Given that the new leasing terms are now with a 4 weeks termination period, I was hoping that as a leasing company to get some more protection from that as well. Seems that is not the case. Given that is much less attractive to lease out aircraft as a leasing company than before, this is really sad.
Assume, you have leased an aircraft to a new startup. As we all know, most startups reset at least a couple of times before they get their grips and establish a more lasting airline. But whenever a lessee liquidates, all he has to pay is the pro-rata lease fee for the period from the last lease payment to the time of liquidation.
Much more logical and reasonable would be that the lessor gets the full 4 weeks termination periodās payment from the security deposit (what is that for anyway, if not that?) and only the remaining amount from the security deposit goes back to the lessee.
That would not only reflect real life situations, it would at least provide the lessors with some protection from startups that just lease and liquidate all the time.
I was about to comment the same - donāt see why we should have the potential for abuse multiplied by four.
And nothing changed for the lessor: Itās certainly still and advantage, if an aircraft is only leased out for one or two days, but you get the money for seven days. I think thatās fair enough.
Also, realism is a difficult thing to throw in hereā¦ looking at recent liquidations in real life or airlines that are in trouble, lessors have a far more difficult time, even getting paid for the lease time that was already usedā¦ let alone getting paid additional money for future contract terms.
Thanks for pointing that out, I was wrong about that. Since the lessor still does get paid, I kinda assumed itād be the regular amount for a weekā¦
So, on the plus side - thereās actually zero cheating potential, thatās good.
But I see the point that the lessor would deserve some sort of compensationā¦ so if anyone has a cheating-proof solution for let, Iām open for ideas how to implement that.
The only solution I can think of is the lessor getting paid the full week and the airplane remaining unavailable for use until the week is due (which is what would happen if the lease was canceled but no liquidation, theyād only get the plane back at the end of the week). Or if paid the whole 4 weeks, the plane being unavailable for that amount of time.
That way they can get no more profit leasing to a ācheatā airline than they would leasing to a real one.
actually i think that there is still a cheat possible here in that if you have 100s of aircraft available for lease and you have an alt account basically lease out and collapse on most of them you are transferring funds from the 10$m AS startup to the lessor even if the planes are not available the transfer of 4 weeks of funds takes place. The āaltā account then re-leases more aircraft on a new start up ā¦rinse and repeat. Basically transferring unlimited funds from start ups to lessors.
I personally am fine with this being limited as it is. The goal of the changes from what I read was to provide a more stable long term market for both lessor and lessee the changes appear to accomplish that which they primarily set out. The lessor is never injured by a failing start up as they receive payment for the used time and they receive the aircraft back. Giving any additional funds to the lessor would have the potential of abuse.
What you wrote ReganRotineque makes no sense at all. zippo. Alternate account cannot re-lease aircraft, only lessor can. Hundreds of aircraft would mean hundreds of secondary accountā¦ Thatās a helluva lot of credits to use up. Trial accounts cannot lease from private lessors so this would be a sizable investment. But letās just take one aircraft and one alternate account. A 50 million aircraft brings you 250,000 lease rate per week. Thatās a million per 4 week term. If you already own the aircraft than that 1 million every month makes no difference to you. You do more than a few aircraft and accounts and somebody notices. So letās say you stick to two alternate accounts, is it worth 30 euros to get 2 millions every month when you already have capital assets of at least 100 million? It makes no sense. Itās the same thing as driving 20 miles to save 50 cents on a pack of cereals.