|Quoting 727LOVER (Reply 20):|
Let's be precise about it: none of the A319 of Northwest are leased in the way that they are rented from a leasing company (ILFC, GECAS,...).
Airlines do like you and me (at least me), they borrow money from banks to buy airliners. Until fully paid, the ac remain kind of the bank's property (not exactly, I know).
So the A319s in question were financed by First Security Bank which sold them (the debt) to Wells Fargo Bank Northwest NA, then State Street Bank which in turn, put them up for sale by auction (maybe some of you saw the auction advertisement in Flight International Feb. 28th, 2006).
And Sibir purchased them.
Sibir was initially interested by getting from GECAS 10 A319s returned by United.
Looking at NWA's A319 fleet, they currently have 5 x A319's that are on operating lease with Q Aviation. All were done via a Sale and Leaseback in late 2005. Otherwise, the remaining part of NWA's A319 fleet are on NWA's books.
You are correct in explaining there are two types of leases that are common in aircraft finance. There is a Finance Lease and an Operating Lease.
Finance Lease -
The aircraft is financed by a bank, and the aircraft are owned by a SPC
(either controlled by a bank or an orhpan vehicle). The airline makes lease payments (equal to loan repayment) and at the end of a period (usually 10-12 years) after the loan is repaid the airline gets to buy the aircraft at a nominal purchase price. While the legal ownership is with the SPC
(makes it easier to repossess in a default), the economic and accounting ownership is with the airline (i.e. the aircraft is on the airline's balance sheet)
Operating Lease -
Ownership of the aircraft is with an Operating Lessor (e.g. ILFA, GECAS, Q Aviation) and the airline makes lease payments for a duration of the lease. At lease expiry the aircraft is returned to the Operating Lessor who is free to remarket the aircraft for the next user. In this case, the aircraft is not owned by the airline but rather the Operating Lessor and accounting wise the aircraft are off-balance sheet.
While other structures exist, these are the two most common ways that airlines can finance aircraft.