European Aviation Services

European Aviation Services

European Aviation Services

European Aviation Services

Glossary

ACMI – known as a wet leasing arrangement, whereby one airline (the lessor) provides an aircraft, complete crew, maintenance, and insurance (ACMI) to another airline, or other type of business acting as a broker of air travel (the lessee), which pays by hours operated.

Dry lease – dry lease is a leasing arrangement whereby an aircraft financing entity (lessor), such as GECAS or AerCap, provides an aircraft without crew, ground staff etc. Dry lease is typically used by leasing companies and banks, requiring the lessee to put the aircraft on its own air operator’s certificate (AOC) and provide aircraft registration.

Operator Default: Lease stream ceases and aircraft needs to be repositioned. Can be strongly mitigated by a good aircraft manager tracking operators CDS ratings, ash on hand anticipating.

Asset recovery: Some jurisdictions are more difficult for asset recovery than others in the case of default, take good guidance on jurisdictions – can be an opportunity for premium lease rates.

Asset value shortfall: Market moves unexpectedly reducing asset value. Initial valuation optimistic. Market temporarily oversupplied. Seek most stable and most liquid assets – challenge then becomes strong competition and lower yields

Lease return conditions: Good technical management can be very valuable at end of lease discussions. Half life return conditions at end of lease need to be well monitored and provisioned for suitable maintenance reserves in an independent escrow fund can be provisioned

EAS
EUROPEAN AVIATION SERVICES UG
Perchtinger Str. 6
81379 München
Fon: +4989-588 08 91 10
Fax: +4989-588 08 91 19
E-Mail: info@europeanaviationservices.de
WEB: www.europeanaviationservices.de