C O N F I D E N T I A L . N O T F O R D I S T R I B U T I O N .
LEASE MANAGEMENT STRATEGIES A IRCRAFT TRANSIT IONS
1 NOVEMBER, 2017
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W H O I S A P O L L O ?
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GLOBAL MID-LIFE AIRCRAFT/ ENGINE LESSOR
Current Lease Portfolio:
Aircraft – 181 Engines – 22 − 32 Wide Body – 7 Lessees − 149 Narrow Body – 6 Countries
− 70 Lessees − 45 Countries
A LEADING AIRCRAFT/ ENGINE PART-OUT FIRM Over last 10 years − Over 100 Aircraft − Over 220 Engines
− Inventory Line Items - ~100,000
Current − 26 Aircraft
− 11 Wide Body − 15 Narrow Body
− 74 Engines
Inventory Line Items - 63,000
ACTIVE
PORTFOLIO
MANAGEMENT
One of the industry’s leading mid to end of life commercial aircraft
Lessors
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A P O L L O ’ S C U R R E N T A S I A N P A R T N E R S – S O F A R !
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A I R C R A F T R E C O R D S - I T ’ S T H E L A W
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Of the more than one million to more than three million parts on a commercial aircraft, it is imperative to know the maintenance history of many.
Records management is the law. − Why does every regulatory agency, acting on behalf of the government consider the
maintaining of maintenance records integrity so important?
− Records ensure safety.
− Who would trust a record system that was not accurate?
Your airplane ride may be the safest part of your day. Why?
− Safety − Safety is an accumulation of knowledge about risk converted into practice. −Merriam Webster = the condition of being safe from undergoing or causing hurt, injury,
or loss − From the plane seats to the cabin air to the course and altitude of the flight, every
decision in commercial aviation comes after careful consideration of its impact on safety.
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H O W D O Y O U M A I N T A I N A S S E T V A L U E ?
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Everyone thinks the physical aircraft is the asset? − without the aircraft records, the physical aircraft would be practically worthless.
Maintaining flawless aircraft records ensures the value of the asset is maintained, and it will simplify and expedite any lease transition. − Poor records management can devalue an aircraft
Clean and organized records? − will allow potential lessees or buyers to easily assess the aircraft and will allow for a much smoother transition.
Almost everyone in the asset lifecycle from manufacturers, logistics, MRO’s and operators, have disparate systems for managing assets. Lack
of standardization leads to limited traceability, and the cost for non-compliance can be high.
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H O W W E S O M E T I M E S G E T T H E R E C O R D S P R E S E N T E D
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H O W W E D E L I V E R T H E M
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How can we make this better and get rid of the uncertainties of paper deliveries, returns
and transitions?
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A I R C R A F T T R A N S I T I O N S
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With the operating lessors’ percentage of the world’s aircraft fleet showing no signs of slowing down, an efficient transition process from the current lessee to the next is critical in preserving the integrity and value of the asset, good customer relations and ultimately return on investment for a lessor.
Costs of aircraft downtime during transition? − Estimates close to $1 Billion industry wide
Records impact during transition
− Regulatory $$ Impact − Taking digital and printing Paper
− Lessee / Operator $$ Impact − Taking paper and making digital
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U N D E R S T A N D I N G T H E C O M P L E X I T Y
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How do you make a complex process – simple?
A very emotional process − The matter of redelivering an aircraft at lease expiry or upon an early termination is an extremely
complex one, and often significantly more emotive than its acceptance into service.
Three major stakeholders involved in transition process − Current Lessee
− Lessor
− Next Lessee
Digitizing records speeds the transition process
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T R A N S I T I O N T I M E L I N E – G E N E R A L R E P R E S E N T AT I O N
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Contractual Obligations, Technical Records Preparation and Delivery Check Supervision
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W H O I S I N V O L V E D I N A T R A N S I T I O N P R O C E S S
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The Lessor’s transition team − Project Lead
− Records auditor(s)
− Engine auditor(s)
− Physical inspection
The current Lessee’s team
The next Lessee’s inspection team
CAMO (Continuous Airworthiness Maintenance Organization) − Reviewing aircraft records and airworthiness
− Reviewing and developing the aircraft maintenance program
− Recommending the issuance of the Airworthiness Review Certificate (ARC or C of A)
MRO and the current Lessee’s maintenance team
Borescope Inspection team
Ferry Flight company
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L E A S E R E T U R N M A N A G E M E N T
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Understanding the Lease! − Potential compensation?
− FAR Part 21 Involvement
− (Certification of Parts and Products) • Modifications to seats • Soft furnishings (carpets, curtains, etc.) • STC (Supplemental Type Certificate) validations • Avionics
Can Digitizing help? − Not always a priority for airlines
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T H E F U T U R E O F R E C O R D S M A N A G E M E N T
MRO’s are moving towards digital sign off on checks, and issuing digital CRS’s
Lufthansa Group: Digitalization supports the green transformation − The Group is focusing strongly on digital solutions and innovations.
− Lufthansa and Lufthansa Technik use FLYdocs digital solutions − “Our goal is a comprehensive and sustainable mobility concept, tailor-made to the customer’s individual wishes. To achieve this, digitalization along the entire
travel chain plays a central role. = Carsten Spohr, Chairman of the Executive Board and CEO of Deutsche Lufthansa AG.
GECAS has an agreement with Aerdata using Stream for its records management
Boeing purchased Aerdata / Stream − Purchase announced 27 May 2014 to offer its customers a way to manage maintenance records
GE purchased Critical Technologies (Air Vault) − Purchase announced 27 March 2017 − Provides cloud based digital records management services and mission critical records across the industrial supply chain network. This allows GE to boost its
ability to focus on asset lifecycle management
Airbus developed own system
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T O M O R R O W ’ S R E S E A R C H
Cranfield University to Host UK Digital Aviation Research Center − The UK is to build a £65 million ($85 million) center at Cranfield University to perform research into the application of digital
technologies across aviation from aircraft to airports and manufacturing to maintenance. - http://www.mro-network.com – 21 Jul, 2017
Cyber security − 39% of Aerospace & Defense executives report the number of privacy and security breaches has doubled over the past
two years, plus the “unprecedented” volumes of complex, difficult-to-manage data being produced and transmitted by industry. – Aviation Weekly 17 Jun, 2017
Standardization − The ultimate goal should be the is the transferability of an aircraft from one operator to another, where all records are
digital. To do that we need standardization of records.
− Delivery bible
− Regulatory acceptance
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A P O L L O AV I A T I O N : T E C H N I C A L C O N T A C T I N F O R M AT I O N
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For more information, please contact:
ROBERT TAYLOR SVP TECHNICAL & CHIEF TECHNICAL OFFICER
Apollo Aviation Group 848 Brickell Avenue, Suite 500 Miami, FL 33131 USA
D: +1 305 764 3902