IATA Aircraft Lease Guidance

Operations
For maintenance reserve claims, efficient communication with the maintenance provider and Lessor is
essential to speed up the release of maintenance reserves, and to minimize possible delays. More often than
not, an event is not considered as a qualifying event if an incorrect work scope has been performed (or only
partly been performed). Agreeing on the work scope prior to commencement of the maintenance activities
will prevent unwanted delays or claim rejections.
It is advisable to review the maintenance reserve rates after each event, to determine if the rates are still
sufficient to cover the cost of such an event in the future. Economic conditions and maintenance best
practices often change during the term of a lease agreement and consequently so does the cost of such an
event. Depending on the lease agreement, any excess outside of the accumulated reserves will have to be
topped up by either the Lessor or the Lessee.
The various maintenance reserve areas are discussed separately.
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Airframe
The claimable amount is usually based on the check including all lower-level tasks (e.g. an Airbus A320,
4C/6YR would also include all 1C, 2C and all other lower interval tasks). The claimable amount also
includes all non-routine work, materials used, and components replaced or repaired. ADs, modifications,
and painting are often not included in the claimable amount. The final invoice from the maintenance
provider should ideally differentiate between the various sections of the check in order to quickly and
efficiently complete the claim. It is also advisable (and sometimes mandatory as per the lease agreement)
to notify the Lessor before the check starts. Dirty fingerprints of all work performed, together with the
final invoice specifying the relevant sections, should be delivered to the Lessor once the check is finished.
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Engines
As with airframe maintenance checks, it is also advisable to agree on the work scope before the engine is
sent for a performance restoration or overhaul. Quite often, reserves are accumulated per module and
separately for LLPs, and by doing so a drawdown of the separate accounts should be calculated. If a fixed
rate is agreed with the maintenance facility, the Lessee should take into account the specific conditions
of the lease for invoicing purposes. In addition, there is often a minimum build life mentioned in the lease
agreement, and for engine shop visit planning purposes one should take into account the redelivery
conditions, to keep any future exposures to a minimum.
During the shop visit, special conditions of the lease should be taken into account, such as the use of
Parts Manufacturer Approval (PMA) parts and Designated Engineering Representative (DER) repairs.
Example of items that are normally excluded from the maintenance reserves are FOD, overheating, bird
strike, engine misuse. This list is not in any way complete and only serves to provide examples.
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Landing gear
The work scope for a landing gear overhaul is less complicated than the work scope of an engine
overhaul or heavy maintenance check. However, as indicated earlier in this document, the landing gear
and individual sub-assemblies are often exchanged to keep the turnaround time to a minimum. This
means that individual parts (and subsequently LLPs) may not always meet the requirements of LLP BtB.
Additionally, aircraft leases sometimes include the requirement that installed parts may not be older than
the airframe (in terms of FHs and FCs). This means that the Lessee should agree with the overhaul shop
about which parts may be installed before the work commences.
4 th Edition 2017 45