A Cost Effective Replacement to

the traditional PBH Programs

Retaining the comfort of cost visibility and smoothing expenditure
with additional cost savings and true transparency.
 Component Management
Traditional Models
Component management models have been pretty stagnant for many years, mainly consisting of;
Time and material component quotation which offers the best possible transparency, but unpredictable maintenance
costs and potentially large administrative burden on the airline.
Fix price agreements, which can help airlines better predict the costs of component maintenance, but no matter what
the predictions volumes can remain unpredictable and often there are multiple exclusions within the pricing. Also fix
pricing includes a ‘risk buffer’ in the modelling as an insurance against higher cost repairs, so taken as an average
these will always be higher in cost over the long term than traditional T&M quoting.
Finally and probably the most popular is the Flying Hour or Power by Hour agreement, encompassing an agreed
number of components over a fixed term, offering the airline visibility on costs, reduced fluctuation in component
repair, and reduced administration.
Though convenient, all PBH providers require they have enough margin in their rate not only to make a profit and
cover administration costs, but also to insure against the risks of component management. Risk of high cost repairs,
BER replacements, increased spares costs (annual uplifts), fluctuations in flight hours, AOG or IOR loans and
exchanges, NFF charges etc. Many flying hour contracts include clauses to cover off some of the risks, for example,
SB clauses, BER clauses or Minimum flying hours, but many are becoming increasingly complicated specifying
exact part numbers or containing multiple exclusions to mitigate these issues. In turn this can make the relationship
between supplier and airline more contentious, making it harder to work together to drive down costs, and can
increase the burden of administration back on the airline trying to ensure the supplier is fairly administering the
exclusions from the contract.
The only way to truly circumvent such issues is to have a truly all encompassing PBH including all areas of risk,
replacement of BER material and high cost components. There are providers that offer this service, however the
costs of such contracts are exponentially higher than the average costs of the airline managing the components
themselves.

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 MCS Agreement
What does MCS Agreement Component
Management Offer?
The Median Component Service Agreement combines benefits of traditional Power By hour or Flying Hour
Agreements with real costs and transparency benefits of time and material quoted repairs:

• Visibility of component maintenance costs

• Smooth predictable month to month expenditure
• Reduced administration
• Lower costs
• Complete transparency on repairs
• Transparency on costs
• Closer relationship between CRS and airline
• Ability to include any repairable components (Rotables, flying surfaces, seats etc)
• Geared to produce annual savings
• Drives improved reliability
• CRS enhanced repair program can be integrated as part of the agreement to offer more time on wing, less failures, less
repair costs, less admin costs, less line engineering costs, less delays

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 MCS Agreement
How it Works
Simply put the MCS Agreement averages an airlines annual component repair costs from the previous 12 months and
divides them into equal monthly payments. In addition CRS gains an annual bonus as an agreed % of any savings they
make from the previous year, driving them to work with the airline, workshop and external vendors to make year on year
savings. The costs to CRS may be similar to those offered by a flying hour provider covering the same material, however
as the risk is substantially lower as any fluctuation in price would be captured in the following year or a close of contract,
thereby the risk element and applicable buffer costs are significantly reduced.

Indicative Shape of Component Maintenance Costs

The table left reflects indicative costs for
three models, no agreement with large
fluctuations betwwen winter and summer
months, Flying Hour or Power by Hour
Agreement at a single steady cost (with no
annual uplift), and the MCS.

Assuming the costs are covering only the

same components as the PBH there would
be a small saving in the first year – this is
from the assumption the component repair
average is taken from the FHA from the
previous year at the same rate. As you will
see the major savings come in years 2 and
3 as the new true cost of maintenance
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4
averages can be applied.
Actual Costs FHA/PBH MCSA

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 MCS Agreement
Process
• The interface and logistics work in the same way as a standard flying hour or power by hour agreement

• An annual meeting to discuss costs from the previous 12 months is required, in order to set the monthly charge for
the coming year. CRS will offer an open book policy on costs and will highlight any reliability issues they feel need
addressing which will assist in further costs reductions in the coming year.

• CRS will utilize there own 145 workshops wherever possible to support the agreement and keep costs reduced, to do
this the agreement requires the airline to appoint CRS as their designated repair facility to the OEM’s for support of
spares and technical data.

• Components not repaired in-house will be subcontracted to carefully selected 145 workshops, and repaired on a T&M
basis with oversight from our own technical engineers to ensure quality and costs

• All quotes and shop reports will be maintained for customer review should they so wish

• Repeat failures of rotables, or specific piece parts will be highlighted with the airlines reliability department with
solutions offered on how to extend life

• All costs of logistics, administrations, repairs, components will be included within the monthly charge

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 MCS Agreement
Additional Benefits
• Due to the simplicity of the costing it is possible to add or reduce fleet size quickly and easily as a percentage of the
monthly charge

• Problem components can be quickly identified and problems addressed (particularly if the airline choses to opt for
our workshops enhanced repair option)

• If issues with any specific supplier should occur, transition to a new supplier can be swift and without penalty

• The contract drives CRS and the airline to work closely together in partnership to reduce costs and improve
reliability, without the need to debate exclusions

• The contract can include as many or as few parts as the airline requires covered, even items that are traditionally not
included in Power by Hour agreements such as flying surfaces and cabin seats for example

• In the event of a international crisis which restricts flights for the airlines (such as the recent Covid-19 Outbreak, or
major volcanic eruption) the agreement can be put on ‘pause’ for the months in questions, and repairs managed with
CRS on a ad-hoc basis, with the airline charged only for the repairs they require completed until the catastrophe
abates, at which point the contract continues with the postponed months added to the end of the agreement term

• If necessary the contract can be cut short at the end of any year, and should their be a deficit between costs on
behalf of CRS and payments by the airline these can be paid at this time. Due to the transparency of the contract, it
will be easy to for the airline to see and check these costs

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 Enhanced Repairs
Addressing High Costs and Poor Reliability
It is our focus whether working directly for the airline, or with their contracted agents, to understand which components
cause them the most problems from the point of view of cost and or reliability. Working alongside operators’ reliability
teams can offer significant savings, and not just on the repair itself. This focus is driven by the understanding that poor
reliability results in multiple costs.

It is our aim to engineer out reliability problems and high cost parts, to offer airlines cost savings on several levels. From
engineering, stores and administration time, to less stockholding, lower storage costs, and obviously less repair costs. This is why
we have invested so heavily in our own part 21 facilities, and specialised R&D and 145 approved workshops.

With regards lessors, as EB’s issued would be documented and minor in their application this would generally not be of concern to
them. However, if the lessor is particularly strict and is not interested in the benefit of the program, it is likely that it would be cost
effective to replace enhanced components with those repaired to OEM standard from the market at end of lease. One component
change at the end of life, rather than multiple component changes during operation.

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 CRS Strengths

• Independent company with 100+ years combined engineering experience evaluating repairs.
• Experienced 145 approved workshops on site with extensive range of capabilities.
• Robust relationships with external OEM and independent 145 workshops.
• In house fully equipped R & D department.
• Long term relationships built with laboratories and testing houses for reverse engineering purposes.
• Extensive Part 21j and g experience allowing for EASA approved designed repairs and EPA part manufacture, with
comprehensive knowledge on Airbus and Boeing platforms.
• Bespoke computer systems allow full integration with all engineering departments, full track and trace on all parts and
high standard of reporting.
• Experience in enhanced repairs and ‘engineering out’ reliability issues offering
longer time on wing.
• On site stores and logistics center, with experience on AMOS,
and Aerotrac software systems.
• Versatile, efficient with innovative ideas.
• Strong customer relationships, and extensive customer base.
• 24 hour AOG support.

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www.crs-aero.com

Contact Us
Component Recovery Solutions Ltd

R & D and Orchard House

Bearwalden Business Park
Royston Road
Workshops Wendens Ambo
UK CB11 4JX
Company Reg: 8083529
CRS Technics Limited
CRS Building
Bearwalden Business Park
Royston Road
Wendens Ambo
UK CB11 4JX

Company Reg: 10264365