“Experience is what you get by not having it when you needed it.”
Let me share my experience with Piston Power. It might save you time, money, aggravation, and disappointment. (This is my personal experience and interpretation; your mileage may vary.)
The most important advice I can give you is to read the contract carefully and have an attorney review it. They will likely advise you against signing it. And in my experience, that would be good advice. I wish I had done this.
Summary
There are three provisions that require your careful understanding. The first is clearly understanding what is covered in the “Tip-to-Tail” agreement for both scheduled and unscheduled maintenance. The second is Piston Power’s ability to unilaterally increase prices under the contract each year. And the final, and most significant, is that you lose any “account balance” (accrual) for engine replacement or overhaul if you do not renew your contract.
Covered and Uncovered Items
The Piston Power contract includes a list of covered items and scheduled maintenance services. These are not illustrative examples; they are the very specific, limited items for which they will pay. If it’s not on the list, it isn’t covered. (“Tip-to-Tail” is a marketing concept, not a contractual obligation.) To fully understand what’s covered, you would be wise to take the list to an authorized service center and ask their most experienced mechanic to advise you on what is NOT covered and to provide an estimated cost for those items. Doing this requires a thorough knowledge of the aircraft, its maintenance manual, any temporary revisions to the maintenance manual, and any associated service bulletins. If you’re a first-time airplane owner, or if this is a new airplane model to you, you don’t know what you don’t know. And this will bite you.
Unless an item or service is explicitly listed in your contract, Piston Power will not cover it. Coverage (or not) is solely at their discretion and interpretation of the contract. And even if something appears to be covered at a high level, Piston Power may determine that certain parts required in the service are “consumables” and not covered. Moreover, if a new maintenance requirement is introduced during the term of your contract (via a service bulletin or AD), it will not be covered. And in some cases, Piston Power may contest coverage of something which was part of the maintenance manual at the start of your contract because it was initially introduced as a service bulletin.
You should also be careful that any scheduled service is correctly assigned to the proper category, primarily between airframe and engine. If a service interval is defined for the engine but listed in the airframe section of the contract, Piston Power may not cover it, even if no such service interval is defined for the airframe. It’s not listed under “Engine,” so it may not be covered under the contract.
The coverage is not “Tip-to-Tail.” And there is no guarantee that what is covered in your first contract will remain covered in your renewal contract. My experience suggests it will be substantially less.
There are other costs that may be categorically excluded, such as sales tax (which varies by location), disposal fees, shop fees, and similar items that are not common across locations. In some cases, Piston Power has requested that owner fly their airplanes across several states to be serviced at a service center with lower labor rates (suggesting they may not pay the higher local labor rates).
Power by the Hour Rate Adjustments
Piston Power’s contract allows them to adjust their “Power-by-the-Hour” rates annually and unilaterally. Their rates are determined by multiple factors. First is the price of parts; second is labor rates; third is your expected annual flight hours; fourth is their aggregated fleet expenses; fifth is their “administrative fee”; and sixth is “applicable taxes,” which include their corporate income taxes. An important part of the rate is preparing for TBO/TBR expenses, and Piston Power adjusts its rates when these costs increase.
You will have no recourse if the rates seem unreasonable and their explanation is unsatisfactory. The lack of publicly available pricing information for parts makes this particularly problematic. The fleet aggregated expenses, the administrative fee, and applicable taxes are opaque and considered proprietary by Piston Power. You’ll have to trust and take their word that these are fair and reasonable.
No Refund of “Account Balance”
The final problematic provision of the Piston Power contract is that if you do not renew your contract with them, you no longer have access to any funds associated with your upcoming engine TBO/TBR or intermediate high-cost scheduled maintenance items. Piston Power’s obligation to fund your overhaul ends with the contract, so you either must walk away from any “account balance” or accept any reduction in coverage and increased hourly rates they unilaterally establish.
There are three ways you can retain the value of your “account balance.” The first is to sell your airplane to someone who pays Piston Power a transfer fee to maintain coverage continuity. For this to happen, you must convince them of the benefits of coverage, Piston Power must accept them as a client, and they must agree to the then-current terms, coverages, and pricing. The way you retain value is not through a refund, but rather through an increase in the price of your airplane. Vref (closely affiliated with Piston Power’s leadership) will assess the value of your airplane as a zero-time engine to support the higher sales price. The second is if you transfer your coverage to your next airplane after you sell your enrolled airplane to someone who doesn’t want to continue the Piston Power coverage. However, any residual value may be reduced by the amount required to buy into the program, based on the specifics of the airplane, its TTAF, and TBO/TBR. The third is selling your airplane and not buying a new one. Piston Power will then determine any residual “account balance” after deducting administrative fees and applicable taxes.
What Does This Mean?
If you are contemplating signing up for a Piston Power program, make sure you know what you are signing up for. Have an attorney, preferably one who is aviation-savvy, review the contract and associated schedules. And have an experienced mechanic review the coverages and advise you about what is and (more importantly) is not covered. Remember, if it’s not explicitly listed, it won’t be covered.
If you are already a Piston Power customer, you must decide whether the program is working well for you and whether you expect to complete an engine overhaul or replacement, or sell your airplane, before your current contract expires. The important thing to understand is that your “account balance” is a “sunk cost” you will not recover until you sell your airplane (if the buyer continues the coverage) or overhaul/replace your engine. If the program no longer meets your needs and your contract ends, you will not receive any money back. You’d better be committed to Piston Power for the long term. Otherwise, the longer you participate in the contract, the more you will forfeit if you do not renew.
If I had known then (as a first-time airplane owner of a new airplane) what I know now (after six years of airplane ownership), I would not have signed up for the Piston Power program.
