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A Commercial Aviation Consultancy

Ernest S. Arvai

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The Cape Town Convention on International Interests in Mobile Equipment is an international treaty that enables leasing companies to repossess aircraft, among other assets, in the event of a default by the lessor.   The protocols under the treaty work well, and facilitate leasing of aircraft all over the world.

Unfortunately, this week the Indian government again treated leasing firms with disregard.   SpiceJet is in arrears on lease payments for some of its leased aircraft, and the owners of those aircraft wish to exert their rights, under both their contract and international treaty, to repossess those assets.  But the Indian government is standing in the way, in direct violation of the international treaty protocols, taking the side of the airline rather than financiers.

This is not the first time lessors have had difficulties in recovering assets from India.  The experience with the failed Kingfisher Airlines some years… Continue reading

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There has been considerable discussion in recent days regarding the potential for re-engining and re-introducing the Boeing 757, which first entered service in 1982, into the marketplace.  While from a fuel burn standpoint, a new engine may make sense, from a technology perspective, the aircraft, even with a new engine, would be far behind its stablemate, the Boeing 787.

Despite the rocky introduction of the Boeing 787, its new technology provides a distinct advantage in fuel burn and maintenance costs vis-à-vis its predecessors, and as the 787 ages, we will need to rethink old rules of thumb about increasing aircraft maintenance costs with aircraft age.  If we focus on technology and maintenance costs, it becomes quite clear that re-engining a 1982 aircraft doesn’t make much sense.

The following chart from Boeing illustrates the difference over time in maintenance cost between the 757’s contemporary, the 767, which was developed… Continue reading

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The International Civil Aviation Organization (ICAO), the UN body with representation from 191 countries, last week came up with a recommendation for tracking of commercial aircraft once every 15 minutes in the wake of Malaysian 370, Air France 447 and other incidents in which aircraft have been lost at sea. With a report every 15 minutes, an aircraft cruising at a normal speed of 470 knots would be between 0 and 117 nautical miles from the last reporting point, depending on timing. This would narrow the potential search area for aircraft, which in the case of MH370, includes thousands of square miles of ocean, with little hope that the aircraft will ever be found.

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The guidelines from ICAO would be scheduled to be implemented in November 2016, and these recommendations are typically adopted by member countries regulatory agencies, including the FAA, after approval. Continue reading

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