Essentially, aircraft leasing is a financial arrangement in which an airline or other company rents an aircraft from a lessor for a specified period, which can extend from a single dedicated flight to even an entire lifetime of an airplane.
This practice is not new in commercial aviation.May 1, 2023.
The leasing company uses its capital to buy an aircraft and provide it to the operator in exchange for being paid for its use on a monthly or yearly basis.
The ownership lies with the leaser.
Usually, it is a short-term recourse not exceeding ten years..
The lessee has the right to use the asset (an aircraft) and in return must make periodic payments to the lessor, the owner of the asset.
From an airline perspective, the lessee (airline) is trying to make a financing decision between leasing an aircraft vs. purchasing the aircraft..
Returning to our price examples, dry leasing a 787 would cost an airline between $800,000 to $1.25 million a month, according to 24/7 Wall St., much lower than the purchase price.
Meanwhile, the popular A320neo would cost an airline $370,000 a month to lease, according to Aircraft Value News; a more manageable cost..
In order to lease an aircraft, a lessee and lessor must sign an aircraft lease agreement, which defines the terms of the lease, such as who is responsible for operating and maintaining the aircraft, the length of the lease and so on..
Top companies in the market
According to the Airfinance Journal, the top 10 aircraft leasing companies in the world by fleet value as of December 2020 are AerCap, GECAS, Avolon, Air Lease Corporation, SMBC Aviation Capital, BOC Aviation, BBAM, ICBC Leasing, DAE Capital, and CDB Aviation.Sep 29, 2023.
In aviation, there are two types of leasing arrangements -- wet leasing and dry leasing.
Wet leasing is an arrangement where the lessor provides an aircraft and the crew too.
So here, the lessor is responsible for the operational maintenance of the flight..
According to the Airfinance Journal, the top 10 aircraft leasing companies in the world by fleet value as of December 2020 are AerCap, GECAS, Avolon, Air Lease Corporation, SMBC Aviation Capital, BOC Aviation, BBAM, ICBC Leasing, DAE Capital, and CDB Aviation..
According to the Airfinance Journal, the top 10 aircraft leasing companies in the world by fleet value as of December 2020 are AerCap, GECAS, Avolon, Air Lease Corporation, SMBC Aviation Capital, BOC Aviation, BBAM, ICBC Leasing, DAE Capital, and CDB Aviation.Sep 29, 2023.
Wet lease, damp lease, and dry lease, which are terms used to describe different levels of service and responsibility in aircraft leasing: 1.
Wet Lease: In a wet lease, the lessor provides not only the aircraft but also the crew (including pilots and cabin crew), maintenance, and insurance.Jul 3, 2023.
In general terms, a lease is a transfer of an aircraft without transfer of title.
The owner of the aircraft, or lessor, retains legal title to the aircraft, but transfers possession of the aircraft to the lessee..
Aircraft leases are leases used by airlines and other aircraft operators.
Airlines lease aircraft from other airlines or leasing companies for two main reasons: to operate aircraft without the financial burden of buying them, as well as to provide temporary increase in capacity..
Lease. “… contractual arrangement whereby a properly licensed air operator gains commercial control of an entire aircraft without transfer of ownership”. (ICAO Doc 8335)..
In general terms, a lease is a transfer of an aircraft without transfer of title.
The owner of the aircraft, or lessor, retains legal title to the aircraft, but transfers possession of the aircraft to the lessee..
2.1.
Aircraft leasing started in the early 1970s and is a still rapidly growing business..
AerCap is the largest aircraft leasing company in the world with a fleet value of $34.7 billion and 1,080 aircraft in service or on order.Sep 29, 2023.
Air Lease Corporation is a leading aircraft leasing company principally engaged in purchasing commercial aircraft and leasing them to its valued airline customers worldwide..
Aircraft Leasing Market Summary:
The global Aircraft Leasing market size was valued at USD 48677.08 million in 2023 and is expected to expand at a CAGR of 4.78% during the forecast period, reaching USD 64406.47 million by 2031..
ILFC and one of its founders, Steven Udvar-Hazy, became synonymous with aircraft leasing, and Hazy became a capable spokesperson of the industry.
The firm was founded in 1973, and by 1980, it controlled 17 aircraft..
Leasing an engine is a great way to keep your aircraft flying while your engines are due for a Shop Visit and subsequent repair at an MRO shop.
There is no heavy upfront investment required, and you do not have to deal with residual value risks while maintaining aircraft utilization targets..
Leasing allows airlines to optimize their fleet size, respond to market demands quickly, and avoid the risks of aircraft ownership.
It also provides leasing companies with a steady revenue stream and the ability to manage their asset portfolio effectively.Jul 3, 2023.
Aircraft leases are leases used by airlines and other aircraft operators.
Airlines lease aircraft from other airlines or leasing companies for two main reasons: to operate aircraft without the financial burden of buying them, as well as to provide temporary increase in capacity..
Each month you pay your loan and you can use the apartment however you want (in accordance with your contract, of course)
After the 25 years, the apartment is yours – you can sell it, rent it or live in it
The choice is yoursSimilarly to this, aircraft leasing works pretty much the same
20 years later, the number has risen to almost 50%
In total, leasing companies around the world own more than 12 000 various aircraft – from the Super Jumbo Airbus A380 to small jets like the Bombardier CRJ200
However, most leasing companies own a huge amount of narrow-body aircraft like the Boeing 737 or the Airbus A320
Firstly, let’s begin with the wet lease
When an airline wet leases an aircraft, the leasing company provides literally everything – the aircraft itself, pilots and cabin crew
Furthermore, the leasing company also takes care of maintenance and insurance
Essentially, you can have 0 aircraft that you own as a company and still run an airline
However, most leasing companies own a huge amount of narrow-body aircraft like the Boeing 737 or the Airbus A320
They have the biggest profit margins for lessors, as when switching operating airlines, preparing a narrow body aircraft is much cheaper than say, a Boeing 787
Global aviation holding company
Topics referred to by the same term
Global aviation holding company
Topics referred to by the same term
