Aircraft Leasing Versus Aircraft Ownership.

Reasons Why Air Carriers and Airlines Lease Aircraft Rather than Purchase It.

Jet Supersonic Air / Via jetsupersonicair.com

September 07, 2016. Frequent travelers, business corporations, operators and airlines prefer leasing airplanes to acquiring them as a result of a number of reasons. These reasons border on the need to meet some specific business goals .

Highlighted below are the key reasons why air carriers and airlines lease aircraft.

1. Financial Burden of Operating and Maintaining Aircraft

Via topfinancialadvisor.org

It is a common knowledge that purchasing aircraft requires a heavy capital. Over 50% of airplanes in the market today is Leased. Leasing aircraft will save cost tremendously rather than purchasing them. For instance, in a large commercial airline, the overall investment capital for aircraft is about $100 million per plane, and if a fleet of 5 airplanes is leased, instead of purchased, the cost is still $100 million.

2. Peak Session Demand

Via gph.is

Air Carriers — after acquiring aircraft — can realize there is a need to have more airplanes in service as a result of the spike in demand during holidays. Additional aircraft can be leased for this purpose; an arrangement could be made for the aircraft to be returned, immediately the demand falls.

3. Focus on Growth

Via jalopnik.com

Leasing planes — in lieu of purchasing them — aids the growth of airlines. This is because it prevents economic uncertainty and offers flexibility.

4. No Waiting Time

Via mtv.com

Leasing aircraft provides an instant access to airplanes all year round.

5. Types of Aircraft Leasing

Safety and legal agencies ensure that Planes are properly maintained. The leasing period for aircrafts usually varies from 3 –15 years. Nowadays, fifty percent of passenger planes operational are leased by airlines from aircraft leasing companies.

Such airplanes are leased under the following types of arrangement:

o Dry Lease

o Wet Lease

o Damp Lease

o Sale and Lease Back