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Business
Aircraft Leasing: Frequed Asked Questions |
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Question
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Answer
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| CAN I ALLOW CERTAIN CO-WORKERS OR FAMILY MEMBERS TO SCHEDULE FLIGHTS ON MY Leased jet? |
You can designate specific co-workers or family members to act as authorized contacts. That means that they have the right to call and schedule flights on your leased jet. If, for any reason, the list of authorized contacts needs to change, you simply call your leased jet Flight Coordinator to let them know. |
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| CAN I USE A SMALLER OR LARGER AIRCRAFT? |
As a leased jet owner, you receive guaranteed upgrades and downgrades. Many other fractional programs do not offer this benefit. Upgrades or downgrades are convenient for occasions when you need an aircraft that travels farther than the one you own, carries your entire team, or is better suited for a short trip. |
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| CAN MY CHILD FLY AS AN UNACCOMPANIED MINOR ON MY Leased jet? |
Within the U.S., children under the age of 18 but older than age 5 may travel as an unaccompanied minor on your leased jet. Please be sure to inform leased jet that your child will be traveling alone and specify who will be meeting your child so that special care can be taken to insure your child has a pleasant travel experience. Your child should be met at the arrival airport by a parent or other responsible adult. Children under age 5 cannot travel as unaccompanied minors. |
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| Do you do interest only loans? |
Depending on the level of investment in the aircraft, an interest only period can be structured into an amortizing loan. |
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| Do you require personal guarantees? |
Guarantees are typical for transactions in which the borrower/lessee possesses limited financial capability or is a special purpose or shell company. |
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| HOW ARE HOURS OF USAGE CALCULATED? |
Hours of usage are calculated as the time between wheels off and wheels on plus 12 minutes (6 minutes prior to takeoff and 6 minutes after landing.) |
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| HOW CAN I SEE THE Leased jet AIRPLANES BEFORE I BUY AND CAN I TAKE A TEST FLIGHT? |
Throughout the year, leased jet hosts numerous events around the country where you can see the leased jet fleet. In addition, you can call and talk to a sales associate. He or she can discuss your needs and the possibility of a demonstration flight where you can experience leased jet just as you would when you become an owner. |
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| HOW DO I KNOW THE AIRCRAFT WILL BE SAFE ? |
Business aviation, is one of the safest ways to fly. The numbers prove it. A review by industry safety consultant Robert E. Breiling Associates shows that the accident rate for corporate jets is better than all other aviation options, even the scheduled airlines. For the period 1995-1998, corporate jets had an accident rate of 0.21 per 100,000 flight hours, the airlines had a rate of 0.27 and general aviation had a rate of 7.78 per 100,000 hours. |
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| HOW DO I KNOW WHICH Leased jet AIRCRAFT IS RIGHT FOR MY NEEDS? |
Our experienced sales team will assist you in determining which leased jet and what share size is right for you. This will be based on information you provide such as the number of people who travel and your typical destinations. |
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| HOW DO I PAY? |
There are three leased jet costs involved with the program: two fixed costs and one variable cost. There is an initial one-time capital outlay when you buy the aircraft. Then there is a fixed monthly management fee that covers the cost of the flight crew, training, maintenance and insurance. Your third cost is variable and is charged for the hours you actually fly on board the aircraft plus six minutes on either end of the flight. |
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| HOW FAR IN ADVANCE MUST I SCHEDULE MY FLIGHTS? |
For domestic flights, this timeframe will depend on the share size you own. It can be as little as four hours notice. International flights require at least 48 hours notice if you are scheduling with leased jet in North America and 72 hours notice if you are flying with our leased jet program in Europe. Certain countries require even more notice. You can check with leased jet's international Flight Coordinators for details. |
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| How long does it take for my transaction to be approved once submitted? |
U.S. based transactions generally take 3 business days to be decisioned from the time we receive all necessary financial information. International transactions, due to their complexity, may take 2 to 3 weeks to decision. |
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| How much do you require as a loan down payment or lease security deposit? |
The required down payment/security deposit directly depends on the credit strength of the borrower/lessee and the valuation of the specific aircraft under consideration. Generally speaking however, 10% to 15% is usual. |
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| HOW NEW ARE THE AIRCRAFT AND WHY IS THIS IMPORTANT? |
Some fractional ownership programs fly aircraft that are 10, 15 and even more than 20 years old. The older the aircraft, the greater the cost of maintenance and the lower the reliability. By operating only the newest aircraft, leased jet protects your investment by keeping costs low, providing reliable aircraft, and helping ensure high residual values. In addition, all leased jet aircraft come with advanced safety equipment including Ground Proximity Warning Systems (GPWS) and Traffic Alert and Collision Avoidance Systems (TCAS II) which are often not available on older aircraft. |
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| IF MY NEEDS CHANGE, HOW AND WHEN CAN I EXIT THE PROGRAM? |
You can easily exit the program after just 24 months. We guarantee to repurchase your aircraft interest at fair market value less a small re-marketing fee. |
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| IF ONE OF THE OTHER OWNERS OF MY AIRCRAFT DEFAULTS ON HIS PAYMENT, WILL THAT AFFECT MY OWNERSHIP? |
Each owner has an undivided interest in his or her aircraft, and the joint owners are ‘tenants-in-common’ according to the Joint Ownership Agreement. Therefore, the owner of one interest in a leased jet is not responsible for the debts of another owner. leased jet ownership is not a partnership |
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| IS MY PET ALLOWED TO FLY ON MY Leased jet? |
Your pet is a member of your family and as such is welcome aboard your leased jet. A pet safety belt will be provided for pets weighing over 25 pounds. Pets smaller than 25 pounds may ride in a pet carrier or on your lap.International laws regarding the admittance of pets vary from country to country and some countries require quarantine periods of as long as six months. If you should want to take your pet outside of the U.S.A., please contact a leased jet Flight Coordinator, who will contact the necessary embassy to determine what the exact requirements are. |
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| Is there an age limit on the aircraft the leasing company will finance? |
There is no specific age limitation, however, the leasing company prefers to finance/lease aircraft less than 20 years old. |
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| ISN'T THIS REALLY A TIMESHARE? |
Unlike a timeshare, where you get to use the timeshare only a few weeks a year, the leased jet program will be available to you 24 hours a day, every day. |
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| WHAT ABOUT HANDICAP ACCESSIBILITY? |
All leased jets require a short climb up some stairs into the aircraft. If a passenger uses a wheelchair or walker or is unable to make the climb on their own or for other reasons, the crew will assist this passenger in boarding and deplaning. The passenger's wheelchair or walker will be stowed with the luggage in flight and brought out again at the conclusion of the flight. |
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| What closing costs are involved? |
Closing costs for U.S. based transactions are generally limited to a minimal documentation fee of 1/10th of 1% of the amount financed. International customers are additionally asked to reimburse the leasing company actual out of pocket expenses incurred in connection with the transaction. |
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| WHAT IF ALL THE JETS THAT ARE THE SAME TYPE AS MINE ARE IN USE AND I WANT TO FLY? |
It's unlikely that all the jets of a given type will be in use on any given day. That's one of the benefits of having a large fleet of aircraft like leased jet. From time to time, however, due to excessive demand, weather-related delays or similar situations, there will be instances when we must substitute a charter aircraft from outside the leased jet fleet to meet your flight schedule. Our historic charter substitution rate is well below 5%. In fact, we guarantee a maximum usage of back-up charter of no more than 5% in any contract year. If a charter is required, leased jet will inform you of this fact and when possible, give you options on the use of the charter. leased jet carefully screens charter operators and uses only a select list of providers. All charter aircraft will be the same class of aircraft as the aircraft in which you own a share. |
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| What information is required for the underwriting process? |
By standard practice we require the latest three years financial information (audited) or personal tax returns together with a current signed personal financial statement, one bank and two trade references. As each transaction is different, we may require additional information. |
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| What is the typical term and amortization? |
Again this depends on the situation, however terms and amortizations of 7 to 15 years are typical. |
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| What is your rate structure? |
This is a good question that is difficult to concisely answer as our pricing policy differentiates by many factors such as transaction size, term, fixed rate, floating rate, etc. In fact, many of our customers choose a combination of fixed and floating rates for their aircraft purchases. The best way to determine our rate structures is to contact one of our sales representatives with a request for a quote. |
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| WHAT KIND OF CATERING IS OFFERED? |
Leased jet operators offer carefully chosen standard catering menu based on input from our owners. Catering is provided by leased jet-approved vendors in our most popular markets to insure that you will receive high-quality catering. In addition to catering, each leased jet aircraft is fully stocked with a variety of beverages including soft drinks, juices, coffee, bottled water and, if preferred, alcoholic beverages. Stock items and items selected from the leased jet Standard Catering Menu are provided to you without charge. Of course, you may also order items that are not on the leased jet menu and we will do our best to fulfill your order. Keep in mind that regional differences may limit our ability to get exactly what you want. Off-menu items will be charged back to you. |
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| WHAT TYPE OF EXPERIENCE DO THE Leased jet FLIGHT CREWS HAVE? WHAT TYPE OF TRAINING DO THEY RECEIVE? |
The experience level required for our pilots meets or exceeds the industry norm with the following minimum requirements at hire:2,500 hours of total time fixed wing, 500 hours of turbine time, 500 hours of multiengine time. Twice a year they undergo Airline Pilot Practical Test Standards training, which exceeds the guidelines set forth by the FAA for private aircraft operation. In addition all our pilots must complete a rigorous leased jet certificate program. We follow this with thorough training at Bombardier, FlightSafety International and SimuFlite facilities in the specific aircraft type the pilot will be flying. |
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| WHAT'S THE MINIMUM SHARE SIZE OR FRACTION OF AN AIRCRAFT THAT I CAN BUY FROM Leased jet? |
leased jet offers share sizes starting at 1/16th (50 flying hours per year). You can add shares at any time in 1/16th increments. |
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| When does leasing versus buying an aircraft make sense and why? |
Leasing is generally preferred to ownership for those companies and individuals that cannot fully utilize the tax depreciation benefits of ownership or in instances where "Off Balance Sheet" treatment is desired for financial covenant or regulatory considerations. As the aircraft owner, the leasing company is able to effectively utilize tax depreciation and pass those economic benefits to its Lessees. Lessees further benefit from the tax deductability of lease payments as current expenses. Also since the lease is usually off balance sheet, lessees' financial statements benefit from favorable financial leverage ratios. Leasing additionally offers significant cash flow benefits versus leans due to leasing company's assumption of the aircraft's future value or residual risk, and hence market devaluation and technological obsolescence risk. |
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| WILL I ALWAYS GET TO FLY ON THE Leased jet AIRCRAFT I OWN? |
Even though you own a share in one or more particular aircraft, you won't necessarily fly in that aircraft each time. As an owner you have access to the entire fleet. Each aircraft of the type you own is equipped exactly the same. This reduces your costs, increases your flexibility and enables us to respond quickly to your travel needs. |
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| WILL I BE ABLE TO FLY ANYWHERE IN THE WORLD? |
Within reason you will be able to fly anywhere. leased jet does not fly into war zones, no-fly zones or areas that have travel warnings to U.S. citizens. If you plan to fly beyond North America frequently, please let that be known to your leased jet sales director so that this can be taken into consideration in the selection of the right aircraft to meet your needs. |
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