absence of such a seamless transfer
system to date means that airlines have to
manually populate their M&E systems
with component S/Ns. The problem of
manually transferring and entering large
amounts of information relating to
components that are constantly being
removed, tested and repaired, and then
installed on aircraft is that airlines rarely
have a real-time view of the actual
component configuration of an aircraft.
Similarly, the changing of components
during airframe checks has to be entered
manually into the M&E system. The same
applies in reverse, where data extraction
has to be done manually.
If the system can be configured and
works, it will always be possible to have a
real-time view of the components installed
on each aircraft.
This is a particular use case, and BC
technology can be configured to solve this
issue. Another use case that frequently
occurs is the issue of resolving purchase
order (P.O.) reconciliations between a
specialist repair shop and an airline.
The Aerospace Industry Association
(AIA) and Cap Gemini are building the BC
solution for material receiving inspection
and transfer for complex manufacturing
processes that concerns accurate
ISSUE NO. 130 • JUNE/JULY 2020
44 I MAINTENANCE & ENGINEERING
information relating to S/Ns and MSIs.
The same issues arise with the delivery of
individual components. To get paid for a
part or an assembly, the DD250 has to be
accurate, so the system is needed to
seamlessly transfer component data from
subcontractor to an OEM and to an
airline, and to ensure that all parties get
paid on time.
There is a plan to implement this type
of system for the US Department of
Defence (DoD). The intent by the AIA is to
implement the same type of system to
commercial aircraft manufacturing
processes. This is being pursued by OEMs
such as Airbus and Honeywell.
Aerospace manufacturing
Authenticiti provides a supply chain
data platform that is powered by BC, and
overlays a company’s existing IT
infrastructure. Authenticiti has already
deployed the platform with an aerospace
manufacturer.
“The aim of the platform is to remove
the complexity of transactions faced by
buyers and sellers in manufacturing
industries,” says Andrew Yang, chief
executive officer of Authenticiti. “We
already have engagements for the platform
with MTU, DAHER Aerospace and GE
Aviation. The intention of the platform is
to provide end-to-end lifecycle visibility of
a component. The platform provides a
trusted data exchange, and has the
attraction of providing distributed security
to all users. Moreover, because of the
quality of data in the ledger, many
management processes can be expedited.
The main objective of the platform is to
avoid the disputes that occur between
buyers and sellers in the traditional
AIRCRAFT COMMERCE
manufacturing process. These are issues
such as quantities specified and received in
orders.”
In addition to having high quality data
with little or no errors, there is the added
benefit that permission has to be given to
the parties allowed access to the ledger
data. This mechanism therefore provides
the data ledger with security.
“A further main advantage of the
platform is that it overlays with the IT
systems of all the involved organisations,”
explains Yang. “It can therefore interface
with systems related to production,
logistics, finance, documentation, and
enterprise resource planning (ERP).”
A main feature of Authenticiti’s
platform is that it has a dispute detection
module. “There are frequently service level
agreement (SLA) disputes between parties
in a manufacturing process. These relate to
incorrect quantities delivered, incorrect
invoicing and other common problems,”
says Yang. “These disputes not only take a
long time to resolve, but also result in
compensation fees. The dispute detection
module eliminates many of these disputes,
and quickly resolves others. It also
automates the invoicing process, and
monitors all steps between orders being
placed and payments being received. It also
incorporates a track-and-trace module.”
The platform is therefore capable of
being self-auditing, and so detects errors as
they occur. “This is one of the factors that
eliminates SLA disputes and errors. The
detection of errors as they occur reduces all
the manual work required to resolve
disputes when they are discovered later,”
says Yang.
DAHER Aerospace is a case study of
Authenticiti’s platform in use. “DAHER
has asked for an open BC solution in its
There are several levels of management in the
lifecycle of rotable component management that
require the keeping back-to-birth records of the
entire activities that occur during a component’s
lifetime. This will aid with several management
functions, including the calculation of reliability
statistics.
aircraft components manufacturing
process,” says Yang. ‘The challenge it faced
is that its cash data is heavily siloed, and its
legacy IT systems are physically separated
from each other. Excel files were the main
form of transferring data between the
disparate systems. This resulted in a very
expensive and inefficient management
process. It also does not have any real-time
alerts for errors, such as those described.
The high volume of invoice disputes often
means each one takes more than 100 days
to resolve. This creates the additional
problem that disputed invoices get dealt
with by third parties, and consequently the
amount owing gets factored, and so the
supplier loses a percentage of their due
revenue.”
Authenticiti found that once its
platform was deployed, the operator had
an immediate reduction of $3.3 million in
invoice factoring, as well as a large
reduction in manual intervention which
incurred high costs. “The platform also
generates alerts to detected errors, so that
disputes can be quickly resolved. The
system can also create dashboards with key
performance indicators (KPIs),” says Yang.
“The platform uses not just BC, but also
middleware and robotic process
automation. The platform being based on
BC means all involved parties can trust the
system and access the information. This
means all parties concerned can avoid
having to go back to their own IT systems.
It also eliminates the needs for checking
and resolving discrepancies.”
Rotable management
Aerotrax is another software provider
using BC, and it has examined the
interaction between airlines and
independent maintenance providers in the
process of repairing rotable components.
“To monitor and document the full life
history of rotable components, and have a
single system to achieve this requires a
huge change in the industry,” says David
Bettenhausen, chief executive officer at
Aerotrax. “We have been working with the
Triumph Group, which is a specialist
maintenance provider for rotable
components. It is also a provider of parts
manufactured approval (PMA)
components.”
Aerotrax has created management
software for Triumph to identify
ISSUE NO. 120 • JUNE/JULY 2020
46 I MAINTENANCE & ENGINEERING
inefficiencies in its maintenance process.
This includes management activities such
as accounting, maintenance management,
and logistics and supply. This is a bespoke
system that can interface with a company’s
ERP system “The system we have with
Triumph is a pilot project, and we need to
see how Triumph interacts with its airline
customers when using the system,” says
Bettenhausen. The system is based on BC
technology and a DLT. A single chain of
data and information blocks is created by
the system, and they are accessed by all
affected parties. The DLT is a database that
is shared between two or more parties.
“Building a system on DLT has the
advantages of privacy, performance and
scalability,” continues Bettenhausen.
“Access to the system means that while a
maintenance provider is performing
maintenance on a high-cost rotable
component, the airline customer can look
at the information in real time, since the
information is held in the Cloud. The
system also works in parallel with
Triumph’s ERP system, and our BC
management system interfaces with the
ERP and other systems via a series of
application programming interfaces (APIs).
That is, we are working with existing
technologies to interface with airlines’
M&E systems. This is the first step, but the
main achievement is that we have built a
real-time life history of each component.
We therefore have a record of every single
event in a component’s life time. This
includes all installations, removals, test and
repairs, every transport and logistics
action, and every invoice raised. The data
for all these main events also includes every
single detailed piece of information.”
Building such a system increases several
AIRCRAFT COMMERCE
efficiencies. This includes data assurance
provided by the use of BC technology. The
accuracy of the data means savings in the
area of administration, accounting,
auditing, reconciling information, and
stock control and inventory management.
This further means the system is able to
identify surplus stock, and parts that are in
high and low demand. It further means
that all the elements of our various
management systems are talking to each
other via our platform, and your existing
systems do not require any modifications.
This is because BC and DLT can be used as
a repository, so it can pull together
disparate systems because it is simply the
storage of data in text.
Aerotrax launched its pilot product
with Triumph, plus one of its airline
customers. “The idea is for the two
companies to trial the product in parallel
with their existing systems. The new BC
systems are therefore effectively being
tested in real time with live transactions.
This trial will run for eight to 10 weeks,”
says Bettenhausen.
Rotable trading
The trading, buying and selling of
aircraft components is an on-going, daily
process around the world. Annually, the
trading of commercial aircraft rotables and
repairables is a $4 billion dollar business.
Most available parts are advertised and
traded via on-line sites. Moreover, these
on-line sites only account for about $100
million of parts transactions each year.
A division of Honeywell, Honeywell
GoDirect Trade has created a rotable and
repairable component trading platform
and market place based on BC and DLT
Blockchain technology has been used by
Honeywell to provide its on-line GoDirect Trade
rotable trading platform. This secures
confidence in users, since the data and
information is secure.
technology. “The platform we have created
allows individual companies to create and
operate their own trading stand for the
marketing and sale of aircraft components.
The platform allows each trader to list all
pertinent information about a component
in the form of documents, images and
pictures,” says Lisa Butters, general
manager of GoDirect, at Honeywell. “The
GoDirect product is in production, but is
also in operation. The main difference
between GoDirect and other component
sites is that the others just list parts that are
available. They do not provide all the
relevant information relating to a part.
“GoDirect acts as a store front, and
currently has more than 60 active sellers
after having been live for about 18 months.
It has about 8,000 active users,” continues
Butters. “The sellers using the system
include OEMs, independent maintenance
providers, parts brokers, airlines, and
airline engineering departments.” The
system recorded $10 million of
transactions in its first year of operation,
and Honeywell forecasts $20 million of
transactions by the end of 2020, and up to
$50 million in 2021.
“The main reasons for using BC
technology in this sector of the industry is
that it creates trust among the parts trading
community,” continues Butters. “The main
aim of our system is to get all the relevant
information relating to a part into a BC
format. This makes it secure, so we can
regard the information as being the part’s
pedigree data. The ultimate aim is to
provide back-to-birth data. This would
mean finding the historical data for old
parts, which is likely to prove difficult. It is
easier, however, for younger components. If
we can encourage all related parties to add
in all relevant information about a part
delivered new on a new aircraft, then
through the GoDirect system we can create
the part’s life history of information. This
means getting all participants to use BC
technology. Honeywell has used SAP as its
ERP system for 15 years.”
Butters explains that GoDirect can
encourage OEMs to feed their data into
the ledger. Honeywell has already
integrated all airworthiness documents into
the data chain. The main documents it
requires are the 8130 or Form 1 repair, and
the certificate of conformance (CFC),
which is effectively the part’s birth
certificate.
ISSUE NO. 130 • JUNE/JULY 2020

Block Aviation is using blockchain technology to
provide a back-to-birth solution for aircraft
maintenance records, and it has developed a
Global Aircraft Records Registry. This will allow
the seamless transfer of data between airlines,
lessors, and regulatory authorities.
Maintenance records
Block Aviation in the United Kingdom
has created a process of using BC
technology to provide a solution for
complete aircraft maintenance and
technical record, and has developed its
Global Aircraft Records Registry (GARR).
“The use of BC technology to create a
ledger and chronological chain of events is
ideal for aircraft maintenance records,”
says Karl Scanlon, chief operating officer at
Block Aviation. “The BC technology also
provides a very good audit trail, because
the data is of course tamper-proof and
encrypted. The chains are also stored in the
Cloud. This decentralised storage means
the data is accessible by all concerned
stakeholders, including the aircraft
operator, maintenance providers, aircraft
lessor, and regulatory authority. We have
therefore designed the system to suit these
needs.”
Block Aviation is using the GARR to
provide a platform or infrastructure for the
movement of aircraft records. An example
of how the system will provide advantages
and benefits to all concerned parties is
where airline A at the end of a lease returns
an aircraft to the lessor. The aircraft is then
leased to airline B. “There is clearly a lot of
data that has to be provided to the lessor
and airline B following several years of
operation by airline A,” says Scanlon.
“This will include the aircraft’s approved
maintenance programme (AMP), the
maintenance and technical records, the
status of each maintenance status of each
task in the AMP, the aircraft’s modification
status, and the reliability statistics of each
component and system.”
ATA Spec 2500 was designed to enable
the transfer of all this data seamlessly
between related and affected parties in an
aircraft transaction (see ATA Spec 2500: Its
purpose, development and the implications
for its use, Aircraft Commerce,
August/September 2018, page 50). “Block
Aviation is creating a transfer
infrastructure to move all this data using
the ATA 2500 protocol,” says Scanlon.
“The infrastructure is based on BC
technology. We are trying to make it easy
for M&E systems to connect to our
platform. Block Aviation is working with
the Air Transport Association (ATA) and
other stakeholders, and the plan is to
ISSUE NO. 130 • JUNE/JULY 2020
develop a software development kit. It is
not just an airline’s M&E system that
interfaces with the platform. It will also be
the various technical records systems such
as Stream and Air Vault. It has to be
remembered that a certain amount of flight
operations data also has to be held in an
aircraft’s technical records. These include
all trips with FH and FC, and technical
faults that arose, and their rectification.”
Block Aviation is currently running a
pilot scheme with a few parties to prove
the system and demonstrate its value. “The
platform basically provides an audit trail of
the entire aircraft transaction,” says
Scanlon. “The system will therefore
provide the digital maintenance and
technical records that left airline A, and so
what goes to airline B when it receives the
aircraft. A long-term view of the asset’s
value has to be taken. This will be helped
by a global registry such as GARR. That is,
GARR will be set up so that all the
technical information that comprise the
aircraft’s technical records can be held, and
that GARR will be a registry of aircraft
transactions across the industry. The only
thing that a relevant party requires to
access the information will be decryption
keys so that it can view the data.
“The system can also be used when
transferring maintenance data between an
airline and a maintenance provider before
an airframe check,” continues Scanlon.
There are several fundamental difficulties
when transferring all the required data
from an airline’s M&E system to the
maintenance, repair & overhaul (MRO)
organisation performing the check, and
then back again after the check has been
performed (see The complexities of data
47 I MAINTENANCE & ENGINEERING
transfer between M&E & CMS systems,
Aircraft Commerce, December
2014/January 2015, page 40). “The system
would circumvent many of the problems
encountered between airlines and MROs.
The platform could also be used at the end
of the aircraft’s life when it is being parted
out, and broken down for components.
This is because the entire history of each
component can be accessed, making it
easier to sell them and increase the number
that can be sold.”
Block Aviation is piloting the platform
on a few aircraft transactions, and the aim
is to have a working solution that can be
used in practice and so marketed in the last
quarter of 2020. “The aim is to trial an
aircraft transaction and try to achieve this
seamlessly, without any difficulties
transferring and providing data,” says
Scanlon. “The GARR platform should
provide a safe deposit for maintenance and
technical data, which will be beneficial to
the industry given the number of aircraft
that are parked. The existence of such a
platform will help with the evolution
towards paperless maintenance. That is,
truly digital and paperless maintenance
records are those that are stored and
transported in extensible mark-up
language (XML) format, including the
mechanic’s digital signature which is based
on a PIN system. The BC-based platform
would therefore be used to underpin the
audit trail for these digital records by
providing a second store in addition to the
traditional archive store.”
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AIRCRAFT COMMERCE
48 I FREIGHT BUSINESS
The slump in passenger traffic is the impetus for a large number of
767-300ERs retirements. This is good news for potential freighter
convertors because the 767 platform can enjoy an enduring second life
converted freighter. Aircraft acquisition and build costs are examined.
767-300ER freighter
build costs 2020
M
any passenger-configured
767-300ERs have been
parked and retired since the
outbreak of Covid-19 due
to the dramatic fall in passenger traffic. It is
unlikely that many of the older aircraft will
return to passenger service, since airlines
will prefer to deploy their younger, more
efficient aircraft during a traffic recovery.
Before the pandemic it was becoming
difficult to find 767-300ER freighter
conversion candidates at a good market
value. Passenger operators were holding on
to their assets, so the supply of conversion
feedstock was low.
Recent announcements from large fleet
carriers, such as Air Canada and Delta
Airlines, are that they will be retiring large
numbers of 767-300ERs. Many investors
have a keen interest in converting them to
freighters by way of a passenger-to-
freighter (P-to-F) conversion. Two P-to-F
modifications are available: aircraft
modified with the IAI conversion are
designated with a BDSF suffix; and aircraft
modified under the Boeing programme are
designated with a BCF suffix.
Israel Aircraft Industries
“Feedstock availability of the 767 has
certainly increased, and we are happy to
see that more of this aircraft will have a
second life as a freighter,” says Noam
Sharoni, director of 767 cargo conversions,
at Israel Aircraft Industries (IAI). “Towards
the end of 2019 we had doubts about the
longevity of the 767 P-to-F conversion
programme, because many passenger
operators were prolonging the service life
of their 767-300ERs due to a shortfall in
passenger capacity.”
There are about 300 passenger aircraft
of this type in service. The youngest are six
years of age, having been built in 2013 and
AIRCRAFT COMMERCE
2014; and the oldest are over 30. “All
these aircraft will be suitable candidates for
conversion at some point, so there is now a
lot of feedstock choice,” says Sharoni.
There is a high demand for freight
capacity, and because of the large number
of retirements of this type, the initial
acquisition cost has dropped. Converting
an aircraft is good for lessors, because they
do not have their ageing inventory
grounded.
“Not all the available 767-300ERs will
be converted, but we expect a large portion
will be,” says Sharoni.
It is believed that the strong demand
for P-to-F conversions will keep the initial
acquisition price for the 767-300ER
buoyant. At the start of 2020 the market
value for a 767-300ER was $10 million for
a 20-year-old aircraft, but by June it had
dropped by 20% to $8 million.
Half-life and older aircraft will be the
first to be converted. It is expected that
younger aircraft will be absorbed back into
the passenger fleet when the Covid-19
recovery begins. Its higher initial
acquisition cost makes it unlikely that
anyone will invest in a cargo conversion
for a six- or seven-year-old asset.
IAI is currently converting a 31-year-
old aircraft, which is expected to have a
post-conversion service life of 15-20 years.
“When we convert older aircraft, we
do not find any serious airframe issues or
harsh corrosion. Lots of the aircraft have
been well maintained by the airlines and
the lessors. Importantly, most aircraft we
are converting have been operating on a
regular basis until recently,” says Sharoni.
Unlimited slots
There is a high demand from operators
such as DHL, UPS and CAM/ATI for 767
freighter aircraft and IAI has reported
recently that interest for conversion slots
for specific aircraft has increased.
“Many customers want to have their
conversion slot for tomorrow, and we are
finding solutions for this. IAI has six 767
conversion lines in Israel and a remote
facility in Mexico,” explains Sharoni.
“IAI’s approach to P-to-F conversions is
‘we have unlimited slots’, so we will open
other conversion lines in Israel or elsewhere
if needed to meet customer requirements.”
Gearing up conversion capacity to meet
demand will be dependent on each
business case and the justification to open
another line at another site. IAI previously
opened a satellite conversion facility in
Brazil to meet the requirements for its 767-
200ER P-to-F programme.
Logistical challenges mean it will take
9-12 months before a new conversion
facility can be made operational. Raw
material and close coordination with
manufacturers are needed to ensure that all
the necessary provisions and apparatus are
ready before the facility opens, including
training the remote site technicians.
Aircraft access
Since many areas on the aircraft are
opened up during the conversion process,
this is an opportunity for major
maintenance on the aircraft combined with
bridging maintenance to the freighter
operation maintenance programme. Much
of the aircraft teardown, and some
restoration of the airframe, are included in
the conversion price, so completing major
maintenance work during this time means
that the aircraft owners will not be charged
twice to access and restore the areas that
have been opened up for conversion.
Freighters are generally operated at
lower utilisation rates than passenger
aircraft, and will typically be placed onto a
ISSUE NO. 130 • JUNE/JULY 2020
 49 I FREIGHT BUSINESS
lower utilisation maintenance programme 767-300ER CONVERTED FREIGHTER SPECIFICATIONS
to match the freighter operator utilisation
profile. Aircraft 767-300BCF 767-300W BCF 767-300BDSF 767-300BDSF
Established in 1994, Aldav Engineering type winglets winglets
is an aviation consulting firm that provides
technical and commercial expertise to MTOW - lbs 412,000 412,000 412,000 412,000
many aircraft owners. Aldav Engineering
specialises in aircraft P-to-F programmes, MZFW - lbs 309,000 309,000 309,000 309,000
maintenance and modifications.
“An operator will want to have a clean OEW - lbs 181,520 185,720 180,800 183,800
aircraft, free from all major maintenance
for as long as possible, so this means zero- Gross structural 127,480 123,280 128,200 125,200
payload - lbs
timing all major airframe checks. This is
because if an operator invests in converting Payload carriage
a 15-25-year-old aircraft, they will want to
keep it in service for as long as possible,” Main deck vol - cu ft 11,884 11,884 11,884 11,884
explains Moshe Haimovich, managing
director at Aldav Engineering. “Coinciding Main deck tare weight - lbs 11,550 11,550 11,550 11,500
with zero-timing the letter checks, bridging
maintenance it will be advantageous to Lower deck vol - cu ft 3,750 3,750 3,750 3,750
terminate as many repetitive airworthiness
directives (ADs) as possible, and rectify any Lower deck tare weight - lbs 6,090 6,090 6,090 6,090
temporary repairs. In addition, operators
Total volume - cu ft 15,634 15,634 15,634 15,634
would like to take the opportunity to
upgrade avionics systems and other Total tare weight - lbs 17,640 17,640 17,640 17,640
modifications for fleet standardisation.”
Other costs include painting the Net structural 109,840 105,640 110,560 107,560
aircraft and its livery to the new operator. payload - lbs

Volumetric payload @ 99,866 99,866 99,866 99,866

Door configuration
One difference between 767-300ER
passenger feedstock aircraft is the various
locations of the passenger doors. The 767-
300ER has three exit door configurations.
These should be considered prior to
conversion.
The baseline configuration (Type A-III-
III-A), for each side of the aircraft, has two
main cabin doors and two emergency exits
over the wing. The second configuration
(Type A-A-III-A) has three main cabin
doors and one emergency exit over the
wing, for each side. Finally, the third
configuration (Type A-A-I-A) has three
main cabin doors, as well as one smaller
door that is located slightly aft of the
wings, for each side.
The different fuselage configurations
deal with different guidelines for airlines
across the world. Some operators and
regulators require larger doors, others
more exit points.
Delta Airlines configured a number of
its 767s to the baseline specifications,
although each fleet has variations. Some
airlines might initially choose one
configuration and another for a subsequent
order. “There is a potential cost issue when
choosing aircraft for conversion that are
built to the second- and third-door
configurations, because the additional
main cabin door situated just forward of
the wing interferes with the installation of
the main deck cargo door. This means that
these aircraft will require additional
structural modifications,” says Haimovich.
Except for the L1 door, all other
passenger doors are deactivated or
structurally plugged during the conversion.
6.5lbs/ cu ft
Undercarriage
All passenger-configured 767-300ERs
were built to a 408,000 lbs maximum
take-off weight (MTOW) baseline
specification. There is a handful of early
production aircraft that had a lighter wing
and a lower MTOW, although these are no
longer in service.
Boeing offered an MTOW weight
upgrade for its passenger aircraft,
increasing it from 408,000lbs to
412,000lbs, and its maximum taxi weight
(MTW) to 413,000lbs. Boeing also offered
an undercarriage upgrade to 413,000lbs
MTW ‘freighter specification’, for both its
passenger and production freighter aircraft.
Maximum zero fuel weight (MZFW) is
the aircraft’s maximum weight allowance
including all its payload contents minus its
usable fuel allowance. Aircraft with a
Boeing or an IAI P-to-F conversion can
achieve an MZFW of 309,000lbs.
“For aircraft with winglets, the landing
gear must be upgraded to ‘freighter
specification’ to achieve the MTW of
413,000lbs,” says Jens Steinhagen, interim
director of Boeing freighter conversions at
Boeing.
Without the additional landing gear
upgrade, aircraft with winglets are limited
to an MTW of 406,000lbs, because the
aircraft’s centre of gravity (CG) restriction
changes when winglets are installed to
aircraft with ‘non-freighter specification’
landing gear.
The aircraft has specified maximum
forward and aft CG locations, and the
aircraft must be loaded so that its CG
remains within these limits. Unless the
landing gear is upgraded, increasing the
767’s MTOW from 408,000lbs to
412,000lbs reduces the distance between
these two limits.
When completing an MZFW weight
upgrade, the forward distance of the
aircraft’s CG limitations is shortened
towards the CG point. As Boeing modifies
the landing gear during its conversion, it
gives the Boeing Converted Freighter (BCF)
a slightly wider spectrum of loadability.
Nevertheless, the loading and CG
parameters of the IAI conversion are well
within the normal operating range of the
aircraft. Furthermore, both aircraft can
ultimately carry the same amount of cargo.
Weights
Operators and lessors have historically
upgraded aircraft weights to the maximum
when undergoing conversion in the belief
that it will improve mission capability and
marketability. Now investors are trying to
minimise the total build costs, and are
assessing if all of the weight upgrades for
767 P-to-F conversions are necessary.
It is possible to change the MZFW,
MLW and MTOW.
Any additions to the MZFW will
increase the aircraft’s payload, so MZFW
upgrades are more valuable than MTOW
upgrades. MTOW upgrades are charged at
a dollar rate per lb increase. MZFW

ISSUE NO. 130 • JUNE/JULY 2020 AIRCRAFT COMMERCE

50 I FREIGHT BUSINESS
upgrades above the highest passenger
weight are done at the point of conversion,
and the cost is agreed in the conversion
price.
Both Boeing and IAI can increase the
MZFW to 309,000lbs and the MTOW to
412,000lbs. First, the aircraft must be rated
to the maximum achievable 767-300ER
passenger weights of 408,000lbs MTOW,
320,000lbs MLW and 295,000lbs MZFW.
These upgrades must be purchased from
Boeing before conversion.
Upgrades above the maximum
achievable passenger weights are bought
from either STC holder during conversion.
The difference in weight between the
aircraft operating weight empty (OEW)
and MZFW equates to its gross payload,
and the difference between MZFW and
MTW determines the amount of fuel
carried, and so affects its range. The MTW
is slightly higher than MTOW since it
includes the weight of the taxi and run-up
fuel for the engines and auxiliary power
unit (APU) that is used before take-off.
“It is believed that operators will
always want more payload,” says Bill
Tarpley, president, Creative Conversions
LLC. “This focus on payload has now
become questionable because the 767
typically operates at consistently low
packing densities.”
A gross packing density of 7lbs per
cubic foot (cu ft) will equal a payload of
about 111,000lbs. It is unlikely that
operators will fill every available inch of
the aircraft with freight, so a gross payload
of 110,000lbs is more realistic.
Operating at a relatively low packing
density means it is questionable as to why
investors want to invest in upgrading the
aircraft’s MZFW to 309,000lbs, and
AIRCRAFT COMMERCE
increase its gross structural payload to a
maximum of 125,000lbs, when the aircraft
will never operate at such weight.
“It is unlikely that express operators
will achieve a gross packing density above
7lbs per cu ft. The weight of a container
and pallet generally adds 1lbs per cu ft in
tare weight,” explains Tarpley. “Typical
express net packing densities are 5.5-6.0lbs
per cu ft.”
Far Eastern operators rely on bubble
and tie wrapping, which significantly
lowers the gross packing densities when
compared to DHL and FedEx which load
cargo into universal loading devices
(ULDs). The substantial ULDs have a
much greater tare weight than pallets.
Depending on the aircraft upper- and
lower-deck loading configuration, tare
weight routinely ranges from 10,000lbs to
17,000lbs. For express operators and 767
P-to-F missions in general, total volumetric
capacity is regarded more highly than
maximum weight.
Range
“It is very straightforward to convert a
lower-rated MTOW version to the higher
gross weight aircraft. We change parts to
give the aircraft its maximum structural
limits, and then we change the aircraft
upgrading limits and paper weights that
are documented in the aircraft flight
manual (AFM) and the placard in the
aircraft,” says Steinhagen.
Many operators will not operate the
aircraft to its maximum range. Shorter
flight sectors translate to the aircraft using
less fuel, which means it can be rated at a
lower MTOW. A lower MTOW rating
also translates to cheaper landing and
The 767-300ER is available with three door
configurations. A number have six main cabin
doors, as well as two smaller doors that are
located behind the wings. Extra doors will need
to be plugged and deactivated which can impact
conversion cost.
navigational fees charged to the airline.
Upgrading to 412,000lbs MTOW and
413,000lbs MTW is only necessary if the
aircraft operates on sectors of 3,300nm or
longer. For typical US domestic sectors,
such as Los Angles to Cincinnati, the
aircraft will not need a MTOW greater
than 390,000lbs, because of the fuel
needed to complete such a mission.
Increasing the MTOW from
408,000lbs to 412,000lbs will require
minor upgrades. Increasing the MTOW
and MTW by 3,000lbs will increase the
aircraft’s range by about 220nm.
Most 767 freight operators are not
pushing the aircraft to its maximum range.
Cincinnati to the DHL hub in Leipzig is
about 3,870nm, which is about 500nm
further than the aircraft can fly with a full
structural payload. The fact that aircraft
are operating this route indicates they are
flying with less than a full structural
payload. So are MTOW and MZFW
upgrades necessary and worth the money?
Flex weight
Many feedstock aircraft will have flex-
weights. All 767-300ER are built to a
408,000lbs MTOW baseline specification,
but Boeing often delivered them as a lighter
specification. This is because customers can
specify the optimum MTOW best suited to
their operation to lower the fees imposed
by airports based on take-off and landing
weights. Boeing will certify the aircraft at
the chosen weight by a paper change.
The lower the incoming passenger
MTOW, the higher the cost of upgrading it
before conversion.
For example, it is conceivable for an
operator to reduce the MTOW from
408,000lbs by 21,000lbs to 387,000lbs,
and Boeing will charge for every lb
removed. Importantly, the OEM will
charge to add MTOW back and increase it
to the 408,000lbs necessary for conversion.
Flex weights enable an aircraft to
operate at more than one MTOW.
Winglets
Adding to the aircraft OEW will reduce
its gross structural payload. Typical OEW
for a P-to-F converted 767-300ER without
winglets is about 180,000lbs. OEW
variables include the configuration of the
feedstock, aircraft age and subtleties like
the number of layers of paint and repairs.
ISSUE NO. 130 • JUNE/JULY 2020
52 I FREIGHT BUSINESS
Winglets will increase the OEW by
3,000lbs. For the 757, Air Partners Boeing
offered an MZFW upgrade to compensate
for the weight increase caused by the
winglets. Boeing does not offer such an
upgrade for the 767, as this results in a
weight penalty that reduces the gross
structural payload.
Winglets are a popular option for 767-
300ER passenger operators, and many
feedstock candidates will already have
them installed.
The increase to the OEW means an
aircraft will have to fly a 3.5-hour sector or
above before winglets lead to any
noticeable fuel savings. “To make the
winglets worthwhile you have to fly sectors
of at least 1,500nm. Winglets represent a
weight penalty when flying on many
domestic US routes, including Los Angeles
to Cincinnati or Memphis,” says Tarpley.
As the wing is strengthened to support
the added weight, removing the winglet
tips will not result in any significant weight
saving. IAI has not heard of a customer
installing them post-conversion, and it
recommends acquiring feedstock with or
without them as required.
Another consideration in relation to
wingtips is the market the aircraft will
operate in.
“We can accept both winglet and non-
winglet aircraft for conversion. If the
aircraft does not have winglets, the
customer can decide to install them. We
have had winglets installed before and after
conversion,” says Steinhagen.
Winglet removal and retrofit is licenced
by Aviation Partners Boeing (APB). The
structural reinforcement needed in the
wing means that the total winglet
installation weighs about 3,000lbs, even
AIRCRAFT COMMERCE
though each winglet weighs 500lbs.
It is believed that many of the standard
wingtips are discarded post-modification.
There are reports of a lack of availability
for replacement wingtips from both the
OEM and used serviceable material (USM)
suppliers. This compounds the problems
associated with winglet removal.
The additional increase to the OEW is
less significant to operators at low express
packing densities, than those that are flying
higher-density general cargo missions.
PW versus GE
There are three engine options for the
767-300ER: General Electric (GE) CF6-
80C2; Pratt & Whitney (PW) PW4000-94;
and Rolls-Royce RB211-524H. Limited
numbers of Rolls-Royce-powered aircraft
were produced, and because they are
relatively old there is no STC to convert
them.
“Only about 30 RB211-equipped
aircraft were manufactured, and initially
we did not design an STC for the Rolls-
Royce configuration,” says Steinhagen.
“We can do it, although there will be an
additional charge, and conversion could
take more time.”
PW- and GE-powered aircraft
dominate the fleet, and engine choice is a
main issue for P-to-F conversion. The CF6-
80C2 series of engines is available in either
power management computer (PMC)
controls or full authority digital engine
control (FADEC) configuration. GE-
powered aircraft are the market preference
for the 767 conversion programme, and
these engines make up most of the 767
freighter fleet.
“The PMC uses cables from the
During the conversion process it is
recommended to terminate any aircraft
airworthiness directives and upgrade the
aircrafts avionics. Other costs include paint and
livery schemes and buyer furnished materials.
pedestal to the main engine control (MEC),
compared to the FADEC, which uses wires
and a digitalised control module engine
electronic control (EEC). There is no
intermix between PMC and FADEC
aircraft,” says Haimovich. “The FADEC
version was preferred above all, but when
presented with no other options customers
also opted for the PMC engine.”
It is believed that the PW engine weighs
300lbs more than the GE, equating to an
additional weight increase of 600lbs per
aircraft. One reason for choosing the GE is
down to fleet integration, and operational
and maintenance experience.
ATSG pushed for higher weights on its
GE engines, which became the standard,
and it is generally accepted that PW has
been at a disadvantage because of this.
During the early period of the
conversion programme, PW-powered
passenger aircraft were only certified to a
maximum MZFW of 303,000lbs, and
MLW of 320,000 lbs when it was possible
for GE-powered aircraft to achieve an
MZFW of 309,000lbs and MLW of
326,000lbs.
This initially meant few 767-300ERs
with PW4000-94 engines were converted.
Both Boeing and IAI have since been
granted approval to upgrade the MZFW
and the MLW of PW-powered aircraft to
309,000lbs and 326,000lbs respectively.
Engine maintenance
Engines’ maintenance condition is
important because of the cost of putting
them through a shop visit (SV). Typically,
freighters have a lower rate of utilisation
than passenger aircraft, and engines do not
necessarily need the full life limits
remaining on their life limited parts (LLPs).
These are 15,000 and 20,000 engine flight
cycles (EFC).
“Engines will stay on wing for 15,000
engine flight hours (EFH), and if you
operate at a ratio of 3.0EFH per EFC, it
will mean removal intervals of 5,000EFC.
Ideally then, engines with at least
5,000EFC remaining would be acquired
for an aircraft that will be converted.
Nevertheless, the engine’s actual removal
interval will depend on the operational
utilisation of the aircraft which can vary
greatly by operator,” says Haimovich.
It is not ideal to be removing and
sourcing replacement engines after a short
period of operational time, so it is
ISSUE NO. 130 • JUNE/JULY 2020
54 I FREIGHT BUSINESS
important to know when an engine’s next
SV is due. As the aircraft will be grounded
for four months during conversion, it is
recommended that operators complete all
necessary impending maintenance.
“If the engines must be removed after
the aircraft has gone into operational
service, this will disrupt the airline’s
operating schedule,” says Haimovich.
PW4000-94 LLPs are more expensive
than those for the GE CF6-80C2, and the
CF6 has a longer on-wing life than the
PW4000. The PW4000-94 is rated to
complete 3,400EFC between SVs, against
the CF6-80C2 that can achieve up to
4,000EFC between SVs. It is typical for a
freighter to fly 600FC per year, so the extra
600EFC for the CF6-80C2 could equate to
an extra on-wing time of 12 months.
Both engines can complete almost
20,000EFC between the LLPs’ intervals,
although the CF6 needs a high pressure
turbine (HPT) replacement at 15,000EFC.
All LLPs in the higher thrust-rated
PW4000-94 variants have lives of
15,000lbs.
A shipset of LLPs for the PW4000-94
is expected to cost $8.9 million, compared
to a list price of $8.7 million for a full
shipset of LLPs for the CF6-80C2.
Avionics
When an aircraft is placed for
conversion it is an ideal time to install new
avionics to meet regulations and to future-
proof the asset. According to IAI, many
customers are focusing more on avionics
upgrades to increase mission capability and
to future-proof service life.
“There are three major areas of
avionics upgrades, navigation, and flight
management and surveillance,” says Mike
Glover, vice president sales and business
AIRCRAFT COMMERCE
development at GoAeroMx. “If you are
flying the North Atlantic and in Europe,
you must be datalink-equipped. In the US
the surveillance picture is driven by ADS-B,
and most 767s will meet this requirement
unless they were retired some time ago.”
If the aircraft does not have ADS-B it
will be necessary to equip it because it is
now a mandatory requirement. Many of
the avionics upgrades required depend on
the type of mission and route the aircraft is
going to fly. If the aircraft is going to
operate in the US, then a datalink might
not be needed.
For navigation it is recommended that
a GPS with required navigation
performance (RNP) capability is fitted.
This will make it possible to fly at a lower
operating minima than a non-precision
procedure at most US airports.
“Many customers are installing a 90-
day underwater locator beacon as part of
the global aeronautical distress safety
systems (GADSS) requirement. It is not an
expensive modification, but operators are
making these upgrades right now, since the
mandate could change in the near future,”
explains Glover.
Rockwell Collins has announced that it
will end the production of its 767 EFIS
display tubes, so operators must now rely
on the manufacturer’s repair capability or
any surplus availability from parted-out
units. Owners of Rockwell Collins-
equipped aircraft must look at how to
manage their EFIS CLT tubes, and if they
should complete a certified display system
update for the aircraft.
One of the biggest impediments for any
avionics upgrade is lost opportunity and
the impact on revenue while the aircraft is
grounded. Many airlines will choose not to
upgrade the avionics unless it is mandated.
“For example, updating the avionics
Winglets are a popular upgrade to passenger
aircraft, although for freighter aircraft operating
sectors less than 3.5 hours the added weight of
the winglets translate to a penalty. It is
recommended that 767-300ER feedstock is
sourced with or without winglets as required.
for $100,000 worth of operational benefits
is significantly negated if the aircraft will
lose $70,000 in lost revenue while having
them installed,” says Glover. “If you are
going to put the aircraft down for 120 days
for a cargo conversion, then this is the ideal
time to update the avionics.”
Not every retired aircraft will become a
freighter, and some will be parted out,
which will increase the supply of USM. It is
forecast that in a matter of months there
will be greater access to USM and
operators will not need to buy avionics
new from the box.
The cost of USM is driven by the
market and prices depend on availability,
but savings can range from 10% to 80%,
depending on the product. According to
Glover, the savings are substantial enough
and it is always worth finding out the USM
availability in the market.
It is important to understand how the
previous operator used the aircraft and
how the new owner wants to use it.
Some carriers in the US have a
domestic fleet and an international fleet.
The international fleet will be equipped to
operate globally, while the domestic
aircraft will have none of these upgrades,
such as SATCOM, as they simply fly coast
to coast.
“If the client wants to convert an
aircraft into a freighter, I would look at the
avionics specification sheet and advise
them on the part numbers (P/Ns) that will
need to be updated, what upgrades they
need to make and any limitations,”
explains Glover. “TCAS change 7.1 is
required in Europe, and if an aircraft has
been operated in the US then it is likely it
will be flying TCAS change 7.0. Some
TCAS units can be in excess of $200,000,
yet at the moment there are opportunities
for better pricing.”
A full FMS and datalink CPDLC Link
2000-capable system and a TCAS will cost
$1.2-$2.5 million. Prices could be higher
for an ill-equipped aircraft.
More mission-capable freighters are
coming on the market. Avionics can be the
differentiator and a globally-equipped
aircraft is highly marketable, since lessors
and operators know that they will not need
to address avionic shortfalls in the future.
General freight market
The 767-BCF is very efficient in the
express freight market, although the
ISSUE NO. 130 • JUNE/JULY 2020

Cincinnati to the DHL hub in Leipzig is about
3,870nm, and beyond the range of a fully loaded
767 freighter. The fuel required to operate across
these distances indicates a low packing density
carried by express operators.
platform does have the performance and
credentials to operate as a general market
freighter. Recently Boeing noticed an
upturn in interest in the platform for the
general freight role.
For this reason, Boeing has made it
possible to configure the aircraft for both
missions by offering a powered cargo
loading system (CLS) as a general freight
option, and a manual CLS for express
freight.
“Most customers are looking at the
aircraft for the express market, but some
are looking at it for the general market,”
explains Steinhagen. “The manual CLS is
the baseline option that we install, but if
the buyer wants to choose equipment to
give the aircraft greater flexibility then they
can add a powered CLS.”
Optionally, Boeing can provision the
aircraft for a powered system by adding
electrical supply lines and control panel
locations. Doing so will allow the customer
to install the powered CLS during the
conversion, so they can build in greater
levels of customisation.
A power drive system is more than
double the cost of a manual CLS. The
power drive system uses complex
engineering to drive the container into the
aircraft, rotate it, and then drive it all the
way aft. The placement of the aft container
on the 767 means it has to be manually
turned before it can be stowed.
The additional weight of the power
driving units, electrical wires and control
system will add 1,200lbs to the aircraft’s
OEW. Is a powered drive system necessary
for an aircraft with a gross payload of
123,000-127,000lbs?
If an operator loads 125,000lbs of
general freight in 24 containers on the
main deck, each container will weigh
5,208lbs, which is not difficult to push
manually. The main benefit of the powered
CLS compared to a manual system is the
number of ground handlers needed to load
the aircraft. Typically, it takes three to four
ground handers to manage a manual
system, against two operating a powered
system.
Boeing delivers production freighters
with power drives, and a powered CLS is
an option that IAI does not have. This is
because the two CLS suppliers for the IAI
conversion, AAR and ANCRA, only offer
manual systems for the 767.
Other Boeing options allow operators
to further customise the aircraft depending
ISSUE NO. 130 • JUNE/JULY 2020
on the market the aircraft will operate in. It
is possible, for example, to increase the live
animal loading weight of the aircraft by
having tighter temperature controls. This is
an important option for an operator that
wants to haul live animals on both decks.
“The general freight market prefers
having these extra options fitted. For
lessors it will depend. Some have a very
targeted market where they aim to place
the aircraft. If the aircraft is to be placed
into the express market, investors will
want to keep it light. Other operators want
versatility, and will configure the aircraft to
be more suitable for general freight to
increase its marketability,” says Steinhagen.
It is believed that most Boeing P-to-F
conversions have left its facilities with
manual CLS components. A power drive
system reduces the aircraft’s gross payload,
adds complexity and maintenance, and
also increases the potential to fail.
Ramp size
Delays delivering the 787 caused many
airlines to continue operating their 767-
300ERs longer than anticipated. “There
has been a shortage of 767 feedstock
aircraft that kept the initial acquisition
values relatively high. When the 787
deliveries increased and Amazon
announced that it would primarily begin its
cargo airline with converted 767-300ERs,
the demand for P-to-F conversions
increased significantly,” explains Cargo
Facts consultant, Jacob Netz.
Amazon is mainly responsible for the
recent success of the 767-300ER
conversion programme. According to
Cirium data Amazon Air uses (37) 767 P-
to-F converted aircraft that are either
55 I FREIGHT BUSINESS
leased or operated by Atlas, ATSG and
ATSG entities.
Other large fleets include Cargo Jet
(12), Amerijet (6) and SF in China (8). UPS
operates a handful of ATSG aircraft.
There is a total of 113 767-300ER
conversions, of which 104 are equipped
with CF6-80C2 engines and nine are
equipped with the PW4000-94.
Nevertheless, the first three aircraft
converted by IAI were PW aircraft for Euro
Atlantic. Now ATSG operates two of these.
Engine values are considerably higher
for CF6-80C2 engines than PW4000.
There have been recent bidding wars for
GE FADEC-powered units.
Investors are uninterested in the
PW4000 because of the lack of
commonality with the rest of the fleet,
which could lead to the lessor having
difficulty remarketing the aircraft.
“ATSG only operates three PW4000-
powered aircraft, and has a preference for
GE power for operational reasons,” says
Stephen Fortune, principal at Fortune
Aviation Services.
The limited number of CF6-80C2-
powered conversion feedstock aircraft has
now dramatically reduced because of
Covid-19. Many passenger airlines are
parking aircraft and not extending their
leases, which has significantly increased the
number of available engines in the market,
so market values of aircraft and engines
have begun to fall. The greater availability
and reduction in CF6-80C2 market values
will mean that the demand for feedstock
candidates with these engines will be much
higher than for those equipped with
PW4000-94s.
“Current economic conditions likely do
not warrant GE 767 freighter operators to
AIRCRAFT COMMERCE
56 I FREIGHT BUSINESS
consider a sub-fleet of PW-equipped
aircraft,” says Fortune. “When economic
conditions improve, the PW-powered
aircraft may be considered, provided the
767 is still a viable conversion candidate.”
Aircraft built from 1998 to 2008 are
considered to be at the ideal age for
conversion to freighter. Nevertheless
reports of older 767-300ERs being
converted means it is entirely possible to
place feedstock aircraft aged 25 years and
over into conversion.
A total of 166 aircraft was built during
this period, of which 115 are powered by
GE, and 51 by PW.
Smaller operators of A300, A310 and
767-200 freighters considering the 767-
300ER freighter may prefer the lower
initial acquisition cost of the PW4000
feedstock to replace their ageing fleets.
There are 200 freighters of these types, of
which 90 are operated by FedEx and UPS;
these will require placing over the next 10
years. Many operators of legacy medium
P-to-F converted aircraft are unlikely to
suffer from the engine commonality
constraints of their larger contemporaries.
“If United Airlines sold a block of its
PW-powered 767s at a favourable rate,
and included support for the engines, it is
possible that PW-powered 767-300ERs
could enter the freighter market. The data
suggests that United’s fleet is large enough
to do this,” says Fortune.
It is unlikely that 33 CF6-equipped
767s operated by ANA and Japan Airlines
will be converted because of the high
number of FCs they have accumulated.
WestJet’s four CF6-powered aircraft were
on the market and were reportedly
purchased by Amazon.
Currently Delta is marketing some of
its 767 fleet, and Air Canada is offering GE
and PW aircraft for sale.
AIRCRAFT COMMERCE
Amazon
The sustainability of the 767 P-to-F
conversion programme is being questioned,
because most of its market share is driven
by Amazon. The eRetailer is getting
increasingly closer to its customers with an
expanding network of well stocked
warehouses that underpin Amazon’s one-
day and same-day deliveries.
“Covid-19 lockdowns mean many
people are ordering more online, although
the true impact of the downturn is not
known,” says Fortune. “Amazon is doing
well, but it is likely that eCommerce
spending will be slow.”
Like UPS, Amazon considers aircraft to
be a high-cost necessity, and would prefer
to use its ground network to a larger
extent. Amazon is building multiple
distribution centres across the US, thereby
limiting air transport as its business grows.
“Amazon continues to add aircraft to
its operation, most recently the 737-800
freighter, but provides few details on how it
will use air transport in the future,”
explains Fortune. “Large retailers such as
Walmart and Target are expanding their
eCommerce services to prise business away
from Amazon, in an effort to compete.”
US tech giant chief executives have
recently been questioned by Congress
regarding their power to thwart
competition. Amazon chief executive
officer Jeff Bezos has testified before the
House antitrust committee as it nears the
end of a year-long investigation of
competition problems within its sector.
Build costs
The oversimplification of costs can
determine whether a project deviates from
its planned budget. Therefore, it is
The success of Amazon has been a key enabler
for the 767-300ER passenger-to-freighter
conversion programmes. However questions
must be asked pertaining to the eRetailer’s
future requirements to ship cargo by air and
consumer spending during a possible economic
downturn.
important to emphasise other cost elements
of the conversion process to potential
investors.
Current acquisition costs for a 767-
300ER conversion candidate are $8-$10
million. The bulk of this acquisition price is
determined by the value and therefore the
remaining maintenance life of the engines.
The airframe will amount to a maximum
of about $1 million of the total value. A
purchase value of $8 million means the
two engines will each have several
thousand EFC of engine life.
The typical conversion cost is $14-15
million. Additional cost during conversion
will depend on the maintenance condition
of the aircraft and the engines. If the
engines do not need to be overhauled an
investor should factor in an additional $3.5
million for heavy airframe maintenance
actions, new wheels and brakes, and
complex rotable components. There should
then be an allowance for avionic upgrades.
The total build cost for the converted
aircraft value will then be $28-30 million,
but the total will vary with the
maintenance status of the engines. If an
engine requires an overhaul, the total cost
could be $28-$32 million, although the
aircraft’s purchase value should be lower.
The monthly lease rates that 767-
300ER operators can expect to pay range
from $330,000 to $380,000 per month,
equal to a lease rate factor of about 1.2%.
Additional costs can vary between both
Boeing and IAI conversions. There can be
many nuances between conversion
suppliers in the items that are included in
the conversion price and those that are not
such as buyer-furnished material (BFM)
and customer-furnished material (CFM).
Other additional costs include ferrying
the aircraft, which will vary depending on
where it is purchased and the location of
the conversion facility. Test flights can be
completed by the operator or the
conversion facility. Furthermore, opting for
an ‘onsite representative’ is another cost,
because wages, accommodation and car
hire will need to be budgeted for over the
typical four-month conversion period. This
includes a couple of weeks post-conversion
to finalise and complete the project.
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ISSUE NO. 130 • JUNE/JULY 2020