Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Paying For New Planes  
User currently offlineMCOtoATL From United States of America, joined Sep 1999, 474 posts, RR: 4
Posted (14 years 9 months 3 days 1 hour ago) and read 2028 times:

I have a question regarding how airlines pay for planes. What sort of payment plans do airlines work out with aircraft manufacturers? For example, is it like my 4-year car loan or my 30-year house mortgage?

Secondly if airlines are flying planes that are paid for, when does it come time to buy new planes? For example, let's assume that Delta's L-1011 planes are fully paid for. Granted, they pay for a flight crew of 3 and less fuel effeciency and arguably more maintenance on an older jet. But certainly this is still far less expensive than buying a new plane.

many poke fun at Northwest for flying aging planes and surely they are taking a beating on fuel bills as their less economical planes suck up the fuel. But from a financial standpoint, is it cheaper than buying new planes?

I know that many of you will argue that newer planes are safer and that's not the point I am wondering about. But fomr a financial standpoint, what would you rather have: 3 brand new 757's that you will be paying for for a long time, or 3 aging 727's that are completely "paid off." Again, from a FINANCIAL standpoint only (not load capacity, reputation, maintenance, number of crew members, etc...)


1 replies: All unread, jump to last
 
User currently offlineYaki1 From , joined Dec 1969, posts, RR:
Reply 1, posted (14 years 9 months 3 days ago) and read 1994 times:

Generally speaking the manufacturer does not finance the aircraft, it's usually financed through a bank or other financial institution or, from the airlines point of view, a leasing company such as ILFC or Itochu or GECAS. Some airlines are able to pay cash for the aircraft but it not the general rule. No doubt it's better to have newer aircraft if the airline can afford the expense because of fuel efficiency, labor costs both inflight crews and maintenance, dependabilty. It may look cheaper to fly the old paid for equipment and most airlines try to maximize there investment but there is a point where it's not worth it. It's a very complicated formula and this is not even taking into account the tax advantages which I don't have the expertise to address.


Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Air China To Sell $2.7B In Stock For New Planes posted Fri Feb 10 2006 11:57:15 by YOWza
OU Shopping For New Planes posted Mon Sep 19 2005 23:13:20 by TripleDelta
A/C MX For New Planes posted Sun May 29 2005 07:23:52 by B6FA4ever
Help Me- Jet Blue Paying For Its Planes? posted Sat Nov 15 2003 15:33:54 by Atcboy73
Report : Air India Scraps All Plans For New Planes posted Mon Sep 1 2003 17:13:55 by B747-437B
NW Hunt For New Planes Includes Boeing Visit posted Tue Sep 19 2000 17:29:01 by TWFirst
Pilots For New Planes posted Thu Apr 1 1999 04:32:49 by Aircanada B767
Are New Planes On The Way For Virgin Atlantic? posted Thu Jun 22 2006 04:00:47 by Ctang
Northwest Wants A New Airline For Smaller Planes posted Sat Oct 1 2005 01:17:33 by KarlB737
New Planes For LOT? posted Mon Jan 3 2005 19:04:47 by Milan320