TUI Group - End of Lease Return Conditions Review
Nyras was asked to complete a number of detailed fleet lease reviews including 757s and 767s for group airlines (Thomson Airways and TUIfly Nordic). Key tasks involved:
- Reviewing engineering reserves compared with the current maintenance status of each aircraft.
- Identifying areas where maintenance plans and lessor return conditions were not aligned.
- Interpreting lease contract provisions and advising our client on areas where clarity should be sought.
- Reviewing insured values for aircraft.
- Developing lease summaries.
We consolidated a team with extensive experience in this area to conduct detailed reviews into the adequacy of the engineering reserves and then used ‘flying forward’ models to identify maintenance events, likely remaining maintenance spend and return condition compensation to end of the lease. We also identified areas where maintenance plans and lessor return conditions were not aligned and helped the client highlight areas of their contract that required greater clarity from the lessor.
Our thorough review of insured values of the aircraft took into consideration current market values, actual insured values and the value of similar vintage aircraft in the Thomson fleet. This in-depth analysis provided us with the insight to development through end of lease summaries.
Nyras produced detailed schedules for each aircraft, identifying avoidable engineering work planned, errors and omissions in end of lease exposure calculation, and accounting discrepancies in maintenance reserves including over-accruals or under-accruals.
This allowed us to identify benefits of around £10.3m across the Thomson Airways fleet during the first exercise and £2m during the second exercise. A subsequent review for sister company TUIfly Nordic identified additional cost-saving opportunities of over £1.3m.