Jetrader - July/August 2011 - 26

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ADVANCED TECHNOLOGY WINGLET SYSTEMS Aviation Partners Boeing ............................................................................. 14, 15 www.aviationpartnersboeing.com AERO ENGINEERING Complete Turbine Services, LLC........................................................................ 26 www.completeturbine.com AIRCRAFT ENGINES CFM International, S.A. .............................................................Inside Front Cover www.cfm56.com AIRCRAFT FINANCING Aviation Capital Group ............................................................ Outside Back Cover www.aviationcapital.com AIRFRAME/ENGINE PARTS Chromalloy .......................................................................................................... 8 www.chromalloy.com AVIATION TRAINING & EDUCATION Broward College Aviation Institute ........................................... Inside Back Cover www.broward.edu CONSULTING AVITAS ................................................................................................................ 6 www.avitas.com FREIGHTER CONVERSION Airbus Freighter Conversion GmbH ................................................................... 18 www.afc.aero.com INFORMATION TECHNOLOGIES AerData B.V. ...................................................................................................... 23 www.aerdata.com LINE MAINTENANCE DeVos Borescope Blending LLC......................................................................... 20 www.borescope-blending.com MODIFICATIONS TIMCO ................................................................................................................. 4 www.timco.aero NEWS Flight ........................................................................................ Inside Back Cover www.ﬂightglobal.com OVERHAUL SERVICES Lufthansa Technik AG ......................................................................................... 3 www.lufthansa-technik.com POWER PLANT DeVos Borescope Blending LLC......................................................................... 20 www.borescope-blending.com Tradewinds Engine Services, Inc. ...................................................................... 20 www.tradewindsengine.com

Continued from page 16 An event of loss causes a forced replacement—it simply must be done and the lessee’s insurers will likely pay the bill. By contrast, the dynamics of a discretionary replacement for the convenience of the lessee are different. The lessor’s veto right given in the context of a loss could unfairly limit the lessee’s ability to conduct a discretionary exchange and having too many restrictions would dilute this right. To address this, the parties can document comprehensive and objectively measurable conditions within which the lessee could have free reign to substitute engines. For example, the selection of candidate engines from within the lessee’s ﬂeet should address the pedigree and recordkeeping issues. Imposing margin requirements could provide a cushion for condition. Lastly, the lease return conditions, ongoing maintenance requirements and existing inspection rights provide backstop protection for the lessor. In the ﬁnal analysis, if the parties can agree as a fundamental concept that each maintains an equal footing in the context of discretionary engine exchanges, then there is no cost to providing ﬂexibility—only the beneﬁt of a cooperative and positive working relationship. Don Mitchell is a partner with the law ﬁrm of Smith, Gambrell & Russell, LLP and concentrates his practice in U.S. and cross-border aviation equipment ﬁnance transactions and litigation. Please email any questions, comments or suggestions for future topics to: dbmitchell@sgrlaw.com ©2011 Donald B. Mitchell 26 The ofﬁcial publication of the International Society of Transport Aircraft Trading

http://www.aviationpartnersboeing.com http://www.aerdata.com http://www.completeturbine.com http://www.borescope-blending.com http://www.cfm56.com http://www.timco.aero http://www.aviationcapital.com http://www.flightglobal.com http://www.chromalloy.com http://www.lufthansa-technik.com http://www.broward.edu http://www.borescope-blending.com http://www.tradewindsengine.com http://www.avitas.com http://www.afc.aero.com http://www.completeturbine.com

Jetrader - July/August 2011

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