Aircraft Leasing and Financing
Tools for Success in International Aircraft Acquisition and Management
- 2nd Edition - June 21, 2024
- Imprint: Elsevier
- Authors: Vitaly Guzhva, Sunder Raghavan, Damon J. D’Agostino
- Language: English
- Paperback ISBN:9 7 8 - 0 - 4 4 3 - 1 5 3 7 3 - 0
- eBook ISBN:9 7 8 - 0 - 4 4 3 - 1 5 3 7 4 - 7
Aircraft Financing and Leasing: Tools for Success in Aircraft Acquisition and Management, Second Edition provides students and industry professionals with unique insights into the… Read more
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Request a sales quoteAircraft Financing and Leasing: Tools for Success in Aircraft Acquisition and Management, Second Edition provides students and industry professionals with unique insights into the latest developments in the Commercial Aircraft and Engine Leasing and Financing industry that has grown into one of the most distinctive and important industries globally. This book offers a blend of academic and professional views that make it educational and relevant to the everyday operations of the industry. It can be used as a stand-alone textbook as well as a practitioner's guide.
Given the impact of the COVID-19 virus on airlines around the world, the industry has experienced substantial changes since the first edition was published. This second edition is thoroughly revised and includes some new case studies and an entirely new chapter on Environmental Considerations with Respect to Aviation Finance.
Aircraft Financing and Leasing details the industry’s foundational concepts, including aviation law and regulation, airline credit analysis, maintenance reserve development, insurance, transaction cost modeling, risk management tools such as asset and credit diversification, and the art of lease negotiations. Different types of aircraft are explored, highlighting their purposes, as well as when and why airline operators and investors choose specific models over others. In addition, the book covers important factors such as modeling financial returns for leased aircraft and appraising aircraft values.
Users will find this an ideal resource for practitioners or as an outstanding reference for senior undergraduate and graduate students.
- Includes a new chapter on Environmental Considerations with Respect to Aviation Finance as well as updates throughout to reflect changes in the industry, particularly due to COVID-19
- Utilizes case studies in each chapter—real-life examples that will help the readers apply newly learned concepts to real problems of the industry
- Highly illustrated with text boxes for examples and real-world applications; graphs, charts, tables, diagrams, flow charts, photos, maps; and examples of forms
- Offers a blend of academic and professional views, making it suitable for both student and practitioner
- Serves as an aircraft finance and leasing reference for those starting their careers, as well as for legal, investment, and other professionals
Senior undergraduate and graduate students studying Aircraft Leasing and Financing; Industry professionals who are using the book as a reference and required reading for junior associates in Aviation Finance, Law, and Asset Management
- Cover image
- Title page
- Table of Contents
- Copyright
- About the authors
- Acknowledgments
- Foreword by C. Jeffrey Knittel
- Foreword by Dick Forsberg
- Chapter 1. Overview of the aircraft leasing industry and market environment
- State of the airline industry
- The market for commercial aircraft
- Regional markets
- Topics discussed in the book
- Chapter 2. Principles of aircraft selection
- Fleet planning
- The lessor's perspective on aircraft selection
- Airline's perspective on aircraft selection
- Manufacturer's perspective on aircraft selection
- Summary
- Appendix 2A: Mini case study A
- Appendix 2B: Mini case study B
- Chapter 3. Principles of aircraft leasing versus ownership
- Aircraft leasing
- Types of leases
- Factors affecting aircraft leasing
- Decision tools for analysis of lease versus buy decisions
- Lease versus buy decision example
- Chapter conclusion
- Appendix 3A: Case study: Lease versus buy decision at Aeromexico
- Exhibit 3.1
- Chapter 4. Aviation legal and regulatory framework
- Introduction to aviation law
- US registration and ownership
- Liens
- Jurisdictional review for cross-border transactions
- Liability
- Bankruptcy and Section 1110
- Due diligence
- Multilateralism and open skies
- Conclusion
- Appendix 4A: The English Blue Sky case
- Chapter 5. Aviation insurance and the impact on risk management
- Introduction to risk management
- Aviation insurance
- Aviation insurance issues arising from the Russian–Ukrainian conflict
- Conclusion
- Case study
- Chapter 6. Aircraft funding—Debt, equity, and the capital markets
- How airlines and leasing companies raise capital for fleet financing
- The pecking-order theory
- Equity financing
- Debt financing
- Role of rating agencies
- Mezzanine financing
- Export Credit Agencies
- Aviation Finance Insurance Consortium
- General Agreement on Trade and Tariff/World Trade Organization
- Enhanced Equipment Trust Certificate
- Aircraft ABS
- Predelivery payments financing
- Basel III and IV issues
- Aircraft financing environment during the COVID-19 pandemic
- Chapter 7. Sustainable aviation: Issues and challenges
- Introduction
- Organization and sustainable aviation initiatives
- Industry initiatives toward Net Zero by 2050
- Sustainable aviation finance
- Conclusion
- Chapter 8. Airline credit analysis
- Introduction to credit analysis
- Airline credit analysis
- Credit scorecard
- Conclusion
- Appendix 8A case study: Alaska Airlines gets a downgrade
- Chapter 9. Leasing portfolio management and risk management
- Importance of risk and portfolio management for aircraft lessors
- Aircraft portfolio acquisition channels
- Risks inherent with the business of leasing aircraft
- Understanding and managing asset side risks
- Understanding and managing interest rate risk
- Portfolio management
- Managing the transition of aircraft coming off lease
- Conclusion
- Appendix A: Pricing interest rate swaps
- Appendix B: Case study
- Chapter 10. Principles of maintenance reserve development and management
- New aircraft orders
- Aircraft prepurchase/predelivery
- Aircraft maintenance
- Maintenance reserves
- Maintenance reserve economics and rate determination
- Maintenance reserve contract management
- Prepaid maintenance programs
- Periodic technical records audits
- Aircraft redelivery
- Appendix 10A: Letter of credit
- Appendix 10B: Form of status report
- Appendix 10C: Redelivery receipt
- Appendix 10D: Predelivery inspection
- Appendix 10E: Mini case study
- Chapter 11. Transaction cost modeling
- Introduction
- Factors affecting cash flows for a lessor
- Life cycle of a lease
- Modeling a lease transaction
- Conclusion
- Case study: Transaction cost modeling
- Chapter 12. Lease agreement and negotiation
- Introduction to the lease negotiation process
- Stages in the lease negotiation
- Overview of an aircraft lease document
- Sale/purchase agreement
- The art and science of lease negotiation
- Summary and conclusion
- Case study: Lease negotiation
- Appendix 1 Sample letter of intent (sale and leaseback transaction)
- Appendix 2 Sample letter of intent (order book transaction)
- Appendix 3 Maintenance payments
- Appendix 4 Redelivery conditions
- Chapter 13. Aircraft valuation and appraisal
- Introduction to aircraft appraisal
- Purpose of an appraisal
- Appraisal process
- Depreciation
- Aircraft valuation methodology
- Appraisal report format and requirements
- Appraisal firms
- Conclusion
- Case study 1: Appraising a business jet Falcon 900B
- Case study 2: Commercial aircraft appraisal Airbus A320-200
- Chapter 14. Taxation and considerations for cross-border transactions
- Taxation and leasing
- Cross-border lease transactions
- United States—Leasing market overview
- Ireland—Leasing market overview
- Japan—Leasing market overview
- Germany—Leasing market overview
- The United Kingdom—Leasing market overview
- France—Leasing market overview
- China—Leasing market overview
- India—Leasing market overview
- Brazil—Leasing market overview
- UAE—Leasing market overview
- Singapore—Leasing market overview
- Conclusion
- Chapter 15. Engine leasing
- Principles of jet engine operation
- Original equipment manufacturers
- Engine maintenance
- Engine economics
- Engine leasing concepts
- Conclusion
- Case study
- Additional information
- Index
- Edition: 2
- Published: June 21, 2024
- Imprint: Elsevier
- No. of pages: 550
- Language: English
- Paperback ISBN: 9780443153730
- eBook ISBN: 9780443153747
VG
Vitaly Guzhva
Dr. Guzhva is a Professor of Finance in the College of Business of Embry-Riddle Aeronautical University, where he teaches Aviation Finance courses. He holds a BS in Aeronautical Engineering, MS in Military Science, MBA in Aviation, and Ph.D. in Finance. He has logged more than 5,000 flight hours as a military and corporate pilot. His work appeared in various peer-reviewed journals, and his research related to the United States' airlines' losses following September 11, 2001, and the financial health of United States general aviation airports was widely discussed in the national business and aerospace press. His applied research and consulting projects included industry assessments and market analyses for major aircraft manufacturers, benefit-cost analyses of Operational Improvements for NextGen Air Transport Management systems, assessments of major investments in aviation infrastructure, and others. His current research interests include analysis of airline bankruptcies, aviation data monetization strategies, and investment performance of Aircraft ABS and EETCs.
Affiliations and expertise
Professor of Finance, College of Business of Embry-Riddle Aeronautical University, Daytona Beach, USASR
Sunder Raghavan
Dr. Raghavan is a Professor of Finance, a Fulbright Scholar, and an ISTAT U program coordinator at the College of Business at Embry-Riddle Aeronautical University. He received his Ph.D. from Washington State University and is an Accredited Senior Appraiser (ASA) with an aircraft specialty designation. His research interests include aircraft finance and leasing, international aviation finance, fuel price hedging, exchange rate modeling, financial distress and bankruptcy, functioning of financial markets in developing countries, and theoretical application of finance to the airline industry. He has published in various journals, including Elsevier's Journal of Air Transportation Management. He has authored two case study books in aviation finance. He has served as a consultant to the Reserve Bank of India. Dr. Raghavan has international teaching and research experience in the United States, Canada, China, India, and the Middle East. As part of his Fulbright grant, he researched innovative aircraft financing methods used by Middle Eastern Airlines.
Affiliations and expertise
Distinguished Professor of Finance and Master of Science in Aviation Finance Program Coordinator, College of Business of Embry Riddle Aeronautical University, Daytona Beach, FL, USADD
Damon J. D’Agostino
Damon J. D'Agostino is a Co-Founder and the President and CEO of Zephyrus Aviation Capital, a leasing platform focusing on young to mid-life aircraft. He previously spent the majority of his career at CIT Aerospace, one of the world's leading aircraft-leasing companies. His last role at CIT was chief commercial officer, where he was responsible for all aspects of' CIT's commercial strategy and execution, including aircraft sale and lease transactions, airline relationship management, contract negotiation, restructurings, and new aircraft and engine acquisitions. Prior to that role, he served as chief sales officer. D'Agostino is a graduate of Embry-Riddle Aeronautical University, where he received a Bachelor of Science Degree in Aviation Business Administration, with a concentration in Finance. He also received an MBA in international business from the University of Miami, where he was summa cum laude and valedictorian of his graduating class.
Affiliations and expertise
President and CEO, Zephyrus Aviation Capital, FL, USARead Aircraft Leasing and Financing on ScienceDirect