Commercial Aircraft Sales and Leasing Key Terms

Find out terminology and definitions to know for commercial aircraft sales and leasing

Commercial aircraft sales and leasing can be a complicated barrage of terms and phrases thrown at you by those trying to sell or lease you the aircraft, those trying to give you the loan or those trying to provide you service on the craft you are about to buy or lease. Familiarizing yourself with these words, phrases and meanings will not only help you with your purchasing and leasing decisions, but it will also help you in the long run as you care for and ultimately make decisions about your craft as well.

Commercial aircraft terms include financing terms, lease type terms as well as maintenance terms. These words and phrases are just the beginning to your understanding of the topic, but they will help you with some of the general ideas in the field.

Bargain purchase option, bargain purchase

A bargain purchase option, otherwise called bargain purchase, is when the lessee, which is usually an airline company, is given the right to purchase an airplane a rate that is lower than the expected market value for that aircraft.

Wet lease, ACMI lease

A wet lease, or ACMI (aircraft, crew, maintenance and insurance) lease is when you don't or cannot do your own maintenance.

Dry lease

An aircraft dry lease is one that does not include insurances, crew or maintenance. Two types of dry lease include an operating lease and a finance lease.

Accelerated depreciation

Accelerated depreciation of an aircraft is when the depreciation is higher than the normal rate, usually done for tax purposes.

AOG, off-lease

Aircraft on ground (AOG), sometimes called off-lease, is the time period when the aircraft is grounded for reasons such as repairs or refurbishments.

Engine exchange

Engine exchange is a service that engine manufacturers and lessors offer where airlines and lessees can swap out engines needing repair for ones that have already been overhauled.

Copyright © 2013 Business.com, Inc. All Rights Reserved.

---