So I recently bought a 10million dollar B727, just to be able to take out a 96,000,000 loan, otherwise it would of been 27mill. So I'm wondering am I able to lease the B727 out. Or do I have to pay back the whole loan before I can lease it out. I know I can't sell it because its my security, but If i lease it out, the plane is still OWNED by me.
although you do still own the plane when you lease it out, I don't believe you can lease it when it's a security. If you think about it, if you were to default on your loan, the bank should have the right to collect the security immediately. If it were leased out, that action would violate the lease contract. So unless the bank was willing to honor the lease, it would be an awkward situation. In short, you can't lease out a plane that against which you've taken out a loan. Unless I'm entirely wrong, which is entirely possible :)
I beleive the game is structured such that you can't lease a plane you are using as a security.
However, inthe real world, I'll have to disagree with auerbacs, in that leasing agreements canb e structured with this consideration - either a clause that allows the lienholder to take back the plane if they want OR a requirement that the lienholder assumes the lease and has to go through the termination process as if it was the original owner wanting to termination the arrangement. Thats what lawyers and hagglers are for - planning out the whatifs and contingencies of business arrangements.
I suppose also the game disallows the securitization of leased assets to prevent airlines from hogging up all of the planes (well, more than the current amount)...
Schro,
I have no doubt that you're right about the real world, but it probably makes more sense not to allow it in a simulation game. Unless you want to program in lawyers and hagglers... ::) Actually, you could bring the lawyers in in other places too, then fund them like marketing costs (who ever has a higher-funded legal team (prices go up with airline size) wins a court battle. That would be hilarious. Make this happen Sami. Anybody else have ideas of where we could implement lawyers and court battles into the game?
Anyway, thanks for clarifying how it works in the real world Schro. It's certainly an interesting scenario.
BA took the Unite union to court and prevented a strike over xmas last year.