Certainly when it comes to engine programs, it tends to make sense for newer aircraft. Especially on Williams (which really penalizes you if you’re not on it), newer Pratt’s etc. On older JT15D’s on a Citation 501SP, then the opposite is true – you’d be mad to be on a program for those. Same goes for Garrett’s – the few programs that are around are very pricy and simply not worth it. Almost nobody in the MU2, Commander, Merlin community is on those.
For maintenance, I think it’s probably a tossup, but I don’t have any experience of being on one. But I do remember that JasonC’s program, that he was on for the Mustang, striked me at the time as pretty economical and a decent deal.
I’m on the grin-and-bear-it program, myself. 
Obviously, with all insurance, you must always lose money in the long run, othewise insurance companies will lose money, which they do not 
I would like to hear a detailed argument on this, with some supporting numbers.
Peter wrote:
Obviously, with all insurance, you must always lose money, othewise insurance companies will lose money, which they do not
No, on average the claims should be below the total premiums collected. Individuals can save money with it and indeed in certain cases with large losses insurance companies can lose money on their underwriting book. A large percentage of their earnings are often from the investment side of their businesses.
An engine program has an element of prepaying for scheduled work and an element of insurance. For example, my engines are due a hot section in a few months where they must be taken off the plane, shipped to Michigan and inspected with numerous SBs to be done including replacing all the HP turbine blades. It costs me nothing at all. This is because the engines have been on a program for the past 1900 hours and that covers it. They undoubtedly make money on that helped by the fact that they get the money early.
Recently in the US a PT2/TT2 probe heater failed. This required a mobile team to drive to the airport after collecting a new probe that Williams send overnight to them and spend 4 hours replacing the probe. That cost me nothing. That is an example of the insurance element.
Of course on average they make money but as an individual you have a very predictable costs with scales with usage (although there are minimums) and you are protected from surprises.
Interesting!
JasonC wrote:
(although there are minimums)
A tech rep might explain that often an engine is pulled as a result of a field test and sent to the manufacturer’s facility with the expectation of cost free service. The facility then tests it and finds it (barely) meets spec as received. The people running the test are ‘encouraged’ by the manufacturer to pass anything that can be argued as acceptable, and that’s exactly what they do. The customer then gets a call asking him whether he’d like the engine returned or repaired at his cost. The tech rep might argue the customers case using the phrase “you know, people’s lives are on the line with these engines” to a disinterested audience.
The customer then typically pays the whole bill to get the engine where he wants it, in addition to continued payment of the maintenance plan cost – which was sold to the customer as being all inclusive… Alternately, the tech rep can raise the argument to a very high level of management, using business logic: if the engine is returned to service as is, depending on the issues it will cost a lot more to fix in the long run (when they see it again later) regardless of whether at this moment it meets spec. The counter argument is that the customer will probably agree to pay the bill now, when presented with acceptable test data as received.
Silvaire wrote:
The customer then pays the whole bill to get the engine where he wants, in addition to paying the maintenance plan cost – which was sold to the customer as being all inclusive.
I don’t understand your point. Please explain.
Snoopy wrote:
Kindly elaborate or explain
It is 150 hours per year so even if you don’t fly that much you have to pay for it.
JasonC wrote:
I don’t understand your point. Please explain.
On fixed price contracts, the contract is often sold at cost and the money is often made on out of scope work.
Silvaire wrote:
On fixed price contracts, the contract is often sold at cost and the money is often made on out of scope work.
Sure but that isn’t relevant in this case as there is no work which is out of scope.
JasonC wrote:
there is no work which is out of scope.
Sounds like you’ve got a great maintenance plan… I hear some interesting stories, as recounted above, from the manufacturer point of view.
(but not your engine manufacturer, I might add!)
on average the claims should be below the total premiums collected
Yes; the customer pays more than he collects, otherwise the insurer loses money.
A large percentage of their earnings are often from the investment side of their businesses.
The customer could be getting the investment income instead
I can understand the peace of mind aspect but not how you save money in the long run.
