Modern Lease Application And Development Of Airline Aircraft Financing

This dissertation discusses the practice and development of aircraft leasing in the air transport industry. Being aimed at the operating features of air transport industry, point out the advantages of utilizing aircraft leasing in civil aviation. This article is divided to four chapters.The opening chapter analyses the operating features of airlines and the importance of financing in air transport industry. The two obvious features of high capitalization and asset-liability ratio in this industry determine the fact that financing is a prerequisite for airline operation. This chapter also analyses the methods of financing and their respective features, as well as the multi function of leasing finance. Leasing finance shows its vitality in the market because it combines the function of stimulating investment, financing, promoting sales and asset management.Comparing with getting ownership of aircraft, the second chapter points out advantages of aircraft leasing, which meet the high input and low output features of air transport industry. It concludes that aircraft leasing provides the flexible and quick way in financing, improves the efficiency of capital utilization, and smoothes the pressure of capital demand. Furthermore, airline can get the usufruct without pay or with a little payment for the aircraft, which helps the flexibility of the financial report. In aspect of taxation, aircraft leasing provide tax relief in some countries and both the lessee and lessor can share the benefits by leasing aircraft. For risk hedging, aircraft leasing helps to avoid the technical risk and inflation risk to a great extent. Aircraft leasing shortens the exchange period and improves the operating efficiency to meet the market demand. Besides, fixed rent-charge shows advantages, such as being relatively easy for controlling operating costs and long-term liability. The last part of this chapter describes the way of evaluating of aircraft leasing. On aspect of operating leasing, the evaluation is divided into economical result and operating result. For financial leasing, besides the economical evaluation, also makethe judgment from economical principle, safe principle, reliable principle and flexibleprinciple.The third chapter demonstrates the advantages of aircraft leasing by analyzing thestructure and participants of aircraft leasing in U.S and Japan, as well as the differentfeatures in different countries. The last part of this chapter shows the revelatoryconclusion to the aircraft leasing practice in China.The last chapter analyses the practice of aircraft leasing in China and the problemsexists. It concludes that aircraft leasing facilitate the development of China's civilaviation in several ways.Although aircraft leasing has great potentials in China, there are some obstaclesinfluencing its development:1. Cross-border financing has increased the foreign liability burden for Chinese airlines, which normally financing the aircraft from foreign companies or banks.2. The foreign exchange of our country hasn't been fully used in the field of aircraft leasing.3. The relative law and regulations about aircraft leasing is awaiting to be enhanced.4. Foreign companies control the field of aircraft leasing in China and it is almost a blank for China-made aircraft leasing.Actually, developing aircraft leasing can greatly facilitate the development of civil aviation in our country. Above all, the flexibility in finance of aircraft leasing helps to make a breakthrough in raising funds for air transport industry in China. Second to this, the flexibility in operation is good for airlines to adjust their fleet structure. And, aircraft leasing can accelerate the development of charter service, which is very important for civil aviation. Besides, aircraft leasing benefit our airlines because it helps them to share the tax benefits.At last, some suggestions on aircraft leasing are put forward according to the problems existing in China:1. Absorb the investors and l...