Originally Posted by
acl65pilot
SKW gets the best rates possible for their purchases, and the payment becomes an operating expense for DAL, not a debt payment. Moving that debt off of DAL debt ledger is by far the biggest savings they get in terms of total debt service whether it is rationalized on our balance sheet or not. Less Debt on our ledger is good for DAL even if they are paying more in the form of cash flow payments for the operational expense of having the debt held outside of the corporation known as Delta Air Lines, Inc.
I still don't get how paying another airline above market value for our airplanes keeps it "debt free" when we could just lease directly from a leasing company anyway. How is the first not considered debt but the second one is? Either way we sign long term, pretty much iron clad agreements to pay but in the case of a SKYW lease laundering scheme we have to pay them a premium in addition to what we otherwise would have paid. Then years into it the lightbulb goes off and some analcyst makes up a new "real debt" metric and all that fake advantage is gone and we're stuck with paying more for our planes.