With the announcement of a total lockdown, the domestic and international skies have also been shut for India’s airlines. As a result, India has 650 commercial aircraft parked across 22 airports which will only fly once the government lifts the restrictions. When that date may be, is anybody’s guess. Little known to most, storing aircraft in itself, is a complex process. This is a challenge India’s airlines are facing now and will face continuously in the weeks ahead.

Considerations before storing aircraft

Thorough planning before storing an aircraft helps in a smooth return to service. Critical to this process is ensuring geographic locations are pre-assigned, risk assessments are carried out and support equipment and personnel are lined up. Of 650 aircraft that are currently parked 78% are narrow body jets (mainly the Airbus 320 and Boeing 737s) with the balance split between 8% widebodies and 14% regional aircraft. Majority of these ~80% are on lease compared with the global average of 41%. This effectively means that even while only parking aircraft, there is a cash-outflow in terms of lease rentals each month. The world’s top lessors have leased aircraft to airlines in India.

Source: Ministry of Corporate Affairs, Industry research, Sarin & Co

The lessee i.e. the airline, is responsible for the maintenance and storage, if required, of the aircraft until the termination of the lease. The aircraft must be maintained in accordance with the manufacturer’s maintenance program, the rules and regulations of the aviation authority, the manufacturers type design and in accordance with any other regulations or requirements necessary in order to maintain a valid certificate of airworthiness for the aircraft at all times.

Throughout the lease term, the lessee bears the entire risk of loss, theft, damage and destruction of the aircraft. To cover this risk and various others insurance requirements mandated by the lessor, the lessee maintains various insurance covers. Airlines must do their due diligence before parking aircraft as there could be serious repercussions for not following procedure.

Several have raised the question that do airlines not plan for such “black swans” given the experience with 9/11, SARS, the global financial crisis of 2008. The answer is that some do, while others do not. One can say with complete certainty that in the current case, airlines have had to rush to park aircraft as a scenario like the one posed by COVID-19 was simply was outside the realm of imagination, much less planning possibilities. Even so, the next few days will be critical in ensuring that the aircraft parked have everything in order and airline personnel dot the i’s and cross the t’s.

Procedure for storing aircraft

The procedure to store aircraft is usually outlined in the aircraft manuals and also the maintenance programme. Additionally, regulators have a set of criteria that must be adhered to.

Parking an aircraft is covered extensively with a section dedicated to Parking, Storage and Return to Service. The document further highlights procedures of short-term and long-term storage and the timelines are defined. For instance, for the Boeing 737, a time period of 60 days is considered as a marker. Any aircraft that is being stored for a time period that exceeds 60 days comes under the long-term storage guidelines. This marker may be critical in helping one forecast how soon the restrictions will be lifted.

Before the aircraft is put into storage, fuel and oil-levels are recorded and adjusted as required. The key risk that has to guarded against is contamination of fuel in the wing tanks and ensuring adequate oil levels to guard against parts drying out. Some companies also add an element to fuel tanks called Biobor to keep microbial growth in the tanks at bay.

As far as the airframe is concerned, visual inspections are carried out with all possible inlets being carefully covered. Depending on weather conditions, landing gear and windows may have to be covered. Hydraulics, flaps, slats and APU may have to be periodically tested to ensure that the lubrication is adequate. Avionics may also be powered on to ensure these are in working condition.

Overall a fairly extensive process, with each check requiring detailed documentation and creation of a long paper trail. Most importantly, Lessor’s must be informed in writing about all scheduled or unscheduled maintenance work and storage of aircraft. There are very specific clauses in an aircraft lease agreement which cover maintenance of aircraft and airlines must comply with these at all times.

Engines are especially critical

Engines often comprise of 40% of the total value of an aircraft. In addition to the aircraft storage, engine storage has its own set of requirements. Lessor’s permit airlines to enter into engine maintenance cost per flight hour, power by the hour (PBTH), fleet management programs (FMPs) or similar agreements with engine manufacturers or any other engine maintenance facility, provided the terms of such agreement are fully in compliance with the requirements in the lease agreement. This often helps airlines significantly reduce maintenance costs without compromising on the quality of work.

Engineers – duly trained and certified by the relevant authorities among other things, have to ensure that the engine parts and bearings are properly lubricated, all inlets covered and sealed. Interestingly, each aircraft comes with a set of engine covers and thus one sees aircraft parked with engines covered.

Aircraft engines also need to be run at regular intervals. As an example, when the Boeing 737Max issue surfaced and aircraft were grounded, maintenance programs required that engineers power up the engines once a week so vaporize any moisture in the oil and fuel systems.

For the current grounding this, however, poses a unique complication – in addition to the fleet being grounded there is a complete lockdown, i.e. personnel movement is restricted. Thus, for the 650 aircraft parked it means that 1300 engines with 14 variants across 5 manufacturers will have to be powered on and run at idle for a specific amount of time (depending on manufacturer recommendations). Indeed, over the next few weeks, airlines will likely request access for personnel as the engines will be run on the ground as a part of the regular maintenance process. Ironically, this time the access requests may be ones to get to the airport given the lockdown across the country. But it should be manageable given that cargo operations are continuing across airports.

Source: Industry research, DGCA; data as of Jan 30, 2020

The Cabin and interiors

Inside the aircraft, certain systems must be deactivated. All windows and doors are covered (ideally), as are the landing gear and tires. This is towards protecting them from the elements.

All the carts are emptied out, if required seats are covered with plastic sheets and in certain cases some equipment is removed from the aircraft.

The inside cabin is also aired to ensure minimal moisture and also mitigate any impact of heat (the Indian summer is fast-approaching).

All of this is also critical towards ensuring that the aircraft, once ready to fly, can be put back to use in the fastest possible time.

The return to service

Once the government gives the go-ahead for a return to service, airlines cannot simply take the aircraft and return it to service. Extensive documentation and checks are again carried out. The primary goal of aviation is safety and ensuring continued airworthiness. This also poses a regulatory challenge since a regulator is simply not staffed to oversee such a large volume of aircraft. How the return to service will be managed, remains a matter of much debate within aviation circles.

Early return to Lessor

It is fairly evident that the demand for air travel is going to remain subdued for a considerable period of time because of the COVID-19 pandemic. Indian airlines will, in all likelihood, consider an early return of aircraft back to lessors to both reduce cash outgo in the form of lease rentals and reduce capacity. This involves an early termination option (ETO) yet these come with clauses attached.

It must be borne in mind that aircraft Lessor’s will be extremely reluctant to easily accept an early return of an aircraft without very heavy financial penalties for the airlines. Repricing, renegotiation and revision of terms is contingent on negotiation and without the ability to meet in person this challenge is compounded. It must be remembered that aircraft Lessors too have obligations to their own creditors and an aircraft returned before the end of a lease term, means lost revenue, which no lessor will let go off without seeking compensation from the airline. Nonetheless, returning an aircraft back to a lessor is an extremely complex and detailed process. Airlines have to comply with stringent redelivery conditions stipulated in lease agreements. The aircraft must be in the same condition as it was when it was given on lease to the airline. Apart from that the aircraft must be air worthy, conform to type design and be in a condition for safe operation, with all aircraft equipment, components and systems, operating within limits approved by the manufacturer and the aviation authority. All repair, maintenance and modifications made to the aircraft, including during storage, must be documented and carried out as per procedures set by the manufacturer. This makes it even more pertinent for airlines to follow due procedure while these aircraft are grounded, as there are hefty penalties involved should they not.

Conclusion

The unprecedented suspension of all domestic flights by the DGCA has left the airlines scrambling for parking at airports across the country. No domestic airline has been able to park all its aircraft at a particular airport. We now have a situation where aircraft are parked away from maintenance bases and may not have certified engineers at airports to maintain aircraft and return to service as and when the suspension is lifted.

Parking airplanes was most definitely the easy part, maintaining them while on the ground and getting them back in the air will be an entirely different ball game altogether.