Obligations for Engine
Leases – Lessor Guide
to Good Practice and
Fergal Whelan-Porter / CEO, Aeolus Engine Services.
4th Annual Aviation MRO Summit
25 November 2022 / Berlin, Germany
Established July, 2000 in Dublin, Ireland.
Privately owned with over 50 years experience
in aircraft engine leasing, maintenance and
Founded on a deep passion for excellence in
service & innovation for aircraft engine
Aircraft Engine Leasing: Focus on CFM56/LEAP family
Aircraft Engine Trading: SLB; Exchanges; Used Serviceable
Aircraft Engine Technical Services: ESV Mgmt; ECM; Field
Air Transport Industry emerging from most turbulent period in memory
New Macro Economy
more challenges for
Aviation than assurances.
Airlines need to improve cost control structures
• ENGINE LEASING MARKET CONTINUES TO GROW Y-O-Y
• LEASING IS IMPORTANT TO AVIATION RECOVERY
• LEASING IS CASHFLOW FRIENDLY FOR FLEET
Engine Leasing: MX Obligations;
A Key Cost Consideration
Types of Engine Leases:
Understand your maintenance obligations
Long Term (5 yr +)
Standard Lease: Basic Rent + MR
Sale and Lease Back (SLB)
Standard Lease (3mths – 3yrs)
Green Time / Run-out (No MX requirements)
Fixed Rent (inclusive of FC limit)
Lease to Purchase (Fixed Rent;All FC incl)
Spare lease (Fixed Rent + FC/FH Use extra
• Nota Bene: Obligations for MX costs defined
by Lease Agreement.
• Key objectives:
• Clarity of language
• Mutual understanding
• Equitable terms
• Important clauses:
• Maintenance Reserve Rates ($/EFH; $/EFC)
• Escalation Rates & Dates
• Delivery condition and inspection
• Maintenance obligations & influence
• Engine build standards
• Return Conditions
• Open/Closed Program (PBTH)
• Workscope focus: Lease obligations +
Operational needs (within Lease Term).
• Workscope optimisation: Performance work
with LLP Replmts = Less cost exposure.
• Workscope decisions: Ensure Lessor
• Part Replacements/Repairs: Careful! Consult
Lease Agreement / Lessor.
• Part Replacements (incl. LLP): Buy parts in
advance of scheduled SV. Savings!
• Component changes: Paperwork;
• Off-coming material = Assets. Monetise!
Operator responsible for maintaining engines on par with
industry standards while keeping proper records.
• Understand $/EFH rates & distribution per
• Understand $/EFC rates & OEM CLP escalations.
• Adjust MX budgets for operating thrust
• MR account ledgers: Lessee-Lessor reviews
• Ensure access to built up MX Reserves.
• Submit MX bills on-time.
• Understand SV Cost Split: Understand MR
A Smooth Handover
Read your contract!
Delays = Unnecessary Costs!
Review QEC changes prior to lease return.
Return Checks / Inspections / Test – Prepare!
Engine Certification: Know your obligations!
Records: Paperwork! Paperwork! Paperwork!
Transport Stand: Is it the same one?
Transportation: Follow OEM guide - No short-cuts!
Redelivery: Not just physical return – Comply with all
Both the parties must work hand-in-hand
to expedite the lease return process.
Unit 2, 2050 Orchard Avenue, Citywest Business
Campus, Dublin, D24 ER27, Ireland
+353 1 8219095