Maintenance, Repair and Overhaul (MRO) Agreements

Across the industry there are a myriad of MRO agreements relating to aircraft, engines and the multitude of components that make up a modern aircraft.

We have recognised experts in the field with years of international experience gained both in-house and in private practice.

Whether you are a purchaser or provider of MRO services we can help you ensure that you enter into these agreements on appropriate terms. Many companies around the globe select English Law and jurisdiction to govern these agreements. However our industry knowledge makes us a good choice to advise even where English law is not selected. We often work as part of a team with in-house lawyers, engineers and local legal experts.

Time and Materials (T and M) Agreements

The traditional way of contracting for MRO services was on a T and M basis. These agreements leave the maintenance cost risk on the operator and simply provide for the man hour rates and material costs that will apply in relation to any maintenance requirements.

Many agreements are still negotiated on this basis. We can help you ensure that the key aspects of these agreement are fully considered. For example the liability and insurance provisions, termination rights and remedies for poor performance.

Flying Hour Agreements (FHAs)

 Manufacturers and MRO service providers may also propose a flying hour solution for MRO services. The rationale for these agreements is that the cost risk is transferred to the MRO service provider and the operator has a predictable cost which is spread across flying hours to smooth the cost impact on the business.

We have built up a significant amount of international experience advising on such arrangements for different carriers with a range of different suppliers in relation to different types of equipment.

Engine Maintenance FHAs

Engine manufacturers offer their customers attractive commercial terms on acquisition in conjunction with long term flying hour maintenance support.

Operators and their financiers need to ensure they pay sufficient attention to the after sale aspects of an acquisition. The value of a 20 year FHA may exceed the initial acquisition cost. These agreements are generally tailored to the individual customer, it is vital that sufficient attention is focused on them.

Operators recognise the importance of evaluating the through life cost of an asset as part of their procurement decision. The terms of the maintenance support agreements are an important contributor to the costs and risks associated with the through life analysis.

For example, a failure to properly scope the extent of the services covered by the flying hour rate may have expensive long term consequences. In addition, a lack of sufficient contractual flexibility for the carrier can severely impact upon its future fleet planning decisions. In order to have the best chance of getting these agreements right, specialist legal advice is required.

We have extensive experience of these agreements. For example we  advised British Airways on the flying hour maintenance agreements that will provide support for its Boeing 787 and Airbus A380 powerplants.

Commercial advice in this area is led by Roger Whipp. Roger spent 10 years working with British Airways’ in-house legal team where his responsibilities included advising on powerplant procurement.