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Author Topic: Lease Payments Continually Going Up - Why?  (Read 431 times)

BD

  • Former member
Lease Payments Continually Going Up - Why?
« on: June 26, 2013, 12:27:22 AM »
How is it that on the Income Statement the line for Leases is continually inching up?

Something must be getting included in that figure.  Otherwise, with fixed leases, all not anywhere near expiration, one would expect that this is a constant cost.

Yes, new aircraft leases get included, but that is easy to figure out and, besides, I hadn't any new ones of late.

Offline alexgv1

  • Members
  • Posts: 2184
Re: Lease Payments Continually Going Up - Why?
« Reply #1 on: June 26, 2013, 10:28:42 AM »
Inflation for the leases which are renewed?
CEO of South Where Airlines (SWA|WH)

BD

  • Former member
Re: Lease Payments Continually Going Up - Why?
« Reply #2 on: June 26, 2013, 03:46:37 PM »
Inflation for the leases which are renewed?
Good thought, but I'd expect that when one does a 4 year lease, the lease price is then fixed for the period.  All mine are 3-4 years in length, no renewals for some time.
« Last Edit: June 26, 2013, 03:53:30 PM by BD »

Offline Sanabas

  • Members
  • Posts: 2161
Re: Lease Payments Continually Going Up - Why?
« Reply #3 on: July 04, 2013, 11:20:52 AM »
Most likely it's planes you leased 4 months ago, for which you paid 4 months in advance. As that 4 months expires, you start paying the regular weekly lease price.

If you've had an identical fleet for 6+ months without any renewals, leases will be a constant cost, apart from some adjustment depending on the length of month.

BD

  • Former member
Re: Lease Payments Continually Going Up - Why?
« Reply #4 on: July 04, 2013, 12:52:38 PM »
That seems like a good explanation, as I was acquiring several aircraft a week for a while.  And, they arrive at different times of the week, so the lease charge would be apportioned so, thus it may look like the line item for Leasing is only "creeping" up.

I'll watch for it on my next acquisition.

 

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