Considerable barriers to rationalising airline maintenance remain. The answer lies not in downsizing but in upgrading training and systems, discarding outdated procedures and making facilities flexible, argues Scott Brandt.Airline maintenance has historically accounted for 9 to 13 per cent of an airline's operating costs. Maintenance cost per ASM varies throughout the industry, from $0.38 per seat mile for America West to $1.15 per seat mile for USAir. So it is only natural that as airlines have tried to downsize - or rightsize - their operations, they have looked to maintenance for major improvements in cost structure. Yet, while airlines have been able to reduce their total operating costs per ASM by as much as 15 per cent over the last 5 years (in current dollar terms), maintenance costs have only decreased by 6 to 9 per cent. In fact, for three US airlines which prefer to remain anonymous, maintenance costs per ASM actually increased during this period. Downsizing, it seems, has not worked for airline maintenance. But are the causes beyond the control of management?

The general concept of downsizing is simple: do more with less. Specifically:

1 Reduce the costs of operations while accomplishing greater amounts of work.

2 Flatten organisational structures and remove management layers.

3 Empower employees at lower levels.

4 Improve processes to make them more efficient and effective.

The fact that each of these objectives has been hard to achieve in airline maintenance is due to various external and internal factors and clearly shows that the approaches and methods used in downsizing are far less applicable in this field.

External factors

Airline maintenance has been more affected by external factors than other activities (see table, p64). First and foremost, FAA and worldwide safety organisations have issued significant numbers of restrictions and requirements, mainly through Airworthiness Directives, in recent years.

One airline estimates that over 25 per cent of all routine work has been directly related to the servicing of AD requirements. While on the one hand organisational flexibility and improvements are desirable, these requirements explicitly dictate additional work efforts and implicitly demand formalised procedures and organisations to enact, monitor, track and report them. For example, one airline that believed it had streamlined its fleet management organisation, then found stacks of service bulletins (many of which could in themselves be helpful in reducing costs), piling up on the engineers' desks waiting for review.

A second factor is the introduction of new aircraft and systems. As new and higher technology aircraft, systems and repair equipment arrive at airlines, substantial new requirements for training, processing and measuring maintenance are needed. For mechanics, training on the repair of new systems and the working of test equipment has significantly reduced current productivity. Additionally, processes that appear to be effective for older equipment, can actually become hindrances. One mechanic for a major airline says that his nightly log book review of overnight aircraft, where deferrals of many items were previously acceptable and expedient, is far more time consuming for the new technology aircraft the airline has recently introduced. The aircraft's on-board diagnostics have increased his review items fivefold, and in some cases requires immediate action before the aircraft can be signed off.

Equipment types and configurations have also expanded over the last five years. Dynamics such as older fleets, airline mergers, performance modifications by manufacturers, and a lack of standardisation/rationalisation programmes in the industry have all contributed to the problem. But with each new aircraft type or modification comes the need for more specialised maintenance, which goes beyond the simple requirement for more skilled mechanics. Additional engineers, technical records, fleet support, trainers and inspectors are also needed to ensure a safe and reliable product. Though this is recognised by many in the industry, manufacturers, Original Equipment Manufacturer (OEM), suppliers and regulatory agencies have made little progress towards decreasing the number of different versions available to the airlines.

A fourth and important factor is the general ageing of the aircraft and engine population (see chart, p67). The recession of the late 1980s and early 1990s took its toll on fleet replacement programmes. Many corporate decisions were taken on the basis of cash flow and inadequate profits could not justify new purchases. Aircraft and spare parts are meeting or exceeding original life expectancies. Older aircraft and engines are more difficult to maintain and productivity initiatives are hamstrung by the inherent problems of older aircraft. One airline gave its mechanics hand held CD-ROM readers but found the units were almost unusable by mechanics looking for corrosion in older aircraft as tight belly areas meant readers were getting damaged.

Internal factors

But external changes are not the only reason for the difficulties of reducing maintenance costs. Many maintenance functions currently fall within the purview of the same managers who oversaw maintenance in the late 1970s and early 1980s. Many of these managers cut their teeth in a regulated environment, whereas today competition is driving the need to cut costs. Older line managers in maintenance organisations are being asked to respond to competitive pressures by introducing productivity initiatives, empowering lower level employees, and enhancing all work-flow processes. For many with strong technical backgrounds and experience, who have focused for years on safety and reliability, these actions don't often come naturally. In fact, the downsizing process frequently calls for some risk taking and experimentation. Neither are consistent with the typical technical operations manager's objectives.

The complexities and documentation requirements associated with maintenance have also resulted in the development of routine systems and procedures. Many current systems were created on mainframes based on older technologies and software. And while procedures were written to keep 'mechanics from overlooking things', they were set 'in concrete' by the regulatory certification process - most regulatory agencies require adherence to stated procedure, once the procedure has been documented and certified, regardless of how inefficient it may be. Downsizing efforts focus themselves directly on these types of systems and processes, as more must be done with less manpower. But these old, ingrained systems and procedures die hard. One airline spent over $10 million and three years to institute a new maintenance management system. Yet months after its introduction, operators were still tracking material requisitions on paper to 'ensure everything was getting done.'

The growth and subsequent contraction of the industry has also led many airlines to operate with varied facilities. Where maintenance is performed, and why, is often more a function of where a merged airline had facilities than where logic would dictate. As requirements have changed due to new aircraft, systems and network adjustments, these facilities have not been able to concentrate on their original intended functions, creating considerable inefficiencies. For example, a leading airline providing third party maintenance decided years ago to focus only on its own requirements but reversed the decision when it recently started marketing its services again to other operators.

Facility rationalisation and concentration are key outcomes of downsizing and should apply explicitly to maintenance. However, the large cost of closing or moving maintenance facilities, along with historical resistance to outsourcing, has prevented much of this rationalisation. As one manager says, closing a maintenance base is not as easy as closing a ticket office. In addition, many airlines view hangar space as a critical corporate resource and have been reluctant to part with it. The result has been a large number of maintenance bases with differing focuses.

If downsizing maintenance is not the answer, how can a cost reduction-hungry senior executive achieve the required reduction in maintenance cost per ASM? A pragmatic review of the current situation demonstrates the futility of recent cost reduction attempts in maintenance. While many efforts have significantly lowered maintenance costs in the short-run, few have been long lasting. Experience has shown that often cost per ASM returns to its previous levels two to three years after reductions occur, with considerable negative effects on morale and productivity.

So why not recognise the constraints of the maintenance environment and gain from them? While the events that have hit maintenance operations are beyond the airlines' control, their impact can be mitigated by upgrading, not downsizing. Upgrading is needed in four areas: training, systems, procedures and facilities.

It is curious that in a competitive environment where training becomes more essential, this is often one of the first items to be slashed to tighten budgets. New systems, new aircraft, computers and other processes demand broader and deeper skills from both technical and managerial personnel. For the technical ranks, one-off or initial courses in new systems and aircraft are inadequate. The current lack of repetitive and hands-on training does not fully address the potential for enhanced productivity. Recurrent and on-the-job training in various related systems, by experts or master mechanics, have been shown to increase drastically both output and quality.

The use and manipulation of PCs is also being overlooked as an opportunity to increase the management and technical skills that are sorely needed in the trenches. One airline invested several hundreds of thousands of dollars to implement a PC-based network throughout the field, with various management software and standard spreadsheet programs. A year after installation, the PCs were being used primarily to book non-revenue flights. The two-day course provided was inadequate and did not recognise the need to demonstrate real world applications for the software. Unfortunately, there is still a significant divide between older technical troops - who still view computers with fear - and younger recruits more familiar with basic computer manipulation. All too often, however, the youngsters take their lead from the experienced people around them.

The current post-deregulation environment requires a different type of manager, more akin to a team coach than a parental disciplinarian. Skills like people motivation, team dynamics and goal/objective setting are as important as coordinating work tasks. Teams comprising various functions without direct management oversight are cropping up everywhere. But without enough continuous management training these teams will lack guidance and focus and will fail to increase productivity and cost effectiveness.

Easier answers

The PC network has taken hold, letting lower level personnel develop their own queries and moving systems firmly into the arena of decision support. Though the old mainframe systems continue to form the backbone of operations, more organisations are finding decentralised, smaller applications more manageable and user-friendly. Recent developments in graphical user interfaces (GUI) for existing mainframe systems allow for a broader set of users.

Any discussion of maintenance systems is insufficient without the word 'development'. The bad news is, existing maintenance mainframe systems are inadequate for today's changing, competitive environment. The good news is that technology has finally presented easier answers so the next system won't cost millions of dollars to develop. Established enterprise-wide packages and standardised development environments for PC-based networks, combined with huge relational database managers, now permit integrated, query-based systems made in a fraction of the time and man-hours previously required for mainframe systems.

GUI front ends can be added, putting real-time systems that provide both operational and management information to all levels of the organisation, within the airline's grasp. Current maintenance systems have failed because this highly technical environment requires extremely flexible systems, which until now have been either too costly to build, or more frequently, too costly to modify. Past failures should not prevent carriers from taking advantage of today's technologies.

Procedures are simply the definition and documentation of processes. For too long the engineering function has driven both the steps used in maintenance and the required documents. Airlines have certainly 'engineered' many, if not all of, their maintenance processes. As headcount has been reduced, these procedures have become extremely difficult to follow, and are often simply ignored. One manager complains that every time he changes a process it requires modifying five differen forms besides involving functions such as technical publications, engineering, quality control and printing departments.

Typical reengineering efforts have recognised this problem and are attempting to remove non value-added steps and reduce queues and downtimes. Though reengineering is attacking the correct problems, airlines need to focus these efforts on revolutionary change, not evolutionary change. Procedures that made sense just five years ago, simply no longer apply. Removing entire procedures and instituting totally new ones is what is most needed now in maintenance. One airline spent months reengineering its engine overhaul processes to reduce overhaul turnround times - a laudable objective - but though turntimes decreased, costs and grievances increased.

Like it or not, airlines are pretty much stuck with their current facilities for the near future. Over-capacity in the industry and lack of funds for major new bases is dictating the better use of existing facilities. So why not refocus maintenance facilities to ensure higher productivity?

Focused bases

Maintenance organisations need to review the capabilities and establish key maintenance functions for each base. One airline found that a base was particularly efficient at performing landing gear changes, and started directing all its large gear jobs to that base. Being able to develop more specialised, focused bases, however, requires a good working relationship with the airline's scheduling group and good cost information. All too often maintenance groups are required to respond to fluctuating schedule changes, a situation made worse by their lack of access to the information needed to counter scheduling's argument that 'this schedule produces considerably more revenue.' Adequate cost and productivity data will enable maintenance to respond to these schedule changes, and in some cases, prevent the relocation of overnight aircraft. This will in turn permit greater base focus.

Schedule changes are of course often more important than maintenance needs, making it important for facilities to improve their flexibility to respond and increase efficiencies through key upgrades. One airline provided NDT (non-destructive testing) equipment at several key bases (with the required training) and found mechanics were not only able to react better to changes in overnight aircraft, but became more efficient at performing NDT tasks. The testing equipment saved up to 30 reroutes per year. Adding higher tech equipment such as Automatic Test Equipment and radio X-ray permits the basic facilities to be used more productively. Cost justifications for investment include savings, such as reductions in reroutes and ferry flights, and added flexibility provided to the airline.

In non-regulated, non-technical environments, logic suggests that airline managers should reduce costs by downsizing operations. However, just as every VCR cannot play every video tape, each situation does not warrant the same approach. Several internal and external factors have made maintenance a difficult operation to downsize. Well-intentioned managers have taken traditional approaches of cost savings, only to find impenetrable 'brick walls' and systems and processes too ingrained to modify quickly.

These obstacles should be recognised so that the inherent strengths in maintenance's highly regulated, sophisticated environment can be harnessed. Upgrading is associated with additional investment or cost and is therefore often ruled out by those seeking lower cost per ASM. But the unique nature of airline maintenance work which suggests great rewards can be reaped from upgrading in terms of productivity, efficiency and overall cost savings. For every dollar or man-hour invested in training, systems, procedures, and facilities, the return can be significant. And secondary benefits of technology advancement and morale boosting should not be overlooked. The road to greater competitiveness is through upgrading, not downsizing.

Source: Airline Business