Startup airline MRO: a case study with Air Premia and AF-KLM E&M

Korean hybrid airline Air Premia, with its fleet of Boeing 787-9 Dreamliners, is a new kind of carrier offering a growing network of flights within Asia and across the Pacific. But how does a new airline, and one without a wider airline group family to lean on, keep its aircraft maintained? We sat down with Tommaso Auriemma, vice president of sales for Asia and Pacific at Air France Industries KLM Engineering & Maintenance — the maintenance, repair and overhaul (MRO) arm of the Air France-KLM Group and Air Premia’s MRO operator — to learn more.

Air Premia is not a traditional low-cost carrier, crossing short-haul, medium-haul and long-haul categories with routes from Seoul’s Incheon International Airport to Ho Chi Minh City, Los Angeles LAX, Singapore Changi and Tokyo Narita. This enables round-the-clock aircraft utilisation, with the medium- and short-haul routes fitting into the aircraft’s day between long-haul rotations.

“Air Premia currently has a limited fleet of aircraft but has a strong ambition to develop with new routes in Asia and the USA,” Auriemma tells us. “The availability of aircraft is a key element of its business model. We must ensure a high level of competence in defining the spare parts made available to Air Premia in its main base — and also a high level of flexibility in case of need during operation.”

To an extent, this model has existed elsewhere, but certainly on a different scale. Cathay Pacific’s all-widebody model — prior to the transition of the erstwhile Dragonair into Cathay Dragon and then its integration into mainline Cathay Pacific — has long been inherently based on the concept of strategic underutilisation. Rather than longhaul-outfitted widebody aircraft spending their time on the ground at Kai Tak (and later Chek Lap Kok) between longhaul flights, or operating varying schedules to maximise utilisation, they fly turns within Asia to regional destinations. 

But Cathay has its own MRO arm HAECO to keep its aircraft in top operational shape to avoid delays. This is equally critical — if not even more so — to the success of Air Premia’s high-utilisation operation given it has only three aircraft at the time of writing in early 2023. 

Air Premia’s MRO selection process, therefore, must equal or exceed the standards of other airlines, and Auriemma highlights that “the criteria for the choice of aeronautical suppliers and the selection process are quite comparable to the major airlines in Asia and the rest of the world”, essentially including “a specification, a list of major suppliers to ask for a quote and then a selection based on total cost of ownership, the quality of the services offered and the value that the supplier proposes.”

Yet the value part of that equation is more complicated to assess than the total cost of ownership figure, even assuming that other quality metrics are similar. 

Services offerings, like the component support agreement that Air Premia recently expanded to two newly leased, previously operated 787-9s, include logistical support, spare parts and digital services as well as the tools-on-aircraft MRO as part of the contract.

As part of those digital services, offerings like AFI-KLM E&M’s Prognos — a predictive maintenance tool that pulls big data from the aircraft both inflight and during turnaround — can swing the balance when it comes to operational reliability, turnaround time, dispatch and delays, and which is particularly valuable downroute.

“Air Premia not only buys the repair of its equipment,” Auriemma highlights. “Air Premia benefits from the knowledge and reliability data we obtain from the operation of over 220 Boeing 787 aircraft by all our customers.”

Author: John Walton
Published 16th February 2023

Feature image credit to AFI KLM E&M Patrick Delapierre

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