While the aircraft is leased the lessor wants to maintain the value of the asset and in doing so wants to be updated as much as possible as to the aircraft’s condition and status etc. This is of course important, but there could be a level where this management of the asset could become intrusive and costly for a lessee if there was no guidance or conditions for this process.
There are multiple conditions and updates that must be regularly provided to the lessor at all times throughout the lease and to protect the lessee we often refer to a term called “Quiet Enjoyment”.This is basically the right of a lessee to operate the aircraft without intrusive and costly requirements from the lessor for in-depth records reviews.
When we see a lease, it might be defined along the following lines:
“Provided no Event of Default has occurred and is continuing, Lessor shall not interfere with Lessee’s quiet use, possession, and enjoyment of the Aircraft in accordance with the terms of this Agreement, but the exercise by Lessor of its rights under or in respect of this Agreement or any of the Operative Documents shall not constitute such interference.
Lessor shall procure Security Trustee to deliver to Lessee a signed Quiet Enjoyment Letter.
If Owner shall be a Person other than Lessor, Lessor agrees to deliver to Lessee a Quiet Enjoyment Letter signed by Owner.”
There would then be a letter identifying the aircraft that would essentially detail the following statement signed by the lessor / owner:
“In consideration of your consent, acknowledgment and agreements to the Notice and Acknowledgment of Assignment, dated this date, from Lessor to you (the “Notice”), we hereby agree that so long as no Event of Default shall have occurred and be continuing, we will not (nor will any Person lawfully acting by, through or under us or in our name), directly or indirectly, take any action that would interfere with Lessee’s rights to quiet and peaceful enjoyment of the Aircraft under the Lease Agreement, in accordance with the terms ofthe Lease Agreement, but the exercise by the Collateral Agent of its rights under or in respect of the Lease Agreement or any of the Operative Documents shall not constitute such an interference.”
Follow us on LinkedIn for more and why not consider one of our courses such as the Aircraft Technical Records Course