IATA Aircraft Lease Guidance

Delivery
redelivery conditions of the previous operator are usually mirrored with the delivery conditions of the next
Lessee). The main objective for the incoming Lessee is to have the aircraft delivered on time for planned entry
into airline operations, whilst seeking to identify and resolve (prior to acceptance) any discrepancies which
might otherwise give rise to unplanned future unanticipated maintenance costs which should be borne by
Lessor or the prior operator. Additionally, the Lessee may want the aircraft delivered in a configuration which
is in line with the standards of the rest of the Lessee’s fleet or will need to consider suitable commercial terms
if the aircraft is not delivered in required Lessee configuration. It can be beneficial to determine the
configuration differences during the aircraft selection process, and prior to entering into an LOI. The Lessor
may agree to incorporate certain configuration or modification changes during the delivery check (often
subject to agreement by the prior Lessee), or may consent in advance to certain modifications to be carried
out post-delivery. In some cases the Lessor may agree to fund modifications on a “rentalised” basis (i.e. with
the modification cost amortized over the lease period and added to the basic Rent amount) or, if the
modification represents a capital improvement to the aircraft a Lessor contribution may be agreed.
Commonality across the fleet saves cost on spares provisioning, staff training as well as maintenance and
operations processes. Also, Lessees often prefer to fly in a standard configuration as part of their branding. It
is common to expect a certain amount of clearance for airframe, engine, and component maintenance.
3.1.2 Delivery of New Aircraft
Before the customer (airline or Lessor) defines the aircraft specification, existing problems with the aircraft
type should be reviewed and, if possible, anticipated by ordering the appropriate modifications. After defining
the aircraft specification with the manufacturer for the ordered aircraft, the manufacturing process of about
18 months is started, during which time the customer (airline or Lessor) and manufacturer should work
closely together in order for the aircraft and documentation to meet both the Lessee’s and the Lessor’s
expectations.
About three weeks before delivery, both parties enter the acceptance phase, in which customer performs
walk around inspection, flights are carried out and the aircraft is finally delivered. Accepting the new aircraft,
which will be leased (or sold by the airline to the Lessor and subsequently leased as part of a sale and
leaseback transaction), requires a different approach than taking delivery of a used aircraft. Although the
aircraft is new, the manufacturer will deliver a similar set of records as one can expect to receive with a used
aircraft: AD, SB/MOD, Component and LLP status summaries are part of the delivery binder. Similarly, a
“repair file” in the form of a concession/commitment letter or Significant Rework Log (as applicable) will be
provided with the aircraft. Just as with any delivery, the aircraft status should be checked against what is
presented in the summaries. Although manufacturers generally are able to re-issue (parts of) the delivery
documentation, errors should be kept to a minimum in order to avoid delays during redelivery to the Lessor.
Especially in case of production damages which have not been recorded correctly, confusion can occur
during a redelivery repainting exercise as to whether specific damage or a blend was already present at
delivery or whether it occurred during operation of the aircraft by Lessee.
Another specific point of attention should be the manufacturer warranties. These should be reviewed and the
effect on the lease process evaluated (e.g. limiting AD cost sharing to ADs that have been issued after
4 th Edition 2017 19