Aircraft Leasing and the Impact of Definitions on lease return.

Aircraft that are leased are done so as an investment for a return; this is important to always consider during a lease review as we have noted in prior posts –an airworthy aircraft might not necessarily meet lease return conditions.

To illustrate this,we can consider an aircraft that is leased for 6 years to IALTA Airlines –at delivery the aircraft will be maintained under an AMP (Approved Maintenance Plan) as per the Continued Airworthiness Management Organisation (CAMO) requires it and the National Aviation Authority (NAA) also.

The airline CAMO will over time change the maintenance plan, they may change it on induction to the fleet –this is called a bridging check when we transition from one maintenance plan to another. Often some additional tasks are required as the intervals between when they are required have changed on them.

This means after 6 years that the aircraft is airworthy and now operates under a maintenance plan withintervals and tasks as per the IALTA Airlines CAMO require.The basic maintenance plan for an aircraft has many sources such as component maintenance manual, engine manuals, repair documentation and maintenance planning document (MPD). The one we will use to illustrate the impact of a definition on return condition is the MPD. In here there are many tasks to be carried out, some of these tasks can have the intervals altered as per operator experience so our AMP intervals now differ in part from the MPD intervals.

Let us look at a lease contract for some examples of return conditionsfor and Aircraft Conditions:

“The Aircraft will be fresh from the next sequential Manufacturer’s block C check (or equivalent as defined in the MPD) with all maintenance tasks cleared for the equivalent of one C Check interval in accordance with the MPD less demonstration and/or ferry Flight Hours.

Prior to the Return of the Aircraft, the thrust reversers and inlet nose cowling shall have been inspected on wing for corrosion and delamination in accordance with the AMM. All corrosion and delamination beyond AMM limits shall be repaired in accordance with the AMM.”Now we can see that the return condition is based on MPD data and not the AMP –this is a common requirement as it standardises the aircraft condition at return and is important to always consider.

Additionally, we have shown a return condition that requires a maintenance task to be completed for thrust reversers and inlet nose cowling and so you can see clearly how that at lease return the conditions are to ensure asset value protection and just because it is airworthy, does not mean that it is acceptable for lease return.

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