Lessor guideline for efficient and cost-saving compliance of maintenance obligations during lease of aircraft engines.

1. Airline Maintenance
Obligations for Engine
Leases – Lessor Guide to
Good Practice and Cost
Savings.
Fergal Whelan-Porter / CEO, Aeolus Engine Services.
4th Annual Aviation MRO Summit
25 November 2022 / Berlin, Germany

2. Company History
 Established July, 2000 in Dublin, Ireland.
 Privately owned with over 50 years experience
in aircraft engine leasing, maintenance and
trading.
 Founded on a deep passion for excellence in
service & innovation for aircraft engine
solutions.
NB Aircraft Engine Leasing: Focus on CFM56/LEAP
family
NB Aircraft Engine Trading: SLB; Exchanges; Used
Serviceable
NB Aircraft Engine Technical Services: ESV Mgmt; ECM;
Field Inspections/Repairs; Evaluations.

3. Platforms Supported / Sample Client
Base
Aeolus Engine Services prides itself on being experts in the CFM family of engines
CFM56-
3
CFM56-
7B
LEAP 1A &
1B
Global client base

4. Air Transport Industry emerging from most turbulent period in memory
New Macro Economy
2022+ presents
more challenges for
Aviation than assurances.
Airlines need to improve cost control structures

5. Engine Leasing:
Growing
• ENGINE LEASING MARKET CONTINUES TO GROW Y-O-Y
• LEASING IS IMPORTANT TO AVIATION RECOVERY
• LEASING IS CASHFLOW FRIENDLY FOR FLEET
EXPANSION

6. 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
 Power-By-The-Hour
 Sale and Lease Back (SLB)
 Short Term:
 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

7. Negotiating Contracts:
Maintenance clauses
• 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)

8. Engine Maintenance:
Planning
• Align with Lease obligations – N.B.: Return
conditions!
• Align with operational requirements
• Understand MX Phase & MTBO
• Budget for escalation rates (MR; OEM; MRO)
MRO)
• Calculate MR Drawdowns: No surprises! Don’t
forget built-up MR access.
• Factor in EFH adjustments for thrust variation
• AD / SB compliance: Pay attention! Prepare!
• Unscheduled MX: Risk Analysis; Budget.
• On-wing MX: Lessor blessing; MR Access.

9. Engine Maintenance:
Good Practice
• Workscope focus: Lease obligations +
Operational needs (within Lease Term).
• Workscope optimisation: Performance work
with LLP Replmts = Less cost exposure.
• Workscope decisions: Ensure Lessor
acceptance.
• Part Replacements/Repairs: Careful! Consult
Lease Agreement / Lessor.
• Part Replacements (incl. LLP): Buy parts in
advance of scheduled SV. Savings!
• Component changes: Paperwork;
Paperwork; Paperwork!
• Off-coming material = Assets. Monetise!
Operator responsible for maintaining engines on par with
industry standards while keeping proper records.

10. Maintenance Reserves
• Understand $/EFH rates & distribution per
module.
• Understand $/EFC rates & OEM CLP escalations.
• Adjust MX budgets for operating thrust
variations.
• MR account ledgers: Lessee-Lessor reviews
• Ensure access to built up MX Reserves.
• Submit MX bills on-time.
• Understand SV Cost Split: Understand MR

11. Lease Return:
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
Return Conditions.
Both the parties must work hand-in-hand
to expedite the lease return process.

12. Unit 2, 2050 Orchard Avenue, Citywest Business
Campus, Dublin, D24 ER27, Ireland
+353 1 8219095
engines@aeolus-engineservices.com