Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
rockythunder
Topic Author
Posts: 4
Joined: Wed Dec 28, 2016 11:24 am

Which airlines lease their aircraft?

Wed Dec 28, 2016 11:28 am

Hi all,

I was wondering if you had, or know where I could find, examples of large airlines which have a predominantly leased fleet.

Many thanks.
 
finnishway
Posts: 562
Joined: Sat Jul 14, 2012 5:17 pm

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 11:50 am

Almost every large airline, even EK does lease aircraft from lessors.
 
User avatar
atcsundevil
Moderator
Posts: 4232
Joined: Sat Mar 20, 2010 12:22 pm

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 12:01 pm

Some carriers lease more than others. Very few airlines exclusively own or lease. The problem with exclusively owning is that it makes capacity reduction difficult; when the airline faces financial hardship, it's easiest and cheapest to simply let their leases expire. Conversely, leasing everything means the airline has very little capital investment, and thus very little purchasing power.

SkyBus was a perfect example of an airline with a 100% leased fleet, which is one of many factors which led to their demise. On the flip side, I believe Allegiant owns most or all of their fleet. I seem to recall Virgin America having (had) a heavily leased fleet. Airlines look for a careful balance between own/lease, but naturally those philosophies vary. Most large carriers are fairly well diversified though, because without that, they wouldn't have gotten large in the first place. If my recollection on VX still holds true, then they're probably one of the larger US examples, although now that they're part of AS, the circumstances have changed somewhat.
 
anshabhi
Posts: 2252
Joined: Thu Oct 20, 2016 10:40 am

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 12:15 pm

India's largest airline- IndiGo has leased 124 A320s and has over 400 NEOs on order, all of which will be leased..
 
VSMUT
Posts: 4428
Joined: Mon Aug 08, 2016 11:40 am

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 12:56 pm

atcsundevil wrote:
Very few airlines exclusively own or lease.


Quite a lot of airlines exclusively lease, and it is becoming more and more normal by the day.
 
dtw2hyd
Posts: 8338
Joined: Wed Jan 09, 2013 12:11 pm

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 1:43 pm

VSMUT wrote:
atcsundevil wrote:
Very few airlines exclusively own or lease.


Quite a lot of airlines exclusively lease, and it is becoming more and more normal by the day.


That's because most airlines won't do mx in-house and SLB transactions allow to "manage" books efficiently. Also airlines don't want to deal with badly built planes lifelong.

Otherwise lease and finance cost the same and owning is cheaper long term.

But as you said trend is to lease frames and pay engines power-by-hour to keep it simple.

IndiGo buys in bulk, flips thru SLBs and flushes them out on the dot at six years combined with premium mx contracts. Unique model and no one can replicate at that scale.

If one analyzes EK's struggles with buying right aircraft(weight and engine thrust), AI's problems with B788 early builds, A320NEO engine issues, and every airline/lessor's dilemma with spending money on interior redos,

A perfect hypothetical lease model should be
-Engines PBH by thrust.
-Frames PBH by weight (xxxW)
-Include cabin maintenance and midlife refurbishment (every six years)

Per hour cost will be very high but airline management becomes even simpler.
All posts are just opinions.
 
bmacleod
Posts: 2990
Joined: Sat Aug 25, 2001 3:10 am

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 2:25 pm

As far as I know, Air Canada leases all its 77Ws and 77Ls.

They may own half of their 787s and lease the rest.

They own mostly all their Airbus fleet and the 767s.
"What good are wings without the courage to fly?" - Atticus
 
jeffrey0032j
Posts: 802
Joined: Wed Jun 15, 2016 3:11 pm

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 4:57 pm

A more interesting question would be, which airlines leases their planes out on a dry lease basis and without the use of a separate leasing arm (ie the operating company itself leases the planes out)?
 
User avatar
ikolkyo
Posts: 2988
Joined: Tue Nov 05, 2013 8:43 pm

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 5:01 pm

bmacleod wrote:
As far as I know, Air Canada leases all its 77Ws and 77Ls.

They may own half of their 787s and lease the rest.

They own mostly all their Airbus fleet and the 767s.



Looks like you're a bit off about the 777s and 787s

https://www.planespotters.net/productio ... us=current

https://www.planespotters.net/productio ... us=current

Also a lot of the Airbus aircraft are leased,

https://www.planespotters.net/productio ... us=current
https://www.planespotters.net/productio ... us=current
https://www.planespotters.net/productio ... us=current
 
User avatar
intotheair
Posts: 1887
Joined: Sun Aug 31, 2014 12:49 pm

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 5:32 pm

I find it interesting that DL's fleet list breaks it down by owned and leased. I can't think of another airline that does that on such an easily accessible page.

For reference, DL has 644 owned aircraft and 186 leased.

http://www.delta.com/content/www/en_US/ ... fleet.html
300 319 320 321 332 333 345 346 380 717 733 734 735 73G 738 739 744 752 753 762 763 772 77W 788 789 CR2 CR7 CR9 CRK Q400 E175 DC10 MD82 MD90
AA AF AS AY AZ B6 BA BR DL F9 FI GA HA KF LH MI QX SK SN SQ UA US VY WN
 
ryan78
Posts: 357
Joined: Tue Mar 02, 2010 1:29 am

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 6:06 pm

jeffrey0032j wrote:
A more interesting question would be, which airlines leases their planes out on a dry lease basis and without the use of a separate leasing arm (ie the operating company itself leases the planes out)?


In Canada, every winter we get a bunch of dry lease airplanes from airlines in Europe that operate for Air Transat & Sunwing. I mean we're talking probably 30+ dry leases from November to April. Transat leases from Travel Service/Smartwings, Transavia France & ASL Airlines and Sunwing leases from Thomson, TUI, TUI Belgium & Travel Service/Smartwings. Now a lot of these airplanes are in turn also leased from someone else so I'm not sure if that counts?

For example: C-GTQY is currently being dry-leased to Air Transat for the winter season from SmartWings, however SmartWings is leasing the aircraft from AerCap.
 
Planesmart
Posts: 2891
Joined: Sun Dec 05, 2004 3:18 am

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 7:50 pm

In the early days of leasing, there were three drivers, with two usually applying to each transaction. For operators with average or lower credit ratings, including country risk, financiers considered leasing offered better security and ease of re-possession. Second, the tax effective cost of funding was lower through legal tax minimisation. And third, the leasee could return aircraft in almost any condition, as long as flyable.

The first reason has pretty much disappeared. If an airline and/or country is a bad risk to loan money to, they are just as bad a risk to lease capital equipment. And more, and more consistent access to EXIM facilities, means OEM's and financiers can take a detached view on credit, other than margin erosion from the various fees payable, and excesses applicable.

Secondly, the drivers have changed from tax minimisation by the leasee (lower cost of funding), to tax minimisation by syndicate participants. As others have stated, the funding cost to airlines - purchase versus lease are similar. Airlines based in low or zero tax environments use leasing because they still have exposure to higher tax regimes, syndicate structure introduces a component of benefit 'sharing' (which airlines in a predominantly zero tax environment can share), and access to more funding sources.

Thirdly, the days of returning an aircraft and engines with days, hours, or even minutes before major overhauls are required, and worn out interiors, are long gone. Lease clauses include very detailed 'condition' side agreements. Many leasors now stipulate power by the hour, certainly on WB aircraft. Balloon payments (based on a formula in the agreement) at the end of the lease period are made based on the percentage of engine and airframe time to the next major inspections / maintenance, including a 'time/out of service' component. There will also be a balloon payment relating to fitting a new interior, or if the leasee supplied the original interior, returning the aircraft clean and bare.

All of the above relate to leasing a new aircraft, or sale/leaseback of near new. The rules change for used leases, and what a.netters, and even the leasees, describe as an extension.

For tax purposes, an extension is treated as a new lease, to protect the original lease syndicate participants tax position, even to the extent of changing the 'owner' and 'leasee' of each aircraft.

A lease extension will see a new lease agreement, and possibly, but not always, new syndicate participants (if the residual value is low enough, the number of syndicate participants may be very low, to minimise set-up and reporting costs).

The balloon payments payable will be paid, but may be notional, as forgiving a percentage (or all) of 'end of lease' balloon payments, is an incentive used to sign a new lease for the same aircraft, with the same operator. Again, the tax treatment of forgiveness has to be very carefully executed.

Aircraft lease agreements make commercial building lease agreements look simple.
 
User avatar
Mortyman
Posts: 5852
Joined: Sat Aug 12, 2006 8:26 pm

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 9:34 pm

HK Express has just received their first Airbus A320neo of 11, leased from Arctic Aviation Assets, a leasing Company that is wholly owned by Norwegian Air Shuttle.
 
User avatar
Channex757
Posts: 2398
Joined: Sat Jun 18, 2016 7:07 am

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 10:01 pm

Virgin Atlantic has an entirely leased fleet.

Leasing is an efficient way of use of capital so airlines will happily negotiate some kind of finance for their acquisitions. Leases on aircraft can even be booked as financial assets with a tangible value in some jurisdictions.

The other point about leasing is that many airlines now lease engines too, separate from their aircraft contracts. That also saves having to find many millions of dollars up front.
 
rbavfan
Posts: 3618
Joined: Fri Apr 17, 2015 5:53 am

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 10:04 pm

atcsundevil wrote:
Some carriers lease more than others. Very few airlines exclusively own or lease. The problem with exclusively owning is that it makes capacity reduction difficult; when the airline faces financial hardship, it's easiest and cheapest to simply let their leases expire. Conversely, leasing everything means the airline has very little capital investment, and thus very little purchasing power.

SkyBus was a perfect example of an airline with a 100% leased fleet, which is one of many factors which led to their demise. On the flip side, I believe Allegiant owns most or all of their fleet. I seem to recall Virgin America having (had) a heavily leased fleet. Airlines look for a careful balance between own/lease, but naturally those philosophies vary. Most large carriers are fairly well diversified though, because without that, they wouldn't have gotten large in the first place. If my recollection on VX still holds true, then they're probably one of the larger US examples, although now that they're part of AS, the circumstances have changed somewhat.



You have it backwards. During the downturn after 9-11 airlines cut capacity by parking owned aircraft. Leased aircraft cannot be parked as you have to maintain lease payments. If you have already purchased and paid off an aircraft parking it does not cost you as much.

Skybus was poorly thought out and ran.
 
Joost
Posts: 1877
Joined: Wed Apr 20, 2005 8:27 pm

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 10:17 pm

@ikolkyo: Planespotters (and equally airfleets.net) is very unreliable for determing in aircraft are owned, finance lease or operational leased. The only reliable data is data provided in most airlines' annual reports.

For Air France - KLM, page 20: http://www.airfranceklm.com/sites/defau ... finale.pdf shows that for AF/KL the narrow bodies and widebodies are predominantly leased, whereas the regional fleet is owned for the largest part.
During the time with an airline, aircraft can also switch from ownership. After the end of a financial lease, aircraft become owned. Airlines can also perform a sale and lease back (from owned to lease), or buy the frame from the lease company.

From page 155 of this earlier report, you'll see some changes: http://www.airfranceklm.com/sites/defau ... ce-klm.pdf

Lufthansa has a predominantly owned fleet. https://investor-relations.lufthansagro ... 2015-e.pdf (page 38)
 
User avatar
RL777
Posts: 650
Joined: Thu Jul 28, 2016 1:43 am

Re: Which airlines lease their aircraft?

Wed Dec 28, 2016 10:19 pm

You likely won't find a major airline who owns all the aircraft they operate, the ratio varies from airline to airline however most airlines lease more than own.
 
anshabhi
Posts: 2252
Joined: Thu Oct 20, 2016 10:40 am

Re: Which airlines lease their aircraft?

Thu Dec 29, 2016 3:25 am

intotheair wrote:
I find it interesting that DL's fleet list breaks it down by owned and leased. I can't think of another airline that does that on such an easily accessible page.

For reference, DL has 644 owned aircraft and 186 leased.

http://www.delta.com/content/www/en_US/ ... fleet.html


Air India also does that! http://www.airindia.in/fleet-details.htm 99 owned, 18 leased.
 
User avatar
kitplane01
Posts: 1471
Joined: Thu Jun 16, 2016 5:58 am

Re: Which airlines lease their aircraft?

Thu Dec 29, 2016 7:51 am

ryan78 wrote:

In Canada, every winter we get a bunch of dry lease airplanes from airlines in Europe that operate for Air Transat & Sunwing. I mean we're talking probably 30+ dry leases from November to April.


How do they handle painting the exterior, and whatever the Canadian airline needs for the interior?
 
zkncj
Posts: 3867
Joined: Wed Nov 09, 2005 4:57 pm

Re: Which airlines lease their aircraft?

Thu Dec 29, 2016 8:04 am

jeffrey0032j wrote:
A more interesting question would be, which airlines leases their planes out on a dry lease basis and without the use of a separate leasing arm (ie the operating company itself leases the planes out)?


Air New Zealand does from time to time, most recently was in the mid-2000s they leased a couple of excess A320s out.
 
UA444
Posts: 2997
Joined: Sun Mar 09, 2014 7:03 am

Re: Which airlines lease their aircraft?

Thu Dec 29, 2016 8:05 am

intotheair wrote:
I find it interesting that DL's fleet list breaks it down by owned and leased. I can't think of another airline that does that on such an easily accessible page.

For reference, DL has 644 owned aircraft and 186 leased.

http://www.delta.com/content/www/en_US/ ... fleet.html

UA used to.
 
zkncj
Posts: 3867
Joined: Wed Nov 09, 2005 4:57 pm

Re: Which airlines lease their aircraft?

Thu Dec 29, 2016 8:24 am

While its hard to get an full breakdown for NZ's fleet. In there 2016 Investor Review on pages 21/22 provides some insight.

[url]https://p-airnz.com/cms/assets/PDFs/annual-analyst-presentation-2016.pdf
[/url]

Page 22 States that they currently own 69% of the fleet, while lease 31% of there fleet and note that they are moving towards an model of higher fleet ownership. in 2004 they only owned 43%.

As of the 30 June 16 - they currently have on order:
Owned Orders:
789 - 6x
A320CEO - 1x
A320/321NEO - 8x
72-600 - 16x

Leased Orders:
A320/321NEO - 5x
 
User avatar
atcsundevil
Moderator
Posts: 4232
Joined: Sat Mar 20, 2010 12:22 pm

Re: Which airlines lease their aircraft?

Thu Dec 29, 2016 8:43 am

rbavfan wrote:
You have it backwards. During the downturn after 9-11 airlines cut capacity by parking owned aircraft. Leased aircraft cannot be parked as you have to maintain lease payments. If you have already purchased and paid off an aircraft parking it does not cost you as much.

Skybus was poorly thought out and ran.

I seem to recall way more owned aircraft being parked around 2008-10 than in the early 2000s. Not only that, but it seemed that most aircraft parked in 2002-04 were aircraft reaching end of life anyway, like the 727s or 732s, whereas a substantial portion of aircraft parked after the financial collapse were mothballed with the intent to return to service.

Either way, what I should have said was that allowing leases to expire is a better capacity management control over the medium term. It course is not a short term fix unless your leases just happen to expire soon. If a short term capacity reduction is needed, then yes, owned aircraft are parked, and those on leases get flown like crazy to get the most bang for their buck. That obviously doesn't quite work with PBH, but it does under a traditional leasing structure. If it's a PBH arrangement, it might be more advantageous for the airline to primarily utilize its owned fleet. The devil is always in the details.
 
iahcsr
Posts: 4777
Joined: Fri Jun 04, 1999 2:59 pm

Re: Which airlines lease their aircraft?

Thu Dec 29, 2016 9:13 am

zkncj wrote:
jeffrey0032j wrote:
A more interesting question would be, which airlines leases their planes out on a dry lease basis and without the use of a separate leasing arm (ie the operating company itself leases the planes out)?


Air New Zealand does from time to time, most recently was in the mid-2000s they leased a couple of excess A320s out.


One of those 320s had a fatal event while being readied for return to NZ... :sigh:
Working Hard, Flying Right Friendly....
 
bmacleod
Posts: 2990
Joined: Sat Aug 25, 2001 3:10 am

Re: Which airlines lease their aircraft?

Thu Dec 29, 2016 2:04 pm

ikolkyo wrote:
bmacleod wrote:
As far as I know, Air Canada leases all its 77Ws and 77Ls.

They may own half of their 787s and lease the rest.

They own mostly all their Airbus fleet and the 767s.



Looks like you're a bit off about the 777s and 787s

https://www.planespotters.net/productio ... us=current

https://www.planespotters.net/productio ... us=current

Also a lot of the Airbus aircraft are leased,

https://www.planespotters.net/productio ... us=current
https://www.planespotters.net/productio ... us=current
https://www.planespotters.net/productio ... us=current


It looked like AC was leaning more on leasing back previously ordered 777s and some 787s as a big money saving strategy. Good to see I was wrong.

Leasing does end up costing a lot more in the long run.
"What good are wings without the courage to fly?" - Atticus
 
zkncj
Posts: 3867
Joined: Wed Nov 09, 2005 4:57 pm

Re: Which airlines lease their aircraft?

Thu Dec 29, 2016 6:10 pm

bmacleod wrote:

It looked like AC was leaning more on leasing back previously ordered 777s and some 787s as a big money saving strategy. Good to see I was wrong.

Leasing does end up costing a lot more in the long run.


Hence if you've got an decent cashflow, and plan to sell the aircraft before there end of life it makes sense to buy.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos