Case Study On Aircraft Financial Leasing Of LA Airlines

As an asset-intensive enterprise,aircraft accounts for over 90% of the total assets.At the same time,as the operating profit tool of the airline,aircraft dominates the decision-making of the strategic planning,marketing,asset management and tax treatment of the airline.Aircraft is a global asset with a life cycle of up to half a century.For airlines,the aircraft leasing is more flexible than the purchase of imported aircraft.Therefore,aircraft leasing has become the preferred way for airlines in recent years.As a state-owned small airline company,LA Airlines has a small fleet size,and its ability to purchase aircraft is not strong.Therefore,it is difficult for the company to purchase aircraft at a lower price.At the same time,the current overseas leasing mode adopted by LA Airlines is too expensive and potentially risky due to heavy tax burden,which is hard for small airlines to bear.Therefore,it is necessary for LA Airlines to study more economical and reasonable methods to reduce the cost.This depends not only on the external environment such as politics and finance,but also on the internal factors such as company strategy and finance.Therefore,for a small aviation enterprise like LA Airlines,it is necessary to explore flexible ways of aircraft introduction according to its operation strategy and conditions,and open up aircraft financial leasing business,to expand the aircraft fleet size in a healthy and reasonable way,and then improve the market share and obtain greater profits.In this paper,using the survey method,experimental method,literature research,empirical study,qualitative study and quantitative study of several research methods,through the research and application of the basic theory of corporate finance,aircraft financial leasing,the basic theory,basic theory of the risk management of aircraft financial leasing three theoretical basis.First,the necessity of selecting financial leasing for LA airlines was determined,then the selection and determination of the financing lease elements of LA airlines were studied,and finally the feasibility of the evaluation scheme was evaluated from capital structure,investment return and accounting.Finalize the design of financing and leasing plan for LA airlines allows LA Airlines get rid of the plight of single aircraft operating leases,established the calculation model and evaluation system.It has important practical significance for the development and growth of LA airline.