1. Mitigating Lease Return Costs and Challenges

2. WHO WE ARE Delta TechOps, we are: The third largest MRO in the world
A $4 billion production center for Delta Air Lines, employing 10,000 people
A fully integrated global maintenance organization with Atlanta-based main operation
Supported by the largest & most experienced non-union TechOps workforce worldwide
Continually improving operational efficiency utilizing 200+ Engineers
86 years of experience We see the big picture and the smallest details
TITLE OF PRESENTATION
11/23/2018

3. Lease Return Costs and Challenges
Regulatory Transferability
The major aviation bodies, FAA and EASA, have established extensive regulations beyond the minimum standards set by ICAO. Those regulations are often followed or copied by other states. However, other states can interpret the regulations differently or add other regulations.
Registration
Design
Approval
Airworthiness
Certification
Continued
Additional
Operational/ Airspace/ Security/ Other Requirements
Operational Transferability
Managing the challenges that arise because the lessor and the lessee look at the lease from different perspectives:
Maintaining Asset Value, Repairs, Records, Insurance, Payments and Securities throughout the lifecycle of the asset.
Background
Pre-Delivery
Delivery
Operations
Re- Delivery
Illustrations from IATA “Guidance Material and Best Practices for Aircraft Leases”
11/23/2018

4. Lease Return Approach
Lessor and Operator agree on joint maintenance management program
Lessor takes lead of program
Lessor selects maintenance provider throughout the aircraft or engine lifecycle – across different operators
Maintenance provider manages all maintenance requirements
Maintenance provider facilitates lease transition from operator to operator
Benefits
Continued time operation = no checks required at transition time
Maintenance Reserves will be less contentious
Back-ground
Pre-Delivery
Delivery
Oper-ations
Re- Delivery
11/23/2018

5. Complete Lease Services
Delta TechOps approach: Complete Lease Service
Complete maintenance service provided by Delta TechOps to Lessor that leverages industry-leading operational and maintenance experience to enhance the long-term value of lease assets
Delta TechOps acts as single source for all maintenance requirements
Delta TechOps can comply with all Lessor requirements, OEM qualification, but also PMA and DER based on Lessors financial asset valuation models
Advantages of Complete Lease Service
Maintenance Management Simplicity
Single Provider of Complete Aircraft or Engine Maintenance Services
Enhanced Maintenance Cost Predictability
Superior on-wing performance and reliability
Minimized long-term engine maintenance cost
Back-ground
Pre-Delivery
Delivery
Oper-ations
Re- Delivery
11/23/2018

6. Questions
Is there value in a non-traditional lease delivery and return structure?
Is covering an aircraft, maintenance and engineering, from delivery until retirement really a viable option?
Is it really important to keep serialized parts installed on original aircraft? What is same age and configuration? Can costs really be saved by putting aircraft CFS programs?
Is transferring aircraft between different regions in the world really a major factor? From China to USA an issue?
Is residual value really an important factor? How is it quantified? Appraisers?
11/23/2018