A few things to keep in mind before signing an airplane lease: Of course, they want to separate the operating costs of the aircraft from the cost of use. Thus, each of their companies could dry lease the aircraft from a separate entity that owns the aircraft whenever it needs to use it. “This structure allows decentralized commercial customers to proportionately bear the operating costs of the aircraft, but each tenant has operational control of all flights under the lease. In the past, banks were usually the lenders of this financing, but the number of banks offering real (tax) leases has decreased significantly since the 2008 recession. Those interested in a finance lease structure are more likely to find ways to work with an equity investor. The most important aspects in the preparation and negotiation of a lease are the understanding of the objectives and expectations of the parties involved and the knowledge of the parties responsible for the care, maintenance and assurance of the aircraft. There should be no confusion about this: tenants are advised to be cautious when a company tries to offer a lease as a viable alternative to a charter contract. The FAA cracks down on these corrupt operations and has taken several enforcement actions over the past two years. Those interested in a traditional lease structure should know that the FAA takes the abuse of dry leases very seriously and has taken aggressive enforcement action against companies that enter into fraudulent dry leases. Any organization requiring the lessee to use a specific group of pilots to lease the aircraft is de facto a wet lease and therefore requires an air carrier operating certificate; Ultimately, this exposes the landlord to a lower risk of enforcement action and civil penalties. A finance lease is essentially an acquisition financing product and an alternative to a secured loan.

To simplify things, you can think of leasing financing similar to loan financing. Although the lease cannot usually be terminated by the lessee, the lessee is required to pay the lessor the agreed value of the aircraft set at the beginning of the lease. In addition to an accident, some finance leases may also allow the lessee to terminate the lease and purchase the aircraft from the lessor or make the lessor complete. When the lessor leases a used aircraft, the purchasing process is essentially the same, except that it is generally slower and less profitable than buying from the OEM, and the lessor does not fund the initial payments. If the transaction is a refinancing, it is structured as a sale-leaseback, in which the lessor buys the aircraft from the lessee and leases it. This would require a contract for the purchase and leaseback of aircraft. The process for creating an aircraft lease is as follows: (g) The Lessee is and will remain valid at all times and in good reputation under the laws of the State of formation (as specified in the first sentence of this Lease Agreement) and the Lessee is and remains a “citizen of the United States” within the meaning of Section 40102(15) of the FAA. During the term of this lease, the tenant may not sell, reorganize or merge, reorganize or merge (in the case of transactions where the tenant is not the surviving company) or sell, transfer, transfer or lease all of its property with another company or legal entity. All aspects of aircraft operation, operation and return should be addressed. The leasing of aircraft should also take into account what happens in the event of non-compliance or failure, in particular in the case of independent parties.

In this agreement, a financial institution takes possession of the aircraft and enters into a lease agreement with a company or individual. It is essentially an acquisition structure that does not require the actual purchase of an aircraft by the lessee, which means that the lessee does not have to carry the aircraft on its balance sheet. 8. LOSS, DAMAGE AND AGREED LOSS VALUE: The Renter hereby assumes the entire risk of loss, theft, seizure, expropriation, confiscation, damage or destruction of the aircraft, engine or any part thereof for any reason whatsoever, unless such events are a direct result of the gross negligence or wilful misconduct of the Lessor. If the aircraft or any of its engines is worn, lost, stolen, confiscated, expropriated, confiscated, destroyed, irreparably damaged or unusable for any reason whatsoever (“Accidental Events”), the Renter must immediately (but in no case beyond 10 days after the date of this accident) and inform the Lessor in full in writing. If, in the opinion of the Lessor, an accident that concerns only the engines of the aircraft has occurred, the Renter shall, at his own expense and expense, replace these engines with one or more engines acceptable to the Lessor and will have the effect of transferring ownership of these engines to the Lessor in order to lease them to the Lessee under this lease agreement. Upon transfer of ownership of these engines to the lessor, these engines will in any case be accepted after the end of the purchase of the aircraft under the lease for the negotiated lease, duration and certain options for expiry of the lease. .