Lee Buying an airplane can be a daunting task, but if you have a plan and follow it, the process can be a lot less intimidating. With that goal in mind, here are 20 tips for buying an airplane that will help you go from dreaming to owning. But with preparation, the right knowledge and a little bit of luck, buying an airplane can be an enjoyable and rewarding experience.
By directly owning their aircraft, operators may deduct depreciation costs for tax purposes, or spread out depreciation costs to improve their bottom line. Operating Leasing Operating leases are generally short-term less than 10 years in durationmaking them attractive when aircraft are needed for a start-up venture, or for the tentative expansion of an established carrier.
The short duration of an operating lease also protects against aircraft obsolescence, an important consideration in many countries due to changing noise and environmental laws. In some countries where aircraft broker business plan may be deemed less creditworthy e.
Moreover, it provides the flexibility to the airlines so that they can manage fleet size and composition as closely as possible, expanding and contracting to match demand.
Conversely, the aircraft's residual value at the end of the lease is an important consideration for the owner. The owner may require that the aircraft be returned in the same maintenance condition e.
US and UK accounting rules differ regarding operating leases. In the UK, some operating lease expenses can be capitalized on the company's balance sheet; in the US, operating lease expenses are generally reported as operating expenses, similarly to fuel or wages.
The operating lease can afford the airlines flexibility to change their fleet size, and create a burden to the leasing companies. Finance Leasing Finance leasing, also known as "capital leasing", is a longer-term arrangement in which the operator comes closer to effectively "owning" the aircraft.
It involves a more complicated transaction in which a lessor, often a special purpose company SPC or partnership, purchases the aircraft through a combination of debt and equity financing, and then leases it to the operator.
The operator may have the option to purchase the aircraft at the expiration of the lease, or may automatically receive the aircraft at the expiration of the lease.
The various forms of finance leasing include: Most commonly used in North America. Although an EOL resembles a finance lease, the lessee generally has the option to terminate the lease at specified points e.
Whether EOLs qualify as operating leases depends on the timing of the termination right and the accounting rules applicable to the companies. Under a JLL, the airline receives tax deductions in its home country, and the Japanese investors are exempt from taxation on their investment.
JLLs were encouraged in the early s as a form of re-exporting currency generated by Japan's trade surplus Hong Kong leveraged lease: Its high tax losses can then be set off against profits from leasing the aircraft to a local carrier. Private aircraft finance options provide a variety of ways to purchase or lease an aircraft that can be tailored to meet the financial needs of almost any business or individual with ongoing need for access to a business jet.
The aircraft financing professionals at TPJC stand ready to discuss all your options and arrange a financing solution to meet your business jet purchasing needs. Please contact us at Private Aircraft Leasing Since our founding ten years ago, The Private Jet Company TPJC has expanded its offerings to meet the diverse needs of our international client base, from finding the perfect aircraft or ideal buyer, to arranging the best access and operating arrangements, such as through our aircraft leasing services.
Aircraft Leasing Basics Aircraft leases are often used by private aircraft operators, as leases provide the same level of access to an aircraft that ownership provides, without the capital expenditure buying a business jet requires.
Leases are offered in two main forms: Under wet leases, flight crews are provided in tandem with the aircraft, while operators of dry leased aircraft supply their own crews. Combination wet-dry leases may also be offered, as when an aircraft is wet leased to establish service, and once an in-house flight crew is trained, switched to a dry lease.
Wet Lease In a wet lease arrangement, the financing entity, or lessor, provides the aircraft, and complete crew, maintenance and insurance ACMI to another party at a cost based on hours of operation over a set time period.
The lessee pays for fuel, airport fees, duties, taxes and other operational costs. Wet leases generally are established for one to 24 months.
Any shorter period would be considered simply ad hoc charter, which can be thought of as wet lease by the hour or mission. In the commercial airline world, wet leases are typically utilized to provide supplemental lift during peak traffic seasons or during annual heavy maintenance checks.
Dry Lease With a dry lease, the lessor provides the aircraft without crew. These arrangements are favored by leasing companies and banks, and require the lessee to put the aircraft on its own AOC and provide aircraft registration.Talk to a business owner who uses a company-owned aircraft and you’re likely to hear about a deal team members made or saved because they could reach a client in a single day or an incredible multi-stop trip that took just days instead of weeks.
Brokers or Professional Buyers, acting on behalf of an end client, either a corporation or an individual, to charter an aircraft or helicopter.
Marketing Agents, selling aircraft charter on behalf of Aircraft and Helicopter Operators on an exclusive marketing basis. The best business plan solutions can be tailored by industry, incorporating highly relevant metrics into your aircraft broker company's business plan.
Our list of business plan software packages offers a comprehensive guide to the best solutions on the market. In aviation professionally now 15 years, he is an active instrument-rated Private Pilot and owns a Cessna turbo H.
An airline which has bought an aircraft, sells the aircraft to a leasing company at current market price and immediately leases the same aircraft back. Airliners typically purchases s of planes in bulk and sells them to banks and then leases them back.