“Ladies and Gentlemen, this flight has been cancelled.”

By Chuck Marx, SkyThread Chief Strategy Officer

Note: this post is part of a 52-week series Chuck is posting about digital aviation. This post is Week 8.

Not at all what you want to hear when you’re trying to get to a business meeting, going on vacation, or trying to get home to your family. AOG causes include weather, crew, airport congestion and maintenance. Let’s talk about maintenance. When a plane is tagged as “Aircraft on Ground” (AOG), the conditions causing it may be known and we’re just waiting for a part, or it’s not known, and into the hangar we go to inspect the plane and determine the issue. The costs to an airline for AOG are very high. There are many studies on this topic, but Boeing estimates that a 1-2 hour AOG will cost an airline $10,000-20,000, and possibly as high as $150,000. With an average of 14 AOG’s per aircraft per year in the US, this cost adds up quickly. The industry spends over $30 billion a year dealing with irregular operations such as AOG.

Every supplier in the aviation industry is focused on AOG. In one Chief Executive’s office of a major global Tier 1 parts supplier, there is an AOG board that looks just like the flight departure board in a major airport. But of course, the planes on that AOG list aren’t going anywhere. SkyThread for Parts is focused on this issue as well.

An aircraft is assembled using thousands of serialized parts. It only takes 1 non-functioning part to “AOG” an aircraft. Now we need to find that replacement part. The industry has assembled a crew of “heroes” that work to find and install that part. But the visibility to these parts and the information that comes with these parts, if you find them, is nowhere near as good as the technicians trying to solve the problem. Where to find the part? There is inventory EVERYWHERE, but as we all know, when you’re looking for something, its always in the last place you look. And too many times, the right part, for this plane, in this place, and in this moment - the part can’t be found. Where might the part be? It could be anywhere.

• Airline spares

• Rotable part pool

• Borrow from another aircraft in the hangar

• Borrow from another airline

• New part from Tier 1

• New part from broker

• USM part from broker

• Harvest from parked aircraft

When you find it, the part must be driven, flown, or even hand-carried to the aircraft in the most efficient way to minimize time on the ground. The waiting time for parts may be shortened or almost removed, but for now, the preparation of AOG services is critical for airline success. But we need to find the right part. There are over 40 million aircraft parts “on the ground” around the world waiting for their next ride on your plane. 

How did the plane get to the point where the part was removed during an AOG rather than through the planned opportunities for part removals, such as the overnight checks, and the short cycle A and B checks or the long cycle C and D checks. It’s also possible that the part failed early, and all the industry attempts at predictive maintenance did not catch it. This of course becomes an issue for the Tier 1 suppliers who do their best to anticipate the need for aircraft spares. But unplanned events and situations create bigger issues when trying to recover from these IROPs.

How Does SkyThread Help?

We’ve built SkyThread for Parts to help the airlines, the technicians, the broker / distributor community and the Tier 1 parts makers work together as part of a bigger community to take care of each other and our planes. The annual parts ecosystem is large – over $30 billion a year just for the parts purchases / exchanges and over $70 billion a year for the total maintenance activities. But the level of inefficiency, waste and delay is tremendous, and the level of forensics work to find the right part is mind numbing. 

SkyThread is providing the trusted data sharing network, enabled by blockchain, to bring forward the life history of an aircraft part to find the right part, for the right plane, at this moment to get this plane flying again. The life history is important, because there are no regulations requiring it to be provided. Therefore, we “get what we get”. SkyThread will provide more visibility to the “status” of the parts we have available, while not interfering with the existing part “offer / purchase” companies, processes and systems in place today. All these current enablers are like silos. You can only see what’s in the one silo, not all the silos. SkyThread is building the data to support:

• Part # / Serial # on wing – what’s flying today and how long has it been there? – 60 million parts

• Part # / Serial # on ground – which parts are “staged” and what status are they in? – 40 million parts

• Part History – Part birth, 1st use of part (installed on aircraft), removal, repair, and installation history

While we can write another article on the difficulties involved in aircraft spare planning (which I did in 2002 after 9/11), this parts status and history information finally brings us to the point where we can perform spares planning at the aircraft tail # level. I know we try to do that today, but having installed many ERP, PLM and MRO solutions over my career, the capabilities are not where they need to be. Once we have a better handle on specific part # demand, we can do a better job of positioning and finding the right part for the right plane at the right place at the right time. 

The Bottom Line

Of course, aircraft safety is mission one. Our industry provides the safest form of transportation through rigorous design and maintenance of the aircraft and its parts. But of course, the costs to achieve this is high in terms of the cost of the parts, their interdependency, redundancies, and the levels of inventories we carry now to keep planes flying. 

But then, the variation in aircraft maintenance costs tells us that we have some work to do. While the global average MRO cost per tail is $2.8 million, the variation by tail and airline is extremely high. The US carriers can operate their large fleets at an average MRO cost of some $2 million, or $800,000 per aircraft better than the global average. That extra cost builds up quickly when we’re responding to high numbers of AOG at $50,000 per event.  Let’s work together to figure this out. No single company or information system can solve this on their own.

SkyThread for Parts

For more information on what we’re doing, see my SkyThread article series on LinkedIn. In the first week of the series, I included a history of how we’ve come to realize there is a better way to achieving what we call “Data for the Life of the Aircraft”. We’ve been working with blockchain (and other technologies) to develop ways to use blockchain to achieve the industry business needs for data transparency and trust. In the 2nd week of the series, I included a short post on “Lessons Learned in Blockchain”. Now we’re making progress and working with over a dozen companies around the world in their respective parts and plane ecosystems to achieve “breakthrough” results. Here are the links to the prior articles in the series.