Aircraft Lease and Purchase

As a European company with representatives in the Middle East, Soha Europe Invest Company is proud to offer commercial aircraft lease/purchase services and related engines and spare parts to the customers all around the world particularly in the Middle East and Asia. 

Our specialized aviation industry knowledge, our relationships with airlines, leasing companies, aircraft manufacturers and other key aviation industry organizations, together with the long-term experience and talent of our senior management team and other key employees have enabled us to deliver strong operational and financial results.

Our core business services are focused on providing new, fuel-efficient, in-demand commercial aircraft at competitive prices from aircraft manufacturers and offering financing solutions. Our goal is to place our customers on long-term operating leases with a globally diversified airline base and enable them to maintain a young fleet.

The expert team of Soha Europe Invest is specialized in offering lease and purchase services from a wide variety of aircraft including Airbus, Boeing, Embraer, and Bombardier.  

Airlines are turning increasingly to “operating” leases, in which they really are renting the planes, for a few years at a time, with a leasing company bearing the risk of any slump in their second-hand values. Over a third of the world's airline fleet is now rented and the proportion is likely to keep growing. Paul Sheridan of Ascend, an aviation consultancy, reckons that of the world's top four owners of airliners, two are lessors: GECAS, with 1,732 planes, and ILFC, with 1,031, soar miles above Delta (800) and American Airlines (775). A chunk of the aircraft makers' bulging order books is from leasing firms betting that demand for rented planes will keep rising. Alafco, a Kuwaiti lessor, splashed out $4.6 billion (at list prices) on 50 Airbus A320neos in November.

Prospects for the leasing business are strong, says Philip Baggaley of Standard & Poor's, a credit-rating agency. Airlines lack cash to finance their big plans for fleet renewal, and they cannot borrow cheaply to buy new planes. Deals in which airlines sell part of their existing fleet to a lessor and rent it back are becoming more common: Air France-KLM wants to do this with planes worth a total of €700m ($897m).

If renting planes makes sense for airlines, why buy at all? Nat Pieper, who oversees Delta's fleet planning, agrees that renting may make sense for small, young airlines that lack capital, for larger airlines trying out a new line of business for which they need different planes, or when manufacturers' order books are full and the only way to get a plane is to rent it.

However, he argues that big airlines are better off buying planes and keeping them for their full lifespan of 30 years or so. Like houses, then, buying is cheaper than renting in the long term. So perhaps the growth and profitability of the aircraft-leasing business is a reflection of how short-term the airline business has become.

ACMI Lease

ACMI stands for Aircraft, Crew, Maintenance and Insurance. Let’s take a brief look at those four pillars of ACMI leasing:

Aircraft – obviously, any form of leasing requires an aircraft. However, in an ACMI formula the lessor needs to ensure everything that is required for the aircraft to be airworthy and fit for the operations it is going to perform. In particular, the aircraft needs to have a current C of A and ARC and all maintenance performed to the current requirements. In other words – the lessor must ensure that the aircraft is perfectly airworthy. Also, in some cases and for prolonged ACMI contracts, the lessee may ask for the aircraft to be branded to the lessees liking. This is normally done by temporary stickers and this is also the reason why a lot of ACMI providers operate all-white aircraft. It makes branding easier.

Crew – the aircraft is leased together with sufficient flight and cabin crew. This means that the lessee does not need to employ nor train their own personnel. Rather, all crew is coming from the lessor who needs to ensure that they meet all the current flight ops regulations. As much as this is not a big issue for the flight crew (pilots) it poses some problems with respect to cabin crew. As an ACMI lease is often international, it would be nice for the cabin crew to speak the local language, for example. For this reason, some operators choose a mix of cabin crew and provide some of their own personnel into an otherwise ACMI aircraft. Crew management may also become an issue, as in most cases the crew needs to be flown in from their original employment country, will require appropriate per-diems and tickets back home ever so often.

Maintenance – in an ACMI lease, the lessor is responsible for ensuring that proper aircraft maintenance is performed at all times. This means that the lessor needs to have signed contracts with line maintenance providers at airports to which the aircraft will operate during the duration of the lease. Sometimes, if the lessee has its own maintenance facility, the lessor may use that facility, but the costs will be reimbursed in one way or another.

Insurance – as self-explanatory as this may be, under an ACMI lease the lessor is responsible for all insurance issues. This includes 3rd party liability insurance for the aircraft as well as appropriate insurance for the crew.

The Benefits of ACMI

ACMI is a perfect emergency plan for airlines which have only a small fleet and have no backup aircraft available. For such airlines, it is wise to have generic ACMI contracts signed with more than one ACMI operator. Basically, if an aircraft goes AOG (for example gets damaged by a food truck at an airport) and becomes unserviceable for a few days or even weeks, an ACMI contract can be engaged almost immediately. The ACMI operator will provide a ready to fly aircraft and resume operations, which normally would have to be cancelled.

The most important benefit of ACMI, in this case, is the very short time in which such lease operations can be started. For any other kinds of aircraft leasing, the formalities associated with the lease take a long time and require numerous approvals or other formal actions. During such time, the airline would lose an enormous amount of money due to cancelled flights.

The second interesting option of using the ACMI formula is to optimize fleet availability during high and low operating seasons. Imagine a European holiday charter operator whose peak season is in the European summer time (May until September) and whose low season falls in the remaining months. This operator may have the need to park some of their fleet during the winter, as there will not be enough demand for flights. But if that operator had a partner airline somewhere in South America, for example, where the times of year are in exact opposition to the European ones, both airlines could take advantage of the ACMI formula for their mutual benefit. Not only the aircraft, but also the crew could be kept busy throughout the entire year and ACMI make it easy.

One of the most demanded activity of Soha Europe Invest is to introduce the best wet lease contracts to its valued mandating airlines. With our support you can achieve substitute/suitable aircrafts as per your requirements of the lease requirements.

If you need to sell or lease your aircraft, we have different ways to assist you. We potentially provide our customers with the necessary statistics and analysis that allow the customers to determine the proper aircraft type that is mostly profitable and convenient for their projects. With the Soha Europe Invest, it is very simple to locate your desired aircraft in the market and purchase it with the best convenience to your budget.