Page 12 - June 2015 Volume 9, Number 6

“Subject to Additional
A Discussion of Billbacks on Core Charges
by Dean Benedict
In earlier years, a core charge for an exchange part was like a little insurance policy for the vendor to ensure they got a unit back in exchange for the one they sent out. It’s just like a trip to the auto parts store. When you buy a starter for your car, they bill you a core charge. After you take out the old starter, install a new one, and then return the old part to the store, they refund the core charge portion. In aviation, some vendors charge the core value up front and refund it later; the majority, though, allows 30 days for return of the core unit and only bill the core charge if one was not received.
Back when I managed Beechcraft West in Van Nuys, core charge billbacks were the exception, not the rule. In rare cases, the customer’s core unit was badly damaged and deemed BER (beyond economical repair), so the core value had to be paid. But back in those days, it wasn’t common to get partial core billbacks – maybe once every couple of years. Now, it’s every other week!
After the economy went south in 2008, I saw a definite increase in partial core charge billbacks for parts or repairs that were “beyond the scope of a normal overhaul.” In the last several years, it has spiraled out of control!
I think I’d rather have a root canal without anesthesia than go to a customer who has just spent a bunch of money on King Air maintenance and tell them they need to pay more because their cores were no good. I’m not sure which is worse – the outrageous cost of parts these days, or the continual billbacks on cores. The end user is getting taken advantage of both coming and going.
There are a host of components on a King Air that go in and out of the rotable pool. Landing gear drag legs and actuators, starter generators, brakes, blowers, engine gauges – these are just a few. Recently, I exchanged a fuel flow gauge because the needle was sticky. A few weeks later I got a billback on the core for $250 with a note that the movement is sticky, and that’s not part of a standard overhaul. Really?
A few months ago, I exchanged a GCU (generator control unit) because the generator would not come online. The billback on that core was $1,000 for a relay. A relay? Seriously?
10 • KING AIR MAGAZINE
Vendors versus Overhaul Shops
Let me make one thing clear – the billback comes from the shop that overhauls the core unit. Their business is making exchange cores serviceable again. The vendors that stock and sell rotable aircraft parts do not originate core billbacks, they just pass them along.
Certain vendors have a sister company that overhauls the components they sell. Others have no such affiliation and shop around for overhaul facilities to maintain their inventories. Some are very selective with their overhaul affiliations, others choose the overhaul shops with the lowest price.
The Agony and the Actuator
A couple years ago, I purchased an exchange ice vane actuator and sent my customer’s core back to the vendor. This particular vendor had a sister company that overhauled these cores. Several months elapsed with no word from the vendor, so naturally I assumed the core was good. Then I got an email noting that the core was BER and they were going to invoice me for the full core value of $3,000! I was extremely displeased!
JUNE 2015
MAINTENANCE TIP