Investments in Airplane Leasing
What is it? - A type of leasing by which a lessor allows a lessee to lease an airplane and/or a combination of flight crew, ground crew, fuel, maintenance, and other flight-related necessities
Generally used as a:
Means for airlines to meet higher demands in the market or volumes of customers
Means for airlines to avoid financial burden of purchasing aircraft
Return on investment for airplane leasing is usually in the 12-15% range
Having assets and liabilities worth >$10 million is not uncommon, and larger leasing investors can easily control aircraft worth more than $100 million.
Types - Airplane leases usually occur in the “wet”, “dry”, and “damp” varieties.
Wet leases are leases in which the lessor provides …show more content…
Longer term
Some airlines will continuously renew dry leases to avoid purchase
Damp leases are leases in which the lessor provides everything (similarly to a wet lease) except the cabin crew.
How to invest - Overall, investing is fairly straightforward. Below are basic steps to follow when investing in airplanes.
Acquire capital: In addition to loans, savings, cash, etc, co-ownership of airplanes is a good way to be able to own them.
Co-ownership occurs when multiple people agree to mutually pay for and share an aircraft.
Co-ownership can be very cheap, as one individual will only pay a small portion of the total cost.
Purchase airplane: To know which type of airplane(s) to choose, market research is key.
If starting out small, general aviation aircraft such as the ones made by Cessna, Piper, Beechcraft, and Mooney are great aircraft.
Maintenance on these smaller airplanes is generally cheap and easy, and the aircraft themselves are extremely reliable.
Larger aircraft, such as ones made by Boeing, Airbus, Embraer, and Bombardier are reliable as well and in high demand.
Lessors of large aircraft will sometimes need to maintain …show more content…
Lease Airplane: The airplane market is volatile, but airplanes are in demand.
Well-known airlines, such as Emirate, Air Canada, Delta, British Airways, etc, are always looking for more a bigger and better fleet.
Direct emailing, phone calling, and professional meetings with lessees will help to be able to secure leases.
Possible pitfalls - There are still scenarios in which money and lives can be lost.
Maintenance: The FAA upholds strict and rigorous guidelines to follow when operating aircraft, and failure to comply can mean fines, or even jail.
The aircraft will be in the hands of the lessee most of the time, however, and any mistreatment of the aircraft on their end will result in a payment to the lessor.
Market: Different aircraft types, currency exchanges, and various other factors, can make leasing difficult.
Diversification in several types of aircraft and companies will be beneficial.
Bankruptcy: If a lessee does lose its money and/or can not make payments, most of the time, the lessor will be insured.
The lessor may very well lose large sums of money that were supposed to be paid by the lessee (in a worst-case
What is it? - A type of leasing by which a lessor allows a lessee to lease an airplane and/or a combination of flight crew, ground crew, fuel, maintenance, and other flight-related necessities
Generally used as a:
Means for airlines to meet higher demands in the market or volumes of customers
Means for airlines to avoid financial burden of purchasing aircraft
Return on investment for airplane leasing is usually in the 12-15% range
Having assets and liabilities worth >$10 million is not uncommon, and larger leasing investors can easily control aircraft worth more than $100 million.
Types - Airplane leases usually occur in the “wet”, “dry”, and “damp” varieties.
Wet leases are leases in which the lessor provides …show more content…
Longer term
Some airlines will continuously renew dry leases to avoid purchase
Damp leases are leases in which the lessor provides everything (similarly to a wet lease) except the cabin crew.
How to invest - Overall, investing is fairly straightforward. Below are basic steps to follow when investing in airplanes.
Acquire capital: In addition to loans, savings, cash, etc, co-ownership of airplanes is a good way to be able to own them.
Co-ownership occurs when multiple people agree to mutually pay for and share an aircraft.
Co-ownership can be very cheap, as one individual will only pay a small portion of the total cost.
Purchase airplane: To know which type of airplane(s) to choose, market research is key.
If starting out small, general aviation aircraft such as the ones made by Cessna, Piper, Beechcraft, and Mooney are great aircraft.
Maintenance on these smaller airplanes is generally cheap and easy, and the aircraft themselves are extremely reliable.
Larger aircraft, such as ones made by Boeing, Airbus, Embraer, and Bombardier are reliable as well and in high demand.
Lessors of large aircraft will sometimes need to maintain …show more content…
Lease Airplane: The airplane market is volatile, but airplanes are in demand.
Well-known airlines, such as Emirate, Air Canada, Delta, British Airways, etc, are always looking for more a bigger and better fleet.
Direct emailing, phone calling, and professional meetings with lessees will help to be able to secure leases.
Possible pitfalls - There are still scenarios in which money and lives can be lost.
Maintenance: The FAA upholds strict and rigorous guidelines to follow when operating aircraft, and failure to comply can mean fines, or even jail.
The aircraft will be in the hands of the lessee most of the time, however, and any mistreatment of the aircraft on their end will result in a payment to the lessor.
Market: Different aircraft types, currency exchanges, and various other factors, can make leasing difficult.
Diversification in several types of aircraft and companies will be beneficial.
Bankruptcy: If a lessee does lose its money and/or can not make payments, most of the time, the lessor will be insured.
The lessor may very well lose large sums of money that were supposed to be paid by the lessee (in a worst-case