When it comes to part and component exchanges, the most dreaded word is billback. An operator with an AOG contacts a vendor, receives a quote for the exchange part and ships the old part as the vendor ships the new one. A flat-rate exchange price is common in the industry, but it is contingent on the condition of the returned part.
In some cases, the condition of the old part is not as good as anticipated, making it worth less as a trade. As a result, the operator receives a billback to cover the appropriate increase in cost. Depending upon the part and its condition, the billback can be significant.
CRS Jet Spares, an aftermarket support company, recently reported a 25-percent decrease in customer billbacks in the preceding 18 months. While the company cites several factors, including taking the time to get more detailed information about the part from the operator at the time of the transaction, Armando Leighton Jr., the company’s president, gives the bulk of the credit to the company’s Option 2 program. “Option 2 gives our customers greater cost control by charging a slightly higher cost with a guarantee there will be no billback,” he said.