2016 July 13

[Strategic Notes] MRO of military helicopter engines – Innovative solutions for a critical asset in military operations

At a time when budgetary constraints are increasingly pressing for the Armed Forces, exchanges between the forces and industry provide opportunities to improve optimization of costs. The British Ministry of Defence (MoD) has studied the transition from six separate support contracts for the same type of engine to one overall support contract and calculated that the direct and indirect gains amount to some £300m over twenty years. Their experience demonstrates that such contracts optimise the engines’ ‘time-­‐on-­‐wing’ (avoiding too many removals), improve their reliability, lengthen the lifespan of Life Limited Parts (LLP) and allow greater recourse to repairs as opposed to ordering replacement parts.

The establishment of such contracting solutions gives the armed forces greater visibility as to the use of their machines, with the necessary built-­‐in flexibility in case of peak activity during operations or, alternatively, reduced activity. Maintenance is also subject to budgets constraints which, in turn, ultimately affect the operational capabilities of armed forces. Solutions for overall support can mitigate these budgetary risks and allow for optimal availability. On the basis of ongoing exchanges on needs and expectations during preliminary discussions and subsequently during implementation, the ‘virtuous’ side of this type of contract lies in this ability to provide visibility to all stakeholders while manufacturers will make gains in production planning.

This type of solution therefore has real advantages over traditional ‘Time & Material’ contracts, under which there is typically an increase in the maintenance costs (Direct Maintenance Cost) and a decrease in the operational availability of an aircraft during its operational lifespan. A good example of these advantages is the support response provided by manufacturers to the problems faced by the French Caracal turboshafts in Mali, which demonstrated the flexibility of such ‘overall support’ contracts and enabled operators to focus on achieving their mission..

About the authors

Etienne Daum is Manager at CEIS, which he joined in 2007. Etienne has more than ten years of experience in the areas of defence industry, market and technology. He developed a very good expertise of technological and industrial issues in Europe, in particular in the aeronautics and aerospace sectors. Prior to joining CEIS, he worked for several major industrial groups and at the French Ministry of Defence as defence market and technologies analyst.

William Pauquet has been a consultant at CEIS since 2011. He graduated of Science Po Grenoble and holds a master degree in “Defence, Geostrategic and Industrial Dynamics” from Paris-I Panthéon Assas University. He’s specialized in defence industry analysis (monographs, market studies, monitoring) and has developed an expertise in naval and aeronautics sectors.

Axel Dyèvre is the head of the Defence & Security Practice at CEIS. He has also been in charge of the CEIS-European Office since its creation in 2006. Axel started his carrer as an officer in the French Forces. A consultant in strategy from 1995 to 1997, he was then a Senior Partner at DATOPS (now LexisNexis Business Information Solutions), a firm developing information systems, between 1997 and 2005. Axel has been a part of the CEIS expansion since its beginnings in 1997, and he has opened the CEIS-European Office in 2006.

Attachment: note-strat-mco-helico-eng