Henry Canaday Washington
Easing Lease
Transfers
Varied regulations, documentation requirements
cost the airline industry time and money
MRO Edition OPERATIONS
MRO16 AVIATION WEEK & SPACE TECHNOLOGY MRO EDITION NOVEMBER 3/10, 2014 AviationWeek.com/mroA
n increasing proportion of com-
mercial aircraft are leased rath-
er than owned by airlines that
operate them. This reliance on leasing
has brought carriers major benefi ts,
including more fl exibility in fl eet plan-
ning—especially in economic down-
turns—and better fi nancial ratios. It
is thus highly desirable that leasing be
made as economic as possible, avoid-
ing unnecessary cost and delays.
But that is not happening today, par-
ticularly at lease-end. When it is time
for an airline to return equipment to
the lessor and to prepare it for the next
operator, the process—one that should
take a couple of months—can stretch
out to several times that period. And
costs mount as time passes.
There are many reasons why end-
of-lease processes are so expensive.
Some originate in the highly varied
regulations that af ect aircraft in the
many jurisdictions where they oper-
ate. These and other challenges are
worsened because some airline lessees
do not take lease-end obligations seri-
ously enough, early enough.
Airlines need to check out specifi c
lease terms much sooner. And the in-
dustry as a whole must attack some
common causes of lease-cost creep.
“The biggest problem is failure to
plan, which is really planning to fail,”summarizes Patrick Ryan, senior vice
president and chief technology of cer
for Aviation Capital Group. “Aircraft
owners and airlines and maintenance
shops are not on the same page on
their contractual obligations. Then
things spiral out of control.”
Airlines’ record-keeping staf often
lack the time or expertise to meet the
high and possibly dif erent standards
of documentation required for lease
return. Ryan suggests hiring an out-
side company six months ahead of
lease return to assemble required
documentation.
Airline maintenance managers may
view the lease-return check as another
C check, with deferral of some items.
But lease-return checks must be done
to higher standards than ordinary Cs.
Even simple things like carpet cleaning
must be done thoroughly. When simple
things are missed, Ryan says, complex
obligations will surely cause problems.
Such obligations sometimes spring
from different regulatory regimes
around the world. Regulators differ
as to records required, the transfer-
ability of engineering changes and in
dif erent equipment required in some
jurisdictions.
EASA and FAA require Form 1 or
8130 for on-condition parts for two or
three years. Other regulators may re-quire these documents for every part
over a longer period. “I need it for all
parts because the aircraft may go any-
where in the world,” Ryan emphasizes.
If the form is missing or lost, a wasteful
component overhaul is required.
Lack of standardized, digitized re-
cords creates problems. Paper docu-
ments on older aircraft fill 50 to 60
boxes, and handling them is expensive.
EASA and FAA have some provisions
for digital records, but digital record
formats are far from universal.
EASA requires equipage for Sesar’s
air traf c management and navigation,
while North America and Asia do not.
Transferring between regions there-
fore mandates this modification as
part of the lease transfer.
Ryan says even the same national
regulatory agency sometimes applies
dif erent inspection standards to dif-
ferent airlines, being stricter with
smaller carriers than with long-estab-
lished majors.
Even with proper documents, com-
ponents may have to be overhauled
before they are due. Leases gener-
ally require that all components on an
aircraft have at least 6,000 hr., 4,000
cycles and 24 months left on them.
Equivalent to a C check interval, these
minimums assure the next operator
that a component does not need to be
removed before the aircraft goes into
the hangar for a heavy check. “It’s
pretty standard; the next guy gets it
new like you did,” Ryan notes.
Engines, APUs and landing gear
may have to be removed for overhaul,
depending on aircraft age. Landing
gear are overhauled based on calen-
dar time, APUs based on condition
revealed in borescope inspection and
engines according to usage.
Airlines generally plan well for engineLease-return planning should ideally start when the contract
begins, but it must start at least a year before return.SANTOS DUMONT
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