Aircraft lease return is a critical time for airlines, which must ensure that airframe, engines, components and all associated documentation meet the return conditions of the lessor.
This should mean preparations which begin more than a year in advance of the return date and involve dedicated return teams that liaise with an airline’s lessor and its maintenance provide to ensure accurate workscoping.
Airlines that fail to plan ahead or devote sufficient resources to lease management risk several unpalatable consequences. Legal action, while uncommon, can run into millions of dollars, but a lessor’s rejection of an aircraft can also incur painful expenses, both from the work required to bring equipment up to standard and from ongoing rental fees while the aircraft is out of service.
Even with a dedicated project team, minor disputes can easily occur over different interpretations of contract language – ‘normal wear and tear’, for instance, might mean different things to the airline and lessor.
Another complication can be OEM maintenance agreements, especially for engines – the most critical element of any lease return.
Full-service maintenance deals with the manufacturer need to be aligned with the lease return to ensure, among other things, that maintenance events occur at the right time. Under cost-per-flight-hour support contracts airlines can also get caught out by double payments – once to the OEM maintenance provider and once to the maintenance reserve of the lessor – if they are not careful.
Airlines that receive mid-life aircraft on lease also need to be diligent about the state of the equipment, since their lease return terms are oriented around the condition of the aircraft when the lease contract starts.
Inside MRO has talked to airlines, lessors, OEMs and third-party maintenance providers to illustrate how contributes to management of maintenance for leased aircraft. To find out more see the May edition.