The Scenario
The operator had leased 2 aircraft (4 engines) across a 5 year lease term. The lease return conditions for the aircraft required that all engines were to have operated less than X hours and X cycles since performance restoration shop visit at the point of lease return. The aircraft had been leased prior to the introduction of the AOG-247 Fleet management Program, and as the operator had little experience with the engine model concerned, had agreed lease terms which were not in their favour. As a result, the operator was faced with approximately $2M in exposure of which they were unaware.
AOG-247’s Service
Following a review of the lease agreement and using AOG-247 experience of the engine model concerned, AOG-247 subsequently identified that the lease return conditions previously agreed were unnecessary. Based on the on- wing performance of the engines and the projected condition at lease return, AOG-247 advised the operator that the shop visits required to meet return conditions were unnecessary and subsequently renegotiated successfully the return conditions with the Lessor on behalf of the operator in order to eliminate the shop visit requirement.
The Outcome
As a result of the maintenance reserve raAOG-247 that had been previously agreed, and the premature removal of the engines driven by the return conditions, the expected shortfall in maintenance reserves of approximately $500K per engine was eliminated completely, removing $2M of unexpected cash liability from the operator.
