JSSI Celebrating 25th Anniversary of Independent Hourly Cost Maintenance Programs

 - April 6, 2014, 3:10 AM

Twenty-five years ago a group of entrepreneurs took a chance on an innovative idea: what if an independent company could offer an hourly-cost maintenance program, an alternative to power-by-the-hour products that typically were available only from engine manufacturers? The result was the founding of Jet Support Services, Inc. (JSSI) on Jan. 6, 1989.

Honeywell (at the time Garrett) pioneered hourly-cost engine programs for business aviation. When it started, JSSI launched programs for business aircraft engines, then it added APUs and finally many airframes, with its Tip-to-Tail program providing the most comprehensive coverage. JSSI’s first customer was Boise Cascade and, said executive v-p and general counsel Susan Marr, “those engines remain on JSSI now.” She added, “This is the beginning of a year-long celebration. I joined this company as general counsel and have been able to watch a little company grow into a recognizable brand.”

One way that JSSI differentiated itself from OEM competition was to offer a lower-cost way for owners to buy in to a JSSI hourly-cost maintenance program. Beginning with its first customer, JSSI didn’t just allow owners to join the program at any time during the service life of the engine; it also pro-rated the buy-in amount needed to cover the engine life before signing with JSSI. So a new customer can spread out the cost of covering the engines, APUs, airframes and so on instead of paying it all at once when joining theprogram.

Protection for Aircraft Under Warranty

In 1994 JSSI figured out a way to sell its hourly-cost maintenance programs to owners of new aircraft. One might wonder why it makes sense to cover an aircraft that is still under warranty, but a warranty is not the same as hourly-cost programs. The reason that owners opt for JSSI’s hourly programs is that they spread the cost of future maintenance over the hours flown subsequently. Maintenance costs are evened out so that the owner doesn’t have to pay a large and often unexpected bill at key maintenance events, and the owner’s hourly payments also accrue to cover future events. The maintenance reserve money paid for each hour is stored in an irrevocable trust and is not intermingled with other owners’ or JSSI’s funds.

For owners of new aircraft, joining JSSI means that maintenance reserves begin accumulating immediately, and these can be used to pay for any kind of maintenance, such as scheduled maintenance that isn’t covered under warranty. “We have many customers today who want to enroll on JSSI as soon as they take delivery,” Marr said. “That way they’ve got complete peace of mind and no [coverage] gaps, even during the warrantyperiod.”

JSSI works with maintenance providers worldwide and can select a provider for the owner, or owners can make their own selection. But with its knowledge and buying power, JSSI can often source maintenance and parts for a lower cost. When it’s time to sell a covered aircraft, the JSSI program can be transferred to the new owner for a $2,500 fee.

JSSI covers all types of turbine-powered aircraft, from business jets to turboprops and helicopters. “[In 1995] we were the first to offer hourly-cost maintenance for helicopters,” said Marr. In 1997 JSSI added the Tip-to-Tail program, which covers all maintenance for the airframe, engines and APU. A new level—platinum coverage—was added in 2010, and this provides supplemental lift. JSSI will arrange for rental engines when needed and even buys engines that are in limited supply to use for rentals, but if none of these is available, supplemental lift will keep the customer in the air. “We will pay for charters during this period so they can keep flying,” Marr said. “Supplemental lift was a creative solution that our people in R&D came up with.”

Last year JSSI signed up its 10,000th asset, a Beechcraft King Air, and charter operator VistaJet signed a 10-year agreement with JSSI for coverage of 50 Bombardier Globals and their Rolls-Royce engines. The agreement is valued at more than $205 million. New programs added last year by JSSI include the Gulfstream G280 and G650, Embraer Phenom 100 and 300, Pilatus PC-12, Cessna CJ4 and Airbus Helicopters EC135 and EC145. More engines were alsoadded.

With so many operators flying JSSI-covered aircraft of all types, JSSI recently began sharing its new JSSI Business Jet Index. This summarizes flight activity of JSSI clients around the world, from helicopters to business jets, and provides a view of the health of the industry.

To celebrate its 25th anniversary, JSSI is planning receptions at this year’s EBACE and NBAA shows and an anniversary event at its headquarters in Chicago. “It’s important to us that we get to say thank you face-to-face,” said Neil Book, JSSI president and CEO. “This is a milestone that we’re all proud of. We’re coming off our strongest year in history. We think the best years are ahead of us.”