An Exclusive Benchmark Analysis (FY2018 data)by IATA’s Maintenance Cost Technical Group

Airline Maintenance Cost Executive CommentaryEdition 2019

MCTG December 2019

PUBLIC VERSION

Preliminary Remarks 2

Data & Analysis Methodology 4

Definitions & Acronyms 5

1 Global Picture 71.1. Airline Industry Landscape in 2018 81.2. World Fleet 111.3. Maintenance, Repair & Overhaul (MRO) Market 14

2 FY2018 Snapshot 172.1. Fleet Overview 182.2. Maintenance Cost Analysis 21 2.2.1. Direct Maintenance Spend 21 2.2.2. Direct Maintenance Spend by Aircraft Category 24 2.2.3. Personnel & Overhead  262.3. Aircraft Leasing & Maintenance Reserves  292.4. Spare Parts Inventory 33

3 Analysis by Airline Group 373.1. Fleet Overview  383.2. Maintenance Cost Analysis by Airline Group 403.3. Aircraft Leasing & Maintenance Reserves by Airline Group  43

4 Trend Analysis 474.1. Fleet Overview 484.2. Maintenance Cost Overview 514.3. General Trends 564.4. Trend Analysis by Airline Group 58

5 Trend Analysis by Aircraft Category 635.1. Overview by Aircraft Category 645.2. Narrowbody Aircraft 665.3. Widebody Aircraft 685.4. Regional Jets 705.5. Turboprops 72

Annex I: MCTG Fleet vs World Fleet 74

Annex II: Base and Component Maintenance Costs by Airline 75

Annex III: Staff 76

Annex IV: Mechanics and Overhead Staff Breakdown 77

Annex V: Time Breakdown 80

Annex VI: Fleet Distribution by Aircraft Family and by Group 81

Annex VII: Operational Data by Aircraft Category 82

Table of Contents

2 Preliminary Remarks

The Maintenance Cost Technical Group (MCTG) – formerly known as Maintenance Cost Task Force (MCTF) – collects maintenance cost data from airlines worldwide on an annual basis. The goals of MCTG are to provide the tools, methodology and definitions to be able to determine how much it costs an airline to maintain its fleet and be able to use the data in cases of new fleet introduction or expansion, “make vs. buy” decisions, year-over-year trends, etc.

Preliminary remarks

This report is exclusively distributed to airlines that provided data for 2018.

We are doing our maximum to present meaningful analysis and we encourage you to provide feedback on this report so we can enrich it again next year.

We regularly send out a survey to airlines in order to gather their advice on how to improve this report and its content.

MCTG data collection is open to all commercial airlines worldwide that would like to benchmark their cost to maintain their fleet. MCTG does not discriminate between IATA and non-IATA member airlines. MCTG does not discriminate between major, domestic, international, low-cost, regional airlines, etc.

The importance of data qualityIt takes a fair amount of time for MCTG airlines to gather and submit data, and it takes a lot of effort to validate this data in order to deliver the most relevant benchmark analysis. We often need to contact airlines and ask for clarifications when numbers do not meet the quality checks set. For this initiative to remain viable and reliable, it is critical to focus on the best possible data quality. That’s why we would like to remind you of the importance of making sure your data are accurate before submitting it. For that purpose, built-in checks are included in the data collection form (on three tabs: Summary Tables, Summary Graphs and P&O Graphs) in order to help you get an idea of the main metrics (e.g. maintenance cost per flight hour, per flight cycle or per aircraft). Unscheduled events can cause dramatic impact on maintenance spend, that is why we need also as many comments to explain unusually high or low costs.

3Preliminary Remarks

The importance of reporting operational dataThe focus of MCTG is clearly on maintenance costs, however operational data (e.g. flight hours, cycles, ASK, fleet size and fleet age) and personnel & overhead data (e.g. number of mechanics and overhead staff, time breakdown, overhead costs, etc.) are very important to calculate unit costs and KPIs. We would like to draw your attention on the importance of reporting accurate cost data and operational data in order to get the best benchmark data and analysis possible for the benefit of the airline industry and your own airline.

The importance of data treatmentAll the MCTG analyses presented in this report use maintenance cost data as they were provided by the airlines through the standardized IATA toolset. No attempt was used to normalize the data based on any parameters such as operational severity (hours

to cycle ratio, utilization, harsh environment, etc.), aircraft ageing, fleet size and commonality, labor rate, etc. Additionally, it should be noted that the analysis is done in USD as most of the aircraft parts are marketed in USD; therefore, currency exchange rates may play a significant role in benchmarking maintenance costs, especially when substantial foreign exchange fluctuations and/or currency devaluation take place.

Finally, the aircraft delivery schedule and the periodicity of the maintenance program can strongly influence costs, especially when many aircraft were delivered within a short period of time.

The acceptance of dataThis report analyzes and comments data from 54 airlines. Due to late submission, insufficient data and poor data quality, a few other airlines’ data was excluded from the analysis and report.

4 Data & Analysis Methodology

Data & Analysis Methodology

IATA’s Maintenance Cost Technical Group (MCTG) collects maintenance cost data from airlines worldwide on an annual basis.

MCTG Airlines are the carriers which participate in the annual data collection. 54 airlines reported data for FY2018, however one airline was excluded from this report, because they submitted past the deadline and/or data that did not pass the quality checks and subsequent questions to clarify data.

The data are then coded (operators are de-identified) and used as reported (i.e. without any normalization) to create this benchmark report.

All airline data are consolidated and then analyzed considering aircraft type, fleet and engine size and models, fleet age, maintenance market segments (line, components, engines, heavy checks and MOD) and elements (labor, material, subcontracted work), flight hours, cycles and geography.

All data presented in this report are de-identified. The two-digit airline codes shown in this report are unique codes given to the participating airlines for de-identification purposes. Although some of these codes may match real IATA airline codes, this is merely a coincidence. If you do not know your airline’s code, please contact us at mctg@iata.org.

Typical metrics include: cost per flight hour, cost per departure, cost per aircraft. The cost data unit is US dollar, and the length unit is kilometer.

The goals of MCTG are to provide the tools, methodology and definitions to be able to determine how much it costs an airline to maintain its fleet and be able to use the data in cases of new fleet introduction or expansion, “make vs. buy” decisions, year-over-year trends, etc.

5Definitions and Acronyms

Definitions & Acronyms

ACAircraft

AFIAfrica

AFTKAvailable Freight Tonne Kilometers

Aircraft CategoryNB, WB, RJ, TP (defined below)

Aircraft FamilyAircraft communalities (e.g. A320 Family includes A318, A319, A320, A321; 737 NG includes 737-600/700/800/900)

Aircraft Sub-CategoryNB, WB2, WB3+, RJ, TP (defined below)

ALAirline

APUAuxiliary Power Unit

ASKAvailable-Seat Kilometers

ASPACAsia Pacific

Cost ElementsMaterial, labor, engine life limited parts and outside repairs (or outsourced, used interchangeably)

Cost SegmentsLine, base, component and engine maintenance

CurrencyAll amounts in this report are in US$, unless specified otherwise.

DMCDirect Maintenance Costs

ESVEngine Shop Visit

EUREurope

FCFlight Cycle

FHFlight Hour

FLFFreight Load Factor

FTKFreight Tonne Kilometers

LATAMLatin America & The Caribbean

LGLanding Gear

LLPLife Limted Part

MCTGMaintenance Cost Technical Group

MENAMiddle East & North Africa

MRMaintenance Reserves

MROMaintenance, Repair and Overhaul

MTBRMean Time Between Removals

NAMNorth America

NBNarrow-body single aisle aircraft with more than 100 seats (excludes Embraer 190/195)

PLFPassenger Load Factor

RegionsAfrica (Sub-Saharan Africa), ASPAC (Asia Pacific), MENA (Middle East & North Africa), Americas (North & South America), Europe (includes CIS), N. Asia (China, Hong Kong, Macao, Taiwan, Mongolia)

RJRegional-jets up to 100 seats (includes Embraer 190/195)

RPKRevenue-Passenger Kilometers

Supply ChainIncludes all maintenance activities performed by third party (also called “contract maintenance” or “outsourcing”) and the cost of material purchased to do work in-house

Total Maintenance CostsDMC plus overhead costs

TPTurboprops

TRThrust Reversers

UnitsK ($#,000) Thousand M ($#,000,000) Million B ($#,000,000,000) Billion

UtilizationNumber of flight hours per aircraft per day (= FH / AC / 365 days)

WACCWeighted average cost of capital

WBWide-body aircraft with more than one aisle or equivalent freighter, combination of WB2 and WB3+.

WB2Wide body aircraft equipped with two engines

WB3+Wide body aircraft equipped with three or more engines

Global Picture 7

1.3. Maintenance, Repair and Overhaul (MRO) Market

Global Picture1.1. Airline Industry Landscape in 2018

1.2. World Fleet

Global Picture

This section provides some context to the MCTG analysis in other sections by presenting an overview of the airline industry, the world fleet count and the Maintenance, Repair and Overhaul (MRO) market for 2018.

The industry recorded a net post-tax profit of US$32 billion, decreasing by 14% compared to 2017.

In 2018, the world fleet count was 27,535 aircraft with 81% of the fleet manufactured by Airbus and Boeing. Globally, airlines spent $69 Billion on MRO, representing around 9% of total operational costs.

$B�YEAR

2017

2019

F

2018E

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

4.4-4.1

14.0

-0.1

20.0

12.9

-1.0-15.9

2.0-4.6

28.0

17.320.0

8.3

18.0

9.2

36.0

13.8

25.0

10.7

62.0

36.0

60.0

34.2

58.0

37.7

60.0

35.5

56.0

32.3

US$/Barrel

0

40

80

120

160

200

Jan-17

Jan-16

Jan-15

Jan-14

Jan-13

Jan-12Jan-11

Jan-10

Jan-09

Jan-08

Jan-07Jan-06

Jan-05

Jan-04

Jan-19

Jan-18

Global Picture8

Collectively, the airline industry had a net post-tax profit of US$32.3 billion, a 6.8% margin on revenues.The post-tax profit airlines generated this year was lower compared with previous year ($37.7 billion reported in 2017 with an 7.7% margin).

Jet fuel prices increased significantly during 2018. The average price of a barrel of jet fuel in 2018 was $86 per barrel (29% higher than in the previous year but still lower than average between 2011 and 2015).

RPKs between regions of the world grew at an accelerated rate in 2018, expanding by 6.5% from previous year (2017). The pick–up in the growth trend reflected increasing demand through improvements in the global economic backdrop. The available seat kilometers (ASKs) in 2018 increased by 6.1% compared to last year.

The passenger load factor this year (2018) has reached 81.9% increasing of 0.6% from last year.

Fig. 1: Industry Net Profits Source: IATA WATS 2019

Operating result Net Result

Fig. 2: Jet Fuel Price per Barrel Annual Average Source: IATA WATS 2019

Jet fuel ($ / b) Crude ($ / b)

1.1. Airline Industry Landscape in 2018

Source: IATA WATS 2019

Global Picture 9

NAM

5.3%

LATAM

7.0%

AFI

6.1%

EUR

7.5%ME

5.0%

ASPAC

9.5%WORLD

7.4%

Global Picture10

Fig. 3: RPK Growth by Route Area Source: IATA WATS 2019

AFI: AfricaASPAC: Asia PacificEUR: Europe

LATAM: Latin America & the CaribbeanMENA: Middle East & North AfricaNAM: North America

Fig. 5 Fig. 6

60%Narrowbody Jet

13%Regional Jet

6%Turboprop

21%Widebody Jet

3%Africa

14%NorthAsia

17%ASPAC

35%Americas

7%MENA

24%Europe

Global Picture 11

In FY2018, the world fleet count was 27,535 aircraft. This number includes all active aircraft in commercial operations. 81% of this fleet was manufactured by Boeing or Airbus. The combined share of the other manufacturers (like Bombardier, Embraer, Fokker, ATR and Bae) represented the remaining 19% of the world fleet.

In the last decade, airlines introduced 7,923 aircraft to their fleet, broken down as follows: 60% NB, 13% RJ, 21% WB, and 6% TP. TPs include only ATR42/72 and Q300/400.

Fig. 5: World Fleet by Aircraft Category (2018) Source: Cirium

Fig. 6: World Fleet by Region (2018) Source: Cirium

Fig. 4: World Fleet by Manufacturer (2018) Source: Cirium

1.2. World Fleet

Operator in Europe and the Americas own 59% of the world fleet in 2018, followed by ASPAC and North Asia with 31%, whereas MENA and Africa account for 10%.

0.51%Fokker7.18%

Bombardier (incl. DHC)

7.26%Embraer

44.88%Boeing (incl. MD)

0.47%BAE Systems (Avro & HS)

3.8%ATR

35.89%Airbus

0

500

1,000

1,500

2,000

2,500

3,000

20182017201620152014201320122011201020092008

6

7

8

9

10

11

122,536

2,803

1,325 1,342

6 95

7 68

FH/AC, FC/AC

Utilization(Hours / day)

Global Picture12

Fig. 7: Top 10 Most Popular Aircraft Families (2018) Source: Cirium

Fig. 8: World Fleet Statistics (2009  -   2018) Source: Cirium

FH / AC

FC / AC

Utilization (Hours / day)

A320 Family remains the most popular aircraft consisting of 7,679 AC and has a narrow lead before the 737 Family with 7,548 AC in FY2018.

7,679

7,548

1,429

1,425

1,399

1,288

750

1,045

739

690DHC-8

787 Family

767 Family

ATR Family

CRJ Family

EJet Family

A330/A340 Family

777 Family

737 Family

A320 Family

1 % of industry RPKs in 20182 Year-on-year change in load factor 3 Load factor level

Global Picture 13

Table 1: Airline Passenger Market Analysis (Dec 2018) Source: IATA Economics

The average utilization in 2018 was 7.68 hours/day (6.7% vs 2017, and 10.5% vs 2009). In FY2008, an aircraft flew on average 2,803 hours and 1,342 cycles.

PLF increased from 81.4% in 2017 to 81.9% in 2018.All figures in the table below are expressed in % change year on year, except for PLF and FLF which are the load factors for the specific month.

December 2018 (% year-on-year) 2018 calendar year (% year-on-year)

WORLD SHARE1

RPK ASK PLF (%-PT)2

PLF (LEVEL)3

RPK ASK PLF (%-PT)2

PLF (LEVEL)3

AFRICA 2.1% 2.1% 1.6% 0.4% 72.4% 2.4% 1.0% 1.0% 71.4%

ASIA PACIFIC 34.5% 6.4% 6.7% -0.2% 81.0% 8.6% 7.9% 0.5% 81.5%

EUROPE 26.7% 7.8% 8.8% -0.8% 81.0% 6.6% 5.8% 0.6% 84.5%

LATIN AMERICA 5.1% 6.0% 5.4% 0.4% 81.8% 6.2% 6.6% -0.3% 81.6%

MIDDLE EAST 9.2% 0.0% 4.2% -3.1% 73.6% 4.0% 4.9% -0.6% 74.8%

NORTH AMERICA 22.4% 3.6% 4.0% -0.3% 82.5% 5.0% 4.7% 0.2% 83.8%

TOTAL MARKET 100% 5.3% 6.1% -0.6% 80.4% 6.5% 6.1% 0.3% 81.9%

18%Line

20%Components

20%Base

42%Engines

3% Africa

11%MENA

24%Europe

32%Asia

30%Americas

Global Picture14

Fig. 9: World MRO Spend by Segment (2018) Source: Alton Aviation Consultancy MRO Forecast

Fig. 10: World MRO Spend by region (2018) Source: Alton Aviation Consultancy MRO Forecast

Global MRO spend in 2018 was valued at $69 Billion, excluding overhead. This represented 9% of airlines operational costs.

With a 4.1% increase per annum, the market size is estimated to reach $103 Billion in 2028.

1.3. Maintenance, Repair and Overhaul (MRO) Market

2018$69B

42%

21%17%

20%

2028$103B

4.5%

3%4%

9%

BASELINECOMPENGINE LINEBASECOMPENGINE

Global Picture 15

Fig. 11: World MRO Market Forecast (2018-2028)Source: Alton Aviation Consultancy MRO Forecast

TRENDS AND MAJOR EVENTS IN 2018Fleet evolution

Narrowbody aircraft will continue to dominate deliveries over the next decade. OAMs are offering re-engined aircraft for a better fuel efficiency (A320neo, 737 MAX) and developing versions of the narrowbody jets for longer hauls (A321 XLR).

Over the same period of time, the fleet of e-enabled aircraft is set to more than double.

IATA/CFMI Agreement

In July 2018, IATA and engine manufacturer CFM International (CFMI) have signed an agreement that will lead to increased competition in the market for maintenance, repair and overhaul services (MRO) on engines manufactured by CFM, a 50/50 partnership between GE and Safran Aircraft Engines.

Under the agreement, CFMI has adopted a set of “Conduct Policies” that will enhance the opportunities available to third-party providers of engine parts and MRO services on the CFM56 and the new LEAP series engines. More information can be found on MCTG webpage.

Top three savings for airlines

• Health monitoring and predictive maintenance driven by improved dispatch reliability, labor productivity

• Fuel cost savings

• Delay reduction through improved turnaround process

To improve productivity, lower costs, and gain additional asset utilization, airlines are considering technologies like the Internet of Things (loT) to change the game.

Reasons for increasing MRO material costs

• Annual OEM material price increases

• OEMs restricting the direct sale of OEM designed parts

CHALLENGES AHEADImpact of Brexit on airline operations:

• Limits access to market

• Adds cost through complexity, inefficiency or administrative burden

• Potentially leads to extensive supply chain disruption, invalidation of aircraft used across the globe and planes being grounded

Potential options for managing UK regulatory framework after Brexit:

• UK seeks to become a Third Country member of EASA

• UK builds an independent regulatory framework, and/or seeks bilateral arrangements on safety and cooperation with other Third Countries

SOURCES • Industry Statistics Fact Sheet – IATA (June 2019)• A study of the effects of the United Kingdom leaving the

European Union on airlines flying to and from the UK – IATA (October 2018)

• Aero-Engine Market Analysis - Oliver Wyman (May 2019)

• Airline Economic Analysis - Oliver Wyman (2018-2019 Edition)

• Exploring airline operation benefits of deploying IoT – Deloitte

• Global Fleet & MRO Market Forecast Commentary 2018-2028 – Oliver Wyman (2018)

• The MRO Market & Key Trends – ICF (January 2019)

FY2018 Snapshot 17

2.1. Fleet Overview2.2. Maintenance Cost Analysis 2.2.1. Direct Maintenance Spend 2.2.2. Direct Maintenance Spend by Aircraft Category 2.2.3. Personnel & Overhead2.3. Aircraft Leasing & Maintenance Reserves2.4. Spare Parts Inventory

FY2018 Snapshot

FY2018 Snapshot — 54 Airlines

This section provides the overview of FY2018 data reported by 54 airlines worldwide. The 5-year trend analysis will be presented further in this report.

The MCTG airlines operated 4,717 aircraft in 2018, of which 92% were Airbus and Boeing aircraft. Technical Division spend totaled $19.78 billion, of which $16.94 billion were Direct Maintenance Cost and $2.85 billion Overhead Cost.

EUROPE (includes CIS)

AL 18 (33%)AC 963 (20%)

AGE 10.2UTIL 9.4

AMERICAS North & South America

AL 11 (20%)AC 1,655 (35%)

AGE 8.5UTIL 8.6

AFRICA Sub-Saharan Africa

AL 3 (6%)AC 88 (2%)

AGE 10.0UTIL 8.0

MENA Middle East & North Africa

AL 8 (15%)AC 621 (13%)

AGE 6.8UTIL 10.4

ASPAC Asia Pacific

AL 10 (19%)AC 1,012 (21%)

AGE 8.9UTIL 8.4

N ASIA China, Hong Kong, Macao, Taiwan and Mongolia

AL 4 (7%)AC 378 (8%)

AGE 8.8UTIL 9.7

FY2018 Snapshot18

In FY2018, the MCTG fleet had 4,717 aircraft, which represented 17% of the world’s fleet.

The fleet size of MCTG airlines ranged from 1 to over 600 aircraft with an average fleet age of 8.8 years. They flew a total of 15.5 million flight hours, and 6.4 million flight cycles. Nine airlines operated both passenger and freighter aircraft.

Table 2: Fleet Distribution by Region (FY2018 — 54 Airlines)

AL: Airline

AC: Aircraft

Age: Average Fleet Age (years)

Util: Utilization (Hours / Day)

2.1. Fleet Overview

207 A/C4.4%

2,380 A/C50.5%

1,936 A/C41.0%

127 A/C2.7%

67 A/C1.4%

FY2018 Snapshot 19

Fig. 12: Fleet Distribution by Manufacturer (FY2018 — 54 Airlines)

Boeing

Airbus

Embraer

ATR

Bombardier

Fig. 13: Fleet Distribution by Aircraft Category (FY2018 — 54 Airlines)

NB

WB2

RJ

WB3+

TP

The MCTG fleet mix is slightly different from the world fleet. Boeing (including McDonnell-Douglas) and Airbus are overrepresented in MCTG fleet. They account for 92% of MCTG fleet vs 81% of worldwide fleet. On the contrary, Embraer, ATR and Bombardier have a combined share of 8% of MCTG fleet vs 18% worldwide. (Fig. 12)As shown in Fig. 13, narrowbody aircraft (NB) were the most popular aircraft (56% of 54 MCTG airlines' fleet) with 3,089 flight hours per aircraft and 1,642

flight cycles per aircraft on average. In 2018, widebody aircraft represented 35% of the fleet with an average age of 8.8 years (8.9 years for NB). Each widebody aircraft (WB) flew on average 3,895 hours and performed 767 cycles (Table 2). Regional (RJ) and Turboprop (TP) fleets are underrepresented in the MCTG analysis because reporting carriers mostly have larger aircraft.More details on MCTG fleet vs Worldwide Fleet in Annex I.

2,649 A/C56%

1,484 A/C31%

225 A/C5%

182 A/C4%

176 A/C4%

Aircraft Category

Aircraft Airlines Avg Age Utilization FH/AC FC/AC FH/FC Dispatch Reliability

NB 2,649 A/C 50 8.9 8.5 3,089 1,642 1.9 98.56%

WB2 1,484 A/C 37 8.8 10.6 3,856 781 4.9 98.74%

RJ 225 A/C 13 7.5 6.9 2,529 2,048 1.2 98.81%

WB3+ 182 A/C 7 8.8 11.5 4,215 655 6.4 97.89%

TP 176 A/C 13 7.8 4.8 1,747 1,939 0.9 96.96%

0

200

400

600

800

1,000

1,200

1,400

A320

Fam

ily

737

NG

777

A330 78

7

767

EMB1

90/1

95

ATR7

2

A350

747-

400

Q40

0

737

Max

A340

EMB1

70/1

75

737

Cla

ssic

0

5

10

15

20

25

30

35

AIRCRAFT AIRLINES

33

20

17

24

15

10 109

75

9

4 43

5

FY2018 Snapshot20

MCTG airlines operated 25 different aircraft families in 2018. Figure 3 represents only the Top 15 aircraft families with a minimum of 3 operators and 5 aircraft, and a total of 4,445 aircraft (94% of MCTG total fleet). Some popular aircraft types

have been removed because they did not meet the ‘3 operators/5 aircraft’ rule. The rest of the fleet (not shown here) is mostly composed of mature to old fleet types that will be retired in a near future, and new entrants on the market.

Fig. 14:Fleet Demographics (FY2018 — 54 Airlines)

Airlines

Aircraft

Table 3: Operational Data by Aircraft Category (FY2018 — 54 Airlines)

Minimum Average Maximum

Aircraft/Airline 1 87 600+

Cost/Airline $1.1M $314M $1,660M

Cost/Flight Hour $43 $1,089 $9,882

Cost/Flight Cycle $91 $2,634 $44,573

Cost/Aircraft $0,0M $3.6M $15.7M

ENGINE41%

COMPONENT23%

BASE15%

LINE21%

COMPONENT23%

ENGINE47%

COMPONENT22%

BASE14%

LINE17%

2014$15.48B (51 Airlines)

2018$16.94B (54 Airlines)

FY2018 Snapshot 21

Table 4:Direct Maintenance Cost - Unit Costs (FY2018 — 54 Airlines)

Fig. 15: Evolution of Direct Maintenance Cost Structure by Segment (FY2014 & FY2018)

In FY2018, MCTG airlines reported a total of $19.78B for their Technical Division spend: this is $16.94B for direct maintenance cost (reported by 54 airlines) and $2.85B for overhead (reported by 46 airlines).

$16.94B represent almost 24.5% of the world MRO spend (Fig. 7) for 17% of the world fleet. This may be explained by the fact that MCTG fleet is skewed towards higher gauge aircraft (35% WB in MCTG fleet vs 21% in world fleet).

They employed a total of 32,915 mechanics (reported by 36 airlines) and 21,755 OH staff (reported by 46 airlines).

Staffing and overhead (OH) are analyzed separately in Section 2.2.3.

The 54 MCTG airlines reported $16.94B for their direct maintenance costs, the average maintenance cost was $314M per airline, $1,089

per flight hour, $2,634 per flight cycle and $3.6M per aircraft.

2.2. Maintenance Cost Analysis

2.2.1. Direct Maintenance Spend

Engine and components remain the highest cost segments with respectively 47% and 22% of maintenance costs (Fig. 15).

Abnormal values are the result of periodic maintenance effects, exceptional low utilization, redelivery costs, etc.

For more information on Component Maintenance Cost Management go to the download section on the MCTG webpage.

LLP $3%

MATERIAL $14%

LABOR $16% SUBC $

67%

LLP $5%

MATERIAL $10%

LABOR $12%

SUBC $73%

2014$15.48B (51 Airlines)

2018$16.94B (54 Airlines)

FY2018 Snapshot22

Fig. 16: Evolution of Direct Maintenance Cost Structure by Element (FY2014 & FY2018)

Important note: For the third year, airlines were asked to report the LLP costs in a separate field, and we included them in the calculation of Engine Mtc costs. However, not all of them were able to isolate the costs and reported them either in their Material costs or subcontracted costs. We recommend exercising caution when interpreting this data, especially the share of LLPs.

Contract maintenance (indicated as ‘SubC’ for subcontracted) represented 73% of total direct maintenance spend (Fig. 16); two airlines subcontracted all their maintenance activities (Fig 17).

As shown in Figure 18, the majority of airlines continue subcontract the entirety of their engine work. 0% mostly reflects the absence of any engine overhaul for FY2018.

The rest of this report is only available to participating airlines

If your airline would to participate in the next maintenance cost data collection, please contact us at mctg@iata org

International Air Transport AssociationMaintenance Cost Technical Group mctg@iata.org

www.iata.org/mctg