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The concept of Direct Maintenance Cost (DMC) is so central to the financial analysis, budgeting and management process of a helicopter operation; yet it is so debatable with regard to the components that must, should or could be included and to their estimating procedure.

Operators and manufacturers have different approaches to producing their estimates; the former, more focused on financial sustainability and collecting data from their own specific operations, tend to have a broader perspective and to be more inclusive; the latter, more focused on market communication and collecting data from a smaller variety of sources, tend to have a narrower perspective and to be more selective and prescriptive in indicating and quantifying the various components of costs.

This study is divided into two parts; the first will provide an overview of how airframe’s DMC are estimated by a generic helicopter manufacturer; the second will explore how the main assumptions and the methodology to estimate DMC interface with operational reality.

### The manufacturers’ DMC

The analysis will be divided into three sections (Assumptions, Labour, Parts) and a summarising model will complete this part.

# Assumptions

The Helicopter Association International (HAI, 2001) issued general guidance for the production and the presentation of cost estimates based on the following assumptions.

1. The suggested reference flight conditions are:

- Weight – 90% of MGTW
- Speed – 90% of VNE
- Altitude – 1,000 ft
- ISA conditions: 15 °C; 1,013.25 hPa at 0 MSL (for the complete specification of the ICAO standard atmosphere see ICAO, 1993)

2. The aircraft is considered in its baseline configuration, without any optional kit.

3. A type of operation is then selected: Charter, HEMS, Off-shore, Utility or Corporate, for example.

4. Based on the type of operation, a yearly amount of Flight Hours (FH) is then assumed, together with the operational life along which DMC will be estimated; for example 600 FH per year over 10 years (or 6,000 FH).

Labour

Labour derives from the estimated total amount of Maintenance Man Hours (MMH) required to carry out all of the periodic inspections (as described in the Maintenance Manual) and the unscheduled maintenance (as estimated by component reliability predictions), over the assumed operational life of the aircraft.

If the type is new, there are different methods to estimate Maintenance Man Hours (MMH):

- Analogy. Comparing the task to a similar one carried out on a different type.
- Parametric. Estimating the task on the basis of a database of key physical drivers (size, weight).
- Extrapolation. Estimating the task duration based on known durations at sub-assembly level.
- Engineering. Estimating bottom up from the lowest sub-components.

Once the aircraft is in operation, design stage estimates should be moderated by data consistently collected in the field. MMH will be multiplied by the relevant Labour Cost (LC) and divided by the operational life to obtain the Labour Hourly component of DMC:

where

- ΣMMH: the total sum of MMH during the assumed operating life
- ΣFH: the total sum of FH corresponding to the assumed operating life
- LC: Labour Cost

# Parts

1. Consumables. This value derives from the sum of the prices of all consumable items estimated to be replaced during each scheduled and unscheduled inspection task over the operational life of the a/c. The formula is:

where

- ΣCP: the sum of all prices of all consumable items replaced on the aircraft during the assumed operational life
- ΣFH: the total sum of FH corresponding to the assumed operational life.

2. Unscheduled Parts. This value derives from the sum of the contributions of each spare-able item for which Unscheduled Removal is likely to occur under the Assumptions. Each item is characterised by an estimated Scrap Rate, an Average Repair Price, a Unit Price and a reliability prediction (Mean Time Between Unscheduled Removal, MTBUR). The formula for Repairable items is:

and for Discardable items (a special case of the previous with SR=100) is:

where

- K: the number of spare-able items installed on the aircraft
- SR
_{i}: Scrap Rate of the*i*th item - ARP
_{i}: Average Repair Price of the*i*th item - Qty
_{i}: number of*i*th units installed per a/c - MTBUR
_{i}: Mean Time Between Unscheduled Removal for the*i*th item - UP
_{i}: Unit Price of the*i*th item

3. Overhaul Components. This value derives from the sum of the contributions of each overhaul-able item, based on their Average price for Overhaul divided by their specified Time Between Overhaul (TBO), under the Assumptions:

where

- M: the number of overhaul-able items installed on the aircraft
- AvOHPr
_{i}: Average Overhaul Price of the*i*th item - Qty
_{i}: number of*i*th units installed per a/c - TBO
_{i}: Time Between Overhaul for the*i*th item

4. Life Limited Components. This value derives from the sum of the prices of each Life Limited item divided by its defined Life:

where

- N: the number of Life Limited items installed on the aircraft
- UP
_{i}: Unit Price of the*i*th item - Qty
_{i}: number of*i*th units installed per a/c - LL
_{i}: Life Limit of the*i*th item

# The summarising model

It is now possible to write a formal and simplified model inclusive of all of the components above:

**DMC=Labour+Consumables+Unscheduled _{(Repairable/Discardable)}+Overhaul+LifeLimited**

It must be stressed that this model represents an *estimate* of Direct Maintenance Costs for an airframe from the perspective of a generic manufacturer; other than Qty, every other component of the model is either an assumption or an average value.

Part 2 of this study will explore how operational reality challenges this model.

# References

**Helicopter Association International** (HAI). 2001. *Guide for the presentation of helicopter operating cost estimates.* Alexandria, VA, USA: HAI.

**International Civil Aviation Organisation** (ICAO). 1993. *Manual of the ICAO Standard Atmosphere*. DOC7488/3.