Financial Considerations
- Insurance
- Consumables
- Environment Protection Fees
- Hangar / Landing Fees
- Taxes
- Freight
- Flat Rate
- Engineering / Technical
- Payment Terms
- Warranty
There are many financial considerations to consider when planning maintenance for your aircraft. Make sure you know as much about an MRO as possible before committing to a project to avoid unexpected costs and hidden fees.
Insurance
Insurance coverage protects against unexpected incidents that may occur. Aviation insurance has become very costly and consequently, some MROs may not have enough coverage to protect your aircraft while in their care. It is wise to ask and compare coverage before starting a project.
Consumables
Some materials used on your project may not actually leave with the aircraft or be completely used during the work. These items are often referred to as “consumables.” Every MRO defines and charges for consumables differently. Unfortunately, this can lead to some surprises in final billing if you don’t understand the consumables policy of your chosen MRO.
Environment Protection Fees
The EPA has a huge effect on corporate MROs. Most follow EPA regulations. However, if the service provider you choose does not, there is precedent that your company could be found liable for environmental damage, employee claims and EPA penalties.
Hangar / Landing Fees
Hangar fees are often an unexpected fee by aircraft operators. When planning your event, it is best to know what to expect beforehand.
Many airports charge landing and tie-down fees.
Taxes
Taxes can have a huge impact on your final bill, especially if they are applicable to both labor and parts. Taxes could vary greatly from state to state and could mean a difference of thousands of dollars when calculating the final cost of your project. Be sure to ask what the local tax policies are at any service provider you are considering.
Freight
Freight charges are typically passed on to the customer for parts required for their maintenance event. Find out if the service provider maintains a parts inventory to reduce freight charges.
Flat Rate
With larger inspections, the “flat rate” may be less than half of your actual total cost when the work is completed. The majority of costs will probably be for repairs that are needed and required as the inspection progresses. Be sure to ask your service provider about costs incurred over and above the quoted flat-rate fee.
Engineering / Technical
Some workscopes may require engineering and/or technical expertise. If this is outsourced by the service provider, an additional charge may show up on the final bill. Find out if the quoted estimate includes these additional services.
Payment Terms
Some service providers may require a down payment before work begins and subsequent progress payments throughout the workscope. If you know the payment terms, then you can avoid surprising the “home office” with “fire drills” to wire funds. Not understanding what type of payment is required and when it is due can lead to bad feelings regardless of the work performed.
Warranty
The last thing you need after paying for necessary maintenance is to discover your service provider won’t stand behind their work after your aircraft leaves their facility. Inquire about warranties the service provider offers for every major area of your aircraft being serviced.
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