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 Post subject: Re: Engine Failure at FL330
PostPosted: 16 Oct 2017, 22:52 
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Username Protected wrote:
Just so long as it is not over insured and then accidentally wrecked, or burned! :duck:

fire is scary, better to ditch it.


Ha. Who would be that stupid.... oh wait. Never mind.
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 Post subject: Re: Engine Failure at FL330
PostPosted: 21 Oct 2017, 11:55 
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Username Protected wrote:
Insurance policy against premature major failures.

Cost leveler for major periodic inspections.

Also, usually "free" SB/SL compliance as well.

Does it cover routine stuff like SOAP, filters, cleanings?

Mike C.

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 Post subject: Re: Engine Failure at FL330
PostPosted: 21 Oct 2017, 23:51 
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Username Protected wrote:
Look, I can see you don't get it. Each engine has its own reserve. It works. You don't like it. You're going to argue at my stupidity to eternity. That's fine. Don't buy anything on programs. Self insuring is what you want. Anything else is going to be wasteful. Good luck to you.



So maybe I'm stupid, but it is not clear to me whether you have to even up on a negative engine reserve balance? You say it is a "low risk" so I'm to assume you are responsible for a negative balance....? This is your thread, and it seems relevant to the discussion. How about answering the question in an informative and direct way so we can all learn? That's why we are reading your thread. :cheers:


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 Post subject: Re: Engine Failure at FL330
PostPosted: 22 Oct 2017, 00:43 
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Username Protected wrote:
Look, I can see you don't get it. Each engine has its own reserve. It works. You don't like it. You're going to argue at my stupidity to eternity. That's fine. Don't buy anything on programs. Self insuring is what you want. Anything else is going to be wasteful. Good luck to you.



So maybe I'm stupid, but it is not clear to me whether you have to even up on a negative engine reserve balance? You say it is a "low risk" so I'm to assume you are responsible for a negative balance....? This is your thread, and it seems relevant to the discussion. How about answering the question in an informative and direct way so we can all learn? That's why we are reading your thread. :cheers:


You are not responsible for a negative balance on Willams TAP engine program if you sell the plane or at the end of your contract period.
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 Post subject: Re: Engine Failure at FL330
PostPosted: 22 Oct 2017, 00:55 
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Username Protected wrote:
You are not responsible for a negative balance on Willams TAP engine program if you sell the plane or at the end of your contract period.

As far as I can tell from the Williams TAP contract, there isn't a concept of a "balance" that pays for engine work.

From what I know so far of the PWC program, there is a concept of a "balance" which can be positive or negative and engine work is charged against it. The sales literature talks about a refund if you have a positive balance, but is mum on the consequences of a negative balance. I've asked PWC for the contract language but they have yet to send it to me.

Mike C.

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 Post subject: Re: Engine Failure at FL330
PostPosted: 22 Oct 2017, 09:28 
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There have been a few off program Williams jets on Controller recently and they were priced way below the market for an on program plane.

Based on the numbers in this thread, I think the depreciation loss from off program time is greater than the increased costs of being on the program. The depreciation on jets already seems a bit breathtaking on some models already.


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 Post subject: Re: Engine Failure at FL330
PostPosted: 22 Oct 2017, 10:14 
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Username Protected wrote:
There have been a few off program Williams jets on Controller recently and they were priced way below the market for an on program plane.

Based on the numbers in this thread, I think the depreciation loss from off program time is greater than the increased costs of being on the program. The depreciation on jets already seems a bit breathtaking on some models already.

So, for the risk tolerant, an off program jet would allow a cash buyer to fly a Williams jet cheap. And due to the fact that a major event is unlikely, that could be for quite a while. Until . . .


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 Post subject: Re: Engine Failure at FL330
PostPosted: 22 Oct 2017, 11:08 
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So, for the risk tolerant, an off program jet would allow a cash buyer to fly a Williams jet cheap. And due to the fact that a major event is unlikely, that could be for quite a while. Until . . .

Until you need HSI or OH.

Williams is the only place you can get HSI or OH done. If you are not on program, your hours are reduced (1750/2000 for HSI, 3500/4000 for OH). So when you hit your next scheduled event, the engine goes to Williams or you junk the engine.

Williams prices off program HSI and OH about 40% higher than what your program payments would have been. They stated this openly to me.

So the best you could hope for in being off program is you get a plane just recently out of HSI or OH and you can fly 2000 hours and then junk it. You would have saved about $600K in Williams payments ($300/hour) but you turn your airplane into salvage with zero engine value.

But no such plane would ever exist because anyone who just did an HSI or OH would have paid up on the program to get that done cheaper. So the off program planes you find are generally less than 1000 hours to an event.

For example:

https://www.controller.com/listings/air ... tation-sii

Engine times: 1943 hours. They are due for HSI (despite the fact the ad claims 5000 TBO implying 2500 HSI, you only get that on program). That will cost much $$$$.

Ultimately, the numbers never work out to be off program as far as I can tell for Williams. You end up paying more and have no coverage for unscheduled events.

Mike C.

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 Post subject: Re: Engine Failure at FL330
PostPosted: 23 Oct 2017, 08:40 
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Username Protected wrote:
So the best you could hope for in being off program is you get a plane just recently out of HSI or OH and you can fly 2000 hours and then junk it. You would have saved about $600K in Williams payments ($300/hour) but you turn your airplane into salvage with zero engine value.

https://www.controller.com/listings/air ... tation-sii

Engine times: 1943 hours. They are due for HSI (despite the fact the ad claims 5000 TBO implying 2500 HSI, you only get that on program). That will cost much $$$$.

Ultimately, the numbers never work out to be off program as far as I can tell for Williams. You end up paying more and have no coverage for unscheduled events.

Mike C.


If the plane already approaches salvage value in your example, I wonder at what point the numbers flip that it becomes cheaper to replace the engines?
e.g. Get off the program after HSI, and then run to overhaul and replace....
I also wonder how this affects the TBO numbers.

Tim


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 Post subject: Re: Engine Failure at FL330
PostPosted: 23 Oct 2017, 09:05 
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Username Protected wrote:
If the plane already approaches salvage value in your example, I wonder at what point the numbers flip that it becomes cheaper to replace the engines?

I investigated that.

Williams stated they only sell engines to OEMs. So to get new engines, you'd have to work out a way for an OEM to get them for you, which seems unlikely.

Quote:
e.g. Get off the program after HSI, and then run to overhaul and replace....
I also wonder how this affects the TBO numbers.

If you stay on program until HSI, then go off, you are looking at about $750K for 2500 hours (pair of FJ44-3A). Once off program, OH reverts to 4000 hours, so you get 4000 hours for $190/hour.

But at 4000 hours, you are then faced with either junking the engines and airframe, or with doing an OH at about $1.1M for a pair. That was $1.55M for 4000 hours, $390/hour.

Meanwhile, you could have been on the program for those 4000 hours, $1.2M in payments, $300/hour, and have essentially "zero time" engines as far as market value all the time.

It is clear the OEMs get the engines from Williams for *way* less than the overhaul cycle payments. I'd figure about $700K each. or about half the $1.55M OH cycle costs. Otherwise, how could Sierra make money on a $2M retrofit? I highly suspect Williams has included language in their contract with the OEM such that they cannot sell engines outright to prevent a back door grey market.

Williams has built a very tight fence around all the options. If you have a Williams engine, you really need to be on the program or you need to decide your plane is disposable.

Lastly, if a plane goes off program, and you want to go back on, Williams requires a catch payment all the way from zero time to the present EVEN IF THEIR HAD BEEN PAYMENTS IN THE PAST. I found this very surprising, but here is my email query and response:

---

So, even if the prior owner had paid some TAP program payments back in time, once the aircraft is off program, one has to pay all the way back to zero hour?

Yes. ... Termination is an owner elective 100% of the time, based solely on self reporting and paying accordingly. An owner always has the ability to terminate without penalty.. but doing so will forfeit any additional funds which may or may not have been paid. This is one reason why virtually no one cancels.

---

That is the scariest part. Williams can unilaterally change program terms and rates, and if you don't pay, all your paid in equity disappears. There is no economic balance in this relationship.

Mike C.

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 Post subject: Re: Engine Failure at FL330
PostPosted: 23 Oct 2017, 09:20 
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How did someone like Sierra buy Williams engines then?

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 Post subject: Re: Engine Failure at FL330
PostPosted: 23 Oct 2017, 09:52 
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Username Protected wrote:
How did someone like Sierra buy Williams engines then?

They are an OEM.

They would have signed an OEM supplier agreement with Williams. Part of that would likely be restrictions on resale of the engines, plus a requirement to register the installation of the engines on particular serial number airframe.

Joe owner can't go to Williams and connect this way.

Mike C.

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 Post subject: Re: Engine Failure at FL330
PostPosted: 24 Oct 2017, 09:28 
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Does this maintenance program or scrap the airplane apply to all turbine powered aircraft? How does it work for the guy who bought any new turboprop with PT6 engine(s)? How does it work for the guy who bought a new large jet say a Gulfstream G650 or a Boeing Business Jet like Trumps 757?


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 Post subject: Re: Engine Failure at FL330
PostPosted: 24 Oct 2017, 09:48 
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Username Protected wrote:
Does this maintenance program or scrap the airplane apply to all turbine powered aircraft?

No.

In many cases, you have choices. TPE331 or PT6 can be serviced by independent shops so you can shop around for off program services. This allows you to choose between being on program or off with there being economic balance.

For a TPE331, like mine, I am off program. I am comfortable with the engine's reliability that I don't worry too much about an unscheduled event. The most damaging of those would be FOD, but my aircraft insurance has protection for that. I know what the typical HSI and OH costs are. Most TPE331 are NOT on program.

A JT15 Citation has options, too, and most are not on program.

Williams has essentially forced the program by the monopoly and the pricing structure.

Quote:
How does it work for the guy who bought a new large jet say a Gulfstream G650 or a Boeing Business Jet like Trumps 757?

Don't know.

Doubt those folks are pinching pennies, so I would guess most are on some sort of program.

The 757 will enjoy airline economics where they run engines a LONG time between event using condition monitoring.

Mike C.

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 Post subject: Re: Engine Failure at FL330
PostPosted: 24 Oct 2017, 19:22 
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Back in the early '90s, United did all their overhauls and HSI in house. Since most airliners always have 2 engine choices, they would have the clout to tell and engine supplier that they would have to let them overhauls in house. I don't know if this is still true.

Vince


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