For airlines operating in an ever changing market, leasing brings the additional advantage of fleet flexibility and reactivity to market fluctuations, providing the ability to temporarily increase or decrease capacity. For investors, effective leasing is an essential element in achieving an acceptable return on investment.
Airlines with temporary or longer term aircraft overcapacity may chose to lease excess aircraft to other carriers rather than sell. This may be the only choice for a number of reasons including where the excess aircraft are leased - normally the best solution to avoid hefty early termination charges is to sublease – or where book values are higher than market values. Leasing airline to airline can provide a useful relief to both parties but is not without its problems. Many carriers are reluctant to consider leasing excess capacity due to the simple fact that they do not have the necessary infrastructure or corporate focus to implement and manage such an operation. In this respect Avinco can provide a ready solution to both the immediate overcapacity issue as well as the longer term asset management concerns by implementing its state-of-the-art lease management system. Not being able to adequately track the aircraft’s usage or airlines true financial condition due to distance or language can also prevent an otherwise economically sensible transaction from occurring.
The Avinco team is at the leading edge of aircraft asset management with its state-of-the-art lease management system and experienced and dedicated lease management team. Avinco delivers a complete lease management service focused on protecting asset value on behalf of the airline owner or head lessor, as applicable.
This is achieved through the timely and effective monitoring of all key areas of risk – lessee credit issues as well as underlying asset issues such as airframe and major component tracking and prudent reserve disbursement – as well as active forecasting of likely risks in the future – such as payment default, upcoming maintenance events, reserve shortfalls etc - and undertake the appropriate actions to mitigate their effects, all in cooperation and coordination with the airlines maintenance and operations departments.
Avinco’s Lease Management Service includes the following activities:
- Aircraft survey – Inspections
- Airline survey
- Technical Findings Analysis & corrective actions
Maintenance Reserve Management
Analysis of large maintenance events
Monitoring and analyzing the information on the lessee’s financial position in terms of key risk areas.
Aircraft delivery/re-delivery management
© Avinco, 2014