A time comes for a business that relies on the use of aircrafts for its business operations to increase the size of its aircraft fleet as demand for its goods or services grow. This is if such a business has its own aircraft. A business that does not have any of its own aircraft will solely rely on leasing. Whichever the case, it is important for a business owner to gain the necessary knowledge before leasing.
Leasing aircraft the traditional way cannot only be a daunting task but very expensive as well. This is where a business owner enters financial institutions for the essential money to lease aircraft. This can take time as a financial institution tries to ensure that the business will be able to repay leasing funds advanced. A business owner may not have such time, which may mean loss of business. Such a business owner may not require to lease aircraft the traditional way but instead consider Aircraft Leasing.
In Aircraft Leasing, a business owner directly contacts with an aircraft leasing company rather than a financial institution. Various aircraft leasing companies specialising in leasing aircrafts to businesses that require them are available that a business owner can approach and explain his/her aircraft requirements. These companies provide various kinds of lease, including:
ACMI – This is short for Aircraft, Crew, Maintenance and Insurance. When a business owner goes for this kind of lease, he/she is free of any obligations except for crew incidental expenses and fuel. The leasing company provides the crew and undertakes to maintain the aircraft for the whole duration it will be in use by the lessee. In addition, the leasing company is responsible for insurance. This type of lease can be very expensive and may only be suitable for a well-established business with adequate finances.
Wet/Damp Lease – This kind of lease incorporates all that is in ACMI except that the leasing company is responsible for allotting fuel for use by the aircraft for the whole process the aircraft will be in use by lessee. This type of aircraft lease can be more expensive than ACMI lease.
Financial/Dry lease – Under this kind of lease, the lessee takes full account of leased aircraft. The lessee is only given with the aircraft, meaning that he/she will need to avail maintenance and operation crew, insurance and fuel. The biggest advantage of leasing an aircraft this way is that the lessee is free to purchase the aircraft at the end of the lease period if he/she wishes. In addition, the lessee is allowed to include the aircraft in the list of his/her business assets.
Apart from aircraft leasing companies, there are also some financial institutions that have diversified and provide Aircraft Leasing services. These institutions give quotes, which can vary greatly and it is essential for a business owner planning to lease an aircraft to compare different aircraft leasing quotes before finalising which to engage. Although going for the lowest quote may be financially beneficial to a business, the lease terms and conditions should suit a business.
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