What is aircraft leasing? | Flightradar24 Blog | Aviation

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When we travel by air, we are used to seeing a variety of airline liveries that aim to showcase the identity of their brands, but did you ever stop to wonder who owns the jet that’s taking you on to your destination? It’s a lesser-known fact that many of the world’s commercial aircraft are not owned by the airlines that operate them – enter aircraft leasing. We asked the experts at IBA Group, a leading aviation intelligence and advisory company and Flightradar24 customer, to help us understand the ins and outs of aircraft operational leasing and give us an overview of what ownership of the global fleet looks like in 2024.

“Aircraft operating leasing became a popular method of aircraft acquisition by airlines in the late 1980’s”, IBA’s President Phil Seymour explains. The demand was spurred by the move from long-term government involvement in air traffic rights between nations to a less regulated system, often referred to as ‘aviation deregulation’. Whilst there were still several agreements in place, the market was much easier to access, especially domestic markets. This led to many airlines operating aircraft under an ‘operating lease’.

What is an operating lease?

An operating lease is an arrangement for rental of the aircraft for a pre-agreed period, rather than a purchase agreement. The aircraft ownership remains with the aircraft leasing company (or ‘lessor’) but the operations, maintenance and insurance are all under the control of the airline.

Why don’t airlines just buy all their aircraft?

Leasing works especially well for airlines that do not have to access huge amounts of capital (or who can’t borrow hundreds of millions of dollars). The airline can simply show a satisfactory business plan and then make regular rent payments for the aircraft. A typical deposit will be the value of around 3-6 months’ worth of payments. 

“The major benefit to the airline (as well as the financial outlay) is the flexibility that…

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