Performing the Lease Returns of 1,381 Aircraft Components from a Big 3 Middle Eastern Carrier

Service Area

Aviation Consultancy, Technical Services

Target Sector

Lessors

Overview

Our client, an integrated provider of MRO services and lease finance solutions across the global aerospace industry, had a significant components leasing agreement with one of the three large Middle Eastern airlines.

The lease agreement was ending, so our client had to initiate the lease return and remarketing process of 1,381 components.

 

Challenge

ACC Aviation was engaged to perform the lease return process on our client’s behalf, performing the physical and technical inspection of the components, ensuring the components met lease return conditions, preparing and managing an open items list, and preparing the technical data room files in support of the remarketing process.

Given the storage cost and loss of value on calendar time parts, the client required ACC to work under tight time constraints and tight deadlines.

Our solution

To complete this assignment, ACC deployed two onsite inspectors for 15 days, inspecting an average of 90 components per day, in addition to the administration work performed after the physical inspection. The team reviewed the documentation and the contract obligations, raising an Open Items List (OIL) for a reliable track of the components that were found in non-compliance.

As part of this assignment, we were responsible for:

  • Tracking, reporting, and resolving all issues relating to the collection of the components.
  • Developing an OIL, hosting and moderating open-issue meetings, resolving project-related issues with the lessee, and collecting information from outside parties such as repair vendors and OEMs.
  • Identifying areas of non-compliance with the redelivery conditions or regulatory criteria, such as PMA components or alternative part numbers, and identifying any unscheduled maintenance, repair, or overhaul that the lessee needed to perform before returning each part.
  • Where components did not comply with the return conditions, we advised our client on appropriate remedial measures to address such non-compliance to maximise the residual value of their assets.

The project was highly challenging, with a large percentage of the components unready for inspection, an above-average level of findings (including 489 OIL items), and numerous negotiations around the buyout of non-compliant components.

Client outcomes

ACC Aviation completed this assignment promptly and with a focus on generating the best financial outcome for the client. Based on our inspection work, our technical division completed the lease return of 1,381 parts and supported the lessee’s buyout of 218 non-compliant components.

With its inventory of components organised and stored in a central warehouse, supported by a complete, indexed, and robust records data room, in addition to follow-up meetings, our client can now remarket its inventory efficiently.

Key achievements

Experience counts.
Our achievements prove it.

  • Successfully returned 1,381 parts, and supported the lessee’s buyout of 218 non-compliant components
  • Organised the inventory of components for a client, enabling the client to remarket its inventory efficiently

Related case studies

AdobeStock 132296282

Comair Liquidation: Aircraft recovery, transition, and remarketing

Discover how ACC Aviation navigated complex aircraft recovery and remarketing challenges, securing optimal outcomes for a bank client amidst bankruptcy protection and liquidation.

15 April 2024Read more
AdobeStock 624544739 1 e1693390929761

Advising a lender on drafting and negotiating an aircraft lease agreement

ACC Aviation provided valuable assistance to a West African financial institution by helping them protect their interests and reduce financial exposure during an aircraft remarketing process. Through careful tailoring of the aircraft lease agreement to account for the unique technical condition of the aircraft, ACC Aviation was able to help the lender structure a lease that effectively transferred significant risk and capital expenditure to the lessee.

1 September 2023Read more
image007

Successful aircraft remarketing: maximising value from a distressed aircraft

ACC Aviation's asset management team recently assisted an HNWI in aircraft remarketing and disposing of a Boeing 737-300 aircraft. The aircraft, awarded to the client through a court-ordered settlement, belonged to the now-defunct Tayaran Jet.

8 August 2023Read more
My project 1 1

Launch of a multibillion dollar aircraft leasing fund

Our client set out to launch and manage a Shariah-compliant aircraft leasing fund with a targeted capitalisation of five billion dollars. The structure of the fund required a combination of equity and debt, with a targeted asset profile of new narrowbody and widebody aircraft.

20 March 2023Read more