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Author Topic: Automatic Lease Renewal?  (Read 574 times)

Offline Karl

  • Members
  • Posts: 206
Automatic Lease Renewal?
« on: March 18, 2013, 11:52:23 AM »
I need to cancel an aircraft lease.

On the "settings" page, I have checked the box to automatically renew leases for one year.

However, for the individual aircraft I do not want to extend, I have selected the option to NOT renew.  The red X has appeared.

Will the lease end and the aircraft be removed from my fleet, OR will the "automatic" option over ride the cancel?  In other words, do I have to manually cancel the lease (for the required penalty)?
« Last Edit: March 18, 2013, 02:04:36 PM by Karl »

mamba

  • Former member
Re: Automatic Rease Renewal?
« Reply #1 on: March 18, 2013, 12:09:18 PM »
I think you have to wait for the mandatory period of the lease to pass, after which the (Terminate Lease) option appears on the aircraft page.

mamba

  • Former member
Re: Automatic Rease Renewal?
« Reply #2 on: March 18, 2013, 12:12:00 PM »
Unfortunately, you would have to pay 50% of the remaining lease cost.

Offline JumboShrimp

  • Members
  • Posts: 7690
Re: Automatic Rease Renewal?
« Reply #3 on: March 18, 2013, 01:26:17 PM »
I need to cancel an aircraft lease.

On the "settings" page, I have checked the box to automatically renew leases for one year.

However, for the individual aircraft I do not want to extend, I have selected the option to NOT renew.  The red X has appeared.

Will the lease end and the aircraft be removed from my fleet, OR will the "automatic" option over ride the cancel?  In other words, do I have to manually cancel the lease (for the required penalty)?

No, the aircraft with red X will not renew automatically, it will disappear (will be returned to lessor) at the end of the lease period.

Offline Karl

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  • Posts: 206
Re: Automatic Rease Renewal?
« Reply #4 on: March 18, 2013, 02:05:14 PM »
No, the aircraft with red X will not renew automatically, it will disappear (will be returned to lessor) at the end of the lease period.

This is what I hope will happen. 

Offline Silentlysailing

  • Members
  • Posts: 145
Re: Automatic Lease Renewal?
« Reply #5 on: March 18, 2013, 02:55:28 PM »
Yeah, the aircraft will be returned at the end of the lease period but the routes for the aircraft will still exist. So you can either re assign the routes to a different one or close the routes and use some of the slots at your base airport.

Offline Karl

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  • Posts: 206
Re: Automatic Lease Renewal?
« Reply #6 on: March 18, 2013, 09:56:50 PM »
Thanks. 

The routes have already been assigned to new aircraft.  The old aircraft have just a few weeks remaining on their original leases.  The button to NOT renew has been checked.  When every dollar is critical, why waste it on cancelling a contract a few weeks early when it is not necessary.

Question answered. 

Thanks.   :D

Offline JumboShrimp

  • Members
  • Posts: 7690
Re: Automatic Lease Renewal?
« Reply #7 on: March 18, 2013, 10:01:07 PM »
Thanks.  

The routes have already been assigned to new aircraft.  The old aircraft have just a few weeks remaining on their original leases.  The button to NOT renew has been checked.  When every dollar is critical, why waste it on cancelling a contract a few weeks early when it is not necessary.

Question answered.  

Thanks.   :D

Let me add one thing:

If the aircraft is no longer flying, you are still 100% of remaining lease.  When you terminate, termination fee is only 50% of the remaining lease.  So you save some money by terminating lease of an idle aircraft you intend to get rid off...

Offline Karl

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  • Posts: 206
Re: Automatic Lease Renewal?
« Reply #8 on: March 19, 2013, 12:10:38 AM »
Let me add one thing:

If the aircraft is no longer flying, you are still 100% of remaining lease.  When you terminate, termination fee is only 50% of the remaining lease.  So you save some money by terminating lease of an idle aircraft you intend to get rid off...


Good advice.  Thanks.  I was being penny wise and pound foolish.  Now, I see that an aircraft sitting idle cost $x.xx per week.  That cost x the number of weeks would cost much more than cancelling the lease. 

The only down side is that a cancellation is a one-time hit to the bottom line.  Fortunately, my bottom line is healthy enough to take the hit.

So, the cancelling bite is better than a long-term smaller, but eventually more costly bite.

Thanks to all.

 

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