So what's the next step... well you now need to consider what leasing options are available and which one is right for you, ACMI or dry lease. Review our Aircraft Leasing Definition page to get an in depth assessment of each type. Next we will briefly discus the main options of both ACMI and the various types of dry lease.
Aircraft, Crew, Maintenance & Insurance is usually a short term leasing option, from a few months to 2 years. The aircraft remains on the Lessor's AOC throughout the lease term. Ideal option for testing route expansion, seasonal demand, scheduled/non scheduled maintenance (AOG) and start-up airlines.
The Lessor provides the Lessee with the aircraft(s), along with crew, maintenance and insurance on either a short and long-term contract. The Lessee absorbs marketing, direct operating expenses, such as fuel, landing, parking fees and ground handling, as well as bearing the commercial risk of load and yield.
The cost associated with an ACMI lease rate is usually expressed as a hourly block rate and the Lessee has to guarantee the Lessor a minimum number of hours per month. Other costs will include a deposit (usually equal to one month lease rate), aircraft positioning and any livery scheme the Lessee my wish to deck out the aircraft. These costs are open to negotiation.
Example ACMI lease first month costs:
What's included and not included in an ACMI lease?
Lease rate includes:
Lease rate excludes:
The basic aircraft without insurances, crew, maintenance etc. Usually aircraft offered on dry lease are owned by leasing companies and banks. A dry lease requires the lessee to place the aircraft on it's own AOC and provide aircraft registration, crew, maintenance and insurance. A typical dry lease starts from two years onwards and bears certain conditions as far as depreciation, maintenance, insurances etc. are concerned. There are two types of dry lease... Operational & Financial lease.
Medium to long-term option, generally a lease term that is short compared to the economic life of the aircraft being leased. An operating lease is commonly used to acquire aircraft for a term of 2-7 years. With an operating lease the aircraft doesn't appear on the Lessee's balance sheet.
Also known as a capital lease, is defined when one of the following conditions are met:
With finance lease the aircraft appears on the Lessee's balance sheet, as it is viewed as a purchase.
Chattel Loan: This is a form of outright purchase where a loan is provided for the purchase so ownership of the aircraft is transferred to the purchasing company and the financier simply takes a mortgage over it. This type of arrangement is commonly used when seeking ownership of the unit at the end of the finance term as a residual or balloon payment is not required. Under a chattel loan the aircraft appears on the company balance sheet as titled to the aircraft has been transferred.