No Paper...No Plane!

When an airline leases aircraft, the documentation is as significant as the equipment. Financial and maintenance records tell the complete story of an aircraft’s condition, airworthiness, history and more. As an aircraft changes hands, the documentation must follow. Without this documentation, a plane is grounded.

In Spring 2009, on behalf of a client, The Aircraft Group delivered two leased aircraft to SkyEurope Airlines, based in Slovakia. SkyEurope was building its fleet to open more routes and expand its operations. The airline went on to lease several more aircraft from other financial institutions. The planes were to be flown throughout Europe for this commercial carrier but a few months later it was obvious that SkyEurope was in financial trouble. In September 2009, the airline declared bankruptcy and ceased operations. All the planes were grounded.

Although The Aircraft Group couldn’t predict the future when it delivered the aircraft to SkyEurope, the firm knew from its years of experience that keeping all aircraft documentation on a centralized server would ensure document integrity and offer more flexibility for transferring the aircraft in the future, if necessary. In the case with SkyEurope, repossession of the two aircraft that The Aircraft Group supplied was as easy as arranging for a crew to fly the aircraft out of the country. Unfortunately, the other aircraft Lessors were not as fortunate.

Several others of SkyEurope’s Lessors are now burdened with the additional task of researching and recreating the necessary documentation history. Without SkyEurope’s staff on hand, the costly task is left for a hired team to go onsite and reassemble the documentation. Oftentimes there are 200,000 to 400,000 documents per aircraft making research and recreation a herculean effort. Making matters worse, the aircraft are sitting idle and incurring storage fees while not producing any revenue.

The Aircraft Group created the optimum system for SkyEurope by supplying the planes and providing secure access to all necessary documentation. This allowed SkyEurope personnel to operate maintenance checks, airworthiness records, flight histories and more while the original hard copy documents remained with the Lessor. Not only was this convenient during operations giving instantaneous access to any document, it allowed for immediate removal of the aircraft when SkyEurope became insolvent, saving everyone time, money and aggravation.

“Technology now offers us incredible flexibility and convenience while still providing security. Unfortunately, many companies do not take advantage of automation on the front-end and end up paying dearly for it on the back-end. We see this scenario time and time again and are hoping that in the future online recordkeeping will be as commonplace as it is in other industries,” commented Walter Andrushenko, president of The Aircraft Group.

Good Recordkeeping Makes a Strong Case

In November 2009 the courts resolved a return condition dispute between U.S. Bank National Association and Southwest Airlines. At the center of this dispute was the provision of the lease that permitted the lessee to substitute engines and parts with those of “equivalent value and utility,” a common clause in agreements in the ‘80s and ‘90s. At question were three Boeing aircraft leased to Southwest Airlines by U.S. Bank National Association. The argument centered on the interpretation of ‘value and utility’ and whether the modifications to the aircraft were inferior and ultimately devalued the aircraft upon return. Key to the case was the aircraft records as well as an overall knowledge of aircraft maintenance and operations. The Aircraft Group was able to assist in both these areas.

The Aircraft Group had the original records on the Boeing aircraft and was able to supply accurate and detailed documentation on the condition of the plane from the beginning of the lease to its return. These records were important to determine if the replacement parts were inferior to their originals. In addition, The Aircraft Group personnel were brought in as expert witnesses due to their extensive knowledge in aircraft operations and maintenance. Their knowledge of what is customary and what is not was significant to the case. Ultimately, the court found in favor of U.S. Bank National Association.

This case proved pivotal in how lessors and lessees interpret aircraft maintenance clauses going forward. Quality recordkeeping is necessary in ensuring that the equipment is maintained properly and replacement parts are appropriate throughout the life of the aircraft.

If you’d like to learn more about this case you’ll find a comprehensive article at http://www.vedderprice.com/docs/pub/23fcc1e6-b861-4462-b70f-fd60a505ccb1_document.pdf

How to Accurately Compare Electronic Document Storage

There seems to be no debate over the advantages of electronic document storage. Over the past 10 years technology has made quantum improvements in capturing hardcopy data and combining it with electronic data into one cohesive system…or has it.

Oftentimes at The Aircraft Group we see how a system that was meant to improve efficiencies does little more than create an electronic version of the same antiquated system that existed originally. The main reason is the lack of understanding of how the documents are captured, stored and retrieved. In many cases, more emphasis is placed on capturing the documents with little thought given to the search and retrieval methodology that will be used ongoing.

At The Aircraft Group we perform dozens of lease returns annually from all parts of the world. While many of the systems being employed today are good for archiving, retrieval is oftentimes cumbersome and intuitive search capabilities are lacking. Many systems in use by major US carriers today can search only through limited indexed fields, tail number, date work was accomplished, the station, etc. but cannot retrieve data contained within check packages. The result is considerable extra effort when the time comes to assemble FAR 91.417, 91.419 records at lease return or other needs outside of the designated search criteria. These tasks and more become just as labor intensive as they were originally!

The key is in identifying a system that can truly search through all documents and packages rather than only indexed fields. Over the years the Aircraft Group has learned that the only way to effectively compare prospective systems is to provide a sample with un-sanitized data, have it converted to the proposed product, and actually test it with your familiar data. For example, let’s say you need data on a certain stabilizer servo and all you have is a unit serial number but don’t know the aircraft it is installed on. Does the system find the servo? How long did it take? Can it search across multiple tail numbers or even fleet types? Were you taken to the exact page or did you have to scroll through sections of records packages? With The Aircraft Group’s DocuSearch, just select the fleet, enter the serial number and the results will be displayed immediately without the need for additional manual searching.

Damage Tolerance Assessment (DTA) is Easy for TAG Online Customers

As you know, the FAA has mandated that Damage Tolerance Assessment (DTA) be conducted on all repairs to primary structure. The problem is, since many of these repairs were not classified as major in the past, there was no need to maintain a separate record when documents were captured and classified. Therefore, to find the data, you have two primary choices, open up and physically inspect the airplane or check the records.

Customers using TAG Fleet Online are having no problems with the government mandate. Since The Aircraft Group’s DocuSearch provides search capabilities by any criteria rather than select fields, recovering repair documents takes only seconds. There is no need to manually search packages and review maintenance documents individually. What a savings in time and money!

TAG Can Take the Sting Out of Bankruptcy Cases

The reality for all industries today is the news of bankruptcies. Companies do not plan to fail but it does happen and what we see at The Aircraft Group is that one company’s demise can have a ripple effect for years to come. We have worked through virtually all major bankruptcies over the last two decades, from Midway through United and Delta, and we are now lending our expertise to enterprises in the USA and abroad. Probably the biggest impact that we see in aviation bankruptcies is that debtors suffer major reductions in staff and other resources—when they are needed most—and primary tasks slip, namely returning assets to creditors. As a result, the immediate burden of preserving aircraft assets in airworthy and marketable condition invariably falls upon the aircraft owner.

Also of paramount importance is the analysis and preparation of Claims for the Courts; a process requiring long hours scrutinizing detailed technical documents to ensure that a comprehensive claim is prepared and filed within court imposed deadlines. So as creditors scramble to determine asset values, whether declining values have evaporated to the point of forfeiture, or from the debtor’s perspective, which assets will be added to the portfolio, the condition of the asset is often unknown or not fully considered.

What is needed most in times like these is a keen understanding of the requirements and in creating efficiencies that can expedite the entire process. The Aircraft Group is offering many companies aircraft condition insight and exceptional document management that is proving to be invaluable in these bankruptcy situations. Since many companies do not have this knowledge in-house, turning to a consulting firm such as TAG can actually save time and money by expediting the entire process.

Keeping it In-House May Not Be the Best Way

Many times we hear prospective clients that want us to quote a system for in-house document and maintenance portfolio management. The primary concerns are always security and ongoing support. Although these concerns are natural, they are truly limiting the potential of a robust document storage system.

By having your aircraft asset and maintenance portfolio management system online, you can take full advantage of the power of a global system while maintaining exceptional security. Your documents are maintained in real-time from anywhere in the world, you can provide on-demand access where and when it is needed, you can process requests in seconds worldwide, and you have access to the latest software improvements as they are offered. All of this means quicker processing of exporting or importing, acquisitions, lease returns and more. Due diligence and maintenance tracking can be done in a fraction of the time that it would take for someone to research the information, copy the data and send it to the parties involved. You don’t lose control of data, you actually gain more control and are able to fully exploit the power of a global system.