You mean lease buyout? Somehow under the current system is exists, but in a format that doesn't encourage its use.
1) Lease-end buyout, one day before the end of the lease period buy the aircraft at purchased price + depreciation. There are two issues:
(a) most leases end just before D check, and the D check date is not incorporated into the pricing of the plane. The current system seems to price an aircraft with D check in 8 years time and another plane with D check next week at the same price.
(b) if the lease price was overvalued at start, that is the purchased price the system will use.
In conclusion, option 1 is not realistic, therefore seldom used.
2) Early buyout, during the lease period buy the airplane. There are three issues:
(a) and (b) mentioned above.
(c) the fact that you still pay 50% of the remaining lease.
In conclusion, option 2 is also not realistic, therefore seldom used.
- Correct the mechanism of pricing an airplane to include D check date. Maybe easy to say, difficult to code.
- Reduce the early buy out clause to say 25% of the remaining lease.
Two categories and One option (at the end of the lease) for airplane leasing.
1) simple lease contract, contract break equals 75% of the remaining lease, no complains. The lowest monthly lease value among the 2 options.
2) lease with early buyout clause, buy at any time during the lease period, pay 25% of the remaining lease no questions asked. A slighly higher monthly lease value than "simple lease".
One month before the end of the lease, a message shows up saying "lease expires in one month, do you want to
- renew lease as a simple lease?
- renew lease with early buyout clause?
- or buy with 10% discount*?"
* of a proper/realistic market value that takes into consideration D check date.
Maybe easy to say, difficult to code.