aviation
Fly-by-hour or time-and-material agreement?
Shop visits are expensive. Engine maintenance and repairs are a significant cost factor for airlines. That’s why maintenance companies offer a variety of service models to help customers keep track of costs.
1 mins reading time published on: 01.05.2017
Fly-by-hour agreement
With conventional fly-by-hour services, customers pay a fixed price from day one for every hour flown, and in return they are offered a comprehensive range of services–engine removal, repair and installation, and the supply of a replacement engine to keep the aircraft flying. These flat rates are particularly popular with owners of newly developed aircraft and engines because they cover unscheduled shop visits and the replacement of parts, known as early removals. Fly-by-hour packages are offered by OEMs—Rolls-Royce, GE Aviation or Pratt & Whitney—who have the work carried out in their network shops. Independent MRO providers like MTU Maintenance also offer fly-by-hour agreements.
Time-and-material agreement
One alternative that is used primarily by airlines with older aircraft fleets is time-and-material agreements. They guarantee a contractually agreed maximum price for maintenance work. Labor and materials are included. Traditionally, this type of agreement is offered mainly by independent MROs who are not dependent on the use of expensive original parts. However, customers can now also sign agreements with OEMs who cooperate with external suppliers.
