Brent Digital Media BDMCC Ltd BDMCC Ltd

LinkedIn Google Plus Facebook

 

Acquisition of 5 New ATR72-600 Aircraft for Wetlease into SAS

ATR72-600 G-FBXA ATR72-600 G-FBXA 01

ATR72-600 G-FBXA 02

ATR72-600 G-FBXA 03 ATR72-600 G-FBXA 05

 

 

1.          Purpose  

Wet-lease 4 ATR 72-600 aircraft to SAS, 2 on 25th Oct 2015 and 2 on 1st Mar 2016. 5th Aircraft TBA

2.          Problem/Opportunity

Full wet-lease of 4 ATR 72-600 aircraft to SAS.

 

To bring into service 4 aircraft and crews to SAS in two phases:

·         Two aircraft in-service on 25th October 2015

·         Two aircraft in-service on 1st March 2016

·         4.5 crew sets per aircraft

 

4.      Project Objectives

Lease 4 new ATR 72-600 aircraft from Avation for full wet-lease to SAS. Option for 2 further aircraft.

·         Fully painted, liveried and SAS branded ex-works

·         ATR Product Support Credits for training, manuals and support services of $250k per aircraft

·         Delivered to Toulouse Airport for distribution

·         Recruit and train crews (4.5 per aircraft)

o   Training based on assumption of all crews not being type rated

 

5.          Project Open Status

 

Project has been changed to two by two aircraft deliveries on:

 

·         25th October 2015

·         1st March 2016

6.          Project Scope

 

6.1         Aircraft

Type:                                        ATR 72-600

Source:                                     tbc

Age:                                         New

Livery:                                      SAS

Seats:                                       70

Galleys:                                    A + D galley

 

                                                            Delivery                        In Service

In Service:                     Aircraft 1.          Wk1 Oct                       Tbc Sep / Oct 2015*

                                    Aircraft 2.          Wk 2/3 Oct                    25 Oct 15

                                    Aircraft 3.          Tbc Feb 16                   01 Mar 16

                                    Aircraft 4.          Tbc Feb 16                   01 Mar 16

 

* SAS may exercise 1 or more Optional Aircraft to start as early as 2015. The decision for this would have to be taken by Jan-15 at the latest.

Suspect the soonest likely date for additional units to be summer 16

6.2         Production

Utilisation:                     Guaranteed       2,160BH per a/c pa

                                    Expected          2,640BH per a/c pa (Summer utilisation may average as high as 250BH/month)

FC:FH ratio                   1 : 0.86 (+/-10% of that ratio allowed as tolerance before rates get adjusted)

Base/Nightstop:                        Aircraft 1.          ARN / XXX

                                    Aircraft 2.          ARN / XXX

                                    Aircraft 3.          ARN / XXX

                                    Aircraft 4.          ARN  / XXX

AOC:                            Flybe UK

Flight Numbers:             SK

6.3         Crews – flight and cabin

Numbers:                                  4.5 sets per aircraft – assuming 18x crew-sets for initial 4x aircraft

Contract with SAS states           Flybe will provide up to 2.5 crews per day. Flybe will be able to charge additional costs to SAS for crews > 2.5 per day.

Languages:                               One Scandinavian language (req’d by SAS) plus English (req’d by Flybe)

Geography:                               Scandinavia; Baltic; Finland; Northern Europe.

Night stops:                              Predominantly away from designated Base.

Hotac:                                      To be sourced and contracted by Flybe

Base:                                        Aircraft 1.          ARN

                                                Aircraft 2.          ARN

                                                Aircraft 3.          ARN    

                                                Aircraft 4.          ARN

Rostering:                                 EXT

Management:                            EXT, but local Project/Contract Manager

Uniforms:                                  to be sourced by BE / SAS will provide accessories. Requirements are: Flight Deck – sophisticated navy, black or dark grey / Cabin – as for flight-deck

 

6.4         Maintenance

Line Support:                            ARN                 3rd party tba

Heavy Maintenance:                  EXT                  Flybe AS

Engines:                                   MB discussing PbH arrangement with PWC / PW to explore spare options with Willis and other suppliers

Spares:                         Tbc

 

6.5         SLAs

OTP:                            minimum OTP (within 15) of 96.51% in any quarter before penalties will be incurred. OTP limited to Flybe controllable items only (IATA delay codes 41-48, 57, 61-68 and 97). Reactionary delays regardless of original cause will not count towards this limit. Cancelled flights do not count as delayed flights. For OTP >98.51%, Flybe will be paid a bonus.

Regularity:                    Based on Flybe controllable items (see above) Regularity of >99.5% is required in any quarter. Any cancellation in excess of 0.5% regularity buffer will cost Flybe €3k per event

6.6         Product

Ground Handling:          Contracted by SAS, to be audited by Flybe

De-icing:                       Contracted by SAS, to be audited by Flybe

Fuel:                             Contracted by SAS, to be audited by Flybe

Cargo:                          If required, part of Ground Handling

Potable Water:              Part of Ground Handling

Cleaning:                      Contracted by SAS

On board:                     SAS specified. Training to be determined probably 0.5days.No commission applicable to crew.

 

6.7         Glossary

ARN                 Stockholm Arlanda Airport

BH                    Block Hours

CC                    Cabin Crew

CDR                 Commander/Captain (pilot)

CPH                 Copenhagen Kastrup Airport

EXT                  Exeter Airport or Flybe Head Office

FC                    Flight Cycle (Sector)

FH                    Flight Hour

FO                    First Officer (pilot)

Hotac               Hotel accommodation

IATA                 International Air Transport Association

OTP                  On time performance

SAS                 Scandinavian Airlines System

SLA                  Service Level Agreement

YOM                 Year of Manufacture

*SAS will assist in providing us with facilities and space at ARN. It will be necessary to outline our needs on that front (storage for spares, crew-briefing, etc.) as soon as possible so that we can communicate those requirements to SAS

 

7.          Project Details and Status

7.1         Aircraft

New ATR 72-600s

Cost Centres

1.     White label cost centre :  9850

a.     To be used up to the point of contract signature

2.     SAS central project code centre: tbc

a.     To be used from the day of signing the contract

3.     SAS Swedish cost centre: tbc

a.     To manage all local operational costs

Currency

SAS has agreed to split EUR/USD rates. Current assumption is based on current understanding of likely USD and non-USD (covered in EUR rate) costs. SAS is keen to minimise USD exposure. To this end, efforts to arrange as much of our cost-base in EUR (i.e. aircraft, rotables, etc.) will be supported by SAS and rate-split can still be adjusted, provided we can stay within current total pricing levels.

 

7.3         HR

TUPE

We obtained a detailed legal opinion in Sweden confirming that we should not encounter any TUPE issues in recruiting in Sweden.

 

Local Base Manager

Jan Kretz recruited as SAS Account Manager

Pilots and Cabin Crew

Awaiting contract proposal from PAS. Internal meeting to review and discuss payment structure in principle. SH will clarify with KPMG for most tax-efficient structure. Meeting with PAS to be scheduled before X-Mas to finalise structure / employment strategy

 

7.5         Training

SAS Product Training

SAS specific product training - we should budget on 0.5 days according to SAS.

 

Finalised as part of the agreement

7.7         Finance

 

Hedging currency

James Pill-Waring:  There is no pegging of the Swedish Kronar.

We wouldn’t look to hedge at the values we are considering in the business case.

 

           


 

 

 

Outlook Group: SAS Flybe

Outlook Group: SAS ATR

 

8.3         Regular Meetings

 

1.    SAS Project Team Meeting – Every Monday 16:00 Hangar 1.3.1

2.    Project Status: Matt Bennett, Brent Westbrook – Every Wednesday 11:00 JWH

3.    SAS MRO Procurement: Brent Westbrook, Paul Allen, Ian Smith, John Pearman, Dave Gharvy, Richard Young, Chris Wilson, Andy Todd – Thursday 15:00 (from Jan 2015)

4.    SAS Project Review: Brent Westbrook, Andy Todd, Stuart Redhead, Jan Kretz – Thursday 12:00

9.      Outcomes/Success Criteria

4 ATR 72-600 wet-leased aircraft serving SAS destinations

10.1      Assumptions

Workspace and resource (being defined)


 

 

11.      Risks

11.1      Assessment and Management

 

Risks will be assessed (mitigated/eliminated) in two ways (See 12.3 Documentation):

 

a.    Lessons Learned Register

b.    Predictions Register

 

Risks will be recorded in the Risks Register.

 

Risks will be managed in the Open Items Register and Risks Register.

 

Where risks are mitigated and/or eliminated these will be commuted to the Issues Register.

 

11.2      Risk Exception Reporting

Any incident predicted, anticipated or sudden will adhere to the following procedure for normal office hours:

a.    Task Resource to escalate to Team Lead/Dept Head/Project Team

b.    Team Lead to escalate to Dept Head/Project Team

c.    Dept Head to escalate to Project Team/Directors

d.    Project Team to escalate to Dept Head/Directors

Contact details will be issued to all parties during out-of-hours work.


 

 

 

11.3      Known Risks

 

 

Risk ID

Risk  Description / Risk Event Statement

Responsible

Last Update

Impact
H / M / L

Impact Description

Probability
H / M / L

R 1

 

 


 

 

 

Estimated Cost

TBA

 

13.      Estimated Duration

November 2014 to March 2016


 

 

14.1      Governance:

Project Management Office: Bruce Porter

14.2      Management:

Methodology:

Project Management Methodology: PRINCE II (Best Practices)

 

Project Management Team:

Jochen Schnadt – Project Sponsor

Stuart Redhead – Flight Ops Project Manager

Brent Westbrook – Project Manager

 

14.3      Documentation:

 

 

 

Document Title

Document Name

Type

Tab

Distribute

Frequency

 

 

 

 

 

 

SAS Wet Lease Provision

SAS Assumption Library V2

doc

 

N/A

N/A

Avation Term Sheet

 

pdf

 

N/A

N/A

Avation Reservation Deposit

 

pdf

 

N/A

N/A

Project Definition Document

Project SAS Definition Vx.xx

doc

 

Stakeholders Project Team

Once

Project Timeline Visual Wall-chart (Republic, Blackbird, SAS, 145, BAU)

2015-2018 Aircraft Planning

xls

 

Stakeholders Project Team

Weekly

Adhoc

Project Plan

Yyyymmdd SAS Vx.xx AC 1-5

mpp pdf

 

Stakeholders Project Team 3rd Party

Weekly

Adhoc

Project Control Spreadsheet

Yyyymmddd SAS Vx.xx

xls

1

Stakeholders Project Team

Weekly

Adhoc

Project Schedule Visual

Yyyymmddd SAS Vx.xx

xls

2

Stakeholders Project Team 3rd Party

Weekly

Adhoc

Risk Register

SAS Risks and Issues Register Vx.xx

xls

1

Stakeholders Project Team 3rd Party

Weekly

Adhoc

Issues Register

SAS Risks and Issues Register Vx.xx

xls

2

Stakeholders Project Team 3rd Party

Weekly

Adhoc

Lessons Learned Register

SAS Risks and Issues Register Vx.xx

xls

3

Stakeholders Project Team

Weekly

Adhoc

Predictions Register

SAS Risks and Issues Register

xls

4

Stakeholders Project Team 3rd Party

Weekly

Adhoc

Open Items Registration

SAS Open Actions Vx.xx

xls

 

Stakeholders Project Team 3rd Party

Weekly

Adhoc

Checkpoint Report

Yyyymmddd CP Report SAS

doc

 

Stakeholders Project Team

Fortnightly

PMO Project Tracking

 

xls

 

PMO

Fortnightly

 

 

 

 

Date:

 

Approved by:

 

Approver Signature:

 

Project Manager Name:

Brent Westbrook