Airplane Leasing Essay

Airplane Leasing Essay

Investments in Airplane Leasing

What is it? – Airplane leasing is a type of leasing or investment by which a lessor allows a lessee to lease an airplane and/or a combination of flight crew, ground crew, fuel, maintenance, and other flight–related necessities. With this type of investment, the average return on investment (ROI) is 12–15%. Costs for the investment in general will range greatly, but having assets and liabilities worth >$10 million is not uncommon, and larger leasing investors will have upwards of $100 million.

Types – Airplane leases usually occur in the "wet", "dry", and "damp" varietie.

~ Wet leases are leases in which the lessor provides almost, if not, everything to the lessee. This will usually include the aforementioned flightcrew, insurance, ground crew, etc. Wet leases are generally utilized as short–term solutions for major and minor airlines looking to meet high demands or flyer volumes.

~ Dry leases are leases in which the lessee self–provides most of the flying necessities such as fuel, crew, etc. In this way, leases generally are longer termed and the lessee has more control over general operations.

~ Damp leases are leases in which the lessor provides everything (similarly to a wet lease) except the cabin crew.

How to invest – Obviously, airplanes and their related services are expensive and daunting. To invest in airplanes as a lessor, one must accumulate capital. Some airplanes will be cheaper than others and serve various purposes. For

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