Buying planes after leasing

[arefixz]

Hi everyone, Im practically new in AWS and would like to know something.

Let's say you've lease new plane with contract of 9 years. Then after 8year11month, you want to buy that plane you leased. How to buy it without breaching lease contract, buy it with discount or reduced price (plane deterioration) without letting the plane goes to used market ?

And what would likely total amount of money spent on that plane?
ex.
new price 100 000000 (100%)
total lease price for 9year 90 000000(90%)
plane direct purchase price after deterioration 70 000000(70%)
Total amount spent on 1 plane = 90%+70%= 160% compared to new plane direct purchase price
(calculation is on assumption, any seniors can provide me correct percentage amount for this purchase technique?)

Another thing, is it worth doing the technique above or loans from bank, direct purchase plane and pays loan by installments?

Thank you 

[schro]

Leases in this game are structured as operational leases rather than financial leases, thus, the buyout pricing will never be optimal (basically, it's a lease termination fee + current valuation of the plane).

As for buying out leases, when they are leased from the automated brokers, then you will have an option of buying out that lease. The general formula for the price you will be offered at will be 50% of your remaining lease payments + current "market value" of the plane.

Generally with leasing in this game, you will pay the full cost of the plane over about 7-8 years (assuming you pay at "market value"), thus, you'll always pay more when leasing and then buying a plane. Buying it outright is the financially superior thing to do, however, there's a limit to the amount of funds that you can borrow, so you've really got to have a highly profitable airline in order to fully finance large plane orders.

[arefixz]

I guess both have same expensive outcome of which paying almost 200% for that technique or paying very huge interest overtime for loaning then 

[alfkan]

I've noticed it is a huge discount in monthly lease if you go for the 15 year length of lease. Haven't studied it precisely, but I think the discount reaches about 25-26% for almost brand new models if you go for that length. So if you and your passengers are happy with the same aircraft the next 15 years (remember the compulsary and regularily C + D checks will keep the aircraft in good shape as it is new if you go for the most sought after models believing the most popular model also reflects their level of quality) long lease period can help you rapidly build growth to your company. Most distances do not need to be flown with the newest luxury aircrafts to make profit if the competion is modest. 

[schro]

The problem that I have with 15 year leases is that a well run airline should be capable of having a fully owned fleet sooner than that. Thus, choosing to rent for 15 years instead of renting for 5-8 years and replacing with owned planes isn't always the best for your bottom line....

I've noticed it is a huge discount in monthly lease if you go for the 15 year length of lease. Haven't studied it precisely, but I think the discount reaches about 25-26% for almost brand new models if you go for that length. So if you and your passengers are happy with the same aircraft the next 15 years (remember the compulsary and regularily C + D checks will keep the aircraft in good shape as it is new if you go for the most sought after models believing the most popular model also reflects their level of quality) long lease period can help you rapidly build growth to your company. Most distances do not need to be flown with the newest luxury aircrafts to make profit if the competion is modest.

Yet, you're still paying about 2x the cost of the plane by leasing it instead of buying it over those 15 years. Then, at the end of the term, you still have a plane that you can then sell, scrap or continue flying for another 8-9 years (third D check is generally the end of economic life in this game).