mjoelnir
in service - 2 years
Posts: 4,089
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Post by mjoelnir on Apr 11, 2019 15:52:20 GMT 1
You explain it like it is the law of the land and not contracts that can be different case by case. Well, I have read many contracts and written quite a few. You are free not to believe me, but why do you think no buyer is engaging in bulk purchase and retail sales ? What's closest to that is lessor business : bulk purchase and retail leases. That is exactly what leasing firms and airlines with leasing arms are doing. They buy bulk and decide later who gets the frame. Do you want to tell me Boeing or Airbus can invoke a veto who gets to lease the frames, if a leasing company contracted for let us say 30 frames? I do not talk about embargoes or similar. Icelandair did it with the 737-800 they bought once upon a time and Icelandair made money of their 787 orders. |
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lowpass
Final Assembly Line stage 1
Posts: 243
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Post by lowpass on Apr 12, 2019 7:50:52 GMT 1
Thank you both for your opinions, even different are well welcomed, I think I understood some new things
The most important detail that escaped me are the leasing arms that some airlines have, interesting strategy.
But there must be some specific contract clauses on these circumstances when such big orders land this way, maybe both are right to some extend.
I've been looking for news and seems Norwegian want to spin off its Irish leasing arm Arctic Aviation Assets and Airbus is somewhat involved in the process
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mjoelnir
in service - 2 years
Posts: 4,089
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Post by mjoelnir on Apr 12, 2019 10:09:14 GMT 1
You explain it like it is the law of the land and not contracts that can be different case by case. Well, I have read many contracts and written quite a few. You are free not to believe me, but why do you think no buyer is engaging in bulk purchase and retail sales ? What's closest to that is lessor business : bulk purchase and retail leases. Several buyers are engaged in bulk purchases and retail sales. Most of them are called leasing companies. And if you start now with your long time leases, the leasing contracts I have seen have a buy out clause by the airline and that again can be in a contract or not. So the leasing company can end up with owing the frame for a short time only. |
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Post by stealthmanbob on Apr 12, 2019 11:53:13 GMT 1
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philidor
in service - 6 years
Posts: 8,950
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Post by philidor on Apr 12, 2019 14:38:22 GMT 1
Several buyers are engaged in bulk purchases and retail sales. Most of them are called leasing companies. And if you start now with your long time leases, the leasing contracts I have seen have a buy out clause by the airline and that again can be in a contract or not. So the leasing company can end up with owing the frame for a short time only. Well, lessors buy aircraft in order to lease them out to operators for several years. They cannot sell any aircraft before the end of a period defined in their own purchase contract (always several years after delivery, often five years), so that any purchase option the lessee may have can, at the earliest, be exercised after the end of that period, which you may call 'a short time' if you like. I bow out of this discussion now, please feel free to have the last word if you like. |
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s543
in service - 2 years
Posts: 3,959 
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Post by s543 on Apr 12, 2019 16:37:43 GMT 1
Philidor - can the customer take the plane and immediately lease it out to someone ?
My guess .... it could be hardly prohibited <
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mjoelnir
in service - 2 years
Posts: 4,089
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Post by mjoelnir on Apr 12, 2019 18:21:15 GMT 1
Several buyers are engaged in bulk purchases and retail sales. Most of them are called leasing companies. And if you start now with your long time leases, the leasing contracts I have seen have a buy out clause by the airline and that again can be in a contract or not. So the leasing company can end up with owing the frame for a short time only. Well, lessors buy aircraft in order to lease them out to operators for several years. They cannot sell any aircraft before the end of a period defined in their own purchase contract (always several years after delivery, often five years), so that any purchase option the lessee may have can, at the earliest, be exercised after the end of that period, which you may call 'a short time' if you like. I bow out of this discussion now, please feel free to have the last word if you like. Always into absolutes, always only one way to write a contract according to you. Norwegian bought A320 family frames leased them out and sold the contracts. It seems not to be possible according to your rules, but that seems to have happened, just one example to not fit your absolute rules. |
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Post by peter on Apr 12, 2019 18:21:55 GMT 1
. . . can the customer take the plane and immediately lease it out to someone ? You have been around long enough to know that it happens: LATAM A350's msn 226 - 245 LATAM --> Hainan, 265 LATAM --> Qatar  |
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s543
in service - 2 years
Posts: 3,959
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Post by s543 on Apr 12, 2019 21:24:45 GMT 1
Exactly that was what I did mean.  There are more similar cases in the NB world. I.e. since most of the planes in the air are leased anyway ...... So by the contract the slots/planes might not be transferable, but who wants to find a way - global agreement - always finds one ! |
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philidor
in service - 6 years
Posts: 8,950
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Post by philidor on Apr 14, 2019 23:44:22 GMT 1
Philidor - can the customer take the plane and immediately lease it out to someone ? My guess .... it could be hardly prohibited < As pointed out by Peters, it happens, but it requires a waiver from the manufacturer. I already explained that in return for the discount on list price, airlines buying new aircraft must commit to keeping them in their fleet for a number of years (often five years). They can sell the aircraft provided that they lease them back at least for the same number of years. Sometimes, however, at the time of delivery or some time after delivery, an airline finds itself in a difficult economic situation and has to apply for help. The situation is then reviewed and some flexibility is usually granted : for instance, a deferment of some deliveries, an authorisation to lease out some aircraft to another airline, a cancellation of orders, or some combination of all these steps. The LATAM A350 case is a good illustration since the airline had very ambitious plans which were partly frustrated by the economic and monetary crisis that beset most South American economies. This however is an exception. Without a waiver, an airline cannot lease out newly-bought frames. Groups owning both one (or more) airline(s) and a leasing operation (Lion Air, Norwegian ...) have different types of contracts. The leasing operation can have a lessor's contract, which of course allows leasing out the aircraft. This requires ordering many more frames than needed by the group's own operations. |
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