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A comment on Airbus Handed A380 Lifeline With $16B Emirates Order. Parent comment

Re:Airbus Handed A380 Lifeline With $16B Emirates Order by notahacker on Thursday January 18, 2018 @08:00AM (#16176724)
Well there is no "typical" for an A380-sized widebody and Emirates might have no choice but to keep most of theirs until the end of their lifespans (unless there's a freighter conversion programme). But in general a commercial passenger aircraft lasts around 25 years, so 10 years isn't really a short period of ownership for a first owner (and is a fairly long lease). Fixed maintenance intervals often require the aircraft to be almost totally rebuilt within that timescale, which is a good opportunity to transfer owner/operator and refit to some other airline's spec.

Most airframes - the A380 is an exception - can be readily resold or leased on a liquid market. There's big depreciation over the first few years, sure, but operating costs are bigger than capital costs, and newer aircraft are less thirsty for fuel. Airlines purchasing aircraft also usually get big discounts, and have specialist financial institutions willing to front up the capital and eat some of the downside risk on the depreciation. Airlines leasing aircraft typically do so for periods of more like five years, with lease extensions at their discretion.

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Re:Airbus Handed A380 Lifeline With $16B Emirates Order by skgoa on Thursday January 18, 2018 @08:29AM (#16176886)
Emirates leases their planes on 12 year contracts. They do this because they want to have a young fleet. Singapore Airlines does the same. The leasing company might be stuck with the plane after the lease is up, but the airline is not going to care all that much as long as leasing companies are ready to enter into new deals.

Those leases will typically cover the costs of the aircraft, so the leasing company will basically get a 12 year old airplane for free that they can use to generate a profit from (lease, sell or part out) as they wish. Though there does not seem to be any demand for used 380s right now. The one Singapore Airlines has returned (for an entirely new one on a new lease) is currently in storage without engines. Apparently the parts are worth 100 million dollars. It will be interesting to see how that continues to play out when more leases end, since it's unlikely that there will be buyers for say 200 planes worth of spare parts when ony 100 planes are still in service...

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Re:Airbus Handed A380 Lifeline With $16B Emirates Order by themagician on Thursday January 18, 2018 @02:04PM (#16180215)
If the lease covers the cost of the plane, why not just buy it instead of lease it?
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Re:Airbus Handed A380 Lifeline With $16B Emirates Order by B1FF_PSUVM on Friday January 19, 2018 @01:54PM (#16188692)
"Financial engineering": capital investment and depreciation vs. operational expenses, interest/taxes/tax-breaks on those things, that kind of stuff.
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