BILL READ FRAeS reports from Derby where leading aero engine manufacturer Rolls-Royce has announced radical changes to its aftermarket and support services to offer a wider choice of options for customers with different requirements.

 

Engine aftermarket support is a vital part of Rolls-Royce's business (Rolls-Royce).

Many articles on aero engine manufacturers often just focus on the technical aspects of new powerplants or announcements of new mega sales deals, the engine support aftermarket is often less well publicised. To redress the balance, Rolls-Royce recently held a technical briefing which turned the spotlight not on new engine projects but on what happens to engines once they are in service to keep them flying. The international aero engine company also explained how it is changing the way the aftermarket operates to fit in with the differing needs of aircraft operators.

In common with most engine manufacturers, Rolls-Royce makes most of its money not only from the sale of new engines to aircraft operators but also from engine aftermarket support. For those airlines which like to take responsibility for their own engine maintenance, aftermarket support can supply technical data and spare parts. “With this basic service we sell an engine to a customer, wait until it breaks and then supply spare parts to repair it,” explains Richard Goodhead, Rolls-Royce’s SVP Customer Strategy and Marketing. “However, this leaves the operator with a number of problems. The first is that the goals of the engine manufacturer are not aligned with those of the aircraft operator. The operator wants the engine to continue operating as long as possible while the engine supplier only makes money if it goes wrong. There is also the problem of being unable to predict the cost of unscheduled maintenance. Another factor is that the value of an engine declines over time and operators need to put money aside to pay for its replacement. When an aircraft is sold on to another operator, the value of its engines may vary depending on how recently they were repaired or replaced. It is also not always possible for operators to predict how long they might want to operate an aircraft and its engines.

TotalCare



 

The Operational Service Desk in Derby monitors real-time information on all Rolls-Royce's engines around the world. (Rolls-Royce)

To try to resolve these issues, Rolls-Royce introduced TotalCare in which the engine manufacturer takes responsibility for keeping an engine on wing in return for a dollar-per-engine-flying-hour fee ($/efh). “It’s like an insurance policy,” says Goodhead. “If an engine goes wrong then we will replace it. With TotalCare, both Rolls-Royce and the aircraft operator have an interest in keeping the engine on wing. In addition, because the fees are known in advance, operators have a more predictable cost of ownership and disruption is minimised.

“TotalCare has proved a great success story,” added Rolls-Royce Director of Services, Tom Palmer. “Beginning with nine customers with a total of 1.2m annual flying hours, we now have over 85 customers with a total of over 14m flying hours. A total of 90% of our Trent engine fleet is under TotalCare and 100% of existing Trent TotalCare customers have selected the service for their future fleets.”

“TotalCare has proved very popular,” agrees Richard Goodhead. “In 2014 we conducted a survey of our customers in which 92% felt that TotalCare had improved their business and 87% said that they felt TotalCare had improved their relationship with Rolls-Royce.” In January Rolls-Royce announced that Singapore Airlines had extended its TotalCare service agreement for Trent 800 engines that power its Boeing 777 fleet.

Term and Life

 A recent Rolls-Royce survey showed that TotalCare was popular among customers (Rolls-Royce)



TotalCare is available in a number of options. The first of these is TotalCare Term where customers set a period of time and number of flying hours in which they expected an engine to operate. Rolls-Royce then calculate a dollar-per-engine-flying-hour service fee based on these parameters. The second option is TotalCare Life in which Rolls-Royce charge the engine manufacturer a constant $/efh for as long as it operates the aircraft. “We first offered TotalCare Life for the Trent 1000 and have since rolled it out for the other Trents,” explains Goodhead. “The service does costs more but the variable term is more flexible for operators who are not sure exactly how long an aircraft may be operated – in particular, aircraft lessors. TotalCare Life also has the advantage that it maximises the value of an engine at every stage of its maintenance cycle and guarantees against the risk of an unexpected event. It’s proved very popular and most of our customers who were on TotalCare Term are now renewing to TotalCare Life.”

From here to maturity

 

Earlier generation Rolls-Royce engines are now approaching the end of their working lives. (Rolls-Royce)

“Another factor that we are having to consider is that of ageing engines,” says Goodhead. “Engines have a useful life of around 25 years which can be divided into three lifecycle stages which we describe as ‘growth’ (the first ten years when new engines are still being introduced in service and everyone is learning how they perform and operate), ‘stability’ (the next ten years when customers know the engines well) and ‘maturity’ (the final five or so years when the engines approach the end of their service lives).

Operators flying aircraft with older engines may have different support requirements from those which operate our newer engines. Many of our earlier engines, such as the Trent 700, 800 and RB211, are now approaching the end of their product lifecycle. Customers operating these engines are less interested in spending lots of money on an asset that only has a short time left to run,

To meet these requirements, Rolls-Royce created a variant of TotalCare called TotalCare Flex in which customers specify a set period of time and total flying hours in which they expected an engine to operate (see Retirement Planning, AEROSPACE, March 2014, p 28). “TotalCare Flex is designed for owners who intend to retire their aircraft but also recognises that planned retirement may not be actual retirement,” said Goodhead. “With new engines, we maximise their life by replacing worn engine parts with new parts but, with TotalCare Flex we can fit ‘serviceable materials’ (i.e used parts) to older engines which will not have to operate for so many cycles. TotalCare Flex still operates on a pay as you go rate but has the advantage that the service can be transferred between both aircraft operators and owners. There is also the option for Rolls-Royce to take over ownership of the engines.” TotalCare Flex has been adopted by Cathay Pacific for the Trent 800s which power its fleet of Boeing 777s and by AerCap and South African Airways for their Trent 500-powered Airbus A340s.

 

New service

Trent 500 maintenance (Rolls-Royce)

This year, Rolls-Royce has further expanded its engine service portfolio with a new variant called SelectCare which fits between the fully comprehensive TotalCare service and the more basic MRO services package. Under SelectCare, customers can tailor the services they require across an agreed number of engine shop visits to match their service needs and budgets. “SelectCare costs less than TotalCare but the customer assumes the risk for when overhauls might happen and how many might be required,” says Goodhead. The first airline to sign up for the new service is American Airlines which has chosen SelectCare for all the RB211-535 engines that power its Boeing 757 fleet. These aircraft were previously supported by separate TotalCare and MRO services agreements.

Caring for lessors

Rolls-Royce is also considering a further new category of engine service and support aimed at the specific needs of aircraft lessors. “Leased commercial airliners are increasing in importance,” says SVP Lessors, Simon Goodson. “In 2014, leased aircraft accounted for over 1.7m flying hours and over 800m miles flown. Two years ago, lessors made up 16% of our customers. “Now, lessors account for a third of our customers and we expect them to increase in importance to 50% in the future. As a result, we are looking at the possibility of offering a TotalCare service aimed specifically at the needs of lessors called LessorCare. As part of this process, we have created OPERA (Operating Lessor Engine Restoration Agreement) which offers lessors a predictable engine refurbishment price. The service is transferable and can be used on new and used aircraft which have had a TotalCare Life agreement. It can also be used on TotalCare Life engines on aircraft which are lease expired or in situations of lessee default. The aim is to keep aircraft earning money in the air and minimise time on the ground while transferring leased aircraft to new operators. We can help with this by providing electronic data on engines to the new operator in advance of the aircraft being transferred. We want to ensure that engines are not the long pole in the tent holding things up.”

A longer article which looks in more detail at Rolls-Royce’s plans to change its international engine support network and use digital data to assist aircraft operators to reduce costs will be published in the March issue of AEROSPACE.


2 February 2016