ABSTRACT
This chapter discusses advantages and disadvantages of leasing that may impact the buy versus lease decision. It shows how to perform Net Advantage to leasing analysis directly through the incremental cash flows of the leasing option relative to the purchase option. Commercial aircraft lease is a legal arrangement availed by airlines and other aircraft operators or leasing companies for diminishing the financial burden of the airlines while procuring new aircraft. Under an operating lease, the airline secures the use of aircraft from the leasing company for a period of time that is shorter than the economic life of the aircraft without any transfer of ownership rights. In addition to the two main types of leases, there are several other ways to classify leasing contracts based on their duration, location, or the parties involved. Cross-border leasing will continue to be popular for both airlines and leasing companies.
