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Aircraft Hire Purchase Agreement

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Commercial aircraft are often leased through a commercial aircraft, the two largest of which are the International Lease Finance Corporation (ILFC) and the Commercial Aviation Services (GECAS). At the same time, leasing has its drawbacks, particularly limited ownership. B of some airlines` planes, increasing financial costs and, therefore, its operating costs (depending on specific rental conditions). The operating lease offers airlines the use of the aircraft for a fixed rent during the period set in the lease agreement. After the end of the lease, the leased aircraft will not be transferred to the property of the airline, but will be returned to the owner. But it is worth mentioning – if necessary to carry out the buyback process in the future, leasing costs increase sharply. Article 12 defines the conditions for subletting and transferring rights in understanding to third parties. A particular type of operating lease is the lease-financing on the basis of which the aircraft is leased with its crew. Such leases are generally short-term to meet surges in demand, such as the Hajj pilgrimage. Unlike a charter flight, a wet-rented aircraft functions as part of the lessor`s fleet and uses the company`s flight code, although it often retains the paint of its owner.

[10] The list of documents required to develop a lease can vary considerably, depending on many factors. Leasing, also known as «capital leasing,» is a longer-term agreement in which the operator approaches the actual «owner» of the aircraft. This is a more complex transaction, in which a lessor, often an ad hoc vehicle (SPC) or a partnership, buys the aircraft through a combination of debt and equity financing and then leases it to the operator. The operator may be able to purchase the aircraft after the lease expires or automatically obtain the aircraft at the expiry of the lease. Business leasing is usually short-term (less than 10 years old), making them attractive when planes are needed for a start-up or the temporary expansion of an established airline. The short duration of an operating lease also protects against the aging of the aircraft, which is an important consideration in many countries due to the change in noise and environmental legislation. In some countries where airlines may be considered less creditworthy (for example. B in the former Soviet Union), operating leases may be the only option for an airline to acquire aircraft. [7] In addition, it provides airlines with the flexibility to manage the size and composition of the fleet as accurately as possible and adapt it to demand. Legal constructions similar to leasing are purchase, leasing, bank credit, commercial loans and order. The main similarities and fundamental differences between the legal structures mentioned above and leasing are presented in the table. 5.

In addition to the usual traditional rules for operating and financing leasing, there are other ways to purchase an air fleet: as described above for private aircraft, an airline can simply take out a secure or unsecured loan to purchase a commercial aircraft. In such large transactions, a consortium of banks may jointly grant a loan to the borrower.

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About The Author
Rodrigo Royo Camblor

Academic Background 2014 | MBA specialized in Human Resources - Universidad Escorial María Crsitina 2018 | Digital Marketing specialized in Real Estate - Crehana and Domestika digital study platforms 2019 - Cinema, Tv and Photographer Director and Producer - Universidad de Deusto, Universidad de Cuyo y Escola des Arts - Currently working for Home Staging, specialized in architecture and street photographer collaborating for ENKI Magazine. Biography summary Grown up in Montevideo, Uruguay in a spanish-italian origin family, moved to Spain in 2006. After living for more than 12 years in different places around Spain, finally settled down in Palma de Mallorca. What I think about Mallorca? Let me show you why I selected Mallorca as one of the best places to invest and live in Spain. I have passion for healthy style of life, enjoying good mediterranean food, weather and of course sea and its magnificent coves. Mixing this with the right high international community within the island lets me find me the perfect style of life I´ve been looking for. Welcome to be part of this paradise of the Balearic Islands. Languages You can communicate with me in english, spanish, portuguese and italian. I can understand basic german, russian & french.