Aircraft Leasing Firms

[shon7]

What do big firms like ILFC or GECAS do with the aircrafts after a carriers no longer want the aircraft or upon completion of the leases? In the event that they are unable to lease the aircraft to a new operator is that a loss or do they salvage the parts?

 

[vc10]

What do big firms like ILFC or GECAS do with the aircrafts after a carriers no longer want the aircraft or upon completion of the leases? In the event that they are unable to lease the aircraft to a new operator is that a loss or do they salvage the parts?

Leasing companies typically lease aircraft for terms of 5-10 years or so. When one lease expires, they either renew the lease or find another lessee.

However, big lessors like ILFC or GECAS are also pretty careful to sell aircraft before they get too old to easily lease. A typical thing to do would be to lease an aircraft for 10 years, hold onto it a few years, then sell the aircraft (with the attached lease) to another party.

Turning over the portfolio is an important part of making money in the leasing business. ILFC and GECAS would typically not hold an aircraft until it needs to be scrapped. Their aim is to have a portfolio of relatively young, relatively easily-leased aircraft.