IATA Aircraft Lease Guidance
Guidance Material for aircraft leasing Guidance Material for aircraft leasing
Guidance Material and Best Practices for Aircraft Leaseshour rates are obviously based on a certain expected time between shop visits. The longer the time betweenshop visits, the higher the cost of a performance restoration shop visit and the higher the margins for theOEM. Hence, it is in the OEM’s interest to have a long time between shop visits so that their margins aremaximized.It is also in the airline’s interest to have a long time between shop visits because this reduces the amount ofshop visits, operational disruptions and cost of ownership. However, for the airline it is also very important tohave some flexibility so that it can optimize its operations and fleet planning. This can get very complicated inthe case of large fleets with high frequency deliveries and several different leases attached to them.The airline needs to take into account an optimum spare engine level and shop visit turnaround timeconstraints, which will ultimately determine how much stagger is required in the removal program. Thisstagger has to be communicated to and accepted by the OEM. Assuming stagger is within reason, the OEMis not expected to raise much of an issue on this, but stagger flexibility has to be addressed in the agreement.The airline needs to take into account lease redelivery conditions. The moment of lease return and therequirements at lease return may require an engine performance restoration shop visit well before the engineis actually due for a shop visit for technical reasons. This issue is specific to certain leases and airline fleetplanning and is much harder, if not impossible to accept from an OEM point of view.The airline needs to take into account possible changes in fleet planning. If a lease is terminated early,performance restoration shop visits may be required early as well. If leases are extended, performancerestoration shop visits may need to be added or occur later than planned.Options to address these issues with an OEM maintenance contract:●●●●●Agreements that have no performance restoration shop visits pricing based on flight hour rates should befully flexible. When pricing is based on fixed price or not to exceed price, it should not matter when theshop visit actually occurs and therefore the airline should have full flexibility to decide when aperformance restoration shop visit is due, assuming slots are available at the shop.If pricing is based on flight hour rates then there must be stagger flexibility. In addition the airline shouldassess its own fleet planning and lease conditions and verify where lease redelivery requirements mayconflict with OEM agreement conditions for engine removal. Most of the time the OEM agreement willonly accept an engine removal for performance restoration when the engine has actually run out ofperformance or is unserviceable due to hardware condition/LLP time expired.It is possible to request a threshold as to when engines can be removed for a performance restorationshop visit, regardless of actual performance/hardware condition. This will likely increase pricing, so itneeds to be reviewed carefully.Another consideration is asking the OEM for an optional pricing for lease return shop visits. This could beon fixed price / not to exceed basis or on an escalated flight hour rate.The airline may come up with a long term plan or different scenario plans and share them with the OEMas a basis for pricing. However, this can be quite difficult for new engine designs where there is noexperience with time on-wing, and for airlines that have very dynamic fleet planning.54 4 th Edition 2017
Operations4.5 Engine SubstitutionIf leasing multiple aircraft of the same model & specification from a Lessor, consideration should be given toallow the Lessee to substitute contracted engines at redelivery. Such policy would provide flexibility in engineremoval planning. Following is an example of how such clause might be worded:At lease expiry, Lessee shall have the right to redeliver an engine to Lessor with a different serial number insubstitution for the original engine detailed in the Acceptance Certificate (“Substitute Engine”) providedthat such substitute engine is also a Lessor-owned Engine and the following conditions are satisfied:Lessee notifies Lessor at least three (3) months prior to the scheduled substitution date, and at thesubstitution date, each substitute engine (including all modules thereof) will be in serviceable condition andof an equivalent or better utility and modification status as the substituted Engine originally delivered byLessor to Lessee.4.6 Technical RecordsThe operator is responsible for keeping all records of maintenance accomplished on the aircraft, as required,and making them available. The operator is also required to describe the system that is used to maintain therecords. The system used needs to be approved by the CAA. Operators can also contract an approvedmaintenance organization to keep their records if approved by the CAA. It should be very important for theoperator that the system used to maintain the records is well organized. This will help the operator in twoways, first when required by the CAA to represent evidence of maintenance work accomplished on theaircraft and second when redelivering a leased aircraft. A well-organized system will reduce the time requiredto examine the records and result in lower possibility of late return from lease due to missing records. It alsolowers the operators’ risk of having to repeat some work that has been accomplished due to records notbeing found.If the Lessee is in the position to provide the technical records for the leased aircraft(s) for the preceding yearto the Lessor on an annual basis they should consider adopting that work procedure. Lessor than has theoption, if he decides to do so, to review the records and potentially minimize the amount of technical recordsdue for review upon redelivery. This procedure may save Lessees time and effort spent in compilingtechnical records at redelivery.4 th Edition 2017 55
- Page 23 and 24: Backgrounddetermined period. As a r
- Page 25 and 26: Backgroundthe repair is within SRM
- Page 27 and 28: Pre-Deliveryin certain circumstance
- Page 29 and 30: Pre-Deliverylimit, however it will
- Page 31 and 32: Pre-DeliveryThe net lease is often
- Page 33 and 34: Pre-Delivery●●Fixed costFlexibl
- Page 35 and 36: Pre-Deliveryreserves rates depends
- Page 37 and 38: Pre-DeliveryAs of July 2015, sixty-
- Page 39 and 40: Deliveryredelivery conditions of th
- Page 41 and 42: DeliveryOther items, such as wheels
- Page 43 and 44: Deliverymodification and without an
- Page 45 and 46: Deliveryand registration process in
- Page 47 and 48: Deliveryimportant, as the continuou
- Page 49 and 50: Delivery3.2.6 InspectionDuring the
- Page 51 and 52: DeliveryooooGear TSN / CSN at Overh
- Page 53 and 54: Deliveryminimum standards set by IC
- Page 55 and 56: Deliveryimporting states recognize
- Page 57 and 58: DeliveryIn Europe, under EASA rules
- Page 59 and 60: Deliveryspecial procedures, phraseo
- Page 61 and 62: Deliveryprogram, which effectively
- Page 63 and 64: Section 4—Operations1Background2P
- Page 65 and 66: OperationsFor maintenance reserve c
- Page 67 and 68: OperationsIt is advisable to the Le
- Page 69 and 70: Operations4.2.7 Other Important EoD
- Page 71 and 72: Operations●●●Reduced flexibil
- Page 73: Operationspractices; for example th
- Page 77 and 78: RedeliveryA specific example of one
- Page 79 and 80: Redelivery●Project plan issued -
- Page 81 and 82: RedeliveryoLessor or Lessor represe
- Page 83 and 84: Redeliveryincludes a “redelivery
- Page 85 and 86: Redeliverythe redelivery of the Air
- Page 87 and 88: Redeliveryrecovery plan. Lessee Pro
- Page 89 and 90: Redeliveryrepresentatives fails to
- Page 91 and 92: Redelivery4. Remediesa) If Lessee f
- Page 93 and 94: References in AnnexesAnnex V Struct
- Page 95 and 96: Annex I: Example Physical Inspectio
- Page 97 and 98: Annex I: Example Physical Inspectio
- Page 99 and 100: Annex II: Typical Redelivery Record
- Page 101 and 102: Annex II: Typical Redelivery Record
- Page 103 and 104: Annex II: Typical Redelivery Record
- Page 105 and 106: Annex III: Typical Index of Deliver
- Page 107 and 108: Annex IV: Engine Documentation Chec
- Page 109 and 110: Annex V: Structural Repair File Gui
- Page 111 and 112: Annex V: Structural Repair File Gui
- Page 113 and 114: Annex V: Structural Repair File Gui
- Page 115 and 116: Annex V: Structural Repair File Gui
- Page 117 and 118: Annex VI: Modifications Guidelinesd
- Page 119 and 120: Annex VI: Modifications Guidelineso
- Page 121 and 122: Annex VII: Aircraft Maintenance Pro
- Page 123 and 124: Annex VII: Aircraft Maintenance Pro
Operations
4.5 Engine Substitution
If leasing multiple aircraft of the same model & specification from a Lessor, consideration should be given to
allow the Lessee to substitute contracted engines at redelivery. Such policy would provide flexibility in engine
removal planning. Following is an example of how such clause might be worded:
At lease expiry, Lessee shall have the right to redeliver an engine to Lessor with a different serial number in
substitution for the original engine detailed in the Acceptance Certificate (“Substitute Engine”) provided
that such substitute engine is also a Lessor-owned Engine and the following conditions are satisfied:
Lessee notifies Lessor at least three (3) months prior to the scheduled substitution date, and at the
substitution date, each substitute engine (including all modules thereof) will be in serviceable condition and
of an equivalent or better utility and modification status as the substituted Engine originally delivered by
Lessor to Lessee.
4.6 Technical Records
The operator is responsible for keeping all records of maintenance accomplished on the aircraft, as required,
and making them available. The operator is also required to describe the system that is used to maintain the
records. The system used needs to be approved by the CAA. Operators can also contract an approved
maintenance organization to keep their records if approved by the CAA. It should be very important for the
operator that the system used to maintain the records is well organized. This will help the operator in two
ways, first when required by the CAA to represent evidence of maintenance work accomplished on the
aircraft and second when redelivering a leased aircraft. A well-organized system will reduce the time required
to examine the records and result in lower possibility of late return from lease due to missing records. It also
lowers the operators’ risk of having to repeat some work that has been accomplished due to records not
being found.
If the Lessee is in the position to provide the technical records for the leased aircraft(s) for the preceding year
to the Lessor on an annual basis they should consider adopting that work procedure. Lessor than has the
option, if he decides to do so, to review the records and potentially minimize the amount of technical records
due for review upon redelivery. This procedure may save Lessees time and effort spent in compiling
technical records at redelivery.
4 th Edition 2017 55
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