Jan Willem Storm van ‘s Gravesande Managing Partner ...€¦ · Background, CV. Why this subject ? 4 Because transitioning or changing the possession of an airplane, besides all

Jan Willem Storm van ‘s Gravesande

Managing Partner

Aviation Independent Consulting B.V.

Aeropodium

London, 31 May, 2013

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Legal stuff

The information in this document is confidential and the

property of


and may not be copied or communicated to a third party, or

used for any purpose other than that for which it is supplied

without the express written consent of


No warranty or representation is given concerning such

information, which must not be taken as establishing any

contractual or other commitment binding upon


Personal

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Background, CV

Why this

subject ?

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Because transitioning or changing the possession of an airplane, besides all specific legal requirements, requires specialized knowledge and procedures:

- (Technical) information to be gathered

- Documents to be collected

- History to be traced

- Airworthiness to be checked

- etc. etc..

Today’s Review

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Transitioning / Repossessing an aircraft:

1 from an ex-operator / -lessee

• to the lessor (“return of lease”)

• directly to a new operator / lessee

2 between operators / airlines

3 to or from storage

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1 The Essence of Leasing

• Aircraft leases are in many different forms

• Most demanding are the operational leases

• Usually; every operational lease-contract is different

• For KLM 21 different lessors�31 different contracts !

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1 The Essence of Leasing

• Lease demand is expected to grow to 50% by 2020

driven by increasing demand from airlines

• Leasing continue to evolve

– Realigning ownership and capitalization strategies

– More fragmentation / niche players

– Emerging new entrants

• Increased quantity of airplanes coming off-lease and will

require to fulfill lease return conditions

(Documents, C-Checks, paintings and reconfiguration etc).

• Cross border movement of leases adds (re-) registration,

records and administrative costs

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2 Between Operators

• Short term leases for e.g. six months to cover holiday traffic

• Lease contracts specifies conditions !

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3 Storage of Aircraft

• Aircraft Storage is not the same as an Aircraft Bone Yard !

• When an aircraft is placed into an Aircraft Storage Program it

receives its normail, routine, maintenance checks

• Such maintenance checks are in line with the Aircraft

Maintenance Manual

• Alternatively, a customized Maintenance Storage Program may

be applied

• A Maintenance Storage Program allows the airline / lessor /

operator to rapidly return the aircraft back into service.

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What has to be done

when possession changes ?The Aircraft itself

• Aircraft physical inspection

– Exterior

– Interior

– IFE

– etc.

• Airworthiness check

– Documents

• Airworthiness Directives (“AD’s”)

• Service Bulletins (“SB’s”)

• Foreign authorities check

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What has to be done

when possession changes ?Maintenance

• The Aircraft / hull - fuselage:

– Maintenance Programs

– Maintenance Manuals

– Task Cards

• Engines

– Borescoping

– Engine Test Runs ?

• Landing Gears

– Exchanged ?

• Components and Parts

– Source ?

– PMA parts ?

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What has to be done

when possession changes ?Miscellaneous

• Reconfiguration of cabin– All Economy, Business Class, etc.

• Exterior Paints– White ?

– Next Operator ?

• Ferry Flights– Who performs ?

• Aircraft Storage

• and:

• The essence of documentation !

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The Essence of Documentationneeded for Repossession

The Lessor / repossessor usually defines a check list:

• (a) EASA Form 1 serviceable tag with dual release

(EASA and part 145 and FAR part 145),

• (b) Updated LLP status,

• (c) Aircraft registration and serial number,

• (d) Lessor’s AD status,

• (e) Updated SB status,

• (f) ETOPS status

• (g)Basic engine and QEC inventory,

• (j) Fuel data

• (k)Engine condition monitoring data

• (l) Data of the full performance test cell run

• (m) Video and hard copy post test boroscope inspection

• (n) Documentation for all maintenance accomplished

• (o) Statement that the Engine did not exceed limits

• (p) Statement that no abnormal events occurred

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The Essence of Documentation needed for Repossession

(q) Statement that lessee has operated the aircraft

according to procedures approved by the Authorities

(r) Statement that the Engine was maintained

operated in accordance with manufacturer’s practices

(s) Statement that no Non-OEM approved repairs were

applied to the engine/QEC during the lease term

(t) Statement that no Non-OEM approved parts are

installed on engine/QEC during the lease term

(u) Statement certifying that the Equipment was not

involved in an incident and/or accident

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Aircraft documentation in place for:

– Showing Aircraft Continuing Airworthiness

Compliance: AD’s, mod’s, CRS, hrs/cls limitations etc.

– Configuration management: actual vs allowable configuration

– Asset management: status(mod, overhaul) and age (LLP)

Requirements for documentation are based

upon:

– Aviation regulations (EASA, FAA)

– (Lease) contracts


Documentation consists of :

– Status data: overviews of AD’s, Hardtimers, LLP’s

(FH, FC and Calendar time) etc.

– Compliance data: AD’s, mod’s, hardtimers list,

engineering data, burn certs. etc.

– Proof of Compliance: detailed Maintenance

Records(DFP’s), approved engineering data

– Other data: historical data, statements, manuals etc.

Status

Compliance

Proof of compliance

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Some complications

• Lease contracts: complex, different, open for

interpretation/discussion

• Aviation Regulations: complex, different(FAA/EASA)

• Traceability of data external and

internal: in different systems (legacy)

• Integrity of data: accuracy

• Many stakeholders: many parties involved during

lease return and aircraft transitions

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Lessor + consultants next lessee or owner

Foreign Aviation Authorities

Lessee/Operator

Internal expertise

Aviation Authorities

Some complications

Different “players”

Lease Agreement

Service Level Agreement

Exchange of data during lease

Redelivery Preparation

Process

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.

Decides upon A/C

destinations

Arranges contracts

Coordinates A/C transactions

Decides upon contract

interpretations

Provides A/C configuration

Provides all A/C

documentation

Key players Airline Operator Maintenance

Key roles

Key Function

Fleet Development Fleet Services MRO Provider

Lessons Learned

• Agreements are binding� Integrate contract requirements into the organisation

� Start in an early stage review of contract requirements with the other party

• Use project structure for redelivery activities� Start project well in advance

� Separate redelivery activities from daily airline operations

� Planning and monitoring progress with focus on redelivery date

� Analyse risks and decide upon extra activities, f.i. a repair-assessment

� Good communication is of vital importance. Make roles of different players “explicit”

• Availability of knowledge and expertise� Involve right adequate expertise

� Develop extensive database

� Create “own” standard (“industry”)

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Challenge for the future ?

Create a Center of Excellence … ?

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Thank you

Jan Willem Storm van ‘s Gravesande

Managing Partner AIC

[email protected]

+31(0)6 33810262

www.aicbv.com

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