Leases are a popular option for aircraft operators, providing flexible access to a platform without the need for large capital investments. But what are the big questions would-be lessees should ask before signing on the dotted line? Gerrard Cowan finds out.
Lessees have different motivations for why an aircraft lease is right for them, so the questions they need to ask will vary depending on why they want to lease in the first place, says Mike Christie, Head of Sales, Americas at Global Jet Capital.
Confirming that the chosen structure will achieve your objectives is a good place to start, he adds.
Global Jet Capital is a major US-based provider of leasing (and other lending solutions) for business aircraft. These include operating leases, where the aircraft is owned by the lessor for the duration of the lease and handed over at the end of the term; finance leases, through which the lessee can take eventual ownership of the asset; and sale and leaseback arrangements, where an owner sells their platform to the lessor and then leases it back, enabling them to free up capital while retaining the use of the aircraft.
What are the Return Conditions at Lease-End?
One of the great benefits of a lease is the ability to simply return the aircraft to the lessor at the end of the lease term. It’s therefore very important to understand the return conditions and process of the lessor, says Christie.
“Do they use internal experts or outside contractors? Is the language clear on what is expected? Are there barriers that may make a return difficult or expensive?”
On top of this, you should ask about potential operational restrictions. Are there annual hour limitations, geographical restrictions or limits on chartering the aircraft? And it can also be insightful to ask the lessor about their commitment to leasing.
This article was originally published by AvBuyer on August 21, 2024.
