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29 Nov 2021, 02:49 [ UTC - 5; DST ]


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 25 Oct 2021, 02:05 
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Ok Mike, so I agree with your points here, but I cracked up when you talked about the do-hickey - I said to myself “do-hickey? That’s what Mike builds”.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 25 Oct 2021, 08:40 
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Mike’s statement that TBO extensions are “solely” for Part 135 operators is not accurate.

They, of course, want to sell to everyone, part 91 included, so they try to convince you it is required.

My statement is that part 135 operators are the ones who need it. Part 91 operators don't.

If you are part 91 and buy the extension STC, you wasted money.

When I priced the TBO extension STC for JT15D-5A, it was $315K for two engines which included an HSI at Dallas. At that price, you aren't saving that much over a basic overhaul. The price was also contingent on having a "clean" HSI, extra if not, which most aren't. They also install some data logging doohickey and you have to report the data back to them.

This data is from Jim Clifford at tboextension.com. When I pointed out part 91 operators don't need to do it, Jim claimed that wasn't true via some argument about it being in the MM. I pointed him to the FAA guidance, and then I didn't hear from him again.

There is no gray area, but there is a lot of disinformation circulating around, often connected to business objectives, namely separating money from owners.

Mike C.


On the piston side of the world I have run across a few IA's and one shop that claimed they would not sign off an annual inspection if the motors were over TBO. Absolutely not correct for a part 91 operation. That's something one should check on before going to a shop with that policy. You could argue with them, but that is probably more trouble than it is worth. Of course I am sure they overlook the calendar time restrictions.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 25 Oct 2021, 11:23 
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Question; did the FAA require you to do Sim training to fly the V?


This was, of course, a rhetorical question. The FAA requires training, but they do not specify what type of training. That is the role of the insurance company.

I can't say what an individual underwriter might do or not do, but considering insurance companies are dropping insurance policies because of the age of the aircraft, I suspect those same companies are going to have a problem with flying past TBO.

Obviously, the cost of an overhaul will buy a lot of insurance and I'm betting Great American will still write it, at a higher premium, but I would make sure first.

There's a whole lot of "I can do what I want" and a whole lot of "that is FUD" (I admit I had to look that up) but as independent as I am in my own life, when it comes to advising clients I have to do my best to communicate to them any risk that I am aware of.

If you are selling airplanes, it's common to say "this is ok or don't worry about it" but we don't sell airplanes, we protect buyers. That's not marketing, it's my mission. If you guys get mad and accuse me of spreading "Fear, Uncertainty and Doubt" that is fine.

I try to bring an open mind to just about everything, I'm not against legacy Citations and I'm not against operating past TBO, but there are other factors that need to be considered beyond what the FAA says is legal.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 25 Oct 2021, 13:34 
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There’s a lot of brokers that read these forums. Have any brokers heard of underwriters denying coverage on a turbine aircraft because the engine(s) are past TBO? Do they even ask about the TBO status? Does anyone know about an exclusion in any turbine policy that excludes coverage past TBO? If some underwriters are excluding aircraft past TBO it would be great to know who they are so we can avoid them.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 25 Oct 2021, 18:17 
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Username Protected wrote:
Question; did the FAA require you to do Sim training to fly the V?


This was, of course, a rhetorical question. The FAA requires training, but they do not specify what type of training. That is the role of the insurance company.

I can't say what an individual underwriter might do or not do, but considering insurance companies are dropping insurance policies because of the age of the aircraft, I suspect those same companies are going to have a problem with flying past TBO.

Obviously, the cost of an overhaul will buy a lot of insurance and I'm betting Great American will still write it, at a higher premium, but I would make sure first.

There's a whole lot of "I can do what I want" and a whole lot of "that is FUD" (I admit I had to look that up) but as independent as I am in my own life, when it comes to advising clients I have to do my best to communicate to them any risk that I am aware of.

If you are selling airplanes, it's common to say "this is ok or don't worry about it" but we don't sell airplanes, we protect buyers. That's not marketing, it's my mission. If you guys get mad and accuse me of spreading "Fear, Uncertainty and Doubt" that is fine.

I try to bring an open mind to just about everything, I'm not against legacy Citations and I'm not against operating past TBO, but there are other factors that need to be considered beyond what the FAA says is legal.

Now do you have time to answer the question about these shops you are talking to that think you can't fly your engine past TBO on Part 91? It would help your argument if you actually cited the people or shops that you say make these claims. Too much unsubstantiated hearsay that you brush off when directly asked and then pivot to another angle, like insurance carriers now possibly refusing to insure if past TBO. Don't make the claim unless you are willing to back it up. I'm here to learn, like most of us. Hearsay doesn't help.

Last edited on 25 Oct 2021, 18:45, edited 1 time in total.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 25 Oct 2021, 18:34 
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Username Protected wrote:
I was at the local Ford dealership today to get a part for my Explorer. The lot was erriely empty. Handful of new trucks, couple of new cars. The used car side was even more empty. I know the chip shortage is impacting new cars but the lack of used cars was surprising.

If you can't buy a new car, you're not going to trade your used car.

Plus you can get a lot more for your old car by selling it privately.[/quote]

Tom, so true. I am actually thinking about selling our extra airport car….a 2008 Expedition. Prices for used cars are nuts! I figure sell now and then when the correction comes, maybe buy a smaller SUV…or not. Sell high, buy low…..never been good at that…maybe now is my chance!

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 25 Oct 2021, 18:35 
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Our local group insures 10+ legacy Citations and NO CARRIER has EVER asked about engine times. I believe it is categorically false that insurance is making an issue of TBO. They just don't care.

Mike


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 25 Oct 2021, 18:57 
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Username Protected wrote:
Now do you have time to answer the question about these shops you are talking to that think you can't fly your engine past TBO on Part 91? It would help your argument if you actually cited the people or shops that you say make these claims. Too much unsubstantiated hearsay that you brush off when directly asked and then pivot to another angle, like insurance carriers now possibly refusing to insure if past TBO. Don't make the claim unless you are willing to back it up. I'm here to learn, like most of us. Hearsay doesn't help.


Fair enough, I'll call tomorrow to verify the shops I mentioned.

I placed a call to Textron today.

It was not my intent to share anything misleading or to pivot.

I am not trying to win an argument about the right or wrong of operating past TBO, I have said many times that I am fine with it and have been since the FAA put out a letter clarifying the legality.

My entire point is that there are other concerns that need to be considered.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 25 Oct 2021, 19:08 
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My 550 is over TBO with fresh hots . Insured with Tarver’s insurance company no problem or problems with inspections.


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 25 Oct 2021, 23:53 
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Joined: 12/03/14
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Company: Ciholas, Inc
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Aircraft: C560V
Username Protected wrote:
I try to bring an open mind to just about everything, I'm not against legacy Citations and I'm not against operating past TBO, but there are other factors that need to be considered beyond what the FAA says is legal.

The only truly significant factor is that once you are past TBO, the potential market for the airplane is limited to other part 91 operators. It will be hard to sell such an airplane to a part 135 operator since their op spec often (always?) requires overhaul at recommended intervals.

You are still potentially ahead as you won't get dollar for dollar back on the overhaul if you did it at the recommended time. If the overhaul is dollar fro dollar (or better), well then you can do the overhaul when you sell and then you have fresher engines than if you overhauled it a few years earlier.

On a jet engine, outside of the hot section, there are really not very many critical parts with wear issues. This is not like a piston and cylinder rubbing against each other on every stroke, this is just stuff spinning. Those spinning things have life limits so they are protected from end of life fatigue by other means than overhaul, and an overhaul won't replace those parts anyway.

Outside of the market contraction, there is really no downside to the past TBO operation. Those will be the cheapest hours you ever get from the engine.

Another nice side effect is that your hull value is lower, which lowers insurance premium. More money back to you.

Mike C.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 26 Oct 2021, 11:52 
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Username Protected wrote:
I try to bring an open mind to just about everything, I'm not against legacy Citations and I'm not against operating past TBO, but there are other factors that need to be considered beyond what the FAA says is legal.

The only truly significant factor is that once you are past TBO, the potential market for the airplane is limited to other part 91 operators. It will be hard to sell such an airplane to a part 135 operator since their op spec often (always?) requires overhaul at recommended intervals.

You are still potentially ahead as you won't get dollar for dollar back on the overhaul if you did it at the recommended time. If the overhaul is dollar fro dollar (or better), well then you can do the overhaul when you sell and then you have fresher engines than if you overhauled it a few years earlier.

On a jet engine, outside of the hot section, there are really not very many critical parts with wear issues. This is not like a piston and cylinder rubbing against each other on every stroke, this is just stuff spinning. Those spinning things have life limits so they are protected from end of life fatigue by other means than overhaul, and an overhaul won't replace those parts anyway.

Outside of the market contraction, there is really no downside to the past TBO operation. Those will be the cheapest hours you ever get from the engine.

Another nice side effect is that your hull value is lower, which lowers insurance premium. More money back to you.

Mike C.


I know people probably assume the opposite, but we actually agree on all of this.

In general, just like older King Airs I don't see overhauls making sense on 500 / 501 / 550's except in very rare cases. As this becomes the norm and not the exception the value issue will probably settle out completely, but no matter what you are 100% right that if the cost of the overhauls greatly exceeds the value of the airplane with fresh motors, it just doesn't make sense to do them.

On the 560's it still seems that the value equation favors overhauls, I'm sure that will change as the airframes get older. It's also important to remember that one of the reasons V's and Ultras are holding their value is that they are very popular charter airplanes.

I'll report back as I hear back more on the shop issue, I did talk to one shop that was in the past opposed to signing off with past TBO, he has reached a solution he is comfortable with, he said "just don't bring me the engine logbooks"
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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 26 Oct 2021, 12:26 
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Username Protected wrote:
I know people probably assume the opposite, but we actually agree on all of this.

In general, just like older King Airs I don't see overhauls making sense on 500 / 501 / 550's except in very rare cases. As this becomes the norm and not the exception the value issue will probably settle out completely, but no matter what you are 100% right that if the cost of the overhauls greatly exceeds the value of the airplane with fresh motors, it just doesn't make sense to do them.

On the 560's it still seems that the value equation favors overhauls, I'm sure that will change as the airframes get older. It's also important to remember that one of the reasons V's and Ultras are holding their value is that they are very popular charter airplanes.

I'll report back as I hear back more on the shop issue, I did talk to one shop that was in the past opposed to signing off with past TBO, he has reached a solution he is comfortable with, he said "just don't bring me the engine logbooks"

As airframes of the older fleet with Williams engines age, I wonder how that will work out. Imagine I have a 525 with many hours on the airframe making it less desireable to buyers, yet it's on Tap Blue and I need to sell the plane for big bucks or I'll essentially lose all the money I paid to Williams. I suppose I could take the engines off and sell them separately?

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 26 Oct 2021, 12:35 
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Username Protected wrote:
I'll report back as I hear back more on the shop issue, I did talk to one shop that was in the past opposed to signing off with past TBO, he has reached a solution he is comfortable with, he said "just don't bring me the engine logbooks"

Which shop?

Whoever said this doesn't understand the regulations and the responsibility and authority that the operator has versus the mechanic.

Mike C.

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Last edited on 26 Oct 2021, 12:47, edited 1 time in total.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 26 Oct 2021, 12:39 
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Username Protected wrote:
I know people probably assume the opposite, but we actually agree on all of this.

In general, just like older King Airs I don't see overhauls making sense on 500 / 501 / 550's except in very rare cases. As this becomes the norm and not the exception the value issue will probably settle out completely, but no matter what you are 100% right that if the cost of the overhauls greatly exceeds the value of the airplane with fresh motors, it just doesn't make sense to do them.

On the 560's it still seems that the value equation favors overhauls, I'm sure that will change as the airframes get older. It's also important to remember that one of the reasons V's and Ultras are holding their value is that they are very popular charter airplanes.

I'll report back as I hear back more on the shop issue, I did talk to one shop that was in the past opposed to signing off with past TBO, he has reached a solution he is comfortable with, he said "just don't bring me the engine logbooks"

As airframes of the older fleet with Williams engines age, I wonder how that will work out. Imagine I have a 525 with many hours on the airframe making it less desireable to buyers, yet it's on Tap Blue and I need to sell the plane for big bucks or I'll essentially lose all the money I paid to Williams. I suppose I could take the engines off and sell them separately?


Please walk me through the logic on how engines removed would have more value than engines attached to a flying airframe.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 26 Oct 2021, 12:43 
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Username Protected wrote:
As airframes of the older fleet with Williams engines age, I wonder how that will work out.

Airframes will lose value. Over the last 8 years or so I have been tracking Williams converted legacy airplanes, they have lost about half their value. A Super SII in 2014 that was going for $2M is now about $1M, for example.

The older CJs are getting on to about 25 years old. They are crossing the $1M line now in value. Almost all of them have over 3000 hours which means Williams got $1M or more in payments over the years.

Quote:
Imagine I have a 525 with many hours on the airframe making it less desireable to buyers, yet it's on Tap Blue and I need to sell the plane for big bucks or I'll essentially lose all the money I paid to Williams.

Well, sort of.

You would be losing money with JT15D not on program, too, the Williams program just doesn't lose as much money, maybe 50% of Williams payment are retained value?

Quote:
I suppose I could take the engines off and sell them separately?

Better ask Williams about this. From what I hear, they may not accept transfer of engines between airframes automatically. They exert control over these things in ways that you may not expect.

Many of the issues with Williams are not spelled out in their contract only for you to discover them after the fact.

Mike C.

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