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Aircraft Lease Question

Fri Jul 16, 2010 2:52 am

I was wondering about aircraft leases. I know when it comes to ordering new planes from the manufacturer airlines pay a deposit and such, but I was wondering, when an airline signs a new lease agreement, do they have to pay a fee up front, or do they just take the aircraft and pay monthly or quarterly?

I did a search and couldnt find anything, so if this is just a repost of another thread, please point me in the right direction..

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RE: Aircraft Lease Question

Fri Jul 16, 2010 3:13 am

Well I assume you are asking about a dry lease. If so they are normally structured with monthly payments, on rare occasion quarterly. Many leases depending on whether they are finance or operating leases do indeed involve upfront deposits.(virtually always on finance leases)

Addition a big area part of leases is defining maintenance terms and cost to protect the aircrafts condition. Particularly in operating leases some carriers chose to build in maintenance reserves in the monthly rates (based on hours/cycles utilized) which basically fund the regular maintenance checks as they come due. In addition there can be other charges related to depreciation and insurance.

Suppose like everything else in life the better financially a lessee(operator) is the better terms it can negotiate.
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