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Case Study:
Program Management - Risk Management
Qantas Boeing 747 Reconfiguration

PM

How to manage 20,000 parts, 2,200 drawings, 1,800 task cards, engineering problems on 9 aircraft with a $250m budget and turn the first aircraft around in 42 days. Program Risk Management is key.

Program management is not simple. In fact, it can occasionally be difficult. But there are several things that a PM can do to improve your chances of success. As you can imagine flying safely is something we all care about but when it is your responsibility as the lead project manager on a Qantas Boeing 747 reconfiguration then it takes on a whole new meaning.

Qantas officially started its Boeing 747 reconfiguration project in 2012. All six of the B747-400 ER’s, and three of the B747- 400 aircraft have been selected. At a high level, the reconfiguration is the replacement of all passenger seating, and a significant number of the cabin monuments. A new seating configuration called a LOPA included 58 Business (lie- flat Skybed), 36 Premium Economy, 270 Economy seats, and a new Inflight Entertainment system. All to offer a similar user experience as the award winning A380.

Qantas Airways is an Australian airline company and one of the world’s largest airlines. It is the second oldest airline in the world, after KLM, and the oldest in Australia. The airline was founded in 1920 as Queensland and Northern Territory Aerial Services Limited (QANTAS), and it began international passenger flights in 1935. The airline has a strong reputation for safety, with no fatal accidents in the jet era. Qantas was mentioned in the 1988 movie Rain Man because of the airline’s strong safety record. In the film, Dustin Hoffman’s character, Raymond Babbit, says that he will only fly on Qantas because it “never crashed.” This line helped to solidify Qantas’ reputation as the safest airline in the world and to this day Qantas has “never lost an airframe”.

I joined Qantas in 2010 as the lead project manager mid-way through the lead up to the project and the pressure was on. The first aircraft VH-OEG was due in the hanger in 18 months, and we had a lot to do. I remember reviewing a Gannt chart with hundreds of tasks, and wading into issue after issue, not to mention coming up to speed at Qantas and how they work and organizing a team – the days were long.

Of key concern to us was the risks that this project had. They can be put broadly into the following areas Engineering, Certification, Supply, Financial and Staffing. At one point I measured over 400 risks identified. How to manage all that risk?

Fortunately, Qantas is expert at Risk Management, and as a Program Manager learned the absolute best practice in this field. They follow a process developed under the Qantas Risk Management Policy for risk and includes identifying risks > ranking risks > planning mitigations > implementing the plans and monitoring and reviewing. All this is intended to reduce the risk.

One example we encountered in engineering was that the increased seating capacity would apply more load onto the flooring and seat tracking. Using the Qantas process to rank this risk we defined it as a medium likelihood of occurrence and a high cost (consequence). This extra weight could introduce a higher rate of metal fatigue in service and lead to costly repairs or even structural floor failure. The resulting Ranking was therefore medium-high. Any risk ranking that is not low requires a mitigation plan.

The engineering team swung into action to analyze in depth the seat load. In co-operation with our contractor Heath-Techna and Boeing, the aircraft manufacturer we were able to design several structural upgrades. They included an upgrade to wider and stronger seat tracks and additional floor bracing in key under floor areas. With these design changes included in the plan the risk was re-ranked to low.

However, this action introduced more cost but also another risk – the Certification. As there were many changes to the aircraft it was required that the FAA, the international aviation regulator, and CASA the Australian regulator would have to approve the changes to the aircraft. They would include a Supplementary Type Certificate (STC). Adding more changes to the application always brings some additional risk that the aircraft would not be approved. However, we ranked this risk as low likelihood and low consequences as we already in place a strong team and Qantas, Boeing and Heath-Techna that included our own FAA approved certifiers that were consulted on the changes as we progressed.

Working through the 400+ risks was a long process and I had to involve many engineering, marketing, and operational staff to support the many mitigations we put in place. As a side note, this explains why aviation projects are costly, expensive and time consuming. There is an enormous effort involved in making sure the risks are low and people safe at 35,000’ and 700mph!

We (a Qantas pilot) landed the first aircraft tail number VH-OEG in Avalon in August 2011, a city near Melbourne Australia. A team of aerospace engineers, aviation mechanics and supporting staff swung into action. I remember my first impression when I witnessed a massive aircraft hangar housing the 747 and thousands of parts from inside the aircraft laid out along with all the new parts. I thought to myself “how will we ever get this back together again, let alone flying”!

The first aircraft to be reconfigured in the fleet was always going to be by far the most difficult, as we were trying new things all the way through and we had to include, aircraft weighing, certification testing, certification approval and flight testing, we had planned for 45 days or less for the aircraft to be on the ground – with the emphasis on “or less”. The costs of grounding any airliner can be quite high, a Boeing 747 aircraft can cost around $400,000 per day when it is not in service.

One issue did arise with the business class seats. We knew there was some risk as the seats were new and had to pass flammability testing. This requires a specified flame being applied to parts of the seat for a set period of time and the seat is required to resist burning for that time. Unfortunately, the seat failed in multiple areas and started to burn. The pressure was on as these seats were to be installed into the aircraft immediately. In the worst case we would have to change the seat design or replace them. This could take months of reengineering and the costs to the airline with this aircraft in the hanger and not in-service would be astronomical.

How did this risk slip through the cracks of our Qantas process and diligence? Risk Management is both an art and a science. For example, identify risks has no scientific method to it. It is largely based on common sense and experience. In this case the risk was identified. Ranking can also be subjective, again this case the likelihood was seen as low as both the seat manufacture and our own team believed the chances of not passing the flammability tests was very low. This example unpins the nature of risk. It is about predicting the future and though the past is a guide it does not mean it is fool proof.

As it turned out there was an engineering solution, applying Kydex a flame-resistant film to the affected area and retesting. Also, the testing was applied multiple times which would bring up the average resistance times. Ultimately the seat passed when the Kydex was applied to the seats. This was enacted for the seats in production and new parts supplied for the seats going onto OEG.

Here is an example of managing an issue, rather than a risk. In this case reducing the risk that the aircraft could not get back in service quickly was our goal. So, a lot of the engineering and program management efforts over the previous years was to reduce the risks to low enough that any issues that came would have the full resources of the engineering and management team without being overloaded with issues.

Risk Management is a key tool for Qantas and is part of how it maintains its high safety reputation. Program Managers should always consider the risks in any program.

I remained at Qantas until we completed the first 3 aircraft in 2012, at this point almost all the risks were managed, and the project engineering team was winding down as it became operational in nature. The program continued into 2013 and all 9 aircraft and went into service with great success.

Pete Cooper is a Program Manager with 20+ years’ experience. He has worked in Aviation, Hi-Tech, Customer facing, Start-Up and many industries and roles. Pete is a thought leader in applying Program Management methodology as a CEO and has been awarded for his skills in managing complex programs in diverse fields.

At Skillion we pride ourselves on our ability to implement and educate Program Risk Management. If you’re in need of a Program Manager for starting a project or are considering doing so please contact us today to learn more.

(*) The numbers in the Case Study are illustrative only not intended to be accurate.

Pete Cooper, CEO

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