What a shame. Williams was fundamental in expanding the lower end jet market with small, efficient engines and helped to develop an entirely new generation of jets. I was impressed with the engines and what it meant for the lower end market. I never realized their programs were so onerous and monopolistically self-serving. It's really a shame and clearly creating a market opening for someone else to enter. Unfortunately, the barrier to entry is monumental and clearly Williams knows it.

Thanks for taking the time to do the homework and share with us here. I'm sure this is shocking to many who may be considering this potential step up one day.

Mike, thanks for posting, this is interesting information.
I'm not sure this is a horrible of a deal as you are making it seem. Aren't all of us flying turbines and turbofans somewhat dependent on the the engine manufacturer playing fairly?
For me, with my turbines, if Honeywell decides to raise the price on internal components to my engine to some absurd price, then I'm going to be screwed at overhaul or when something breaks. Maybe not immediately, but for consumable items it seems to me that a big price increase by the OEM will eventually filter its way into the market for parts and operating costs. It will result in engines hitting overhaul and airplanes being scrapped rather than overhauled or re-engined.

In the Williams case, they are giving you the option having what are effectively new, zero time engines on your aircraft at all times for a price, which today is $150/hour per side. They are making it punitive to not be on their program due to the monopoly they have on overhauling their engines. Power by the hour deals are not unique to Williams, lots of larger jet engines are being run on such programs. Lots of the big jets: Learjets, Falcons and Embraers are on programs by Honeywell, Rolls Royce... I remember seeing figures on, e.g., Falcon 20s, where you were paying $1000/side/hour for the engine program. If they overprice this power by the hour deal, that will adversely impact sales of new engines and also lead to aircraft being scrapped rather than kept in service. They need to shear the sheep, not skin it. And it is in Williams best interest to have as many of their engines as possible, out there flying and paying them under the engine programs.

The Williams engines are more powerful and fuel efficient than the P&W engines they replaced on the Citations, as I understand it. There are certain cost advantages and performance improvements as a result of this. There are offsetting costs of $150/hour/engine and being somewhat at their mercy regarding price increases on the TAP programs. For every plane you have tradeoffs.

This seems to have become some sort of religious crusade for you. No one is forcing you to consider a Williams engined aircraft and, it appears, you seem to prefer the deal you can get with a P&W engined aircraft which is not on a program. I have heard a number of Williams customers in CJP and elsewhere saying good things regarding the actual support they receive from Williams and regarding the engines, themselves.

This is not some sort of hidden cost which is not fully disclosed. Yes, there is a scenario where they could totally screw you over and raise the cost per hour to infinity, which would mean they would stop selling any new engines and ground the fleet of flying planes. But that wouldn't make any sense... I guess you need to make a leap of faith that they will be long term greedy, not short term greedy. That said, I'm pretty sure that all of us airplane owners are subject to very similar risks in lots of ways, from engine manufacturers, from type certificate owners, from approved parts manufacturers, from avionics manufacturers, from nav data providers... If we let each one of these financial risks deter us, we would not own any aircraft which we couldn't fabricate all the parts for ourselves.

Great research Mike, thank you!

This thread is like saltpeter for my Jet lust.

To a much lesser extent for Pratt JT15. I can select a non manufacturer overhaul shop. That shop can select various PMA third party parts. I can elect to HSI and not OH for part 91 and run past TBO. I can find relatively plentiful used engines.

I also can do life extension on the JT15 with this program:

http://www.sijet.com/flex-engine-life

BTW, Williams is also playing games with "overhaul". The regulations only require that you "inspect" the engine per a program, that is check the parts are airworthy, and honor life limits. You are never required to "overhaul" the engine, that is, restore life to it. But Williams doesn't have an "overhaul", instead they call it a "major periodic inspection", or MPI. The idea behind the terminology is that the MPI is mandated since it is an "inspection" and not an "overhaul". Yet another example of manipulating the situation.

What this means is that a part 91 operator can't do an HSI instead of an "overhaul" like other engines. Or you have to get some sort of legal interpretation from the FAA that parts of the MPI are really overhaul and don't have to be applied. It is all a moot point anyway since Williams will never let you do that any how.


While this is true, the dynamics are far different. If Honeywell gouges us for parts, we can elect not to overhaul or service the engine and we have not lost a huge paid in balance over past years. If Williams decides to gouge you on program price at some future date, you have a bunch of paid in equity which you have to keep paying to retain. You are leveraged to keep paying.

If Honeywell did raise the prices really high, that would incentivize a PMA third party supplier as well. That can't never happen with Williams since you have to have independent shops in order to do that.


The operative word is "today".


Very much so. And the price has increased well over inflation. It was easy money at first, lots of new engines not needing anything, so the money just flowed in with not a lot of expenses. Now engines are showing up for HSI and OH quite frequently, so the bean counters at Williams raise the price to keep the profit margin up.

As part of that tactic, they also increased the intervals for their program engines, but not for off program engines. Did the engine program costs go down? Not one penny, they went up as usual. The longer intervals save Williams money, save the customer nothing, and they fly with potentially more worn out engines for longer.


It is in Williams interest to raise the price of the program to maximize their profit. To do this, keep putting owners in a dilemma between going off program and losing ALL of their past payments, or continuing to be bleed dry with future payments. The key here is the chain that binds you to your past payments. Note that Williams cancels ALL of them if you go off program.

At some point in the future, it will be in Williams interest to have older engines retired. This lowers cost of maintaining those old engines and promotes sales of new engines on new aircraft. When this cross over point is reached, Williams can effectively do this unilaterally by raising the program price substantially.

Imagine if Cessna had this power with legacy Citations. They could effectively scrap the fleet. They have tried to do that somewhat with the SIDs on the Conquest (an issue still very much of questionable legality).


It is religion to get actual numbers?

The Williams program has a good reputation for supporting the engine and it is perfectly reasonable for an owner to decide they want to pay for the program. The owner should know what it costs and should know the contractual risk that comes with it.


Not true, most of the program cost is hidden.

The only costs I know are those through 12/31/2017. After that, I have no idea what the costs are to be on the program or to be off it.


They can do this preferentially to older engines. This helps promote selling newer ones.

Again, imagine if Textron could do this with airframes, make old ones uneconomically viable just by changing terms and costs.


That's no excuse for not being fully informed.

Mike C.

Or misinformed.

Or misinformed.

I still believe in competition, and they can only go so far until they lose the race.

I didn't pay the bills , but I sure liked flying in front of 2 FJ44-4As for almost 3 years. They are bullet proof, and the FADEC is outstanding.

Jeff

Great write up Mike. Certainly OOML, but I to have been curious. How about a cost analysis with original engines? Include a range of fuel costs.

Fact is Garrett's look awfully nice about right now.

If you look at an engine program as a way to finance overhauls, it doesn't make and sense... programs like TAP are insurance policies that take the concern out of operating a set of very expensive motors.

There's a couple of Williams powered airplanes out there that are not on TAP, the owner's are desperate. Take a gamble Mike, buy one! What do you have to lose?

In his paranoia for the possible evil of Williams business practices. It has no basis in the reality of how Williams has handled customer issues for the life of the FJ44 engines.

There are over 5200 FJ44 engines manufactured. The vast majority on Williams TAP program. I guess all those customers must be waiting to be taking advantage of by Williams.

The basic facts are accurate.

- The engines he is looking at will run about $150/hr/engine
- Note that TAP cost for new engines for the first 5 years is significantly less, about $100/hr/engine
- TAP minimum is 150 hours
- Williams has a low utilization deal as described

The choice to be on an engine program is up to the aircraft owner. The age and value of the aircraft, status of the engines, utilization, and owners risk tolerance, all come into the decision making process.

What it seems Mike has not done is talk to the many owners on TAP to hear of their first hand experiences in the way Williams handles customer issues. I have yet to hear any war stories where Williams has screwed a customer. I do hear stories where when there is a question of doubt Williams decides in the customers favor.

A friend lost his CJ in a hangar fire and bought a new one. Williams rolled his TAP balance onto the new plane. They didn't say sorry, the money is ours.

I have heard of owners buying into TAP with used engines. Those stories are on other forums that Mike frequents. There are usually some concessions that Williams gives to get a customer signed up. These have all been CJs and I don't know if Williams is less inclined to give concessions on a Sierra mod.

I also don't know if Mike has talked with any Williams executives. I have and have visited their headquarters in Michigan. Williams is a family owned private company. They don't need to worry about keeping a stock price up or meet Wall Street earnings expectations. They have sharp good people who want to manufacture and support a world class product. Talk to Williams employees and you will find they are happy and there for the long term.

I would much rather be on a Williams engine program then P&W. From what I heard Williams doesn't take a lawyerly position with the contract language while P&W does.

Yes, it costs you around $300/hr in engines to fly with two FJ44s. You can lose that value when you sell, or pay it to Williams, probably get it back when you sell, and get the benefit of the "insurance" against engine problems and Williams AOG services and no sudden big bills to pay.

Do your own due diligence, talk to actual owners on TAP, and talk with Williams executives and do your own due diligence to reach your own conclusion on what is right for you.

Williams forces it to make sense by overpricing off program engine service. If you have Williams engines, you really have to be on the program *OR* you are going to dispose of the engines or airframe when the next engine event occurs.


Engine problems are quite rare.

It doesn't cover all engine problems, even ones you might think it should cover, like corrosion or faults with accessories.

For catch up fees, they are being paid for a risk in the past that didn't happen.


Money.

Mike C.

FJ44 engines failing in flight are rare. Maintenance issues that require Williams maintenance at a Service Center or an engine pulled to go to Williams while a loaner is hung happen more then rarely.

Corrosion is covered by TAP BLUE. And I have yet to hear of someone getting a significant upcharge for corrosion during an MPI. Minor corrosion Williams seems to let pass.

Define accessories that are not covered? FCU and FADEC are covered.

Thanks.


For one year or for all the history on his previous airplane?

For example, if he had 1000 hours on the old plane, that's $300K he has paid in. Did Williams give him $300K of program value on his new plane so he wouldn't pay for several years? Or was this just the current year's balance, potentially a relatively small sum?

A hangar fire is a big win for Williams. Customer paid in for future maintenance they will never have to perform. So if Williams only gave the customer a part of his balance, then they are still well ahead.

Customer also paid higher insurance premiums for the higher hull value (to cover "zero" hour engines). The insurance payout was thus partly paying for value Williams retained, not actually the true state of the airplane itself.


And there is no real alternative due to the terms Williams controls.


Excellent advice and not contrary to anything I have said.

Mike C.