Which One You Should Consider: Aircraft Buying or Leasing

If you’ve decided you want to own or run your own aircraft, one thing that comes up to everyone’s mind is whether you should buy or lease an aircraft. In fact, there are many times when company has more than enough capital to buy an aircraft outright, but it is actually a good solution to lease one. However, it doesn’t mean that buying isn’t a good option.

What are the Advantages of Leasing an Aircraft?

For those who don’t know, more than one-third of all aircraft are leased by the airlines themselves. Let’s talk about the advantages of leasing an aircraft.

One of the main advantages of leasing an aircraft is that it is cost-effective as compared to affordability. If a company can’t afford to purchase an aircraft outright, leasing would be the best option as they can begin to enjoy the benefits of aircraft ownership.

Those who are involved in businesses are very well aware of the fact that leasing an aircraft can have a great impact on a company’s balance sheet. However, make sure you keep this in mind that leasing an aircraft does not qualify as either an asset or a liability.

In addition, there are two kinds of leases – capital leases and operating leases. All equipment is classed as assets, meaning that the company can take advantage of tax depreciation to a great extent.

What are the Advantages of Buying an Aircraft?

Coming to the buying prospect, one of the biggest advantages of buying one is that the aircraft will be yours, meaning you’ll have a valuable asset to show for your investment.

When you have an aircraft, you can modify it in the way you want. This means that you can upgrade engines, outer design, or brand new interiors as per your liking. However, if you have lease, then this would be difficult indeed and you need to have the owner’s permission.

Another best thing about buying an aircraft is that they need to go on a long way to reassuring its stockholders and customers because these assets naturally double up, ultimately opening the door to raise funds when needed.

What are the Roles & Responsibilities of an Aviation Consultant

As the name suggests, an aviation consultant works in an aviation company that assists aircraft owners by providing a multitude of services, ranging from engineering and design to crew certifications. In addition, they have a responsibility of overlooking the procedures of the supervision of air traffic.

Listed below are the roles and responsibilities of an aviation consultant that you should know. Let’s take a look at them.

Analysis of Operational Department: The main job of an aviation consultant is to ensure that the technical reviews must be performed more often that are aimed at the running of the operational analysis. In addition, a consultant is the one who has to implement the safety procedures and measure that the company’s subdivisions for the proper functioning of an aircraft. In addition, they also have to take care of the new policies and also consult the management for the best strategies that will help a company achieve their desired objectives.

Aircraft Maintenance: An aviation consultant is well-aware of the management practices of the airport. In addition, a consultant also suggests the aircraft control system in the best possible way that will ultimately help uphold the reputation of their company. After that, they will evaluate all the policies and then recommend the best ones that would be beneficial.

Suggestion: Another responsibility of an aviation consultant is that they will advise their clients on the type of evidence that they need to preserve. Moreover, a consultant will also present their clients in court and at the same time, providing opinions that will help the jury in evaluating the clearing the facts in order to determine in which direction the case will go.

Report: An aviation consultant also prepare reports on the analysis of performance and the progress of all the aviation activities. And once they are done, they will present these reports to the management. After that, the reports will need to give special focus to different departments of the client’s company.

Coordination With Clients: Last but not least, aviation consultants work with clients and perform a case assessment of the company. There are possible chances that the company may be dealing with a recent aircraft accident or may be a client require extensive repair work on its aircraft, and the consultant can negotiates the provision and cost of repairs easily and provide the best solution for the same.

How To Choose The Successful Aircraft Financing

Just like the rest of the world economy, the business jet finance market is changing and most importantly, evolving. And the bottom line is that it’s becoming more highly regulated, more conservative and more international. Talking about its biggest challenge, it is nothing but the surfeit of cash that many aircraft buyers have on hand with no great place to invest.

Having observed that the banks famously prefer to lend money to people who don’t need it, and in today’s business jet market, there are more of those people.

However, if you’re looking for financing, here’s a strategy that will help you find the right or you can say, the best deal.

Consider Timing: Sometimes aircraft financing used to be arranged virtually overnight. No more. If you want to finance, make sure you began the process as soon as possible. It is important for you to have a good idea about financing costs and terms. And you can do this by talking to a lender generally about the airplane model, model year and estimated acquisition cost.

Choose Loan or a Lease: There is no denying the fact that the availability of tax benefits will determine this choice for most airplane buyers. If you can use the tax depreciation, a loan may be the best option, but if not, make sure you go with leasing, where you can still get the benefit of tax depreciation through lower financing costs. If you’re still not sure, then request proposals for both.

Consider Relation-based Financing: It is a well-known fact that aircraft financiers differ in their appetite for making transaction-based loans–one-off financing with someone the bank may not otherwise do business with. In other words, if a bank focus on aircraft financing for its current clients, then make sure you probably look elsewhere unless you’re one of those clients.

Make Your Decision: Make sure that you don’t assume that you should just choose the lender offering the best overall financial deal. No doubt, that’s an important consideration, but not the only one. Make sure you ask a question to yourself like can the lender deliver what it promises, especially in time for closing?

Finalize Your Deal: Last but not least, make sure your aviation attorney can review all the necessary financing documents. Bear in mind that aviation transaction lawyers do this all the time, and often more effective than top-class finance counsel.

Benefits of Choosing the Right Aircraft Leasing Company

In today’s world, aircraft leasing companies are some of the largest shadow players of the industry, owning fleets that help cater to all your business needs. In simple words, an airline leasing firm is a kind of business that airlines rent off a physical plane, instead of buying a plane themselves.

Now, the question arises why airline leasing companies prefer to lease? Here’s why.

An airline could have the latest and greatest aircraft on the market.
If an airline has a large travel/holiday demand, they can upgrade their fleet in no time, which helps to increase substantial sales.
If an airline faces any technical problem, they can swap in another aircraft quickly and easily.
Airlines can have maintenance options included in on their leases.

How an Aircraft Leasing Company Can Benefit You?

Following are the benefits of hiring an airline leasing company.

Reduce Stress: If you hire an organization that can provide you with all of the aircraft you are going to need in your fleet, your stress will reduce to a great extent. Ultimately, you will focus better on your goals.

The transition of Fleet: If you have owned your aircraft for a decade, possibly you will think about upgrading. One of the biggest concerns that come with upgrading is figuring out how to transition out the old aircraft when bringing in the newer one, without disrupting the current operations. However, with an aircraft leasing company, upgrading can be done seamlessly and effortlessly.

Flexibility: Talking about what’s written in an aircraft leasing arrangement, the lessee can either own the aircraft at the lease end or send the aircraft back to the lessor. However, this thing totally depends on the goals of your program, you may want to own the planes or you may not.

Cost-Effective: Keep this in mind that leasing aircraft is not expensive; you can control how much you spend based on the aircraft you want. In addition, you will have the option to choose how much you want to spend on aircraft and the length of the lease.