How Does an Aircraft Lease Work?

How does hubzone aircraft lease work? If you are in the aviation industry you probably already know by now that airlines often lease aircrafts instead of actually purchasing them. For instance, are you aware that Emirates, of the biggest airline companies in the world, had just leased Boeing 777-300ER? You’re probably wondering why they would do that? Why would huge companies think about leasing an aircraft when they can afford it? Let’s learn more about aircraft leasing and how it works.

Aircraft Leasing Defined

You can think of aircraft leasing as something similar to loaning a house or an apartment. Hypothetically, let’s assume that a large construction company owns a massive condominium in a prime location. Meanwhile, you’re planning to buy a unit in that same location. What you do is you get in touch with the owner of the condominium, discuss a deal until you both agree on a reasonable price. You’ll go to the bank to apply for a loan and decide whether you’ll get a fifteen, twenty or thirty-year loan. Every month you are required to pay the bank based on what you’ve agreed on the contract. Once you have completed and paid off the amount, let’s say after thirty years, you can live in the condo unit, rent it off or you can sell it. You get to decide what you want to do with it.

Aircraft leasing is quite similar to this. When an airline company is planning to add more planes to its fleet, but they don’t have enough budget to buy one they resort to leasing. This is usually the case if the airline company has just started out or if they want to expand their operations when their bankruptcy protection has expired. If an airline company wishes to lease an airline, they should get in touch with an aircraft leasing company.

Do you know that there are different kinds of leases? There’s the wet, the dry and the damp. Let’s understand the difference between the three.

Understanding Wet Lease

When a particular airline applies for a wet lease the leasing company will be the one to provide for the aircraft, the cabin crew and the pilots. In addition, the leasing company will also shoulder the insurance and the maintenance needs of the aircraft. This means that when you apply for a wet lease you don’t have to buy an aircraft to be able to run a company. In such case, the leasing company normally provides the Aircraft, Crew, Maintenance and Insurance service under their own certificate.

When should you get a wet lease? Here’s an example. Your airline is located in one of the most visited areas in the US. However, when it starts to get cold during the winter season the number of passenger’s plummet and the airline is able to handle the operations by themselves without problem even if they have a limited number of aircrafts. However, during the summer when travelers flock the area, the demand skyrockets but if the company doesn’t have enough money to buy an aircraft, pay for maintenance and new crew to meet the demands they can always go for a wet lease. In a nutshell, a wet lease is a short-term solution like when you need the extra hand for a limited time.

What happens when the airline company has a lot of crew available? That’s the time you’ll need a dry lease.

Understanding Dry Lease

There was a time when Southwest Airlines went through a crisis. Most of their Boeing 737s were all grounded as a result of maintenance problems. To make matters worse, those who are trained to fix aircraft problems went on a strike. Subsequently, their Boeing 737 Max groundings happened right after the terrifying crash of Ethiopian Airlines.

Basically, Southwest Airlines had a lot of free cabin crewmembers and free pilots. When the problem with the mechanics was resolved the only problem, they were facing were the aircrafts. Due to lack of aircrafts, the company had no choice but announce the cancellation of numerous flights. This problem was solved through dry leasing. Dry leasing can be a short-term solution for a company that is experiencing a shortage of aircrafts.

Assuming airline companies have the means to afford a new aircraft, time is what they’ll be up against because waiting for a new aircraft could take years. Why wait for years when you can get one ASAP through airline leasing?

Understanding Damp Lease

A damp lease is a bit of both wet and dry, which explains the name. In this type of lease the leasing company will loan an aircraft including the pilots as well as the insurance but the only difference is the agreement. For instance, the airline company may have numerous free cabin crew but they don’t have enough engineering personnel in charge of maintenance operations. This is where the airline can benefit from a damp lease because they can loan an aircraft and the pilots and the insurance but they can refuse the cabin crew and this means the amount of lease will be relatively less expensive because they can save on cabin crew.

Why do you think airline companies choose to lease aircraft? Let’s find out.

One possible reason why the airline company prefer to lease is when they don’t have sufficient funds to buy an aircraft. Another possible reason is when a competing airline has filed for bankruptcy and they need an aircraft fast. Although they could opt to order an aircraft from Boeing or Airbus waiting for the aircraft could take years. However, when they choose to lease an aircraft, they can be able to get it in just a matter of weeks or months.

There are also unforeseen issues wherein several aircrafts are being maintained simultaneously so in order to continue operations airline companies choose to lease. Like the example mentioned earlier, seasonal changes also prompt airline companies to lease especially when the supply cannot meet the demands like during the summer when passengers multiply in numbers. Similarly, during the winter the number of passengers dwindle which makes leasing the most feasible option there is.

When airline companies do not have sufficient funds to purchase a new aircraft they resort to leasing or when they need it urgently to continue their operations and to cater to seasonal changes. Choosing to lease an aircraft is a more practical option instead of actually buying an aircraft although there are some airlines that prefer the latter. However, you have to keep in mind that when you order a new aircraft you have to be patient because it usually takes years before you can receive it. The long waiting time is actually one of the many reasons why airline companies prefer leasing to buying especially if they need it right away.

The question is, can leasing companies profit from this? And how do they earn money? Is this a profitable business?

Yes, this business is profitable otherwise they wouldn’t be in this business in the first place. In fact, it’s quite a booming business since more and more people are flying all year round and as a result, airline companies are always leasing aircrafts. According to a report by KPMG on the aviation industry, approximately 15% of global aircraft fleet was leased in the year 1999. After two decades the number of aircraft being leased has increased by 50%. If you add up all aircrafts of leasing companies ranging from small jets to Super Jumbo Airbus it can add up to more than 12,000 airplanes.

How Do They Make Money?

Aircraft leasing companies earn money by purchasing aircrafts in bulk. One example is the Airbus A320, which costs a total of $101 million. If the airline leasing company orders two, the amount will not be the same as its full price. Whenever leasing companies purchase aircrafts, they will always order in bulk to avail of huge discounts therefore giving them a high profit margin.

When an aircraft is properly maintained it will not incur significant depreciations. Besides, when leasing companies do decide to let go of an aircraft, they will still earn a profit when they resell it. If airline leasing companies cannot find a buyer for their aircraft, they can simply sell aircraft parts. The demand for aircraft parts is always on the rise. Although it will not have the same value, at least you can still earn money from your aircraft.

The Risks in Aircraft Leasing

As in every business, there are always risks involved. Although the industry is rising, you can’t escape the risks associated with leasing. According to surveys, the number of leasing companies is growing in numbers and because of the industry is so crowded leasing companies are forced to offer low rates to compete and that means they operate on exaggeratingly low profit margins. It’s also possible that they can go bankrupt if airline companies fail to pay their loan agreements. So, you see, this kind of business, although profitable, still has its own fair share of risks.

Hockey Umpiring Requires Good Conditioning

Field hockey is a very important part of sports within Ireland and Irish culture. In the matter of public interest, I will be give a bit of an explanation of what exactly Irish hockey umpires are and what their job is once they are on the field.

This is a very important role in the sport, since field hockey is taken very seriously in Ireland. Around thirty two countries are involved in the sport currently. So it is helpful to provide some information for viewers to fully understand what the duty and job of the umpire is exactly.

The umpire is an important role as they know all the rules of the game, usually better and skilled than most of the people present. Unfortunately, field hockey umpiring doesn’t pay well, but it isn’t as hard as doing air conditioning repair work, either. This role is important as it ensure that all rules of the game are being followed and met with, if they are not being followed they make it clear and let everyone know. An umpire is there to closely look at the entire game from an objective point of view and look to see if any rules are being broken. Without an umpire, games like field hockey can be very biased and a lot of rules can be broken without anyone even noticing and knowing. Having a good umpire is important as it keeps the game fair.

Although umpiring the sport doesn’t require nearly as much physical ability as it does to be a professional player, umpires do need to be in good physical shape. The majority of an umpire’s work will involve running up and down the field in order to keep up with the athletes. Being in poor shape could mean not being in the right spot to make a crucial call.

Overall, if you do not know what Irish hockey umpires are, they basically are a skilled person who knows the rules to the games and applies them to the current situation of the game as they come along. In Ireland the role of an umpire is huge as field hockey is a very sport that people take very seriously. An umpire ensures that the game is played with equality and both teams are given the same amount of advantages and that no one is favoured more than the other.

Officiating Field Hockey in Ireland

Field hockey is a very in demand and popular sport within Irish culture. It relates back to their heritage and is a symbol, since it is so widely enjoyed. Today, I will be discussing reasons as to the job of the umpires within the actual sport.

Some people always wonder what the job of Irish hockey umpires is, today I will be providing you with an answer. There job is skilled and they get paid well because of the importance the job holds within the game and how it ends up working.

To start off with, Irish hockey umpires are skilled people who have learned the in and outs of the game. They know the rules front and back and know how to apply them to the game. They are placed at the games to ensure all the rules of the games are being followed. Often, players end up making mistakes and it is important to catch those mistakes right when the happen so the game can be corrected and all players are given equal chances. This is why the umpire will look out and speak out every time a rule is broken or not properly being followed by the sport players. Field hockey can be very quick, which is why it is very important to have an umpire who is skilled and knows a lot about the game.

Overall, Irish hockey umpires play a very big role in the game. Hockey is a very popular sport within Irish culture, which is why it is important to understand the key players that make the game happen. A umpire is just as important as a coach, in making sure the game is being played correctly, or correcting people if it is not being played with the rules.

The Job Of Irish Hockey Umpires

Umpiring is a difficult job no matter what sport it is being done for. It is a career that requires an extensive amount of knowledge and skill set about the game one is umpiring for. A list of few sports that require umpiring are field hockey, cricket and golf. This job needs to be taken very seriously as the entire game can rely on their judgement. The job requires one to be very familiar with the sport they intend to umpire. They need to know the rules and regulations of the game inside and out.

Not only is it important for the umpire to know the rules of the game, but it is also very crucial they know how to apply those rules to situations that may come along as the game progresses. In Ireland field hockey is a very important sport and is liked my many citizens. It is heavily watched on TV and live because of it’s thrill. In the game of field hockey they have Irish hockey umpires. Irish hockey umpires are just like any other umpire. They are placed over there to ensure that all rules of the game are being met and are not being broken. The Irish hockey umpires are paid very well, as there is a demand for them and there are not that many people who are trained to be one.

Overall, the job of an umpire is very important to the entire game of field hockey. They make sure that both sides of the teams are given the same equality. The umpire makes sure one team does not have an advantage over the other team, so that there is a fair chance on who ends up winning the game at the end of the day. There job is vital in order for there to be equality within the game.