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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In a lease contract many terms and definitions are noted to avoid contention or dispute such as what a Total Loss means:

The term “Total Loss” as an example can in a lease be defined as an example, we will quote text from a “lease” and under it, we explain its intent.

“The actual or constructive total loss of the Aircraft (including any damage to the Aircraft or requisition for use or hire which results in an insurance settlement on the basis of a total loss).

This statement refers to a situation where the aircraft is considered a total loss either through actual destruction or circumstances making it unusable (like severe damage or government commandeering). If the insurance company settles the claim by treating the aircraft as a complete loss, it’s recognized as such.

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