Among the challenges aircraft lessors
will need to navigate over the coming years include industry cyclicality, geopolitical risk, oil price volatility, competitive pressures on underwriting standards, funding and placing the delivery of large aircraft order books, residual value risk associated with older model planes, and rising interest rates.
Slais continued, "We then tapped Alios Finance in Lusaka, a member of The Global Lessor
Network, to finance the transaction.
An operating lease, put simply, is a lease where the lessor
takes residual risk on the asset and rent is broadly based on the actual cost (including depreciation) and profit margin to the lessor
, with the lessor
taking back the asset at the end of the lease.
owns the car, unless the lessee options to buy it at the end-of-term or refinances the remaining amount.
SECURITY DEPOSITS: It's fairly common for a lease to require you to pay the lessor
a security deposit.
Since the lessee of an operating lease can have the option to cancel the lease prematurely, the operating leases are not guaranteed by a third party like bank, or any other institution or individual, because it denies the right of lessor
to terminate the lease agreement before maturity.
The tax consequences to the lessor
and lessee of a rent holiday will generally be governed by Internal Revenue Code (IRC) Section 467.
Examples: a stand-by letter of credit by a major bank may be inserted as security; the lessor
can participate as a term lender, also.
This influx of capital may unduly influence competitive dynamics, drive down price/lease terms, and focus certain lessors
on the near-term goals of their private-equity backers.
can join The Global Lessor
Network and see transaction opportunities that match their interests and geography at http://www.
The proposal is designed to provide a single model for lease accounting for both lessees and lessors
- a 'right of use' approach.
The airline has reportedly renegotiated leases for 88 aircraft with a group of lessors
, with rates set to save it USD200m in annual rent payments.