As older business jets go down in value, the cost of maintaining them does not. Now a new engine MRO plan is bringing benefits of old age.

A pay-by-the-hour engine maintenance plan for older Honeywell TFE731 engines launched at last year’s NBAA is slowly gaining traction, with 10 aircraft now on the program and another two to three a month in the pipeline. “That’s right on plan,” says Sean Lynch, founder and program coordinator of EAP, the Engine Assurance Program.

Lynch believes EAP could save operators up to $90,000 a year. How? “Well,” he says, “take a tri-jet Falcon 900B that flies 300 hours a year. EAP comes in perhaps $100 an hour less than a traditional engine maintenance plan. So you’re saving $300 an hour in engine maintenance costs, and over 300 hours that’s $90,000.”

How come EAP can undercut the big boys, the Honeywells of the world with their huge economies-of-scale pay-by-the-hour engine plans?

“More and more airplanes and engines are being parted out, and more supply is available. Plus competition in the aftermarket is driving prices down,” says Lynch. “But zero savings have been passed on through the marketplace. Instead, there’s been the philosophy that you increase your rates by 3% a year.” For an airplane that has been on the same engine plan for 30 years, that could result in quite high payments today.

“We’ve studied the market dynamics…and we basically just came in and priced the engine program much closer to the actual cost to maintain the engine,” says Lynch. He notes that EAP has already reached critical mass to self-insure, and is quite picky as to which engines it will underwrite – it doesn’t, for example, want a portfolio weighted toward near-term overhauls.

It has signed up three engine overhaul shops: Standard Aero, Duncan Aviation and Dallas Airmotive, and they decide the workscope on any maintenance action under the EAP plan, Lynch says.

Dallas-based EAP covers scheduled and unscheduled maintenance, as well as the life-limited components, LRUs, rentals, shipping, R&R and 24-hour AOG service. Operators get full coverage with 75 hours as the yearly minimum. More than 3,000 business jets are still in service powered by EAP’s target engines: the TFE731-2, -3 and -4, and the Pratt & Whitney Canada JT15D-4 -5.

EAP has just expanded with the hiring of Marco Cardenas after a 26-year career with Dallas Airmotive, where he served as regional sales manager for Pratt & Whitney, Honeywell and Rolls-Royce engines.