Easing The Lease-Return Documentation Struggle

IATA, airlines seek to simplify the lease-return documentation process

Industry groups are certainly aware of end-of-lease challenges. IATA sees three major structural challenges in transferring aircraft at lease-end, according to Chris Markou, assistant director of engineering and environment. First, differing regulatory requirements among jurisdictions complicates and delays moving aircraft to operators in different countries. Second, lack of standardization and clarity in lease-return documentation causes delays and increases cost. Finally, continued reliance on paper documentation makes aircraft transfer slower and more costly.

IATA is working with ICAO to promote global acceptance of electronic records, but “it is a slow process,” Markou acknowledges. He says airlines and leasing companies are eager to standardize and digitize documents, and a few of these are pioneering new methods.

Airframe OEMs are critical to standardized and digitized records, as they create digital birth records of aircraft and parts and strongly influence supply chains. With OEM leadership, airlines, lessors, MROs and suppliers could continue to expand digital record-keeping. Markou urges supply-chain participants to harmonize digital records to ensure parts and aircraft can be transferred seamlessly. “Records harmonization is a focus area,” Markou stresses.

Agreeing on a common checklist of requirements during redelivery would dramatically simplify aircraft transfers. Markou says agreement is most necessary on back-to-birth traceability of life-limited parts (LLP), repair documentation, certification and support documentation. “These are typical areas of misunderstanding between airlines and leasing companies,” he observes.

To meet these and other challenges, IATA has formed the Aircraft Leasing Advisory Group, a forum for discussion and sharing best practices. IATA has published its own “Guidance and Best Practices for Aircraft Leases,” but even common solutions must recognize that each airline and lessor has its own business model.

Others are more impatient. Non-uniform, paper-based lease documents cost the industry $1 billion annually, notes Michael Denis, vice president of FlatIron Solutions. He says technology is available and ASD standards for XML documentation will soon be available to support standardized, digitized documents. “The problem is will and regulation.” 

The will to make the change is weak, because no one party pays much of that $1 billion—even a giant like American Airlines, which will transfer 1,400 aircraft in and out over the next decade. And there are up-front costs to conversion.

Required data is similar under EASA, FAA and Transport Canada regulation, due to bilateral agreements. Elsewhere, differences persist. Even in the U.S., some primary maintenance inspectors still insist on “dirty fingerprints,” Denis notes. Fortunately, “the world is following EASA.”

That should mean XML documentation according to ASD standards. And new aircraft should set the pace. Denis says most OEMs are going this way for their new models. The engine makers have adopted the new ASD standards. Airbus did not for the A380, but will for the A350. Bombardier’s CSeries will, as will the Mitsubishi Regional Jet and, probably, Embraer’s E2 jets. The Boeing 787 is not on the new standards, but Denis thinks this may change when Boeing starts delivery of its KC-46 tanker, which will require the latest ASD standards.

If Boeing joins the ASD movement, that also may give standardization a critical push. 

A version of this article appears in the November 3/10 issue of Aviation Week & Space Technology.

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