Boeing stressing its 787 ‘GoldCare’ service

Published 9:00 pm Sunday, May 7, 2006

RENTON – Boeing Co. executives say they’ve developed a service plan for the 787 that will be as revolutionary as the technology in the new airplane.

Under the new program, which Boeing calls “GoldCare,” Boeing would manage and supply 787 spare parts for airlines, and could even arrange to have mechanics come install them.

It’s all part of a new sales approach at Boeing. The company is trying to get airlines to focus less on purchase prices to look more at the cost of operating a plane over 15 or 20 years, and what value a Boeing plane brings them.

A big part of that is customer service, said Lou Mancini, Boeing’s vice president for Commercial Aviation Services.

“Our customers are asking us for better solutions,” he said. “We’re working on connecting all the things we do. It’s frankly what the customers have been asking us to do.”

Mancini and other Boeing executives briefed reporters about the new program, and other aspects of the company’s growing airline services business, last week.

Boeing doesn’t disclose separate financial figures for its Commercial Aviation Services business, which is based in Tukwila. But Mancini said sales by his unit account for about 12 percent of Boeing’s overall Commercial Airplanes revenue. That would have been $852 million in the most recent quarter.

Boeing has always provided customer services to the airlines, helping them keep the 12,000 Boeing and McDonnell Douglas jetliners flying. But the company is putting more emphasis into it, going as far as to open a round-the-clock operations center to take calls from airlines and help them get planes back in the air. The new center opened late last year.

Airlines “are not bashful at reminding us they’re under a lot of stress,” Mancini said. Boeing believes that if it can solve problems for airlines and reduce that stress, airlines will be more likely to come back to it for new planes in the future.

“When you do this well, you build a special relationship with customers,” he said.

Boeing already has launched programs to manage spare parts supplies for the airlines. Instead of airlines maintaining purchasing departments that contract with scores of suppliers of everything from carpets to cockpit electronics, they can hire Boeing to do the work for them.

The company has about 20 customers for its existing programs, which provide parts for 777s and next-generation 737s. Japan Airlines, which was one of the trial customers, recently signed a 10-year extension of its initial contract.

Boeing already is managing the flow of airplane parts that go into building the planes, so it’s just “an incremental step,” for it to manage the flow of spare parts to airlines, said Bob Avery, vice president of services and support for the Everett-based 787 program. “We can bring the economies of scale to the world fleet, not the individual airline fleet.”

The benefit for airlines is that they don’t have to maintain a big parts-purchasing and inventory operation, Avery said. Parts suppliers benefit because they get guaranteed business supplying replacement parts for planes, plus they have better information about the future demand for those parts, which helps them plan their own production schedules.

Boeing’s planned purchase of Aviall, the Dallas-based parts provider, will accelerate that process, said Joe Brummitt, the direction of Integrated Material Management for Boeing’s Commercial Aviation Services. That $1.7 billion deal was announced last week, and should close later this year.

While Boeing has focused on providing its own proprietary parts to airlines, Aviall distributes “a lot of what we call vendor parts,” Brummitt said. “We were already headed down that path. They get us there faster.”

Aviall also gives Boeing access to new markets in general aviation, Mancini said.

The new GoldCare program for the 787 expands on Boeing’s current offerings, and takes advantage of the new technology being built into the plane, Avery said.

New sensors being built into the 787 will track the performance of different parts and send out alerts if something starts to fail. At the same time, pilots in the cockpit will be able to report problems they see. All that information can be sent by satellite to the ground.

Under the GoldCare program, the information will be sent to Boeing, which will alert airlines to the problem and help them determine whether it means fixing a part or replacing it. If it requires a replacement part, Boeing can order the part for the airline before it touches down.

And if the airline wants the full service package, Boeing plans to hire leading jet-maintenance companies to work under contract for it, doing the actual labor replacing the parts, using work plans developed by Boeing.

“We think GoldCare provides any operator with the chance to become a low-cost carrier,” Avery said.

Boeing is negotiating contracts with the jet-maintenance companies, and is in talks with about a half-dozen airlines that are “very interested” in GoldCare, Avery said. Boeing plans to launch a pilot program to test the system in February 2007, a few months before the first flight of the first 787.

Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.

At your service

Boeings new Commercial Aviation Services support center, in Tukwila, opened in December 2005.

n It handles about 150 calls from airlines each day, including 55 that are urgent, meaning they require a response within 24 hours.

n The majority of the calls (64 percent) are from airlines looking for advice on how to handle structural repairs. That includes damage from ramp rash, collisions between planes and ground equipment, but also bird strikes and hail.

n On average, Boeing says the center finds solutions for airlines within 10 hours.

n The center is open round-the-clock, and peak hours tend to be 10 p.m. till noon, Pacific time.