Aircraft Leasing – what do maintenance reserve funds cover?

Last week we looked at what maintenance reserve funds were as a concept and how they help to
protect asset value and maintain limited exposure for the lessor in the event of an early hand back
or repossession taking place.

As the aircraft will have scheduled maintenance tasks based on durations such as flight hours, flight
cycles or calendar days the maintenance reserve fund should be a comprehensive consideration of
how we ensure all the different requirements.

Also some items on the aircraft do not fall into requiring maintenance at durations such as C or D
checks, as they fall less often; how do we cover these items. For example, we can consider here the
landing gear and the engines as components that will last multiple years on the wing, but at some point,
need a costly overhaul based on a life being reached.

Based on the above considerations then we need the maintenance reserve fund to consider routine
maintenance based on aircraft usage (flight hours and cycles) along then with calendar-based costs
where aircraft utilisation is not a factor.

There is also the factor of non-routine maintenance cost – defect rectification for example.
As with any maintenance it needs to be completed which means we often need parts for tasks such
as component replacements or servicing. Additionally, each task will take time, and this means Man
Hours (MH), also are costly.

The maintenance reserve fund will be considered to accommodate the above and of course there
will be many conditions attached also to this.

Learn more HERE