The Critical Role of Remaining Engine Life in Lease Negotiations

Lease agreements governing aircraft engines place significant emphasis on the remaining life of critical components – this is to address the cost exposure for the lessor of such items and ensure serviceability and asset value for the engine along.

There will be several significant areas of inspection and return conditions to be aware of, noting that much of the areas are internal and as such require shop visits and come with high cost and time impacts.

Borescope Inspections look at the internal condition of the engine and blades, the condition assessment offer a detailed view of the turbine engine’s internal health, revealing wear, damage, or potential issues – within the hot section is typically highest wear.

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Boeing – An Aircraft Maintenance Program (AMP)

Airplane mechanics checking jet engine if civil aircraft

Building a Boeing Aircraft Maintenance Program (AMP) is a multi-faceted process, essential for ensuring an aircraft’s safety, airworthiness, and compliance with regulatory standards. This comprehensive approach involves integrating a variety of considerations and once created it needs to be maintained throughout the aircraft life.

The Maintenance Planning Document (MPD) is the foundation of the AMP, providing detailed guidelines for routine maintenance based on effectivity, configuration and status of the aircraft.

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Aircraft Leasing and Insurance Protections

In aircraft leasing the insurance protections will oblige the lessee is mandated to maintain both hull and liability insurance.

The Hull insurance is paramount as it covers the physical damage to or total loss of the aircraft, thereby protecting the lessor’s asset value and it is typically aligned with the higher of market value or an agreed value, which might reflect a premium over the lessor’s book value during the lease period.

Liability insurance encompasses broader legal liabilities such as third-party, passenger, and baggage legal liabilities and acts to ensure that the lessor and other relevant parties are shielded from potential legal claims and liabilities arising from the operation of the aircraft.

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Aircraft Lease Conditions – Obligations and Protections

An aircraft lease is complex and the lease conditions regarding obligations and protections serve to guard the asset and maintain value for the lessor, while allowing the lessee to operate the aircraft in a realistic and non disturbed manner during the lease period.

The lease is always going to favour the lessor in order to ensure the asset value and allow that the lessor maintains rights to the aircraft regarding access and or rights to repossess under certain circumstances – this is important as local or regional decisions can affect lessors and their dealings with certain countries or authority registrations if there is a risk to their asset.

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Airbus – Aircraft Maintenance Program (AMP)

The Airbus Aircraft Maintenance Program (AMP) is a comprehensive plan designed to ensure the continued airworthiness of an aircraft. It is derived from various sources, including the Airworthiness Limitations Section (ALS), Maintenance Planning Document (MPD), and other Original Equipment Manufacturer (OEM) documents, as well as regulatory requirements. The AMP outlines the maintenance tasks, inspections, and intervals necessary to maintain the aircraft in a safe operating condition.

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