Nearly half of all airplanes in commercial service globally are leased. Those leases give airplane owners and operators a large degree of flexibility, which is demonstrated by increasing annual aircraft trading volumes that have doubled over the past five years. When you consider that the typical leased narrow-body aircraft changes operators and owners an average of four times during its service life, it explains why there is $30 billion worth of commercial aircraft trading annually. Since airplane trading and leasing go hand in hand, let’s examine several reasons why you should consider trading aircraft, the potential benefits, and the capabilities you need in an airplane trader partner.
Trading aircraft with leases attached helps preserve operating capital, but here are three more financial reasons you might want to trade a plane.
- Upcoming maintenance or repairs: As the time for expensive maintenance events, inspections, or repairs approaches, it can become more difficult to trade in or sell your aircraft. The cost of that maintenance is factored into your aircraft’s resale price. Trading sooner rather than later can help you avoid some of these costs and airplane downtime.
- Aircraft damage: One airline’s damaged aircraft can become another’s star performer. If it makes financial sense, avoid the cost of a lengthy downtime for major repairs by trading in your aircraft for a lower value and move on to a newer one.
- Warranty: Trading your aircraft before the warranty expires allows time for the next owner to work through any unexpected issues that can come with pre-owned aircraft. It will also be reflected in the price you receive for your aircraft, which may be higher than an aircraft without any remaining warranty.
Airlines trade aircraft to either replace their fleet, grow it, or reduce excess capacity. Changing travel patterns, economic downturns, and mission considerations might all be inducements to trading an airplane. If your aircraft no longer efficiently serves your route structure, it might be time to trade it or think about adding another type of aircraft to your fleet.
Updated Cabin Amenities
Upgrades in all cabin classes pay dividends by generating repeat customers who enjoy their flying experience with your airline. Passengers want to feel they are getting more value for their money. Bright and stylish cabins create an impression of luxury and quality that leaves passengers with a greater feeling of well-being, and fliers today expect a certain level of cabin amenities like Wi-Fi or inflight entertainment systems. Based on this, they may even choose the cabins of one airline (yours) over another. Trading an older airplane for a newer one may help avoid extensive upgrade time on the ground.
- Avionics upgrades: Keeping up with the latest FAA mandates costs downtime and money. The decision to trade your current aircraft or invest in a newer, more-equipped model might be made by the equipment it does or does not have. For example, the automatic dependent surveillance-broadcast system (ADS-B), increases safety by significantly improving a pilot’s situational awareness—and is required equipment beginning Jan. 1, 2020.
- Updated technology: Because newer airplanes have improved equipment, engineering, and technology, this may inform your decision to trade your current aircraft in order to achieve better performance and reliability. Sometimes you just need the peace of mind that comes with owning a newer model.
While the legal aspects of airplane trades are beyond the scope of this article, it should also be noted that a thorough physical inspection of the airplane and its paperwork is crucial for a successful trade. After examining these reasons to trade your aircraft, the next question is: Who should be your airplane trader partner and what can they do for you? The answer is AerSale®.
Trading with AerSale
No two airplane leasing scenarios are the same. The expert AerSale leasing team develops unique solutions to meet a client’s operational needs, ensuring flexibility and responsive service. AerSale’s customers can also count on proven guidance, personalized attention, and thorough follow-up through each step of the aircraft leasing transaction. The AerSale airplane leasing portfolio includes Boeing and Airbus narrow and wide-body aircraft in both passenger and freighter configurations. Unique among aircraft leasing companies, AerSale offers in-house refurbishment and configuration capabilities through its MRO services. As a result, customers receive a quick response to their delivery specifications.
A global aviation leader, AerSale specializes in the sale, lease, and exchange of used aircraft, engines, and components, in addition to providing a broad range of integrated maintenance, repair, and overhaul (MRO) services and engineering services for commercial aircraft and components. AerSale also offers asset management services to owners of end-of-life aircraft and engine portfolios. Headquartered in Coral Gables, Florida, AerSale maintains offices and operations in the United States, Europe, and Asia.