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Author Topic: Why do aircraft leasing expenses continue to grow?  (Read 914 times)

forsberc

  • Former member
Why do aircraft leasing expenses continue to grow?
« on: November 13, 2009, 02:16:54 AM »
Why do aircraft leasing expenses continue to grow, even though no new leases have been completed and they have not expired yet?

I thought the lease price was 'locked in' until your lease expired and then you had the option to release them (with a new rate) or terminate the lease.

Any help would be much appreciated. My leasing expenses have climbed 30% in the last 6 months.

Thanks!

Offline Sigma

  • Members
  • Posts: 1920
Re: Why do aircraft leasing expenses continue to grow?
« Reply #1 on: November 13, 2009, 04:10:07 AM »
Hm.  That is odd.

I don't have the same problem as you (in fact my lease rates were about completely flat for well over a year), but Between Week 4 and Week 5, my lease expenses went up about 15%.  But no leases expired at that time to be renewed, and even if they had, my expenses wouldn't have climbed that much in a single week.  And I haven't leased any aircraft in years, so it's not new leases either.

forsberc

  • Former member
Re: Why do aircraft leasing expenses continue to grow?
« Reply #2 on: November 14, 2009, 12:45:18 AM »
Interesting. Ya these new expenses are killing me slowly. My very modest profit margin was cut in half or even a little more, which is making things very difficult...

Offline powi

  • Members
  • Posts: 435
Re: Why do aircraft leasing expenses continue to grow?
« Reply #3 on: November 14, 2009, 09:08:06 AM »

Offline schro

  • Members
  • Posts: 3077
Re: Why do aircraft leasing expenses continue to grow?
« Reply #4 on: December 20, 2009, 04:06:01 PM »
When you first lease an aircraft, you prepay the first 4 months of the lease, thus, you have zero leasing expense until month 4, when you begin making the regular payments (which can lead to an overall increase in leasing expenses over the course of many months).

If the total cost of operating the plane isn't acheiving the returns that you need to make a profitable airline, I suggest you fly the planes somewhere else where you can make enough money :-)

 

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