BAE sees future in ATP cost-cutting programs

 - October 8, 2003, 11:18 AM

BAE Systems Regional Aircraft plans to work with ATP operators, maintenance organizations and equipment vendors to reduce the turboprop’s ownership costs by some 20 percent. Using the Franco-Italian ATR-42/72 as its cost benchmark, the UK manufacturer is accelerating negotiations with maintenance, repair and overhaul (MRO) companies, and hopes to build upon individual customer/ MRO arrangements.

It has stressed to equipment suppliers that the ATP will be in service for “many, many” years beyond the course of its current support program, which runs for at least another 10 years. Officials hope to receive approval for a “substantial investment in people” for the program.

BAE draws on 15 years of experience in ATP operations and 40 years’ service with its BAe 748 predecessor. The 60 ATPs in service or “potentially operational” have accumulated over 800,000 hours and more than one million landings; 24 of the 60 sit idle, while BAe lists some 40 ATPs on its asset management portfolio. Anticipating that the majority of ATPs eventually will enter cargo service, BAE three months ago signed a deal with Romania’s Romaero under which the aerostructures manufacturer would convert 10 ATPs into freighters with large cargo doors (LCDs).

ATP ownership costs comprise on-aircraft maintenance checks (A, C, and heavy structural checks, for which analysis suggests costs of $127 per flying hour) and off-aircraft checks (wheels, tires and brakes, propellers, landing gear, and so on, calculated to total $340 per flying hour). BAE acknowledged that the figures may vary among operators, being influenced by, for example, local labor rates and individual MRO and service-provision deals. The manufacturer used costs typical of a 13-year-old aircraft with 20,000 flight hours and 25,000 landings to arrive at its estimates.

BAE also pointed out that total airline costs accommodate lease charges: “We estimate [ATR maintenance costs at] about $300 per hour. That lower rate can be offset to quite a large extent by the fact that our lease rates are lower. But even so, we acknowledge that work needs to be done to reduce the ATP cost of ownership.” To achieve cost reductions it cannot generate from “pure engineering effort,” BAE hopes to draw concessions from engineering, operator, equipment and MRO organizations.

The company argues that, in the case of ATP freighter conversions, costs can drop by reducing aircraft specifications. For example, freighters don’t generally need cabin lighting and air conditioning systems. Also, the freighter’s likely lower annual use will lead to improved component-support costs, according to BAE.

Its initial work incorporated input from Scandinavian cargo operator West Air, which already operates the first LCD-equipped ATP: “West Air Sweden has played an important role in [planning] this cost-of-ownership review. We have visited them on several occasions to learn more about the modifications they have introduced.” Now, BAE wants to involve other ATP operators in its plans.