The Issue
The engines required scheduled shop visits during the term of the lease which would be covered under the Rolls Royce Total Care Agreement (TCA). However, the redelivery requirements meant a further shop visit was necessary on both engines immediately prior to handback. These further shop visits would not be covered by the standard TCA, resulting in the airline potentially incurring a $17M cost for the additional shop visit. This cost would be over and above any regular payments to Rolls Royce for the TCA.
The TGIS Aviation Solution
On TGIS Aviation’s recommendations, the redelivery conditions were renegotiated to minimise the risk of a redelivery shop visit. In addition, discussions with Rolls Royce took place to align future handback shop visits with the new redelivery conditions under the TCA. Due to these actions, the risk of an airline funded shop visit was removed.
Outcome for our Client
The airline was able to maximise the benefit of cost exposure through bringing TGIS Aviation into the contract negotiations.
