Major European Airline Group - Heavy Maintenance Provision Review
Nyras were asked to help a major European leisure airline group develop a business plan and maintenance cost model to optimise heavy maintenance spend. The group operates 165 aircraft across five airlines, which were each planning and contracting their heavy maintenance work independently. Consequently, maintenance planning was sub-optimal, resulting in lower productivity at in-house facilities and excessive costs at outsourced locations. A project was set up to focus on the following:
- Analysing provision of maintenance across the group.
- Evaluating the situation and proposing a way forward.
- Optimising costs and quality across the airline group.
By deploying a team of Nyras experts with extensive experience in maintenance and finance, a detailed analysis was performed, reviewing heavy maintenance planning, work practices and procurement across the five airlines. Our analysis demonstrated large differences in hangar and manpower efficiency at the group’s two heavy maintenance bases in the UK and Germany.
In order to redress this, ten-year maintenance plan scenarios were created in order to forecast hangar utilisation and the volume of heavy maintenance that should be outsourced each year at the two in-house bases. A further ‘total outsource’ scenario was also developed.
We worked closely with the UK and German in-house staff to understand the current manpower planning and human resources practices, and also the willingness and ability of both to embrace change. A detailed business plan and maintenance cost model was developed, identifying the optimum future set-up.
Nyras then supported the successful implementation of recommendations, working closely with consultants engaged by trade union representatives in Germany.
Following the presentation of our findings, the group made significant changes to their operations including:
- Consolidation of group heavy maintenance into the UK heavy maintenance facility.
- Closure of the heavy maintenance facility in Germany.
- Introduction of industry-leading annualised hours scheme aligned to workload.
- Improvements to cost base including increasing the mix of licensed engineers/technicians, and permanent/contract staff.
- Moving all airlines onto 24 month Maintenance Planning Document (MPD) and aligned Approved Maintenance Program (AMP) for all airlines.
- Outsourcing of heavy maintenance moved to LHT’s Eastern European base following tender process.
- Identifying other areas of key focus for the client’s Group Engineering Director.
- Securing annual savings of €7.2m, representing approximately 40% of annual heavy maintenance spend.