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Why do airlines lease?

Old 04-29-2006, 07:24 PM
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Default Why do airlines lease?

Somewhat off topic, but I am curious. I heard that a majority of the airlines lease all of their aircrafts. Why do they do this? Doesnt it make sense to pay into something you can keep and invest into?
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Old 04-29-2006, 08:10 PM
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Originally Posted by TravisUK
Somewhat off topic, but I am curious. I heard that a majority of the airlines lease all of their aircrafts. Why do they do this? Doesnt it make sense to pay into something you can keep and invest into?

Are you implying that an airplane is an investment? Pretty good joke if that's the case.
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Old 04-29-2006, 08:43 PM
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Default Own vs. lease

Originally Posted by TravisUK
Somewhat off topic, but I am curious. I heard that a majority of the airlines lease all of their aircrafts. Why do they do this? Doesnt it make sense to pay into something you can keep and invest into?

One reason involves taxes. If you're making little or no money, you have no use for the depreciation and amortization tax writeoffs that come with airplane ownership, but a big financial institution with lots of income could use those writeoffs. You can sell airplanes you own and lease them back, or the financial institution can buy new ones, often at a volume discount, and lease them to you.
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Old 04-30-2006, 05:08 AM
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Okay..With the airlines going down hill I just assumed that it wouldnt really be feasible for them to lease because they are paying more than the worth of the aircraft. But anymore I guess they are just lucky to be around from year to year.
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Old 04-30-2006, 06:24 AM
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UPS pays CASH for all of it's airplanes. UPS does "lease" a few of it's aircraft. UPS OWNS the leasing company!
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Old 04-30-2006, 07:27 AM
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Part also has to do with the upfront costs of acquiring an aircraft. It is often cheaper in the short term to lease aircraft, allowing a carrier to bring more aircraft to the fleet.
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Old 04-30-2006, 07:33 AM
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Why do people lease a car?
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Old 04-30-2006, 08:08 AM
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Originally Posted by B757200ER
Why do people lease a car?


Because they can't afford to buy one.
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Old 04-30-2006, 08:32 AM
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Originally Posted by Browntail
UPS pays CASH for all of it's airplanes. UPS does "lease" a few of it's aircraft. UPS OWNS the leasing company!
And WHY do we care???
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Old 04-30-2006, 09:00 AM
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One benefit is the flexibility to trade up to more technologically advanced aircraft, if your lease is structured that way.

In today's environment, the big reason is probably that you can get airplanes on property with little capital outlay.
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