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Author Topic: Leasing fees going higher, but temporarily  (Read 649 times)

Offline Tha_Ape

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Leasing fees going higher, but temporarily
« on: January 02, 2020, 10:57:53 AM »
Would someone be able to explain why my leasing fees suddenly increased for a few weeks (almost +2m), then got back to previous levels as quickly as they went up?

I have to precise that I'm in a consolidation process, buying ~75% of my expiring leases. Thus, while some of the renewed leases will go up, the global trend goes down. And while I could have explained a sudden jump followed by a slow decrease (if I had renewed some leases for way more money than previously), I don't see any reason for the sudden decrease.

Thanks.

Offline sanabas

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Re: Leasing fees going higher, but temporarily
« Reply #1 on: January 02, 2020, 11:17:00 AM »
Because buying out the leases means paying half the remaining lease, which goes under lease payments? If you did all the longer buyouts in that slightly elevated period, it'd explain the bump.

Offline Tha_Ape

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Re: Leasing fees going higher, but temporarily
« Reply #2 on: January 02, 2020, 11:20:24 AM »
Can't be that. Leases are counted in "operating expenses", but cancelling fees in "other revenue / expenses".

Offline sanabas

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Re: Leasing fees going higher, but temporarily
« Reply #3 on: January 02, 2020, 11:38:55 AM »
Ahh, I've got it. The bump is in February, right? Leases are monthly price, paid each day.

If lease is 868k/month, that's 196k/week in Jan & March, 217k/week in Feb. That's a ~10.7% increase.

If airline's been roughly same size for a couple of years, bet you see a bump every Feb on the monthly view for however long it shows.

you can see a slightly smaller bump in Nov 94 on the graph you posted, too. 30 day months are 3.33% more expensive to lease per week than 31 day months.

Offline Tha_Ape

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Re: Leasing fees going higher, but temporarily
« Reply #4 on: January 02, 2020, 11:44:52 AM »
Facepalm :-[
(I've come across this "issue" before)

Thanks!

Offline schro

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Re: Leasing fees going higher, but temporarily
« Reply #5 on: January 03, 2020, 04:46:40 AM »
I've explained this one many a times in the forums. Sheesh.

Of note, leases are charged to the income statement on a daily basis of monthly lease rate * (1/days in month). Naturally, the longer the month, the lower the daily (and weekly) leasing costs, and the shorter the month the higher the daily/weekly costs.  Monthly costs on the income statement will also not be entirely accurate due to the common unit of weeks being used (months are either 4 or 5 weeks, no more, no less).

The same math applies to staffing costs...

 

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