Don't Let Your Aircraft Redelivery Stall

The culmination of a lease agreement, an aircraft redelivery is a critical juncture for both lessors and lessees. A smooth handover ensures a timely transition for the lessor to place the aircraft with a new lessee, minimizing downtime and maximizing revenue. For the lessee, a successful redelivery minimizes financial penalties and fosters a positive relationship with the lessor for future endeavours. However, achieving a seamless redelivery hinges on meticulous planning.

In a report from our friends at IBA in 2023 one of the biggest issues in a delayed redelivery was a lack of planning. The issues can be variable and broad, so let's delve into the intricacies of planning an aircraft redelivery, exploring common pitfalls, and outlining the characteristics of a successful plan.

Common Issues That Can Hinder a Redelivery

Several recurring issues can disrupt a well-intended redelivery plan. Here are some of the most common:

• Misinterpretation of Lease Agreement - A thorough understanding of the lease agreement is paramount. Inconsistencies in understanding between parties can lead to different delivered aircraft condition and these disputes can take time leading to delays and / or over financial responsibility for necessary adjustments.

• Inaccurate or Incomplete Records - Incomplete or inaccurate maintenance records can significantly impede the redelivery process, taking longer to review, raise more open items and in turn take longer to resolve. In the worst case missing records can necessitate additional inspections or changing of significant components, pushing back the handover date.

• Unscheduled Maintenance Needs - Unexpected maintenance discoveries during pre-redelivery inspections can cause delays. A good example is corrosion or a finding during a borescope as they have to be resolved and take time to sort, often blowing apart any plan or schedule as a resolution is found that satisfies all parties.

• Logistical Hiccups - These can be wide ranging issues as there is a global supply chain issue for parts and components. Equally with growth of post covid air traffic other logistical factors can impact planning such as crew availability for the ferry or demonstration flight, maintenance hangar facilities or shop visits with a long backlog at most engine shops

The Domino Effect of Poor Planning

Failing to adequately plan for an aircraft redelivery can have a cascading effect, impacting both parties involved. The airline won’t hit its schedule and can tie up valuable resources.

• Financial Penalties - Missed redelivery deadlines often incur financial penalties for the lessee as stipulated in the lease agreement. These penalties can be substantial, impacting the lessee's bottom line as they can be 2 or 3 times the lease rate and it is further compounded by a period of non-operation, not making money for the airline.

• Downtime Costs - For the lessor, delays in placing the aircraft with a new lessee translate to lost revenue opportunities. Every day the aircraft sits idle represents a missed chance for generating income and inconveniences a second airline.

• Strained Relationships - A redelivery is always an emotive process but once there are delays in a contentious redelivery process it can damage the relationship between the lessor and lessee. This can have negative consequences on the opportunities for resolution and. future business dealings.

Often Forgotten, Yet Crucial Planning Considerations

Beyond the standard elements of a redelivery plan, there are a few key aspects that are sometimes overlooked, have you considered these in your planning -

• Crew Training - If the new lessee requires the aircraft to be ferried to a different location, ensure the delivery crew is properly trained and certified on the specific aircraft type. Equally on the demonstration flight the flight will follow a special profile, and this may need to practised by the flight crew, using simulator time to de-risk the situation.

• Airworthiness Directives - Verify that all applicable Airworthiness Directives (ADs) have been addressed before redelivery. Often there is a clearance period and a level of resolution that has to be met , if not met it can be grounds for a delay of the re-delivery until resolved.

• AMP or MPD? – A shrewd lessee will have negotiated that the aircraft is returned to their AMP but typically an aircraft maybe returned to the MPD, requiring additional bridging tasks to be added to the EOL check. This can sometimes be forgotten to be planned in and then requires sorting and reporting at the last minute, potentially causing issues in the final check or records review.

• Redelivery Location – One for the lessors to keep in mind is the re-delivery location. Once the aircraft is handed back at the airlines habitual base it could be the lessor’s responsibility to get the aircraft out of the airport. This can often become a logistical and bureaucratic nightmare at a secure international airport, particularly if the lessee no longer wants to support.

The Hallmarks of a Successful Redelivery Plan

A well-constructed redelivery plan serves as a roadmap to a smooth and efficient handover. Here's what it should encompass -

• Early Start - Begin planning at least 12-18 months before the redelivery date. This allows ample time for inspections, record gathering, and addressing any discrepancies to meet the lease return conditions.

• Clear Communication - Establish open communication channels between the lessor and lessee. Regular meetings and progress reports help identify and address potential issues proactively. Aviation Mover's training programme focusses heavily on these, providing tools and techniques to help ensure an on-time redelivery.

• Detailed Schedule - Develop a detailed project schedule outlining key milestones, maintenance tasks, and deadlines. This ensures everyone across the business that is involved is on the same page and aware of critical dates, both for the lessor and lessee. A Gantt chart can be an effective tool to manage such planning along a timeline or workstreams.

• Resource Allocation - Allocate sufficient resources, including personnel, budget, and tools, to ensure all tasks can be completed efficiently. This can be a great way to engage a wider group of people in a different project, particularly within an airline to learn new skills and competencies helping towards a successful project outcome.

• Contingency and Risk Planning - Develop contingency plans to address potential roadblocks such as delayed parts, delayed maintenance, or unexpected records issues. Equally, risk assess each stage of the process to ensure where the issues could come to ensure a viable mitigation is in place. Aviation Mover is a is a strong integrator of risk management in its processes and training for aircraft transitions as it has helped save millions over many re-deliveries.

By incorporating these elements, your redelivery plan becomes a robust framework for a successful handback.

Conclusion

A meticulously planned aircraft redelivery is a win-win situation for both the lessor and the lessee, assuming a balanced market. By anticipating potential issues, maintaining open communication, and allocating the necessary resources and processes, you can ensure a smooth and timely transition, minimizing downtime and maximizing value for all parties involved. Remember, a successful redelivery not only concludes a lease agreement but also paves the way for future positive collaborations and career opportunities for those involved.

If you wish to learning more about our aircraft training programmes, particularly around aircraft transition planning head to https://www.aviationmover.com/courses