|Quoting rfields5421 (Reply 2):|
The disadvantage - the bank risks having the airline default.
And as inferred in the airline 'advantages', another disadvantage for the bank is if the residual value is less than expected (some A340 lessors must have been hit hard when 777's started really getting their legs).
Of course it works the other way for an aircraft that maintains it's value.
Taxation is a huge influence. Depends on the country, but often the full cost of the lease is an 'expense' so the cost comes off the revenue top line for taxation purposes for the airline, but owning the aircraft means you can only deduct the depreciated value. So your income taxes would be higher than the extra interest implied in the lease.
Cost of Capital
To add to these replies - getting the cash or the loan to buy a plane is hard and expensive for an airline - similar to getting a mortgage to buy a house. (Maybe worse - would you lend monsy to an airline?).
In some cases the airline might be able to afford it, but even then they might want to save the cash, or be buy a few with their own money and lease the rest - if the deal is all structured together they might get a lower lease rate because they have lowered the risk to the bank by including some of their own skin in the game - in my industry for example this is a good way to leverage any spare cash we have to lower our overall costs by refinancing even a small percentage of loans or leases.
Also, 'Money' (capital) is 'expensive' and hard to find - and as rfields5421 points out, those that have the money like the security of being able to take the plane back if you stop paying the lease. If they lend you the money to buy a plane, you own it (not them), and if you stop paying for it, then they have to stand in line with everyone else to get their money back.Good luck with that!
So, if you are an airline with no money (did I really need to qualify that?) then a lease is often the only way to gete plane in the first place.