The traditional asset management practice of a financier or lessor performing an annual inspection of an aircraft and its records has been severely impaired since the pandemic took a grip of the World.
The pandemic caused/is causing several issues:
1. Airlines/MROs were/are in turmoil, the last thing they needed was to accommodate an inspection.
2. Staff may have been on limited time rotas to reduce workspace congestion to reduce exposure to COVID, hence visitors were/are discouraged.
3. Flying inspectors, employed by lessors or financiers, around the World (or even within a country) to perform such surveys may not be seen as essential.
4. Records and planning staff were/are furloughed
Meanwhile, there has never been a more appropriate time to ensure your asset is protected. The default risk has never been higher and the airline may not be up to date with rental payments and/or maintenance reserves payments. They may be broader restructuring issues that raise concerns over the viability of the airline or that such drastic air traffic reductions mean that your specific aircraft is no longer required by the airline. Contractually there may still be many years for the financing or lease to reach an expiry date.
What are the risks that need to be considered in such dire circumstances?
1. Aircraft location and condition: only a few sectors have seen continued utilisation at pre-COVID levels. An aircraft such as a freighter may not be under the same pressure as a passenger aircraft. For most passenger aircraft, especially large widebodies, the chances are that the aircraft is flying much less than anticipated or perhaps not at all. The ideal storage location would be in an air-conditioned hangar but it is more likely that your aircraft is parked in a remote area of an airport. Where exactly is the aircraft parked, how secure is the facility and what are the climatic conditions? Is the location likely to be impacted by winds, sand, salt that could accelerate corrosion? Is the prevailing/seasonal weather likely to create problems due to inclement weather, strong winds and storms.
2. Ongoing storage checks. Exactly how has the aircraft been prepared for storage. The airline will have options ranging from keeping the aircraft in a relatively high level of operational readiness up to a long term protection level that requires engines and systems/parts to be inhibited. These options need to be understood as they will effect the ongoing inspection work required to be performed by the airline and or it's MRO. Understanding exactly which type of program is your aircraft being maintained to and is that work being accurately recorded is important to avoid "gaps" in the aircraft history.
3. Records condition: the concern here is related to the accurate and current status of the records. Although the aircraft may not be flying it will still need to be certified as being stored in accordance with the appropriate manufacturer's procedures. It may also be an opportunity to have the complete histories fully audited especially if the likelihood of an early return or termination has increased.
4. Airline/MRO resource. Unfortunately, airlines and MRO facilities have had to furlough or make staff redundant. Perhaps there are many more employees suffering with COVID and increased sickness caused manpower shortfalls. How has that impacted the remaining teams and is there sufficient staff to keep the aircraft in a satisfactory condition? Some airlines have actually taken the opportunity to bring forward maintenance checks or changed the role of the aircraft. How will the airline be able to revert to pre COVID operations if they have laid staff off work?
5. Maintenance Programme and Utilisation. It is likely that changes will be required for the maintenance programme due to change in utilisation. Exactly how has this impacted your aircraft in terms of future maintenance checks and engine shop visits. For aircraft with associated maintenance reserves, this will result in further understanding and analysis of the impact to current accrued reserves and future payments to/from those "pots"
6. Have your aircraft been robbed? Keeping control and oversight of the components especially, the larger ones such as engines, and landing gears is essential in maintaining the aircraft airworthy. It is easy for an operator to save costs by not sending an engine to the shop whilst leaving the rest of the aircraft in a sub-optimal condition.
IBA are able to provide "light touch and remote" technical support and asset management to ensure your aircraft is kept to optimum condition.
Travel may be restricted but we can still provide a service to provide proactive asset management.
Please get in touch using the form here, for more information on our asset management services.