The aircraft leasing business is an integral part of the aviation world, yet the travelling public knows relatively little about it. Ireland, you may be surprised to find out, is a bit of a hub for aircraft leasing.

Nine out of the top 10 leasing firms in the world operate here. This is due to a few factors.

We have favourable corporation tax rates and tax treaties that allow leasing companies to be competitive. In addition to this, there is a big pool of aviation expertise in our country. One of the first major players in the aviation leasing industry was Guinness Peat Aviation. After its dramatic demise, several companies rose from the ashes and ever since, Ireland has been a major player in global leasing. But first, why do airlines need to lease planes — can they not just buy them, you might ask?

Well yes they can, but owning your own aircraft can present problems. Price Aircraft are not cheap. You only need to look at the list prices of Airbus and Boeing to see just how pricey they can be. Therefore some airlines might not be able to afford aircraft, or in a bid to keep their balance sheets looking healthy might not want to have such large outlays. Also from an operational point of view, it allows airlines access to newer planes and more fuel efficient aircraft.

Cranky Air might be able to buy a on the market, but could afford to lease a newer Economic uncertainty The last few years have been a good example of why leasing planes can be a better alternative than owning them outright.

When demand is unstable, the more flexibility you have in your fleet levels, the better. Take for example Cranky Air, based in Long Beach. They can step in and relatively cheaply relative to buying an aircraft provide them with aircraft to cater for the spike in demand. If they own the 5 aircraft they would find themselves in a major problem, trying to fill the aircraft or lease them out.

However if their fleet was composed of a few leased aircraft, they could arrange for the early return of the aircraft, and with some penalty payments, address their capacity issues. Risk When dealing with a potential new customer, there will always be risk analysis done on the airline.

Do they have a good safety record or have there been any incidents in their past? What are the chances they might not pay us? If a customer is risky, there are mechanisms to protect yourself as a lessor. This would be done by getting guarantees or large deposits that you can access in the event of default by the airline.

Maintenance Long leases are better for the lessor than shorter ones. The fewer changeovers an aircraft does during its life the better! When an aircraft comes off lease with Cranky Air, in an all business class configuration owing to a misplaced opinion that an all business class Long Beach — Topeka route was a guaranteed success , and we want to place the aircraft with a new operator, Concierge Air, who want it in an all economy lay-out, reconfiguring the aircraft comes at a huge cost to us.

Other considerations are maximum takeoff weights MTOWs , repainting the aircraft, and inflight entertainment systems. So if we can place the aircraft in 2 ten year leases, rather than four 5 year leases — this is incredibly beneficial to the leasing entity.

Ideally, we like to have a new customer lined up for an aircraft before it even comes off lease with the previous operator. Certain jurisdictions are typically avoided, as the red-tape to get the aircraft on lease and out at the end of the lease is too onerous and costly.

For example, sometimes you see airlines across the world operating aircraft that are on the Irish register EI-XXX , as their own national registers might be a nightmare to deal with. The airline industry is unpredictable by its nature and despite all these checks, sometimes leases do not work out. The lessee might not maintain your aircraft as agreed, or simply not pay. This could be done by an airport authority or someone like Eurocontrol, who may also be owed fees for the use of the same aircraft.

It is typically easier to negotiate a compromise as seizing aircraft can get litigious and can restrict the use of the plane until it is all settled. In the future, it will become more likely that the planes you fly on will be leased as this area of the aviation world grows. Next time you fly, consider for a moment that you could potentially be on board a hired aircraft. David is a self-professed aviation nerd- he blames this on both his parents who worked in the airline industry. He is a Business and Law graduate from UCD Dublin.

Currently he is working as a legal intern in an international aircraft leasing firm in Dublin. You can find him on Twitter davidwilliamp. There was a big merger announcement last week, though admittedly it's one you might have missed. Caifornia-based Surf Air came to an agreement to acquire RISE, a similar operation The long-awaited branding decision has been made, and as expected, Alaska will be retiring the Virgin America brand in the next couple of years.

I had the chance to For months now, Alaska has been preparing to acquire Virgin America, and yesterday it became official. Alaska now owns the airline, but the two are far from becoming one.

When aircraft makers announce new orders there many times large numbers go to a leasing company. Thanks for the comments- Financing for leases can come from the firms themselves, or from financial instiutions and investment-funds, to name a few.

It depends on the structure of the deal. Wet-leases tend to be intra-airline, and hence not a feature of this section of the industry. I have worked in the airline industry for over 30 years, and have never gotten such a clear concise answer to this ever-present question of WHY DO WE LEASE!!

Congrats on the new addition to your family. I knew a person who leases and had some spare DCs, and an embassy official whose national airline needed to update its trans-oceanic capability. My role was to get the parents together between scores. Before you know it, your offspring might be playing soccer or some other sport —and who knows what may transpire on the field. You might be surprised to learn that Ireland is a global hub […]. I got that figure in the firm I was working with from a colleague who had just given a presentation on the area.

WHY DO OPERATING LEASE COMPANIES GENERALLY FAVOUR INVESTING IN MID SIZED, SINGLE AISLE AIRCRAFT LIKE A AND FAMILIES? I might have an opportunity to enter in the aviation leasing world in Ireland but I have no idea about this sector. Would it be possible for you to enlighten me about it? Is it a good sector to work at? Work conditions, salaries etc.. I am looking contacts in the aircraft industry.

As contacts with the airports, airline, factories. If you are seriously interested in hearing from you. I am a start up company looking into doing commercial flights. Could anyone tell me what the requirement are to commence my operation. Good day, I have just started a new business on aircraft and my client would like to lease 3 aircraft Boeing for commercial use.

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Hi, Just like Omisore and Patrick pointed out. I am also new in this aviation world but some I have learnt in a short while. Could you please inbox me contacts of some lessors who I can have direct dealings with as I have been mandated by two airlines to source aircrafts for them.

Get Cranky via RSS. Get Posts via Email When They Go Live or in a Weekly Digest. Similar Posts You Might Like. Surf Air Acquisition of RISE Kicks Off Big Expansion Plans There was a big merger announcement last week, though admittedly it's one you might have missed.

Alaska Sticks With Its Own Brand But Learns a Little From Virgin America Before Killing It The long-awaited branding decision has been made, and as expected, Alaska will be retiring the Virgin America brand in the next couple of years.

Alaska and Virgin America Officially Begin Trying to Prove that "Different Works" For months now, Alaska has been preparing to acquire Virgin America, and yesterday it became official.

Participate in this discussion via email. Share On Twitter Share On Google. I can confirm that plenty of aircraft in Russia have EI-XXX registration. It was funny to me at the time. I think there are two points to be added to the article. Jan 16, 6: Jan 16, 7: Jan 16, 8: Jan 16, 9: Jan 16, Jan 16, 1: Best of the Web - Golf Hotel Whiskey.

Jan 21, 8: Jul 10, 3: Hi Niamh, I got that figure in the firm I was working with from a colleague who had just given a presentation on the area. Jul 29, 8: Oct 14, Hi David, Can you please email me with your contact information. Dec 25, 7: Hi David, Very interest post! Sep 9, 1: COULD YOU BE KIND ENOUGH TO SHARE SOME GOOD LESSORS CONTACT WITH ME. Dec 10, 9: Hi, Dave, COULD YOU BE KIND ENOUGH TO SHARE SOME GOOD LESSORS CONTACT WITH ME. Jan 1, Dec 5, Dec 22, 9: Feb 1, 7: Norwegian Makes a Risky Choice to Serve New York City… How Southwest Determines Your Boarding Card Number, and How… 3 Links I Love: Upgrade Any Single… 3 Links I Love: Emirates Having a Rough Ride, The Power of….

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