6. Aircraft Leasing

Author: Jorge Juan VILLAR-GARCÍA


Even some aviation enthusiasts and professionals are unaware of Aircraft Leasing; airlines often lease some of their aircraft, instead of buying them.

A lease agreement is a contract whereby the owner of an aircraft (the lessor) grants another party, the lessee (the airline), the exclusive right to the use of an aircraft for an agreed period in return for a periodic payment of rent.

The leasing of aircraft has been a particularly Irish business. Its origins can be found in the 1970s, when Aer Lingus, the country’s flag-carrier by that time began to lease two Boeing B747s to Air Siam (now Thai Airways) during the lean winter seasons. Previously, airlines had generally owned all the aircraft in their fleets. Since then, leasing has allowed airlines to finance rapid expansion of their fleets without taking on debt. Since 1980, when aircraft operating leases represented less than 2% of the overall aircraft operating market, the number of aircraft operating leases has grown significantly. In the year 2000, the percentage of leased aircraft reached 24,7%, and by January 2020, lessors´s share of aircraft in service reached 47% according to FlightGlobal. 

The acquisition of commercial aircraft is sometimes the most expensive investment decision for an airline; and furthermore, often requires external sources of funding. Thus, with the airline industry being a highly competitive fragmented industry with low margins, most airlines tend to lease some, most or all their aircraft in order to avoid running out of liquidity.



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  • Guidance Material and Best Practices for Aircraft Leases. 4th Edition. IATA (2017)