When were they last OH/HSI?

Recent -10 overhauls/HSI may be eligible, older ones might not be.

My engines were overhauled/converted in 2000. So they are relatively recent and thus eligible for the 2500/5000 interval.

Now the question is if they can be extended to 3500/7000 interval and what that takes.

Mike C.

Mike, here is the deal governing price increases on GMP.

Interesting formula.

70% of wage, 30% of material inflation rate.

Then, 0% to 3% results in 3% adder, 3% to 5% result in 3% to 5% adder, above 5%, you get slightly less than inflation, for example, 10% is 7.5% adder.

A bunch of low inflation years (like recently) means you get dinged at 3%, but high inflation comes with a reduction.

The next thing to watch out for will be escape clauses where PI can terminate the contract if the above terms are not to their liking any more. That is, can they escape the commitment?

Mike C.

A Lear 60 operator I know recently had his big (300 Series) Pratts extended to 7,000 by the program manager without his involvement. He was pretty pissed about it.

Can you explain further how a part 91 operator can get the 3500 HSI interval without using the engine program?

And what do those statements say?

Mike C.

Sure. He's paid in all these years to get fresh motors when he reaches TBO, and now he has a plane with "over" TBO engines instead.

One wonders if he could have gotten the extension if he wasn't on the program. It appears the engine knows how to live longer when the owner is not paying for it.

Another aspect is hull value for insurance. Do you insure market value plus overhaul reserves banked at the engine vendor? The plane is not worth that by itself. Do underwriter's accept that or not?

In a total loss situation (say hangar fire), do you get any of that money back from the engine vendor? I'm guessing no.

So your exposure is hull plus reserves, but you may only be able to insure the hull itself.

If the insurer allows you to up the hull value by the engine reserves, then you are paying higher insurance premiums over a TBO cycle, so that is a little extra cost to being on the programs.

Mike C.

Interesting formula.

70% of wage, 30% of material inflation rate.

Then, 0% to 3% results in 3% adder, 3% to 5% result in 3% to 5% adder, above 5%, you get slightly less than inflation, for example, 10% is 7.5% adder.

A bunch of low inflation years (like recently) means you get dinged at 3%, but high inflation comes with a reduction.

The next thing to watch out for will be escape clauses where PI can terminate the contract if the above terms are not to their liking any more. That is, can they escape the commitment?

Mike C.

Interesting. This sounds like a better program than most.

Williams contract terms only last 5 years, so they can change the rules at that point if they so desire.

Their earlier contracts have inflation formulas, their later ones don't. The language is:

"The Published Rate and the Hourly Rate shall be subject to an annual rate adjustment, to be applied January 1 of each year."

No limits in the contract on that adjustment.


Williams contract allows "exchange", though it is a bit vague as to whether that includes the entire engine or just parts.

Mike C.

Mike, I think you have to view engine programs sort of like a wife. In terms of getting rid of either your going to have some expense....nod here going to the engine program.

You can go through life without either and learn how to deal with associated tasks on your own. You'll be money ahead but with sore knuckels and aching wrist...

And what do those statements say?

Mike C.

Are you trying to be unhelpful on purpose? You seem to be allergic to providing any useful specifics such as the particular SBs involved to do this.

Mike C.

I would, if they would treat me like a husband.

Mike C.

Are you trying to be unhelpful on purpose? You seem to be allergic to providing any useful specifics such as the particular SBs involved to do this.

Mike C.

An example would be still be useful, even if it is outdated.

Mike C.