Turning complexity into clarity for an A320 lessor and lessee

The challenge

As redelivery approached, the A320 lessor and airline lessee were facing a challenging exit strategy:

• The impact on transition cost or trade-in by the continued operation of the aircraft and its ‘as-in’ condition
• A mismatch between the maintenance reserves collected and the increased cost of engine overhaul.

This left the lessor facing an expensive transition of the aircraft to a next operator and a gap in reserves that the airline lessee had to bridge.

Our way ahead

We found a clear path ahead. We gave the lessor a forward purchase commitment on the aircraft in assumed redelivery condition at the end of the lease. On the back of that commitment, the two parties were able to continue working together commercially and operationally, for a smooth lease redelivery in line with agreed terms and conditions.

The outcome

The lessor avoided a costly transition and the airline was able to avoid an expensive, operationally-challenging lease return process. This helped to maintain a good working relationship between the two parties for the years ahead. Our MRO facility then disassembled the airframes and engines, and the parts were repaired and overhauled and placed in our inventory pool to support our global A320 and V2500 customer base.