YUL332LX From Canada, joined Feb 2004, 820 posts, RR: 1 Posted (7 years 11 months 3 days 13 hours ago) and read 1938 times:
South African Airways (SAA) is leasing at least 4 Boeing aircraft for double their market price under contracts entered into by its previous management, the company said on Wednesday.
SAA Chief Executive Khaya Ngqula said the state-owned carrier was paying USD$900,000 a month each for the Boeing 747-400s when the current market price was only about USD$450,000.
The lease contracts were entered into by previous management and would run until the end of 2006, adding to operating costs as the company struggles to return to profitability after years of heavy losses, he said.
Gigneil From United States of America, joined Nov 2002, 16215 posts, RR: 88 Reply 2, posted (7 years 11 months 3 days 10 hours ago) and read 1765 times:
Quoting United Airline (Reply 1): So what Boeing aircraft do they plan to lease more?
WhiteHatter From , joined Dec 1969, posts, RR: Reply 4, posted (7 years 11 months 3 days 8 hours ago) and read 1652 times:
Not enough detail.
There is no breakdown of just what is involved, and on what basis the 'double' statement has been arrived at.
For instance a fresh D checked 744 with low hours, against one which is 15 years old or similar. There is also nothing about how the leasing has been done. Is there some kind of risk loading which was necessary at the time we are not aware of? Are engines included in the deal or leased separately? Lease guarantee insurance? Offshore corporations?
Before anyone starts pointing the finger and making any allegation of corruption or incompetence then there are so many issues which have to be looked into and the article doesn't reference anything like that.
UAL747-600 From United States of America, joined Sep 1999, 538 posts, RR: 0 Reply 5, posted (7 years 11 months 3 days 8 hours ago) and read 1643 times:
How is a 340-300E worth $925,000 per month and a 747-400 worth only $450,000 per month???
SA7700 From South Africa, joined Dec 2003, 2916 posts, RR: 20 Reply 6, posted (7 years 11 months 3 days 8 hours ago) and read 1635 times:
AIRLINERS.NET CREW HEAD MODERATOR
Well the new CEO is not off to a good start anyhow, the South African media is stepping on his gas pedal already - chartering aircraft and helicopters for himself while we as taxpayers have to foot the bill?
I don't like it, plain and simple...
Rgds
SA7700
When you are doing stuff that nobody has done before, there is no manual – Kevin McCloud
MidnightMike From United States of America, joined Mar 2003, 2892 posts, RR: 16 Reply 7, posted (7 years 11 months 3 days 8 hours ago) and read 1585 times:
Perhaps when SAA signed the agreement, that was the market rate, or, perhaps SAA had bad credit and had to pay a higher fee to secure a line of credit.
Just like a car, when I signed the papers for my lease car, I was happy, about a year later, the rate was about $75 less per month.....
PlaneSmart From New Zealand, joined Dec 2004, 737 posts, RR: 0 Reply 8, posted (7 years 11 months 3 days 7 hours ago) and read 1539 times:
Quoting WhiteHatter (Reply 4): For instance a fresh D checked 744 with low hours, against one which is 15 years old or similar. There is also nothing about how the leasing has been done. Is there some kind of risk loading which was necessary at the time we are not aware of? Are engines included in the deal or leased separately? Lease guarantee insurance? Offshore corporations?
Quoting MidnightMike (Reply 7): Perhaps when SAA signed the agreement, that was the market rate, or, perhaps SAA had bad credit and had to pay a higher fee to secure a line of credit.
Exactly. You can't compare deals unless you know all the facts. Some lease deals include equipment & services that in other countries would be treated as revenue expenses and charged to P&L. Tax rules influence behaviour. What hours / cycles are included? Does the cost include local taxes?
There would also be a country risk component.
The leasor's financial position would also determine costs which have to be passed on to SAA.
Some leases have a credit / refund component at termination for under-utilisation.
SAA are giving a less than subtle message to the leasor and B. To the leasor, it's you better have a sharp pencil ready in 2006 if you want the leases extended. And to B, it's if you want SAA to remain a 744 operator, and 747ADV prospect, you better assist the leasor.
Sponsor Message: 
From Canada, joined Feb 2004, 820 posts, 
From Hong Kong, joined Jan 2001, 8792 posts, 
From United States of America, joined Nov 2002, 16215 posts, 
From South Africa, joined Feb 2004, 8298 posts, 
From , joined Dec 1969, posts, 
From New Zealand, joined Dec 2004, 737 posts, 
Printer friendly format 
