A SmartBuyer specialist replaced the organisation’s costly spare engine stock strategy with performance-based contract structures, working alongside its engineering and procurement teams to pay for availability rather than hold spares.
contract structures
CLIENT
Aviation
operator
CATEGORY
Spare
engines
SPECIALIST
Performance-based
contracting
OUTCOME
Stockholding
replaced
Spare engines exist because an engine removed for overhaul can be out of service for a long time, and an aircraft without one stays grounded. Each spare is a very high-value asset that earns nothing while it waits, and its cost shows up as capital, storage, insurance and maintenance rather than as one line anyone reviews.
Performance-based contracts move that burden to a provider, but the value sits in the drafting: how availability is defined, what counts as a failure, what credit the operator receives and how existing stock is handled. The provider’s standard contract defines availability in the provider’s terms, so the operator’s own definition has to be written before any price means much.
An aviation operator covering engine availability by holding spare engines in stock: high-value assets that sit idle between removals, while the capital cost of owning them continues.
Client identity not disclosed.
The specialist worked with engineering and procurement to establish what cover the spares provided, then moved that obligation to a provider under contract.
REVIEW
Establish the cost of cover
Built the full cost of holding the spares, covering capital, storage, insurance and maintenance of idle engines, and set it against the availability they delivered, giving a yardstick for judging any alternative.
RESTRUCTURE
Design the performance-based contract
Defined what availability meant in contract terms, including how it was measured and what the provider owed when an engine was not available, so payment tracked the cover the operator needed.
SWITCH
Transfer cover to the provider
Moved cover from owned spares to the provider’s arrangement, settling how the existing stock would be handled and the exit terms, to keep the option of changing provider later without losing cover.
Performance-based
The spare engine stock strategy was replaced by performance-based contract structures, so engine cover is now bought as a service with defined terms rather than owned as idle assets.
The operator pays for engine availability, so the cost of cover follows the service delivered and is visible as a contract price, not spread across holding costs.
Capital tied up in idle high-value assets was released, and the risk of an engine not being available now sits with the provider.
Defining availability in contract terms
Everything in a performance contract turns on its definitions. The specialist fixed what counted as available, how it was measured and what the operator received when the provider fell short, because a loose definition returns the risk to the operator while still charging for cover. Clear remedies and few exclusions were weighed against the headline rate.
Transferring risk without losing control
Paying a provider moves the cost of holding engines but adds a dependency. The specialist weighed how much availability risk the provider took, so capital was freed without tying the operator to a single supplier on terms it could not leave. Price the cover already owned before comparing offers, because without that cost no offer can be judged cheap or dear.
Complete
Complete
Complete
Specialist support without a permanent hire
SmartBuyer matches organisations with experienced specialists across 250+ categories, giving budget owners access to focused aviation and performance-based contracting expertise exactly when the work demands it.
500+
specialists
Experienced specialists who have replaced costly asset-holding strategies with performance-based contracts inside aviation and other asset-heavy operations.
250+
categories
Focused coverage across aviation, spares and the wider direct spend base, matched to the contract in hand.
Flexible
engagement
Specialist cover to restructure a single contract or a wider category, scoped and costed before any work begins, with no permanent hire.