Reading the thread on the pilot sick out at airBerlin and the repossession of their A330 fleet, does anyone know how far along financially behind a repossession takes place of an civilian aircraft?

Is it weeks behind payment, months, years, or just a matter of deterriorating finances at the carrier where the lessor deems the airline unstable and unable to make future payments so they can repo at any time they deem necessary to preotect they're assets?

a lease is a contract which will stipulate how an aircraft can be taken - it's not written to be flexible

Do leasing companies/Banks keep pilots on payroll for repossession flights?

gunsontheroof wrote:

Do leasing companies/Banks keep pilots on payroll for repossession flights?

If it comes to that there are specialist agencies who can do the job. The most famous is Sage Popovitch

https://www.youtube.com/watch?v=iIZhIzmU3x4

gunsontheroof wrote:

Do leasing companies/Banks keep pilots on payroll for repossession flights?

I worked for startup WinAir Airlines (SLC based not Caribbean) in LGB in the late 90's We had at one time a fleet of 2 733 and 4 732. When the company started having financial issues the 733 fleet disappeared. Shortly after we had one 732 sought by the creditor. If I recall correctly registration was N921WA. For a few weeks the aircraft was constantly used in swaps last minute so that the destination wasn't determined until last minute so that the creditor couldn't foresee the arrival in advance and take possession in that city. At night when it was RON I personally towed the aircraft between two general aviation hangars at an FBO on the opposite side of the airfield from the terminal. It made me sweat as the alleyway between the hangars gave less that a foot from each wingtip to the hangar doors. I did this for about two weeks. The plane was basically hidden.

I did get a chance to sit jump seat once we turned it over to the creditor with our in house pilots and one flight attendant staffed in the cabin. We ferried the aircraft LGB to LAS and parked at the Signature Aviation FBO and were met by the creditor and gave possession of the aircraft to them.

Interesting experience. The one thing I will always remember was the turn outside of Long Beach harbor between Catalina the pilots had a little fun and I got to experience about 10 seconds of weightlessness.

To answer some questions. The leasing company agents first take possession of the maintenance log. How quick is per contract and how likely the leasing company will gain or lose future revenue or asset value.

jmonroe wrote:

a lease is a contract which will stipulate how an aircraft can be taken - it's not written to be flexible

Exactly. It isn't just payment, but also preserving the value of the assets. It amazes how much more proactive leasing companies are after Kingfisher.

Lightsaber

I enjoyed the reality tv show "Airplane Repo" -- some episodes are on you-tube ( https://www.youtube.com/results?search_ ... plane+Repo ).

Sure it had its 'made for tv' moments ( i.e. late in the series a muscle-bound enforcer and then a young female co-pilot showed up ) but I think there was a lot of aspects of the 'cat and mouse' game that had to be accurate.

I wish it had covered more than just the field work. I think some of the interactions between the debtor and the lessor would be entertaining.

Even the electronic boxes can be re-possessed.

I remember one occasion where there was a chartered 747 in Penang (PEN) and someone showed up with a court order to re-possess a box. In this case someone somewhere must have rushed down to the ATM machine as it was settled without requiring actual repossession.

These are just tactics to get payment. I'm sure the guy who showed up did not really want to carry an electronic box back to the states but it could have potentially caused serious delay and impacted further business for this particular operator.

Also there are certain countries where it is easier to get a court order to hold an airplane. There was a period when Philipine Airlines was going thru a bad patch and the owners got a court order in HKG so that when the aircraft landed it could not depart.

Most airlines are very conscious of the differing laws in various countries and take steps to safeguard their property. Recently when Tiger Air (singapore) ceased their joint venture with Mandala Air, the PK registered birds were ferried to Malaysia to avoid problems with the Indonesian government during the de-reg/re-registration process. This was pre-emptive measure by hthe owner, either Tiger or actual owner.

bug

Revelation wrote:

I enjoyed the reality tv show "Airplane Repo" -- some episodes are on you-tube ( https://www.youtube.com/results?search_ ... plane+Repo ).

Sure it had its 'made for tv' moments ( i.e. late in the series a muscle-bound enforcer and then a young female co-pilot showed up ) but I think there was a lot of aspects of the 'cat and mouse' game that had to be accurate.

I wish it had covered more than just the field work. I think some of the interactions between the debtor and the lessor would be entertaining.

Hehe I was wondering how long it would take for someone to bring that up. It was interesting to watch, although as the reenacted nature became more obvious the interest waned. In the end a friend (also a pilot) and I used to watch it to laugh at how much it was hammed up!

V/F

Usually a repossession doesn't come as a surprise to the leasee or borrower. Leasors and funders have regular meetings with customers, and they become more frequent, as the customer's financial position deteriorates / payments are overdue.

Most repossessions are amicable, and occur without making the news.

While financial covenants in a contract differ between lenders and leasors, if a financial contract is terminated for non-payment with one lender or leasor, that will trigger a generic covenant default with all the remainder.

Having been put on notice, other lenders and leasors can choose to continue, or trigger their own contract terminations.

For difficult clients, the next step for the lender / leasor, is a chat with the aircraft and engine OEM's, and with the country's airworthiness authority (if not paying key creditors, it's possible maintenance and safety corners are being cut).

In respect to Air Berlin, the repossession is not hostile by the leasor.

From the moment an administrator or receiver takes possession, the old liabilities are frozen, and the administrator / receiver is responsible for all new liabilities and costs going forward. So a rapid assessment is required, and action taken.

If the entity continues to exist, it would be premature to assume these aircraft won't fly again for Air Berlin.

I have been involved in several aircraft repossessions. (On the flying out side of things)

A lot depends on the country involved and there are a wide variety of protections that are taken on repossessed aircraft. I am sure everyone remembers a certain Indian carrier which also had a beer company, I was involved in picking up a few of their 320 which were parked several places in India. The aircraft were in absolutely terrible shape, some aircraft had been used for parts, others had nothing done to them in months, dead batteries, APUs which faulted....the list goes on and on. Oh, and no maintenance records.

We probably ferried about 20% of the aircraft we went to pick up. The company which leased the aircraft was not too forthcoming on the shape of the aircraft, where they were. All in all, it was not a very pleasant experience. Threats were made to call the airport police, the continual arguing over who owned the aircraft and ultimately, what right did we have to take the aircraft.

The only good thing is we got paid no matter if the aircraft was removed or not. I have done some in Europe and the US and it's much smoother operation than it ever was in India.

gunsontheroof wrote:

Do leasing companies/Banks keep pilots on payroll for repossession flights?

They might be contracted with re-possession companies. I worked for such a company years ago..

mmo wrote:

... I am sure everyone remembers a certain Indian carrier which also had a beer company, I was involved in picking up a few of their 320 which were parked several places in India. The aircraft were in absolutely terrible shape, some aircraft had been used for parts, others had nothing done to them in months, dead batteries, APUs which faulted....the list goes on and on. Oh, and no maintenance records.

We probably ferried about 20% of the aircraft we went to pick up. The company which leased the aircraft was not too forthcoming on the shape of the aircraft, where they were. All in all, it was not a very pleasant experience. Threats were made to call the airport police, the continual arguing over who owned the aircraft and ultimately, what right did we have to take the aircraft.

The only good thing is we got paid no matter if the aircraft was removed or not. I have done some in Europe and the US and it's much smoother operation than it ever was in India.

Do you have any proof of what you are claiming, like type or regs? Air Works (India) revived most of King Fisher's AOG aircraft. Only a handful was done by non-Indian MROs.

Revelation wrote:

I enjoyed the reality tv show "Airplane Repo" -- some episodes are on you-tube ( https://www.youtube.com/results?search_ ... plane+Repo ).

Sure it had its 'made for tv' moments ( i.e. late in the series a muscle-bound enforcer and then a young female co-pilot showed up ) but I think there was a lot of aspects of the 'cat and mouse' game that had to be accurate.

I wish it had covered more than just the field work. I think some of the interactions between the debtor and the lessor would be entertaining.

Honestly I question exactly how realistic that show is. I've only seen a few episodes but from what I remember there's a disclaimer in the credits stating that the show is a "reenactment" or something like that depicting the kinds of situations an airplane repo guy might encounter, not actual footage of actual incidents. That makes me wonder if it's "reenacted" in a way to make it seem much more dramatic than it would actually be in real life.

Yflyer wrote:

Revelation wrote:

I enjoyed the reality tv show "Airplane Repo" -- some episodes are on you-tube ( https://www.youtube.com/results?search_ ... plane+Repo ).

Sure it had its 'made for tv' moments ( i.e. late in the series a muscle-bound enforcer and then a young female co-pilot showed up ) but I think there was a lot of aspects of the 'cat and mouse' game that had to be accurate.

I wish it had covered more than just the field work. I think some of the interactions between the debtor and the lessor would be entertaining.

Honestly I question exactly how realistic that show is. I've only seen a few episodes but from what I remember there's a disclaimer in the credits stating that the show is a "reenactment" or something like that depicting the kinds of situations an airplane repo guy might encounter, not actual footage of actual incidents. That makes me wonder if it's "reenacted" in a way to make it seem much more dramatic than it would actually be in real life.

Repossessing airplanes is a no joke idea. Out of the USA it can get you Killed really easily. I worked with a team to repossess an airplane at a Miami Repair center when the airplane was getting a new interior. We had to bring in police and our own security after the airplane had the cabin removed and it was being stripped. The repossessing company didn't care about the airplane's interior as it was going to become a freighter.

I always felt that the original episodes of "Airplane Repo", looking at the operations of Sage Popovitch, were fairly realistic. It was the newer episodes that got to be the stuff that reality TV is made of. Although, anyone doing repossession of general aviation aircraft probably does deal with angry owners who don't want their planes taken.

I remember reading an interview of Nick Popovitch. He said that he had a repo in foreign country. Of course, he was arrested for what was believed to be the theft of an aircraft. He was put in jail for a while. To avoid problems with other detainees, he started to act like a "crazy person". It worked, since no one gave him any trouble.

A friend of mine who is a pilot with one of the US legacies said that before 9/11, it was a common practice for U.S. carriers (particularly the LCCs) to miss a payment on purpose. That generally triggered clauses that deemed the lease as terminated. So, the lessor would simply renegotiate the lease.

After 9/11, lessors started taking back the aircraft, rather than renegotiate. The health of all carriers was in doubt, and lessors wanted their aircraft returned.

dtw2hyd wrote:

mmo wrote:

... I am sure everyone remembers a certain Indian carrier which also had a beer company, I was involved in picking up a few of their 320 which were parked several places in India. The aircraft were in absolutely terrible shape, some aircraft had been used for parts, others had nothing done to them in months, dead batteries, APUs which faulted....the list goes on and on. Oh, and no maintenance records.

We probably ferried about 20% of the aircraft we went to pick up. The company which leased the aircraft was not too forthcoming on the shape of the aircraft, where they were. All in all, it was not a very pleasant experience. Threats were made to call the airport police, the continual arguing over who owned the aircraft and ultimately, what right did we have to take the aircraft.

The only good thing is we got paid no matter if the aircraft was removed or not. I have done some in Europe and the US and it's much smoother operation than it ever was in India.

Do you have any proof of what you are claiming, like type or regs? Air Works (India) revived most of King Fisher's AOG aircraft. Only a handful was done by non-Indian MROs.

I guess I don't quite understand what you are asking. There were never aircraft which were ferried that were not in airworthy condition. We attempted to take several that were supposedly airworthy but their condition left quite a bit to be desired. There were issues with engine serial numbers not matching, APU not servicable with numbers not matching. The list goes on and on. Just about everything which could be leased on the aircraft was. Brakes/tires were all leased and it created quite a headache in terms of paperwork. Most of the aircraft I went after were 320s.

Much of what is being described, seems to be ancient history (or more recent for NB), relating more to elderly aircraft which are on a final (or close to it) lease or funding. Or GA.

New commercial aircraft and their key components, are inspected by independent third parties 2-4 times a year. More often if payments are in arrears, or deemed to be at risk.

Banks and owners track aircraft and all major component movements, especially lack of movement, and maintenance too, including missed and late, all of which are default T&C's.

It wasn't always this way. Leased aircraft would be returned end of lease with close to expiry engines, plus other components switched. Potentially more issues if customers owned and leased aircraft with interchangeable parts.

As aircraft age, a wider range of leasors and financiers are attracted, some not so skilled and knowledgeable, with aircraft supplied to less skilled, knowledgeable and well funded operators.

Where it gets really complex, is when aircraft have more than one layer of ownership. For example, a used aircraft purchase from an owner airline, and the leasor stops making payments to the airline, but leasee is up to-date with the leasor.

With aircraft like the 787, it's possible to ground an aircraft from the other side of the World. The critical thing then is to secure the aircraft so it's not destroyed or damaged.

Even less reputable countries want to stabilise or improve EXGO credit lines, guarantees, and ratings, so will often intervene to smooth the process.

When Malév had been liquidated one could watch all their 737s flying back to the US one behind another on FR24. That chain of birds crossed the pond in the afternoon/early evening of the very same day piloted by Malév crews. Quite a nasty job, I think - just as if they had been forced to dig their own graves.

Planesmart wrote:

Much of what is being described, seems to be ancient history (or more recent for NB), relating more to elderly aircraft which are on a final (or close to it) lease or funding. Or GA.....

Thank You, Planesmart for bringing some reality to this discussion.

Any truth behind the claims that every plane in the world (except in India) having all parts with matching serial numbers from the delivery bill of material. How do lessors handle these cases particularly if there was an engine swap?

mmo wrote:

I guess I don't quite understand what you are asking. There were never aircraft which were ferried that were not in airworthy condition. We attempted to take several that were supposedly airworthy but their condition left quite a bit to be desired. There were issues with engine serial numbers not matching, APU not servicable with numbers not matching. The list goes on and on. Just about everything which could be leased on the aircraft was. Brakes/tires were all leased and it created quite a headache in terms of paperwork. Most of the aircraft I went after were 320s.

Were you part of the AOG team or ferry crew. Were the planes deregistered or your team showed up pending legal case.

Sure KF repo was a mess because laws conflicting with Cape Town Treaty, but the legal system worked and Cape Town reigned supremacy and all KF birds found new homes.

Since KF, a lot of SpiceJet, Air Costa, Air Carnival, and other frames were repoed rather quickly without much fuss.

I had it easy, I was just the Captain on the ferry crew. Supposedly every thing was good to go, but once there it was very different. This was years ago and I have no clue what happened to the aircraft, and I really don't care either. The planes had been deregistered and had all the documents for the applicable country. However, the reg was only temporary and it was pending an Airworthiness Cert being issued.

Revelation wrote:

I enjoyed the reality tv show "Airplane Repo" -- some episodes are on you-tube ( https://www.youtube.com/results?search_ ... plane+Repo ).

Sure it had its 'made for tv' moments ( i.e. late in the series a muscle-bound enforcer and then a young female co-pilot showed up ) but I think there was a lot of aspects of the 'cat and mouse' game that had to be accurate.

The whole thing is dramatised or recreated. None of it is shot on a 'real' job.

Yflyer wrote:

Honestly I question exactly how realistic that show is. I've only seen a few episodes but from what I remember there's a disclaimer in the credits stating that the show is a "reenactment" or something like that depicting the kinds of situations an airplane repo guy might encounter, not actual footage of actual incidents. That makes me wonder if it's "reenacted" in a way to make it seem much more dramatic than it would actually be in real life.

I have seen episodes of Airplane Repo, and I agree with you. What I find unrealistic is when they show scenes of the aircraft in flight with external camera views. They are always in such a hurry to take off, however they seem to have enough time to mount belly cameras, sometimes multiple cameras are shown on the TV show. Some external camera views are on business jets, which would require more than a quick installation with duct tape.

When SY came out of Chap 11 in 2002. All the planes had a placard located next to main door..L1, stating.." MN Airlines Inc. LLC aba "Sun Country Airlines" " This was done as MN Airlines Inc. was a new company that purchased all assets of Sun Country Airlines. with that note on the planes they could not be repossessed. I asked about it, and it was a founder/owner of MN Air. that replied during a Q&A after the purchase of assets.

Or do what airport authorities do when they don’t get paid and park a big honkin snow plow in front of the thing.. It’s not going anywhere, I think YYZ ended up with an ex Royal Airlines/Canada 3000 737-200 when they siezed the aircraft on the ground. Somebody on here probably knows the details of that debacle..

sunking737 wrote:

When SY came out of Chap 11 in 2002. All the planes had a placard located next to main door..L1, stating.." MN Airlines Inc. LLC aba "Sun Country Airlines" " This was done as MN Airlines Inc. was a new company that purchased all assets of Sun Country Airlines. with that note on the planes they could not be repossessed. I asked about it, and it was a founder/owner of MN Air. that replied during a Q&A after the purchase of assets.

Just as for motor vehicles, ships and other assets, there are online registers of ownership and credit interest. In 2017, you would be dealing with very unprofessional characters if they needed placards as reminders.

Kilopond wrote:

When Malév had been liquidated one could watch all their 737s flying back to the US one behind another on FR24. That chain of birds crossed the pond in the afternoon/early evening of the very same day piloted by Malév crews. Quite a nasty job, I think - just as if they had been forced to dig their own graves.

IIRC almost all flew BUD-SNN on the evening of the carrier's collapse. They were parked there pending decisions on their future but the B736s went on to the US fairly swiftly as they were destined for retirement. The B737s and B738s found new homes with various carriers and I don't think this generally involved them being flown to the USA.