(Do single Flight Simulation Training Device Training Centres make business sense?)
For many years the trend for smaller airlines has been to outsource their Flight Simulation Training Device (FSTD) training requirements, leading to large independent Training Centres. Conventional wisdom was that the cost of operating a single Full Flight Simulator (FFS) training centre didn’t make sense; the mantra being that it costs no more to run two FFS than one FFS. This article looks at this issue and if indeed a one FFS training centre can make sense, especially in the current climate where unnecessary travel is frowned upon and social distancing is the new norm.
Is it actually true that two FFS can be run for the same cost as one?
This has been the perceived view in the industry for at least fifteen years and there is some logic to the assertion. In most countries the wages of the maintenance staff and key post holders will account for the majority of the training centre operating costs. With so little scheduled maintenance on modern FSTDs and availability rates above 99% the maintenance staff have little to do. Most centres will schedule to have at least one technician on site at any one time to cover for breakdowns but they will have plenty of spare capacity. A team of, for example, six staff can easily run a 24/7 operation covering two devices. There is also the argument that the cost of running the building does not double by adding another FFS bay and associated facilities. But of course, there are additional costs including power, consumables and spare parts.
In summary whilst it is not one hundred percent correct that two FFS can be run for the same cost as one FFS it does not double the cost to add the second device. Numbers do vary according to local conditions but the increment in running costs to add a second device are around an additional ten percent over the cost of running the first.
Airline Operated Versus Independent Training Centres
What can change the equation is whether we consider an airline operation or an independent training centre.
For a start-up airline the purchasing of their own training capability is often well down the list of priorities; with a handful of aircraft, finding FFS dry lease time for recurrent training is not normally a problem, if the FFS is based at a location on the airlines route structure even travel may not be too much of an issue. In addition to the usual Type Ratings (TR) training you should take into consideration recurrent training, recency, command upgrades, standardisation, instructor training, etc because as the number of aircraft in the fleet increases it becomes more difficult to source all the required training from the same training centre. Typically once your demand for FFS time exceeds 3,000 hours a year the likelihood is that it will become viable to own your own FFS or FTD depending upon the type of training to be undertaken. There are many factors to consider in making the case however, these include:
The dry lease amount you currently pay per year
The number of lost productive hours for crews and instructors travelling (lost duty days) and implications on flight time limitations
The cost of travel and accommodation for staff undertaking training
Quality of the device, a FFS that matches your fleet requirement without compromise
Control of the training. Who, what, when and how
Guaranteed FSTD access, not always on the graveyard shift
The important thing for an airline is to actually ignore the question about one versus two (or more) FSTDs; what should be considered is if it works for none versus one.
A potential independent training centre has a different equation, they will need to set their rates to stop single FFS training centres being attractive! In short, whereas an airline has the imperative to save money, an independent training centre has to make money. For them the cost savings in running multiple devices are essential in driving the price per hour down, for them every cent counts. There are independent training centres that started with one FFS, but not many, usually where they have a strong link with an airline and an exclusive contract.
Steps in making it work
As ever the first step is to run the numbers in a business case; for this you will need to get indicative pricing for devices and check on the availability of buildings (new build or adaptation). But it is important to do the business case based on your own firm/predicted hours requirement. The temptation is to factor in sales to other airlines that may or may not materialise; third party sales of time can make a big contribution, but the initial case should not be predicated on them. You also need to put your project team together and start the discussion with suppliers.
The Flight Training Device (FTD) wildcard
There is also a new factor to be considered now, with forthcoming changes to regulations, it is becoming possible to carry out more training on lower level FSTDs, in particular FTDs. Even if the business case for an FFS is not workable it might well be the case that an FTD is an option. Consider that an FTD will cost no more than a third of the price of an FFS, require much less maintenance and no expensive facilities and the prospect becomes very attractive. See our recent blog RIP the FFS.
So does it work?
In short yes, for an airline. There are plenty of examples around the world where the savings outweigh the costs for an airline; this is without even trying to put a number to the intangible benefits such as quality of training. Certainly if the airline transfers the maximum possible training to an FTD then the case becomes even easier.
For an independent training centre the only way is if the set up is being done on the back of a firm contract with an airline that will cover the running costs, not impossible and there are a few examples of where this has worked but it will be tougher.
How can Sim Ops Help?
At Sim Ops our principals have been involved in many such training centre set up projects to help airlines and crews effectively train at home base when it was not previously thought possible. Sim Ops can advise you all the way from business case creation and validation through to training commencing and even beyond. We can lead you through the whole process or specific elements. Read more about how we can support your FSTD Assessment and Appraisal.