Aircraft Corp provides airplanes and services to commercial airlines and shipping companies on a multi-year basis. A typical contract stipulates that Aircraft Corp will provide the airplane, crew, maintenance, and insurance (ACMI) for the customer at any time during the term of the contract. Flight schedules are planned weeks in advance. Aircraft Corp has numerous planes in different locations and the legal right to provide any aircraft meeting the minimum requirements stipulated in the contract. The planes have various specifications, such as their size, fuel efficiency, and registration (i.e., which jurisdictions they can be flown in), interior layout (i.e., furniture and entertainment systems), or external paint color. Idle airplanes can be substituted for airplanes in use. Aircraft Corp’s practice is to keep its airplanes flying as much as possible and, as a result, the airplane is rarely grounded for more time than is needed to service it for the next flight.
Aircraft Corp signs a multi-year ACMI contract with Customer Corp. The contract
does not specify a particular airplane; only the model type and relevant characteristics of the airplane for a minimum of 400 hours each month. As such, the contract is silent to substitution rights. Aircraft Corp has several of this particular model in its airplane inventory.
Does the contract explicitly or implicitly identify an asset to be used to fulfill the contract?
