Air Transport World

Lessors finding greater need for aircraft condition monitoring.

Lessors finding greater need for aircraft condition monitoring People in the service industry like to talk about "value-added" products. These products, the result of finding some niche not already being served, generally reap attractive profits, at least until the competition sets in.

Once cut loose from government decision-making, the commercial airline industry started spawning its own batch of value-added services. The major carriers' computer reservations systems and the products based on them (for example, travel agent management reports) are one form. The overnight delivery business and the increasingly sophisticated varieties of services offered by participants in it (for example, electronic customer hook-ups) are another.

A far smaller, but growing, value-added business comes from the rapidly expanding commercial fleet flown under shorter-term, operating leases. The greater the number of such leases, the greater the lessors' need to monitor the condition of aircraft. The planes have to hold up well, i.e. retain their value, so that lessors can re-lease them quickly, without major expenses.

Definition of airworthiness

The old lease language requiring return of aircraft in "airworthy" condition is no longer sufficient (ATW, 4/86). A plane with hailstone damage or needing a $1.5 million overhaul may be flown from point A to B, but it sure isn't "airworthy" to a lessor. As Avmark Inc. President Morten Beyer notes, "Most laymen have the mistaken notion that 'airworthiness' means that all work that can be done to an aircraft is done, and that it is in 'perfect shape.' 'Airworthiness' merely means that there is no imminent danger in the continued operation of the aircraft and that no component has exceeded allowable limits."

There is one case cited by Beyer as a classic, when American Airlines had to spend $6.9-10 million each to bring 15 DC-10s purchased from Pan Am to American standards. "Pan Am, in order to conserve cash, has pursued a deliberate policy of deferring all possible major maintenance," said Beyer. …

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