Aircraft Operating Leasing

Aircraft Operating Leasing A Legal and Practical Analysis in the Context of Public and Private International Air Law Third Edition Donal Patrick Hanley Although aircraft leasing is comparatively young as a commercial activity – less than fifty years old in practical terms – already well over half of the world’s commercial aircraft fleet is leased. The legal significance of aircraft leasing is, therefore, growing very quickly. Bringing together the laws affecting both air travel and leasing can, however, be challenging. This book is the first to assume this task in a major focused way, thus providing invaluable expert guidance to practitioners handling aircraft lease agreements as well as to legal academics and students. In this third edition, the author examines the aircraft operating lease from both a legal and practical point of view and contextualizes it in light of the latest public and private international air law agreements, case law, statutes and regulations from a variety of jurisdictions and current literature in the field: – the obligations and rights of each party; – failure to meet delivery conditions before delivery; – standby letters of credit and guarantees; – regulatory constraints concerning aircraft registration or foreign remittances; – manufacturer’s warranties; – possession and replacement of parts and engines; – sub-leasing; – damage to the aircraft and other loss to lessor; – liability for damage to third parties; – safety issues and lessor’s liability for acts of the airline; – the events that will entitle the lessor to terminate the contract and recover its asset; – issues pertaining to enforcement of remedies; and – governing law. The format broadly follows that of a typical aircraft operating lease. The author flags the principal legal issues to be considered in developing a standard form aircraft operating lease and makes recommendations in that regard. His approach balances the desired commercial outcome with the legal, or more theoretical, mandate to apply the law to disputes that may arise. An immensely useful supplement sets out a real example of a form of aircraft operating lease for a used aircraft, as used by a leading commercial aircraft leasing company. As a detailed examination of each part of the lease with particular reference to the impact on each term of relevant case law, statutes, regulations and international treaties, this work greatly enhances understanding of the legal and practical aspects of the aircraft operating lease.

Aircraft Financing and Leasing: Tools for Success in Aircraft Acquisition and Management, Second Edition provides students and industry professionals with unique insights into the latest developments in the Commercial Aircraft and Engine Leasing and Financing industry that has grown into one of the most distinctive and important industries globally. This book offers a blend of academic and professional views that make it educational and relevant to the everyday operations of the industry. It can be used as a stand-alone textbook as well as a practitioner's guide. Given the impact of the COVID-19 virus on airlines around the world, the industry has experienced substantial changes since the first edition was published. This second edition is thoroughly revised and includes some new case studies and an entirely new chapter on Environmental Considerations with Respect to Aviation Finance. Aircraft Financing and Leasing details the industry’s foundational concepts, including aviation law and regulation, airline credit analysis, maintenance reserve development, insurance, transaction cost modeling, risk management tools such as asset and credit diversification, and the art of lease negotiations. Different types of aircraft are explored, highlighting their purposes, as well as when and why airline operators and investors choose specific models over others. In addition, the book covers important factors such as modeling financial returns for leased aircraft and appraising aircraft values. Users will find this an ideal resource for practitioners or as an outstanding reference for senior undergraduate and graduate students. Includes a new chapter on Environmental Considerations with Respect to Aviation Finance as well as updates throughout to reflect changes in the industry, particularly due to COVID-19 Utilizes case studies in each chapter—real-life examples that will help the readers apply newly learned concepts to real problems of the industry Highly illustrated with text boxes for examples and real-world applications; graphs, charts, tables, diagrams, flow charts, photos, maps; and examples of forms Offers a blend of academic and professional views, making it suitable for both student and practitioner Serves as an aircraft finance and leasing reference for those starting their careers, as well as for legal, investment, and other professionals

This book is written particularly from the airline's perspective, providing explanations for the many complexities of an aircraft operating lease. The author challenges some established practices that impose huge financial obligations on airlines and offers a more equitable alternative approach that will save airlines millions of dollars. The book dissects clause by clause a sample aircraft operating lease agreement to explain the legal principles underlining certain terms and the practical, commercial and legal reasons for their inclusion. Some of the areas covered include: Why an operating lease should not be a net or a non-cancellable lease; Whether the delivery condition should be a warranty or a condition precedent; Ramifications of accepting the aircraft in "as is, where is" condition; Why the unutilised maintenance reserve deposit should be returnable to the airline; Power-by-the-hour and aviation maintenance reserve bonds as alternatives to maintenance reserve cash payment; AD Cost Sharing; Perfection of aircraft security interest and the Cape Town Convention; Legality of gross-up clauses; This compelling publication demystifies the complex aircraft operating lease. It is designed to inspire, guide and provide resource material for those new to the subject and help build the capacity to negotiate aircraft operating leases. For seasoned professionals, the book offers a definitive one-volume practical reference material on the subject.

Although aircraft leasing is comparatively young as a commercial activity – less than forty years old in practical terms – already well over a quarter of the world’s commercial aircraft fleet is leased. The legal significance of aircraft leasing is, therefore, growing very quickly. Bringing together the laws affecting both air travel and leasing can, however, be challenging. This book is the first to assume this task in a major focused way, thus providing invaluable expert guidance to practitioners handling aircraft lease agreements as well as to legal academics and students. In this second edition, the author examines the aircraft operating lease from both a legal and practical point of view and contextualizes it in light of the latest public and private international air law agreements, case law, statutes, and regulations from a variety of jurisdictions and current literature in the field: – the obligations and rights of each party; – failure to meet delivery condition before delivery; – standby letters of credit and guarantees; – regulatory constraints concerning aircraft registration or foreign remittances; – manufacturer’s warranties; – possession and replacement of parts and engines; – sub-leasing; – damage to the aircraft and other loss to lessor; – liability for damage to third parties; – safety issues and lessor’s liability for acts of the airline; – the events that will entitle the lessor to terminate the contract and recover its asset; – issues pertaining to enforcement of remedies; and – governing law. The format broadly follows that of a typical aircraft operating lease. The author flags the principal legal issues to be considered in developing a standard form aircraft operating lease and makes recommendations in that regard. His approach balances the desired commercial outcome with the legal, or more theoretical, mandate to apply the law to disputes that may arise. An immensely useful supplement sets out a real example of a form of aircraft operating lease for a used aircraft, as used by a leading commercial aircraft leasing company. As a detailed examination of each part of the lease with particular reference to the impact on each term of relevant case law, statutes, regulations, and international treaties, this work greatly enhances understanding of the legal and practical aspects of the aircraft operating lease.

This title presents a flexible valuation and decision-making tool for financial planners, airlines, lease companies, bankers, insurance companies, and aircraft manufacturers.

Revised and updated in its third edition, this internationally renowned and respected book provides the essentials to understanding all areas of airline finance. Designed to address each of the distinct areas of financial management in an air transport industry context, it also shows how these fit together, while each chapter and topic provides a detailed resource which can be also consulted separately. Thoroughly amended and updated throughout, the third edition reflects the many developments that have affected the industry since 2001. It features several important new topics, including Low Cost Carriers (LCCs), fuel hedging and US Chapter 11 provisions.

Aircraft Financing and Leasing: Tools for Success in Aircraft Acquisition and Management, Second Edition provides students and industry professionals with unique insights into the latest developments in the Commercial Aircraft and Engine Leasing and Financing industry that has grown into one of the most distinctive and important industries globally. This book offers a blend of academic and professional views that make it educational and relevant to the everyday operations of the industry. It can be used as a stand-alone textbook as well as a practitioner's guide. Given the impact of the COVID-19 virus on airlines around the world, the industry has experienced substantial changes since the first edition was published. This second edition is thoroughly revised and includes some new case studies and an entirely new chapter on Environmental Considerations with Respect to Aviation Finance. Aircraft Financing and Leasing details the industry's foundational concepts, including aviation law and regulation, airline credit analysis, maintenance reserve development, insurance, transaction cost modeling, risk management tools such as asset and credit diversification, and the art of lease negotiations. Different types of aircraft are explored, highlighting their purposes, as well as when and why airline operators and investors choose specific models over others. In addition, the book covers important factors such as modeling financial returns for leased aircraft and appraising aircraft values. Users will find this an ideal resource for practitioners or as an outstanding reference for senior undergraduate and graduate students.

Over the last 50 years, aircraft leasing has rapidly developed and increased in importance. Today, more than half of all commercial aircraft operators around the world lease more than 50% of their aircraft, and almost all airlines use leased aircraft for their operations. Leasing is now the most efficient way of acquiring aircraft, and is no more regarded as a capital substitute for second- and third-tier carriers with poor access to traditional debt and equity markets, or the "poor man's way" of building a fleet, it is indeed a legitimate source of low-cost capital for airlines. The author examines aircraft wet leasing from the practical point of view of an airline operator with sufficient detail to reveal its operation in practice. The book commences with a discussion on the fundamentals of aircraft as a compelling alternative investment portfolio, detailing the reasons and benefits of investing in aircraft and how to invest. It considers the dichotomy between new and used aircraft, the ageing-aircraft question, the impact of ageing on aircraft economics and on aviation safety, whether ageing-aircraft bans or the mandatory retirement of ageing aircraft improve aviation safety and whether such restrictions infringe on the rights of aircraft owners. The idea of aircraft leasing, the aircraft leasing industry, regulatory restrictions on the use of wet lease and the question of operational control and responsible party in a wet-lease operation are examined. The sometimes confusing concept of aircraft wet leasing is clearly unravelled and the component parts of an aircraft wetlease agreement are analysed in great detail in order to expound the legal principles underpinning certain terms and the practical reasons for their inclusion. Some of the important topics discussed in this section include aviation insurance, problems of crossborder wet leasing, the question of adequate regulatory oversight and the relevance of Article 83bis of the Chicago Convention, flag of convenience in an aviation context, guaranteed minimum aircraft utilisation, asymmetric or unilateral option and nonexclusive jurisdiction clauses, wet leasing with state or sovereign parties and others. The format of presentation of the chapter dealing with component parts of aircraft wet-lease agreements is unique: it follows the structure of a typical aircraft wet-lease agreement. The author first discusses the general legal issues to be considered in structuring a wet lease and then furnishes sample drafts of terms and clauses to take care of these legal issues. This approach enhances understanding of the legal and practical aspects of the subject. This compelling publication provides a convenient one-volume resource in the field of wet leasing and structured, expert guidance to negotiating wet-lease agreements. It is also a practical guide for the use and benefit of everyone involved in wet leasing, including airline in-house counsel, lawyers, jurists, aircraft investors, business-aircraft owners, airline accountable managers, aviation regulatory authorities, international aviation organisations, and aviation-related departments of national governments. Because many parts of an aircraft wet-lease agreement are derived from the general principles of law of contract, this book, particularly the parts dealing with analysis of the component parts of an aircraft wet-lease agreement, will be useful to all students of law of contract and all those involved in negotiating, drafting and implementing all forms of contract.