Lease Management

Aircraft Lease is a specialised discipline with high stakes for all parties involved.

Lessors hand over their valuable asset (aircraft or engine) to airlines and wish to protect that asset as good as possible in terms of current and future market value, remarketing possibilities and compliance with various registers and certification environments. Continued airworthiness management and adequate maintenance is essential for these objectives.

Lessees on the other hand wish to have “quiet enjoyment” of their leased aircraft or engine. They pay a lease rate and want to have optimum flexibility to optimise their daily operations and earning capacity, also in order to service their lease obligations. They also want to avoid undue investment in assets not owned by themselves.

Lease Contracts therefore contain technical aspects not trivial to non-aviation experts like civil lawyers or structured finance experts. These aspects cover delivery and return conditions of the aircraft or engine, maintenance reserves, certification basis and maintenance approval standards to be applied. Also settlement for expensive mandatory modifications (AD notes) is covered.

Delivery and Redelivery too often end up in expensive corrective actions and last minute settlements. The problems and the cost associate are in the vast majority of the events solely attributable to a sub-optimal lease contract. This means these cost are avoidable, if recognised and mitigated during contract negotiation

Though Lessors and Lessees can agree whatever they want, it is important for a fair, durable and lasting relationship that technical aspects of a lease contract build a fair and level playing field for both parties. Each should pay for its own obligations c.q. wear and tear, not less, not more. The lack of a level playing field is usually caused by fine differences in wording. Experience shows that in many cases, the wording used has been chosen without understanding the technical impact and the financial consequences of such wording

It is worth to have a lease contact checked for fair technical content for both parties by and experienced airline consultant, with extensive knowledge in airline maintenance, lease management and aircraft certification. Having an independent legal opinion is more or less standard. Why do you not have an independent technical opinion too?

If you want to discuss this in more detail, please contact me through the contact form!