IATA Aircraft Lease Guidance

Guidance Material and Best Practices for Aircraft Leases
Introduction
Since the 1980s, when aircraft operating leases represented less than 5% of the overall aircraft operating
market, the number of aircraft operating leases has grown significantly. Airlines have realized the advantage
of aircraft leasing; adding aircraft to the current fleet for a convenient period of time, without the economic
risk of aircraft ownership. Prior to the actual lease, a complicated process is enacted to make sure a lease
contract satisfies both the Lessor and the airline. Over time this process has become more cumbersome and
time-consuming due to the associated delivery and redelivery processes. The complexity and timespan of this
process often catches airlines off-guard. It is therefore important for the Lessee to understand what
difficulties must be dealt with, and how to avoid any time-consuming and costly pitfalls. Since there is no
uniform protocol for engaging aircraft leases, the International Air Transport Association (IATA) has taken the
initiative to provide guidelines and best practices for IATA airline members and other interested parties in this
document.
This document may be used by airlines to effectively manage and optimize the leasing process. This
document is written with an attempt to consider the airline’s perspective, and also the perspective of the
Lessor and the regulator to provide insight into the different points of view.
This document consists of five different sections which cover the entire aircraft leasing process, starting at
the negotiation phase, through to operations and subsequent redelivery. Figure 1 illustrates the structure of
this document.
Section 1
Section 2
Section 3
Section 4
Section 5
describes the background of this document.
provides legalities which should be considered at the pre-delivery phase.
describes other legal as well as technical considerations, and formal acceptance of the
aircraft in the delivery phase. The challenges of importing the aircraft from one state to
another are also described in this section.
advises on best practices for minimizing costs for maintenance events, and offers some
considerations in case the lease is at risk of early termination.
sets out guidelines for the redelivery process. In the final phase of the lease period, the
Lessee and Lessor have to review the aircraft’s compliance with the redelivery conditions,
with regard to both the physical conditions of the aircraft and the technical records and
documentation status.
xvi 4 th Edition 2017