JSSI, is a leading independent provider of maintenance support and financial services to the aviation industry. President and CEO Neil Brook explains what his company brings to the market and is answering the call of aircraft operators.
Could you give us an overview of the maintenance market for commercial aircraft, particularly regional jets and turboprops? What changes or trends are you seeing that are shaping the market in the year ahead?
I believe MRO demand will remain high in 2020. Older aircraft are flying longer, creating increased demand for MRO services. It takes time to obtain land, complex machinery and staff highly trained technicians, often resulting in a backlog of work. This can be compounded by supply chain breakdowns, leading to depleted stock levels of used serviceable material for several popular engines, including but not limited to the CF34, CFM56 and V2500.
A development that is starting to gain traction is data sharing between airlines, OEMs and MRO providers. This initiative will substantially improve safety and efficiency across the industry. Having a clearer picture of what is happening industrywide helps organizations have more control over their maintenance and support partners, driving reduced costs.
JSSI was a pioneer of the pro rata (or cost-sharing plan), could you tell us the benefits of this approach over others?
We’re the leading independent provider of hourly cost maintenance programs – also known as cost-sharing or risk-sharing plans – for aircraft engines, APUs and airframes. These programs give customers comprehensive, flexible, and affordable tools for managing the often-unpredictable costs of operating and maintaining aircraft. We introduced the pro rata concept to the market to provide operators with an option to avoid the large upfront “buy-ins” our competitors require.
An example of a buy-in would be enrolling an engine with 5,000 hours TSN (time since new) with a US$200 hourly engine rate. That would require a US$1 million upfront payment to ensure the operator had 100% coverage. JSSI allows customers to enrol on our program with zero upfront payment. The operator pays the hourly rate and at the time of the event, JSSI and the customer will each pay a pro rata share of the total event cost. As a result, the customer is benefitting directly from the JSSI terms with the MRO. With over 2,000 aircraft in our fleet, customers significantly benefit from the economies of scale that come with our supplier buying power. Additionally, we audit every invoice to ensure owners and operators never pay a penny more than necessary.
JSSI has made a series of acquisitions over the past couple of years. What was behind those acquisitions and what is JSSI hoping to build through this expansion?
We have made three strategic acquisitions in the last 24 months in an ongoing effort to deliver a new level of market intelligence to the aviation community. JSSI’s aim is to provide a full package of maintenance support and financial services that leverage more than 30 years of technical knowledge, experience, buying power and data to provide support at every stage of the aircraft life cycle; from aircraft acquisition to aircraft teardown and part-out.
To help us achieve this, we have targeted companies that have developed solutions that will benefit our customers and improve the service we can offer. Our acquisitions all have a common value proposition of being accretive to our core maintenance program business.
The first business we acquired, Conklin & de Decker, is synonymous with delivering quality operating cost data to aircraft owners and operators. Now with JSSI’s real-world maintenance data incorporated into Conklin’s platform, we can enhance Conklin’s suite of products to more precisely predict operating costs.
In addition, we acquired S3 Aero Specialists last year to bolster our aircraft appraisal business. When a transaction takes place, aircraft lenders and financiers will often require both a maintenance program and an appraisal. Given we work closely with these institutions delivering maintenance programs, providing appraisal services was a natural fit.
Another more recent example is the acquisition of Tracware. This transaction allows us to vertically integrate by offering a service of significant interest to our supplier network of MROs. Tracware’s MRO process control software optimizes planning and forecasting for airlines, tracks maintenance, and improves business performance by managing workflow. Every year, JSSI works directly with over 500 MRO facilities, so this software provides an ideal opportunity for us to offer additional value to their operations.
As new aircraft deliveries climb, will this put a strain on supply chains and if so, how can parts suppliers and lessors deliver through these challenges?
Increased aircraft deliveries have put a significant strain on the supply chain, highlighting the need for true expertise in managing the supply chain process. Today, we support thousands of operators globally, and we are meeting this ever-growing need to assist with maintenance planning, procurement, and invoice auditing activities.
The supply chain solutions we deliver through JSSI Parts and Leasing allow an operator to outsource their parts procurement arm to us, where we can harness our buying power and decades of historical data to provide better value to their operation. We are in a unique position to identify upcoming maintenance demands and source and acquire the required inventory fast, either through our own inventory or our qualified vendor marketplace.
How is digitalisation supporting workflows for MROs and OEMs, are there any challenges to implementing these processes?
Digitalization is crucial to improving the workflow for MROs globally, as companies step away from using pen and paper to record events and organize shop visits, and towards digital platforms that can support the entire maintenance process. The challenges we face are changing the mindset of those who are resistant to upheaving the way things are done, but as a new wave of MRO engineers and planners enter our workforce, the use of technology is becoming second nature and seen as something we should embrace in every area of work life. At JSSI, we are committed to the democratization of data and collaborating more with industry partners to share data, centralize data and implement data standards. The world is rapidly evolving, and data is at our fingertips every moment of our lives. To ensure long-term success and viability, it’s critically important to embrace change and implement these new processes.