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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 15 Jun 2018, 11:55 
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I think the answer is that if you want insurance to cover the engine damage that was caused by native airframe hardware ingested by the engine then you need to have a clause spelling that out in your policy- whether that's your airplane insurance, the manufacturer's engine program, or something else.


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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 15 Jun 2018, 11:58 
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Username Protected wrote:
I think the answer is that if you want insurance to cover the engine damage that was caused by native airframe hardware ingested by the engine then you need to have a clause spelling that out in your policy- whether that's your airplane insurance, the manufacturer's engine program, or something else.


Correct Jim but I don't see any hull and liability insurer agreeing to that under any circumstances. However if a component fails and causes downline damage you may have opportunity to recover from that component manufacturer or even perhaps an engine program under certain conditions (such as Williams TAP Blue for instance).

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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 15 Jun 2018, 12:23 
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I'll withhold any comments on your experience or your specific claim as I wasn't involved - however in the case I noted the part causing the engine damage was native to the airframe so respects an engine FOD definition as a covered loss - it was excluded. It was not a foreign object it was domestic object or native object. Turbine engines in an aviation policy will specifically DEFINE coverages as respects FOD.


Thanks for the clarification Tom. (wasn't trying to be argumentative - Just trying to better understand the issue in the hopes that one of these days I'll have an insurance policy on an aircraft with a turbine engine!).

Robert


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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 15 Jun 2018, 13:57 
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I predict for their highest level of coverage, scheduled and unscheduled, for a GTSIO-520 on a 421C will be about $75/hour. That's $120,000 over a 1600 hour overhaul period.

Mike C.


Clearly there has to be a margin for the insurer to make business sense for them. In your example, let’s assume a GTSIO-520 actual costs over 1600 hours is $90,000 to cover complete overhaul and some cylinder replacements and odds and ends along the way. That’s a margin of roughly 33%. I wouldn’t consider that to be outrageous if someone wanted peace of mind and evenly distributed costs. The high risk, as you point out, is the long term viability of the insurer.

What’s the equivalent margin in a Williams engine over the cycle life including HSI and O/H costs?

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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 15 Jun 2018, 14:49 
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Username Protected wrote:
Thanks for the clarification Tom. (wasn't trying to be argumentative - Just trying to better understand the issue in the hopes that one of these days I'll have an insurance policy on an aircraft with a turbine engine!).

Robert


Robert-
Roger that and it is a good question and point. Thanks for mentioning :cheers:

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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 15 Jun 2018, 17:20 
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What’s the equivalent margin in a Williams engine over the cycle life including HSI and O/H costs?

Williams has priced the engine program such that being off program is about 30% MORE than being on program.

That is, over a complete TBO cycle, new through first overhaul, the program is 30% cheaper than paying for HSI and OH yourself, MINIMUM.

So the engine program "margin" is negative 30% for Williams.

This is why the vast majority of Williams owners are on program. If you buy a Williams engine not on program, and want to put it back on program, you essentially pay a lump sum of all the payments it would have taken to be on the program from zero hour.

Williams is the only source for HSI and OH servicing, so they can set the prices for either strategy as they see fit. They clearly want people on the program.

Mike C.

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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 16 Jun 2018, 12:37 
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I mentioned this in other threads but I strongly considered a legacy Citation instead of the CJ. It is a compelling argument - better performance for 1/2 of the money (depending on the model). The trade off is more fuel but you could argue that the savings in cap cost could buy a lot of fuel. In the end, I went with the CJ because it is easier to fly and I worried that the legacy airplanes would suffer from heavy depreciation if fuel prices go up and I assumed that the CJ's wouldn't.

I was trying to imagine what this event might have looked like in a 550. Lets assume I didn't have engine coverage and I had low-time engines. If one of those engines gets hammered from DOD, I'd have to come up with $350-400K for a mid time engine and the airplane wouldn't be worth anything more after I spent that. It might even be worth less if the engine I bought had more time than the DOD engine -or- I could repair the engine and probably spend even more and still be in the same position.

That would be a very hard pill to swallow for me. I could see where going through something like that would sour me on jet ownership.

I didn't have coverage on the PT-6's in the KA so I was ok with this risk for the three years I owned it, but now that I've experienced this event I think about it differently. The low probability of risk doesn't matter. It happened to me so my probability (looking backwards) was 100%.

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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 16 Jun 2018, 13:54 
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I went with the CJ because it is easier to fly and I worried that the legacy airplanes would suffer from heavy depreciation if fuel prices go up and I assumed that the CJ's wouldn't.

There is a lot more downside to the 525 since it costs twice as much.

The loss for the legacy airplane is limited to its value.

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I was trying to imagine what this event might have looked like in a 550. Lets assume I didn't have engine coverage and I had low-time engines. If one of those engines gets hammered from DOD, I'd have to come up with $350-400K for a mid time engine

You can buy another 550 with two engines on it for that price. Used JT15D-4 engines aren't as expensive as you think.

There are multiple shops that can fix the JT15D-4. So you have choices, including using PMA parts and used parts from other engines.

Also, you *can* get various forms of engine programs on the JT15D-4, including one just for these sorts of unscheduled events. The unscheduled only insurance is fairly inexpensive.

You spent a lot more for the 525. Cost of money can equal one engine event in just a few years.

You also spent a lot for the FJ44 program. About $310/hour. In 1000 hours, you have greatly exceeded the cost of the JT15D-4 repair.

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It happened to me so my probability (looking backwards) was 100%.

In 5 years, you will pay Williams as much as the JT15D repair would have been.

There are reasons to buy a 525, but being cheaper than a legacy airplane is a stretch that requires discounting cost of money to buy it and the payments to Williams.

Mike C.

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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 16 Jun 2018, 14:00 
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I think you have to be willing to buy used engines to play the legacy game.

I agree, legacy values will likely plummet. There will be some opportunities ahead.


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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 17 Jun 2018, 00:18 
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Username Protected wrote:
I went with the CJ because it is easier to fly and I worried that the legacy airplanes would suffer from heavy depreciation if fuel prices go up and I assumed that the CJ's wouldn't.

There is a lot more downside to the 525 since it costs twice as much.

The loss for the legacy airplane is limited to its value.

Quote:
I was trying to imagine what this event might have looked like in a 550. Lets assume I didn't have engine coverage and I had low-time engines. If one of those engines gets hammered from DOD, I'd have to come up with $350-400K for a mid time engine

You can buy another 550 with two engines on it for that price. Used JT15D-4 engines aren't as expensive as you think.

There are multiple shops that can fix the JT15D-4. So you have choices, including using PMA parts and used parts from other engines.

Also, you *can* get various forms of engine programs on the JT15D-4, including one just for these sorts of unscheduled events. The unscheduled only insurance is fairly inexpensive.

You spent a lot more for the 525. Cost of money can equal one engine event in just a few years.

You also spent a lot for the FJ44 program. About $310/hour. In 1000 hours, you have greatly exceeded the cost of the JT15D-4 repair.

Quote:
It happened to me so my probability (looking backwards) was 100%.

In 5 years, you will pay Williams as much as the JT15D repair would have been.

There are reasons to buy a 525, but being cheaper than a legacy airplane is a stretch that requires discounting cost of money to buy it and the payments to Williams.

Mike C.


I don't have the time to fact check the rest of your post, but TAP blue is less than $310 an hour. TAP elite is pre TAPblue and must be more expensive. $146 is more than we pay on the big -4.

Edit: also, there is some fine print in the tapblue program that sticks the operator for some of the costs. Paying to ship the engine to williams for work ($5k), and shipping the rental back to them is one I remember.

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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 17 Jun 2018, 00:52 
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Glad it worked out for you John. Your situation shows the unknown value of an engine program. Pilots tend to overlook the risk of unscheduled events and how expensive they are. My engine event last summer resulted in a $450K repair, which was covered by the program (as well as the $47K engine rental). I can’t imagine flying a turbine uncovered.

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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 17 Jun 2018, 01:25 
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Username Protected wrote:
I don't have the time to fact check the rest of your post, but TAP blue is less than $310 an hour.

For a pair of FJ44-3A installed on an S550, the quote from Williams for TAP Blue was $154.03 per hour per engine for 2017. It is surely now over that, making it over $310 per hour for a pair.

For a pair of FJ44-2A installed on 501SP, the 2017 quote was $147.17 for TAP Blue, 2018 quote was $152.32. So the smaller engine is a touch cheaper, about $7 per hour per engine.

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TAP elite is pre TAPblue and must be more expensive.

TAP Elite was before TAP Blue and lacked some coverages on TAP Blue such as FOD, corrosion, and non mandatory SBs. TAP Elite is about $11 cheaper per engine per hour ($22 pair). Williams ran a deal where you could upgrade to TAP Blue, but it required a lump sum payment and many elected to not do that.

In some cases, Williams forces TAP Blue depending on what you want. In particular, they would waive yearly hourly minimums (if you prepay 300 hours) for TAP Blue, but they would not for TAP Elite.

Quote:
$146 is more than we pay on the big -4.

Williams has various programs that discount early hours, and also have some payment plans that back load the costs, so it is possible that you are paying less presently. I ran into this with one airplane I looked at, turns out there was a back loaded plan (called "progressive") on this airplane where the costs escalate and it would take a pretty hefty payment to clear that up.

The "normal" rate is what I quoted above.

Quote:
Edit: also, there is some fine print in the tapblue program that sticks the operator for some of the costs. Paying to ship the engine to williams for work ($5k), and shipping the rental back to them is one I remember.

I have attached the TAP Blue contract that I got from Williams last year. There's a long list of exclusions. Shipping, installation, and removal of rental engines is on that list, so you need to decide if getting a rental engine is worth it if your engine has to come off.

Mike C.


Please login or Register for a free account via the link in the red bar above to download files.

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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 17 Jun 2018, 10:06 
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Ok turbine guys, a question...

Seems like engine programs (at least on Williams engines) are normal in the jet world, but virtually non existent in the turbo prop world.

I've seen a couple of King Air listings that talk about JSSI, but it seems to be very rare (at least from pursuing Controller).

Why aren't engine programs more common in the PT-6 / Garrett worlds?

Robert


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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 17 Jun 2018, 11:05 
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Garret/Honeywell has engine programs known as MSP (known as "mail $ to Phoenix). Pretty common for jets, not sure on the TPE series?


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 Post subject: Re: Being on the Williams engine program paid off!
PostPosted: 17 Jun 2018, 12:03 
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Username Protected wrote:
Garret/Honeywell has engine programs known as MSP (known as "mail $ to Phoenix).

MSP = "Money Sent to Phoenix".

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Pretty common for jets, not sure on the TPE series?

Relatively rare, < 10% of fleet would be my estimate.

Mike C.

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