Skip to main content

Aircraft Leasing and Finance

  • Chapter
  • First Online:
Aircraft Valuation in Volatile Market Conditions

Part of the book series: Management for Professionals ((MANAGPROF))

Abstract

Coronavirus has caused the most significant disruption that aviation has ever seen. The Coronavirus pandemic has radically altered the aircraft leasing market landscape, as the number of passenger aircraft in operation has fallen significantly, leading to less demand for passenger aircraft. Undoubtedly, it may take several years for passenger air travel to recover to the pre-pandemic level. Before the pandemic, the industry expected the global aircraft leasing market to reach $470 billion by 2026, growing at a healthy 7.5% annually.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

eBook
USD 16.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 69.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 99.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    KPMG is one of the Big Four accounting organizations headquartered in Amstelveen, the Netherlands. KPMG stands for “Klynveld Peat Marwick Goerdeler.”

  2. 2.

    Financial Review. January 2, 2020.

  3. 3.

    Travel News India, January 18, 2021.

  4. 4.

    CAPA. Beijing Daxing Airport to complete construction and commence operation in 2019.

  5. 5.

    Fresh News Daily, February 25, 2011 – China Expands Number of Airports.

  6. 6.

    Scott, Alwyn (November 9, 2017) Boeing signs deal to sell 300 planes worth $37 billion to China, Reuters.

  7. 7.

    Nikki, Asian Review. September 20, 2019.

  8. 8.

    CAPA. Turkish Airlines grows fleet to 335 aircraft. May 12, 2019.

  9. 9.

    CAPA. May 07, 2018.

  10. 10.

    LATAM Airline Group is considered the largest airline in Latin America; however, it filed for Chapter 11 bankruptcy on May 26, 2020.

  11. 11.

    Avianca Airlines filed for Chapter 11 on May 10, 2020.

  12. 12.

    CAPA. Airline Profile 2020.

  13. 13.

    Reuters, Alaska Airlines leases 13 Boeing 737 MAX jets after ungrounding, November 23, 2020.

  14. 14.

    CIRIUM, IndiGo orders another 300 A320neo-family JETS. 2019.

  15. 15.

    Finnair owns 29 and leases 36 of the 65 aircraft now in its fleet (CAPA April 2021).

  16. 16.

    Lease classifications are defined in the FAA Advisory Circular AC 91-37A – Truth in Leasing.

  17. 17.

    Aircraft Commerce. Issue No. 110, February/March 2017.

  18. 18.

    Conklin and de Decker, Lease Pros and Cons, The Things You Should Know, 2019.

  19. 19.

    FAR Advisory Circular 91-37A, Truth in Leasing.

  20. 20.

    NBAA. Lease Options for Financing Aircraft, 2019.

  21. 21.

    The residual value is the risk that the fair value of the equipment will be less than originally estimated.

  22. 22.

    CRIUM. Fleet data. 2021.

  23. 23.

    AVIATAS. Aircraft Operating Lessors – Aircraft in-service vs. on order. July 2016.

  24. 24.

    The CPA Journal. Accounting for Leases under the New Standard Part 1. August 2017.

  25. 25.

    In the U.S. the tax ownership in a capital lease is the lessee, whereas in the U.K. and Ireland the lessor in a finance lease is regarded as the owner for tax purposes.

  26. 26.

    Reuters. Ireland has over 12,000 aircraft orders- but not for traditional airlines. January 2019.

  27. 27.

    Reuters. BUSINESS NEWSMAY 8, 2020.

  28. 28.

    CIRIUM. Deals report 2019.

  29. 29.

    Pande, Pranjal (March 2, 2021) IndiGo Sells 8 Airbus A320neos To BOC Aviation For Leaseback, Simple Flying.

  30. 30.

    Statista and Worldwide; Prophecy Market Insights; 2019.

  31. 31.

    Air Transport Intelligence News, May 18, 2011.

  32. 32.

    GlobalPlaneSearch.com

  33. 33.

    SOFEMA Aviation Services. Aircraft Leases Types and Options Full Wet, ACMI, Dry, Damp. October 2019.

  34. 34.

    The depreciation tax saving is equal to the depreciation times the tax rate.

  35. 35.

    The depreciation percentages listed in IRS Publication 946 are used to generate the declining balance schedule for 7 years.

  36. 36.

    Statista. Top fractional operators in the United States in 2017 and 2018.

  37. 37.

    Lombardo C. & Glazer, E. (March 7, 2021) GE Nears Deal to Combine Aircraft-Leasing Unit With AerCap, The Wall Street Journal.

  38. 38.

    PIMCO Account Management, October 19, 2020.

  39. 39.

    Reuters, March 7, 2021.

  40. 40.

    CAPA. Company Profile.

  41. 41.

    CAPA. FITCH AFFIRMS AERCAP RATING AT ‘BB+’ AND REVISES OUTLOOK TO ‘POSITIVE’.

  42. 42.

    CAPA. Company Profile.

  43. 43.

    CAPA. Company Profile.

  44. 44.

    BBAM. Company Website. Number in Review.

  45. 45.

    CAPA. Company Profile.

  46. 46.

    Nordic Aviation Capital. Company website. 2020.

  47. 47.

    SMBC Aviation Capital. Company Website 2020.

  48. 48.

    CAPA. Company Profile.

  49. 49.

    AMBC Aviation Capital, 2020 Annual Report.

  50. 50.

    S&P Global Market Intelligence, Apr 7, 2020.

  51. 51.

    CAPA. Company Profile.

  52. 52.

    ICBC Leasing. Company Website.

  53. 53.

    CAPA. Company Profile.

  54. 54.

    Cirium (FlightGlobal). Parked A320neo backlog declines after triple-figure peak. 2018.

Bibliography

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Bijan Vasigh .

Rights and permissions

Reprints and permissions

Copyright information

© 2022 The Author(s), under exclusive license to Springer Nature Switzerland AG

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Vasigh, B., Azadian, F. (2022). Aircraft Leasing and Finance. In: Aircraft Valuation in Volatile Market Conditions. Management for Professionals. Springer, Cham. https://doi.org/10.1007/978-3-030-82450-1_9

Download citation

Publish with us

Policies and ethics