Airline leasing examples. Aviation leasing in turbulent times. Positioning of Russian leasing companies in the aircraft market

The total losses of Russian airlines for the first half of 2015 amounted to 28 billion rubles. Airlines' debts to lessors are growing, and this could lead to further problems for both parties.

Photo: Evgeny Biyatov/RIA Novosti

Airplanes for airlines are the main means of production. Since these are expensive assets worth many tens or even hundreds of millions of dollars, many airlines prefer or are forced not to acquire ownership of aircraft, but to lease them, financial or operational.

Financial leasing, with a number of reservations, is an installment sale, while during the leasing period the aircraft remains on the balance sheet of the leasing company, and upon completion it becomes the property of the carrier or is purchased at its residual value. Operating leasing, also with a number of reservations, is the lease of an aircraft; at the end of its term, the aircraft continues to remain, as it was, in the ownership of the leasing company.

A financial leasing agreement is usually concluded for 15 years, and an operational leasing agreement for five years. With operating leasing, an airline can reduce its costs by 15-20% because it does not buy the aircraft. In general, this is a more flexible tool that allows airlines to more quickly maneuver their capacity in the event of changes in the market.

And turbulent times have already arrived. Obvious problems for air carriers began a year ago. Previously, in 2012-2013, airlines hoped for demand growth of 12%, but at the end of 2014 they faced the problem of an oversupply of carrying capacity, and the almost two-fold depreciation of the ruble hit the economy of air travel painfully. The total losses of Russian airlines for the first half of 2015 tripled compared to the same period of the previous year and amounted to 28 billion rubles. According to the Russian Association of Air Transport Operators (AEVT), airlines' direct costs increased by 25% during this period, with fuel costs increasing by 17% and leasing payments by 45%. “Lease payments are huge. The operating lease can still be extended, but there is no point in spending money on buying the aircraft,” says the general director of a small airline engaged in regional transportation, who wished to remain anonymous.

In general, relations between air carriers and leasing companies have become more strained. In the spring, seeing the problems of carriers, many lessors agreed to restructure payments, that is, they allowed airlines to fly on credit in order to pay off the debt following the high summer season. However, there are serious suspicions that even during the usually most profitable third quarter, many carriers failed to turn a profit, and the fourth quarter will definitely be unprofitable. As a result, airlines' debts to lessors are increasing, and this may result in further problems.

Operational advantage

“Operating leasing is more common for typical assets, since, for example, a unique object is more difficult to lease, and then return and transfer to someone else. And for cars, railway rolling stock and aircraft, this is a completely normal situation, since each such asset is fully consistent with its type,” says Pavel Piskun, director of the international business development department at Sberbank Leasing.

In the case of aircraft, a certain role is played by the fact that they are operated according to strictly defined and strictly observed rules, the technical condition of the aircraft and all work on it are documented, so that the lessor always has a clear understanding of how his asset is operated, in what condition supported and what its residual value is.

As lessors admit, transactions are becoming more risky these days, and here it is necessary to emphasize the fundamental difference between financial and operational leasing. In the first case, the main risks are concentrated on the lessee. As many large Russian leasing companies said some time ago, “we work only with reliable clients,” but the experience of Transaero Airlines showed that they were mistaken.

Most transactions were concluded under the so-called leaseback scheme (SLB, Sale-Leaseback). In a typical SLB deal, the airline itself orders the aircraft from the manufacturer according to its needs, makes all the advance payments, but when the delivery date approaches, sells the ordered aircraft to the leasing company and leases them from it. The company is usually selected based on the results of a tender - who will offer lower leasing rates. In fact, the role of the leasing company in an SLB transaction is reduced to attracting the cheapest possible long-term loans; leverage in such transactions reaches 90-95%. It is not surprising that the subsidiaries of the largest Russian banks, which had good credit ratings and access to international financial markets, were able to make good progress in competition with foreign leasing companies.

SLB transactions are attractive when the market is stable; moreover, with large volumes of financing, they have a small margin for leasing companies. In this case, a fundamentally important criterion is the financial reliability of the lessee airline, because if the carrier turns out to be insolvent, cannot pay and returns the aircraft to the leasing company, it will have a serious problem finding a new customer, and at this time the aircraft will sit and bring huge losses. Although subsidiaries of leasing companies of Russian banks are accumulating experience in remarketing aircraft on the secondary market, they do not yet have enough of it. However, now, while solving problems with Transaero aircraft, they are gaining this experience at an accelerated pace.

Working under an operating leasing scheme transfers risks from the client’s solvency to the quality and liquidity of the asset, that is, the aircraft. This, of course, places increased demands on the level of competence of the leasing company - market and technical, in order to solve the problem of remarketing the aircraft as quickly as possible.

In Russia, this business model has traditionally been used by the leasing company Ilyushin Finance Co (IFK), which itself buys aircraft for subsequent placement on the market. IFC has a smaller volume of transactions compared to the largest leasing companies, since it works exclusively with aircraft equipment and is the largest in this leasing segment in Russia. The company has its own marketing and technical service specialists. Thanks to this approach, IFC can rely more on aircraft as financial assets, and not just on the reliability of airlines as payers.

"Wet" leasing

Typically, operating leasing refers to the so-called dry leasing - the airline leases an aircraft, but at the same time provides it with its own crew, maintenance and insurance. Another option, “wet” leasing, is still banned in Russia (this is a legacy of the early 1990s, when it was easier to ban than to regulate), but it has become widespread around the world. In this case, the airline leases the aircraft together with the crew; the lessor is also responsible for the technical condition of the aircraft and insurance. This is the most flexible type of leasing, allowing airlines to very quickly, within the season, increase carrying capacity or, conversely, temporarily get rid of excess.

The wet leasing scheme can be used to promote the new Russian regional aircraft Sukhoi Superjet 100 (SSJ 100) on world markets. Since this is a new product on the market, an interested foreign airline can take a few aircraft from the Russian airline Red Wings and try them out on its own route network. For Red Wings, the aircraft lessor will be IFC, which is promoting the SSJ 100 on the world market.

“Currently there are commercial negotiations on this topic with airlines from Cambodia and Laos, it is necessary to finally agree on the numbers,” says IFC General Director Alexander Rubtsov. — We also met with three or four companies from Iran who want to get the SSJ 100 on a “wet” lease. And if this country opens up for supplies, I think that we will definitely transfer several cars to Iran.”

Another promising area of ​​IFC’s work on the global market is the leasing of the latest Canadian Bombardier CSeries CS300 regional aircraft. “The winner is the one who takes the new generation aircraft, because they provide a qualitative leap in their efficiency,” says Alexander Rubtsov.

During the Dubai Air Show in early November, IFC signed a letter of intent for the leasing of two CS300s, which will be delivered to the customer under financial leasing terms in the second half of 2016. The parties agreed to conclude a firm contract by December 1, 2015, but the name of the customer was not disclosed at the time the issue went to press.

So the changed realities are forcing IFC to develop new types of leasing, in particular “wet”, since this option is the most attractive marketing tool for carriers who can check whether they like the aircraft before ordering more of them. Quite a bold step considering that none of the Russian leasing companies have ever done this. But in difficult times we have to invent non-standard approaches.

Modern airplanes and helicopters are expensive. For example, the list price of a new, modern Boeing 737 MAX reaches $129.9 million. If you want to organize a small airline with at least 5 similar aircraft on staff, the business owner will have to shell out almost 650 million dollars. Therefore, many global air carriers use aircraft leasing.

What is leasing in aviation

Aviation leasing as a financial service can be compared with renting or lending aimed at purchasing aircraft, which are the main means of providing the service. It all depends on the terms of the concluded agreement, which may imply either the lease of an aircraft with subsequent purchase, or without it.

A distinctive feature of leasing agreements in aviation is the opportunity to receive, along with the aircraft, all the necessary infrastructure, equipment and even pilots. Contracts are concluded both for completely new aircraft and for those used by other air carriers.

Operational leasing and its types

Two main types: operating and financial leasing. Operating lease agreements are concluded for a period of up to 10 years and are optimal when launching a new airline or expanding the air carrier’s route network to new destinations for which there is no business data yet. Another advantage of such agreements is that airlines can quickly expand and reduce their fleet based on demand and flight occupancy.

An important aspect of such agreements is the incomplete depreciation of the equipment and after the end of the lease period the aircraft can be returned to the lessor. Or the lease term may be extended. For Russia, contracts lasting up to 7-10 years are typical.

Wet leasing

Wet leasing is a type of agreement in which the aircraft itself, the full crew, maintenance and insurance are leased. In this case, the end user of the aircraft typically pays for the service using an hourly rate. Such agreements are concluded for a period of 1 to 24 months. Typically, wet leasing is used during peak occupancy periods, the opening of new routes, or when the lessor's main aircraft undergo major maintenance checks and repairs.

The variety, called wet or damp leasing, differs in that the lessee himself provides the cabin of the aircraft with flight attendants. Mainly used in the UK.

Dry leasing

Roughly speaking, the lessor provides a bare aircraft without registration, insurance, maintenance, crew and other things necessary for operation. Such contracts are usually concluded for a period of 2 years or more and include certain maintenance obligations.

financial leasing

Financial leasing (also known as capital leasing) occurs under a scheme where the lessor acquires an aircraft through a combination of collateral and financing by issuing new shares, and then leases it to the operating company. The operating company can receive the aircraft automatically after the contract expires, or buy it back at its residual value. In Russia, the term of such contracts is, on average, 15 years, and the advance payment is up to 10%.

Alternatives: other ways to purchase aircraft

In addition to the common classic operating and financial leasing schemes, there are alternative ways to acquire an air fleet:

1. Operating lease + sale or leaseback.
2. Bank loan or financial lease.
3. Cash (buyer’s own funds).
4. Export Guaranteed Loan Credit.
5. Tax leasing.
6. Producer support programs (usually national).
7. Trust certificate for equipment.

Leasing companies: who provides the service?

There are a large number of leasing companies on the world market, both Russian and foreign. As a rule, they are all associated with large financial groups and banks. About 45% of the world's air fleet is leased. Let's list some of them in the table.

Leasing company	Aircraft	Clients
Sberbank Leasing	Airbus 321-200, Boeing 737 Classic, Boeing 737-NG, Boeing 747-400, Boeing 747-8F, SuperJet 100, An-124 Ruslan, An-148, Mi-8.	Aeroflot, Russia, Pobeda, Ural Airlines, Volga-Dnepr, AirBridgeCargo, UTair, Irkut, Angara.
STLC (State Transport Leasing Company)	44 SSJ100 aircraft, 32 L-410 aircraft, 81 Mi-8 helicopters and 29 Ansat helicopters.	Russian air carriers.
GTLK Asia (100% subsidiary of the Russian state-owned State Transport Leasing Company)	55 Airbus and Boeing aircraft	Airlines of Southeast Asia
Air Lease Corporation	271 Airbus, Boeing, Embraer and ATR aircraft. Of these, 38.9% are Boeing 737-800s.	91 airlines
Ilyushin Finance Co.	Tu-214, Tu-204, Il-96-300, An-158	Declared bankrupt in 2012.

Video interview

Andrey Lipovetsky, Ilyushin Finance Co. Short interview from 2018.

Financial conditions

We have provided financial terms from three large Russian companies so that you can evaluate the financial component of the transactions.

The Leasing 24 system (VTB Group) enters into contracts on the terms presented in the table.

Alfa Leasing (Alfa Group) offers the conditions indicated in the table below.

Standard conditions of MKB-leasing:

Prepaid expense:	from 10%
Increase in price per year	from 5.44%
Term:	up to 120 months

So, as we have already said, there are many reasons to once again draw the attention of our readers to the place and role of modern approaches to tools for providing domestic airlines with the necessary aircraft equipment.

Firstly, the January change of the head of the UAC “heated up” the discussion of possible ways to develop the aviation industry, including its civilian sector. Secondly, designing and building an aircraft today, in a certain sense, is easier than selling it profitably on the free market given the current drop in effective demand and a large number of offers in a competitive environment. A natural question arises about expanding the list of all possible schemes, what else can be used to implement all the aircraft already built and in the UAC production plan? Thirdly, there have been significant changes in the political situation in the world; sanctions and other restrictions on trade have entered the agenda. Fourthly, the economic situation has also changed: the fall of the ruble, fluctuations in cross-currency rates, faster economic growth of some countries compared to others. Fifthly, which is of particular importance for the air transport industry, is a significant decrease in oil prices and, as a result, cheap kerosene.

Here are just a few points characterizing the dynamic nature of the changes, as well as the external and internal conditions of the aviation industry and the air transport industry.

Before turning the conversation to the specifics of the schemes, it should be recalled that a modern aircraft, especially one that has just left the final assembly shop, is a high-tech product with a high initial cost. A new regional turboprop aircraft is being put up for sale with a price tag ranging from 10 to 30 million dollars, a 100-seat regional - from 35 (according to the January price list of Toulouse aircraft manufacturers, the price tag for the A318 is US$74.3m), for a narrow-body mainline they are asking over 60 million " green" (A320 US$97.0m), widebody - more than 200 (A330-200 US$229.0m).

Not all airlines can purchase such expensive cars with their own funds. They have to turn to banks and leasing companies for help. Together they are trying to find mutually acceptable forms of cooperation. Various financial instruments are used. Let's look at the most popular of them.

financial leasing

This is a well-known, long-used and proven mechanism that is widely used both abroad and in our country. Among investors, financial leasing is usually considered, by and large, as an airline loan. We are talking about providing access to funds for the purchase of aircraft in installments. What is important for the investor here is not what kind of aircraft the aviators are asking for (their choice is not questioned), but what kind of borrower? “Good” airline borrowers are given a loan, while “bad” airlines are refused. The airline uses the funds received to buy the aircraft from the owner (manufacturer) and operates it, paying off the loan debt in regular payments in previously agreed amounts. Typically, the loan is repaid within 10-15 years. Then the encumbrances are lifted and the airline becomes the full owner of the aircraft. Many large, financially stable airlines use financial leasing. They are ready to both accept and manage the risks of the residual value of the aircraft.

A classic example is the German airline Lufthansa. It has a large aircraft engine fleet, transports a huge number of passengers, and works punctually and accurately in German. Investors are happy to give money to such clients.

Let us repeat that we are talking about providing financing on a repayable basis “for the borrower.” Which airline purchases the aircraft (its type and modification, technical condition), who its designer and manufacturer are - investors look at such topics in the second place. The loan is issued “for the borrower”, his balance. The airline took over the plane - liquid, illiquid - it is responsible for it with its balance sheet. However, finance leasing typically uses all other means of securing the borrower's obligations, including pledging the aircraft and setting up special purpose vehicles in generally accepted jurisdictions.

Operational leasing

But what if the airline is not as powerful and strong as Lufthansa? World practice shows that financial leasing is also applicable in this case, but with reservations. Investors and banks are tense: what kind of airline is this, will it be able to pay accurately? If there are doubts about this, they offer loans “for the product.” The first place is not the quality of the borrower, but the aircraft, which is the object of financing and is the object of collateral.

In such cases, investors say: “We see that this aircraft is a liquid product. If it is properly operated and regularly and fully undergoes maintenance and repair (MRO), it will retain its market value. If something happens to the airline, we can confiscate it and offer it to another client.”

Such mechanisms as operating leasing help to implement this scheme. Lending goes against the property, and the quality of the borrower becomes less important than with financial leasing. Although, of course, it remains under consideration.

The introduction of operational leasing into practice as an addition to other aircraft sales schemes expands the number of airlines that gain access to the expensive aircraft they need.

True, a very weak client will not be given a plane under operating lease: investors need to be shown that they can count on regular payments. They also want to be sure that if such a need arises, the aircraft can be removed quickly enough (this means that it is important to be in the appropriate legal environment - this is a separate story, more related to the peculiarities of national legislation and the applicability of “best global practices”). Otherwise, they will not waste their time and will go looking for another client (taking into account the country), more reliable.

Operational leasing is attractive to investors because the aircraft is a liquid collateral. Unless, of course, you make a mistake with its manufacturer, type, modification, and so on. As a rule, investors entrust their funds to a leasing company whose employees have sufficient experience in the aviation market. It consolidates its own funds and those entrusted to it by investors to place an order for a relatively large batch of aircraft in order to obtain the best deal terms from the manufacturer (price per unit of production, delivery time, technical support, and so on).

The leasing company purchases a batch of aircraft from the manufacturer or on the secondary market and begins to assign them to airlines under operating leasing terms. A new aircraft is transferred from the factory to the carrier for a relatively short period (compared to financial leasing) - often up to seven years. Upon expiration, the car is returned or the contract is extended. As a rule, in the middle of an aircraft's life cycle the terms of its operational leasing are five years, towards the end - three years or even less.

Practice shows that successful aircraft produced in large numbers remain in service for 25-30 years or more. Over the first five, seven, or ten years (depending on your luck), the car “returns” a significant part of the funds invested by the investor in its purchase. And he makes a decision: continue to lease it out for operating lease or sell it at the residual value?

The American leasing company Air Lease Corporation (ALC), through the head of the department of strategic planning and interaction with investors, Mr. Ryan McKenna, formulated its strategy for working in the market as follows. “We strive to organize our work so that the purchased aircraft spends the first third of its life with us. Even before delivery from the manufacturer, we enter into an agreement with the airline to transfer the vehicle for long-term lease. When the aircraft reaches seven or eight years old, we sell it [to the airline] in installments.”

Airlines benefit too

Thanks to leasing schemes, small and medium-sized carriers that do not have a good credit history (and start-ups do not have one at all) have the opportunity to replenish their aircraft fleet, transport passengers with the required reliability of scheduled departures and providing acceptable comfort on board the aircraft. In addition, they gain additional planning flexibility. It’s rare that any airline executive can honestly boast that he has a complete understanding of how the business and the air transportation market under his control will develop over the next 10-15 years? But, as a rule, there is some understanding for five to seven years.

Operational leasing is important for airlines in that it gives them the opportunity to obtain temporary use of expensive equipment, for the purchase of which they do not have sufficient own funds or the opportunity to purchase in installments using a bank loan. In addition, it makes it possible to manage the fleet with a high degree of flexibility: if in five years the situation changes, the previously taken aircraft can be handed over, and some other aircraft of a different brand and capacity can be taken.

This flexibility makes life easier for airlines. In particular, because they work on newly opened routes, the economic return from working on which is not yet clear. To begin flights, aviators take used equipment on an operating lease basis and work on them in the hope of “rolling out” routes. If their plans can be achieved, then, after three to five years, they take operating leases to newer aircraft and, as a rule, of greater capacity.

This scheme is also interesting because the airline does not care about residual value management issues. How much will the plane cost in five years? This is not the concern of aviators, but of leasing companies and their investor partners. Having relieved itself of the “extra” burden of worries, the airline focuses on issues of operational activities, flight safety, personnel training, and so on.

In short, with operational leasing there is a clear division of responsibilities between the operator and the owner of the aircraft, but with financial leasing they merge. In the latter case, the operator and the investor act as one person.

Due to its flexibility and affordability, operating leasing is becoming increasingly popular in the global aircraft market. Manufacturers like this because it serves to stimulate demand for their products, parts and services, including through the activation of processes in the secondary market.

This practice began to be introduced in the seventies of the last century and its market share gradually increased. Among all transactions on the market in 2010, it reached 40-50%. Today, operating leasing schemes are involved in no less than half of all transactions on the market, and according to individual marketers there are even more of them - about two-thirds.

Leaseback

Leaseback is a relatively new, interesting practice that has gained popularity in the world market in the current 21st century. But it does not enjoy the popularity it deserves in our Fatherland. And therefore, in the conversations of Russian-speaking industry professionals, it is often mentioned using the English phrase “sale - lease back” or the abbreviation SLB. It would not be very correct to place leaseback with a comma after financial and operational leases, since leaseback is theoretically applicable to both types of leasing.

Traditional leasing-back technology involves an enterprise selling its equipment and real estate to a leasing company and then using it under lease terms. Thus, enterprises attract additional financial resources, and in some cases have the opportunity to save on taxes. However, the aviation industry widely uses the practice of leaseback transactions for new aircraft.

The matter begins with the fact that the airline selects a certain type of aircraft and approaches its manufacturer with an offer to sell a certain number of similar aircraft within a specified period. Subsequent negotiations are carried out in order to clarify the delivery time, the execution option with all the details, and, most importantly, the cost of the contract. Well-known airlines often negotiate very large discounts for themselves, which leasing structures are not always able to obtain.

Having fixed the achieved parameters of the transaction in the appropriate agreement, the airline turns to the leasing company, transferring the newly acquired aircraft to it. It is transferred from the balance sheet of the airline to the balance sheet of the leasing company, while the aviators undertake to lease this aircraft on pre-agreed terms.

Why is the leaseback scheme attractive to airlines? We talked about the benefits of direct purchase from the manufacturer above. Also, when a contact with the agreed price for the aircraft has already been signed with the manufacturer, the airline organizes a competition between leasing companies. The goal is to get the best financing offer. The airline says: “here is an agreement with the manufacturer for an aircraft at a good price, who will give me a loan for it at the lowest rate?” So, financial benefits are obtained through “double competition” (first - between manufacturers, then - leasing companies).

Typically leasebacks are done by large airlines and, most often, under financial leasing. Thus, she manages to “skim the cream” at the stage of “resale” of the aircraft to the leasing company. Theoretically, an airline can agree to an operating lease, but, as practice shows, financial leasing is more profitable for it.

As far as we know, in Russia, leaseback transactions for new aircraft were used by Aeroflot.

The most promising direction

It seems that in the foreseeable future the most rapid development in the Russian market will be operating leasing. There are several reasons for this. Firstly, the fall in world oil prices. Let us recall that in June 2008, a barrel of “black gold” was sold on the world market for 135 US dollars. This is a historical maximum, from which by December 2008 there was a drop to $43. Since then, oil has gone up and down in price. In September 2014, it again dropped below one hundred dollars and continued to fall, to $48 in January 2015. It turns out that world fuel prices have dropped by more than half in three to four months. And they are in no hurry to “crawl” upward.

How long will oil and, as a result, aviation kerosene be sold relatively cheaply? Historical analysis shows that there have been large fluctuations. Moreover, many of the forecasts given at different times did not come true in practice. Oil prices changed, as they say, “without warning.” Few people today dare to say how events will develop. Most often it is predicted that oil will most likely gradually rise in price, but will not be able to approach the historical maximum of the summer of 2008 for a long time. Conclusion: when making long-term calculations, you cannot rely on the current situation with hydrocarbon fuel prices.

In addition, the air transportation market is extremely sensitive to changes in the global economy or the economic indicators of a particular country. In conditions of economic instability, it is very difficult to predict the dynamics of growth/decline in passenger traffic, changes in demand for various types of transportation, and determine the most suitable type of aircraft for a given historical moment and a specific flight direction.

Operational leasing is good because it will allow you to do something on the aircraft market until the picture with the price of fuel becomes clearer. In conditions of uncertainty, airlines have more reasons to take on operating leases for relatively short periods of time. And quickly change them to more suitable ones when the situation becomes clearer both in terms of fuel pricing and the dynamics of demand in the air transportation market. In addition, in conditions of declining demand and falling solvency of citizens, it makes sense to be more attentive to cheaper aircraft from the secondary market.

In addition, there are considerations regarding the entry threshold. In comparison with financial leasing, which is well developed in Russia, the use of operational leasing lowers the investment threshold for those wishing to “play” in the aviation market. This statement applies to investors, leasing companies, and airlines. Options like “buy a fleet of Boeing 737-500s, finance some of them with your own funds, and take out the rest on credit at an understandable residual value” were again considered.

For leasing companies, the transition from financial leasing schemes to operating leasing brings both certain benefits and new challenges. It is believed that more opportunities to earn money open up for them. First, play on the residual value (albeit with a certain risk). Secondly, use payments collected from the operator for maintenance and repair. The lessor, after all, provides the airline with an aircraft for a period of time, and, accordingly, wants to create “savings” for future necessary forms of aircraft maintenance. Therefore, the airline is asked to make monthly payments for maintenance along with the rent. These deductions are not spent immediately, but only when there is a need for repairs or scheduled maintenance. Until such time arises, these funds are in the hands of the leasing company, and are somehow placed on the market by it.

When the contract ends and the airline returns the aircraft to the owner, an interesting moment comes. The parties begin to examine the actual condition of the aircraft and how it differs from the return requirements specified in the contract. Was the aircraft modified (according to the bulletins), were the units changed, was the equipment rearranged? When assessing the condition in which the aircraft is returned, there is a very delicate professional bargaining process. The result can be two options. Or the airline will pay extra if the plane is returned in worse condition. Or the leasing company will give the airline money if the plane is returned in better condition than expected.

Why has operational leasing developed poorly in Russia? Among the reasons is the problem of the owner withdrawing aircraft before the end of the contract period if such a need arises. But, most importantly, to engage in operational leasing, you must have a different mentality of the leasing company. You have to be proactive, ready to take a plane from one company and transfer it to another (remarketing). There must be a client network... A leasing company must be deeply immersed in aviation topics, be able to clearly understand what it buys, what equipment it operates? One of the important tasks is to learn how to predict the cost of an aircraft yourself. And to maintain this cost, which requires professional “monitoring” of the technical condition of a particular aircraft.

In Russia, many leasing structures, especially at large systemically important banks, until recently did not want to seriously deal with this topic. They considered it “not their business.” Why do all this, hire the appropriate specialists, have a headache with a technical audit, maintaining the technical condition of the aircraft, remarketing, when the market is already growing?! Working under a financial leasing scheme brought greater benefits with less labor input. And today, when there is a decline in passenger traffic, leasing companies have to deal with issues of early termination of lease agreements, seize aircraft from some airlines, assess their technical condition, carry out the necessary repairs and re-equipment before transferring them to other interested operators. The work of managers of leasing structures is becoming more difficult.

Among the difficult tasks that they will have to solve is the problem of adding domestic aircraft: these are the idle new Sukhoi Superjet 100 (according to various estimates, from 25 to 30 aircraft), and the flying Tu-204/214, and Il-96. Some of them were previously leased out under financial leasing, with the use of subsidies according to the Decree of the Government of the Russian Federation No. 1073. Unfortunately, subsidies today apply only to leasing (“financial lease”). There is information that it is proposed to extend them to transactions under the operating leasing scheme (“lease”). In this case, most likely, it will be necessary to introduce some restrictions, for example, excluding short-term transactions from consideration. In view of the fairly large number of idle unclaimed Superjet aircraft, as well as the growth in their production, in the context of a clearly insufficient order portfolio with clear sources of financing, such changes may come in handy.

Leasing on VT (Aviation leasing)

Aviation leasing is a type of leasing, the subject of which are aircraft, as well as the accompanying infrastructure and equipment.

Leasing companies, manufacturers and airlines use several different schemes for the supply of aircraft on lease. The main ones are two: operational and financial leasing.

Operational leasing is used for relatively short aircraft lease periods. During operating leasing, aircraft equipment is not fully depreciated during the lease period and, upon expiration of the lease term, can be leased out again or returned to the lessor. In Russia, the delivery period for aircraft under operating lease is, as a rule, no more than seven, sometimes ten years. Basic financial terms of operating leasing provide for monthly payment by the customer of leasing payments, the amount of which is set depending on the leasing term. After the end of the leasing period, the aircraft is returned to the lessor.

Financial leasing is an operation for the special purchase of an aircraft from the manufacturer into the ownership of a leasing company with the subsequent delivery of it to the airline for temporary possession and use for a period approaching in duration the service life and depreciation of its entire cost. In Russia, aircraft are supplied to airlines under financial leasing, usually for a period of 15 years. At the end of the leasing period, ownership of the aircraft is transferred to the customer airline. Additionally, the airline pays the costs of aircraft maintenance and insurance. At the same time, during the financial leasing period, the airline has the right to purchase the aircraft at an agreed price.

The development of leasing as a new investment mechanism and the main contradictions in its understanding.

Translated from English, leasing means “rent”. From an economic point of view, leasing can be defined as a complex of organizational and economic relations associated with the transfer to the lessee for use of property (equipment, equipment, machinery) acquired by the lessor from the manufacturer (seller).

The current stage of development of leasing relations is associated with the spread of leasing in Western Europe and Japan, and then throughout the world.

Leasing arose due to the emergence of business entities who felt the need for a specific element of fixed assets or intangible assets to implement an investment project, while experiencing a shortage of financial resources for self-financing and sufficient collateral to obtain a loan.

Various forms of attracting resources to entrepreneurial activity arose as a result of the need to use convenient schemes for the acquisition of expensive equipment, therefore these schemes complement each other to a greater extent than act as competitors.

In table 3 presents the prerequisites for the emergence of legal structures.

Based on data from the International Finance Corporation and the State Statistics Committee of Russia, a graph has been constructed reflecting changes in the volume of the leasing market in Russia for the period 1998-2003. (Fig. 4).

Leasing is a relatively new type of activity in the changing economy of Russia, therefore, an analysis of the state and prospects for its development is reflected in the works of domestic economists of the last decade, and the very concept of “leasing” is interpreted by them quite ambiguously, which indicates differences in approaches to its essence.

In the works of Russian economists, scientists and Russian legal legislation, six interpretations of the concept of leasing can be distinguished:

1st opinion: leasing is an economic category built on

implementation of property relations;

• 2_e opinion: leasing is a special type of business activity associated with attracting investments;
• 3_e opinion: leasing is a special property relationship that arises when transferring property for temporary use;
• 4_e opinion: leasing is a long-term rental;
• 5_e opinion: Leasing is an investment mechanism similar to installment purchase;
• 6_e opinion: Leasing is an investment operation similar to a credit transaction.

Various definitions of leasing take into account certain forms of manifestation of this economic mechanism. Attempts to formulate the concept of “leasing” from the point of view of one of the participants in the leasing operation lead to the substitution of the concept of leasing as such in the specific form of its application. For an equipment supplier, leasing can be considered as an effective form of marketing its goods, for a lessee - as a capital-saving form of investment financing, for a lessor - as a type of entrepreneurial activity.

Thus, leasing needs to be considered from the perspective of systemic relationships between all participants in the leasing operations.

Legal structures similar to leasing are purchase with own funds, lease, bank loan, commercial loan and assignment. The main similarities and fundamental differences between the above-mentioned legal structures and leasing are presented in Table. 5.

When analyzing the similarities and differences presented in Table 5. financial instruments with leasing, it becomes obvious that the economic essence of the leasing transaction gives the emerging trilateral partnership a new qualitative characteristic that cannot be taken into account by existing traditional legal structures. Thus, leasing relations correspond to a fundamentally new type of legal relationship, which determines the unique role and place of leasing in the economy.

A classic leasing operation can be represented in Fig. 6.

Its essence lies in the fact that a potential lessee who does not have available financial resources approaches a leasing company with a business proposal to conclude a leasing transaction, according to which the lessee can choose a seller who has the required property, and the lessor acquires ownership of it and transfers it to the lessee in temporary possession and use on a paid basis. The value of the property is determined by agreement between the lessee and the seller, but should not exceed the market value. At the end of the contract, depending on its terms, the property is either returned to the lessor, or becomes the property of the lessee, or is used under the same conditions by extending the leasing agreement.

For leasing, you can distinguish your mission, which is different from the missions of similar legal institutions. The mission of leasing is to facilitate the functioning of a competitive market where resources are scarce and other forms of financing are unavailable or ineffective by bringing available limited resources to points of economic growth.

Thus, having considered the theoretical aspects of leasing relations, we can say that leasing is a financial and credit operation consisting of a complex of multilateral relations of legal entities and/or individuals that arise regarding the transfer of property for temporary or permanent use on a paid basis. This definition fully reveals the economic meaning of leasing in that it simultaneously includes elements of a credit operation, a trade transaction, investment and rental forms of activity, which are closely combined and interact with each other.

Modern methods of foreign and domestic approaches to calculating leasing payments.

Financial and economic assessment of investment projects occupies a central place in the process of justification and selection of possible options for investing funds. Since leasing is one of the forms of investment activity, well-known and generally accepted economic methods for assessing investments are applicable in the analysis and planning of the leasing process. Over many years, strict rules have been formulated, proven in theory and repeatedly tested in practice, the implementation of which ensures the reliability of the results obtained during economic analysis. Leasing as a method of financing investments has its own characteristics.

Comparing foreign leasing work with domestic leasing methods, three significant disadvantages of the latter are noted:

Firstly, in domestic works there is often no analysis of the external environment - those conditions that justify the correct use of the selected investment assessment method for leasing analysis. The most commonly used are five main methods for assessing investments, which can be combined into two groups:

• 1. methods based on the application of the discounting concept: method of determining net present value; method for calculating return on investment; method for calculating the internal rate of return;
• 2. methods that do not involve the use of the discounting concept: the method of calculating the payback period of investments and the method of determining the accounting return on investment.

Secondly, the greatest difficulty lies precisely in the formulation of the problem. In foreign literature, the formulation of the problem begins with the selection and justification of a criterion (system of criteria), on which (which) a leasing assessment methodology can subsequently be built.

The characteristics of these criteria are reduced to the following positions:

they must be objective - evaluate unambiguously and avoid controversial assessments; the criteria must be adequate - evaluate exactly what should be evaluated; the criteria must be neutral - equivalent in relation to the objects under study.

Most domestic leasing methods do not consider the formulation of the problem, much less the choice of criterion for analysis.

Thirdly, the most significant reason for visible differences in methods is the definition of leasing itself. That is, the answer to the question: “What is leasing?” is given in different ways. Apparently, the revision of the history of the issue for market reasons and the underdevelopment of market relations in Russia became the main reasons for the justification of many domestic leasing methods solely on the calculation of rental rates and rental amounts.

Methods of domestic approaches to calculating leasing payments:

• * Methodology for calculating the total amount of lease payments and drawing up a schedule for their payments. Author - E.N. Chekmareva. The technique was published in 1994 in the book by E.N. Chekmareva "Leasing business".
• * Methodological recommendations for calculating leasing payments developed by the Ministry of Economy of the Russian Federation and intended for calculating financial leasing payments. Methodological recommendations were published in 1996.
• * Methods for determining the amount of leasing payments presented in the book by V. A. Goremykin “Fundamentals of the technology of leasing operations”, 2000.
• * Methodology for calculating leasing payments, published by L. Prilutsky in 1996;
• * Improving the methodology of payments for leasing transactions in investment activities, published in 1998 in the book “Financial leasing in an enterprise;
• * Methodology for determining leasing payments in conditions of hyperinflation, published in 1996 by ZAO Moscow Leasing Company;
• * A method for calculating leasing payments that ensures break-even activity for the lessor, proposed by R.G. Olkhovskaya and published in issue 1/2 for 1998 of the Journal Leasing Review" (the method of R.G. Olkhovskaya is mentioned in the article by V.D. Gazman and Yu.A. Rudnev, who developed their own methodology based on the method proposed by R. G. Olkhovskoy);
• * The method of financial rents, presented by L. Prilutsky in the magazine "Leasing Courier";
• * The CAP (cash flow) method presented in the magazine "Leasing Courier";

Methods of foreign approaches to calculating leasing payments:

• * Options for comparative analysis of lease and loan financing, given in Chapter 13 “Rent” of the book “Commercial Banks”; authors: Reed E., Kotter R., Gill E., Smith R... (M.: Progress, 1993).
• * Determination of leasing rates for industrial equipment using economic and mathematical methods. Gutman, E.; Yagil, J. A practical derived lease rate algorithm // Management science. - Providence, 1993. - Vol. 39, N 12. - P. 1544-1551;
• * Methodology for assessing the effectiveness of financing an enterprise through leasing or bank credit. Model of financial decision making. Petrollo, P. Leasing e mutuo: un tentativo di analisi finanziaria finalizzata alla scelta della fonte di finanziamento // Riv. bancaria. - Milano, 1992. - A. 48, N 3. - P. 71-83;
• * On the reasons for concluding leasing agreements by an entrepreneur to finance investments. Analysis based on agency theory. Germany. Huber, B. Okonomische Analyze von Leasingvertragen. Ztschr. fur Wirtschafts- u. Sozialwiss. - B., 1994. - Jg. 114, H. 1. - S. 63-80.

The presented foreign works were written in different countries over a period of more than 40 years. These works have much in common and examine similar problems found in the Russian literature. These works are united by a “market approach” to solving leasing problems, and they do not contain any mention of the method of calculating leasing payments, so widely known in Russia, which is limited to summing up the lessor’s costs. The basic rules of the “market approach” are presented in Fig. 7.

Compliance with all these rules will provide the opportunity to present the calculation of leasing payments in a form that is logical and understandable to a modern entrepreneur, and will make it possible to identify the advantages of a leasing operation when compared with other investment mechanisms.

Prerequisites and prospects for the use of leasing activities in air transport of the Russian Federation.

Social changes of the late 80s - early 90s. XX century and the transition to market conditions destroyed the old economic relations.

New borders were established between independent states, industries were redistributed, and the structure of most enterprises changed. The centralized distribution system was transformed into a complex system of independent business units that received legal status. The ownership structure has changed fundamentally. The unified transportation structure of the USSR almost instantly divided into several hundred airlines, airports, service enterprises (refueling, catering, etc.). Repair factories became independent. The main market factors that determined the state of civil aviation in Russia for many years were an almost threefold reduction in traffic volumes (the level of air traffic in Russia in 2004 corresponds approximately to the level of traffic in the USSR in 1963-1964) and the increase in air tariffs for air transportation , which took place against the backdrop of a fall in the effective demand of the population. Small airlines were becoming unprofitable, and the largest ones did not have the funds to purchase new aircraft.

Every year, several hundred aircraft and helicopters are decommissioned as they reach the end of their service life. With the introduction of Chapter III of the ICAO (ICAO - International Civil Aviation Organization) on April 1, 2002, the access of Russian aircraft to international flights is limited. Of the Russian aircraft, the Tu-134, Tu-154B, Il-86, Yak-40, etc. are subject to the ban.

About 70% of civil aircraft are in the final stage of operation and operate on resources extended beyond the values ​​​​provided by the technical specifications. In table 8. The schedule of write-off of major aircraft in the period 1996-2001 is presented. During 1999-2005 About 300 civilian aircraft are subject to write-off annually. According to the forecast, by 2015 - less than 30%. Reduction in the number of main types of aircraft for the period 2002-2010. shown in Fig. 9.

Today it has been officially announced that “the main mechanism for the comprehensive development of air transport, taking into account the interests of air carriers, developers and manufacturers of aircraft, is the further development of aircraft leasing on the basis of leasing companies created with the participation of the state.” Aviation equipment leasing in Russia began to develop only in the early 90s. XX century, when the first leasing companies were created. Currently, there are about twenty domestic leasing companies engaged in aircraft leasing, these include: commercial leasing, long-term lease

• * Financial Leasing Company (FLK), Moscow;
• * “Ilyushin-finance” (IFK), Voronezh;
• * "Aviakor-Leasing", Moscow;
• * "Central Air Leasing Company", Moscow, etc.

In the current conditions, air carriers can independently make decisions about their development, choice of direction and partners for strategic development. Now the airline has the right to purchase both domestic and Western aircraft based on economic feasibility, subject to compliance with current legislation. Therefore, the constant desire to order foreign aircraft, supported by preferential terms for financing transactions and permission to deviate from current customs legislation, will always be present in this market. The main attractive feature of Western aircraft was and remains the high quality of equipment and an impeccably functioning maintenance and repair system.

The Western aviation industry is capable of offering new aircraft of any type. In addition, there is a huge number of unclaimed aircraft on the Western market (more than 2 thousand units), and competition today is no longer with new aircraft, but with secondary market aircraft that have a market price comparable to the cost of new domestic aircraft. In competition with old foreign-made aircraft, domestic equipment is already losing in terms of economic parameters in the domestic market.

Examples of decisions made recently by UTair, Sibir (Airbus), KrasAir and Pulkovo (Boeing), and a number of other carriers, clearly confirm this conclusion.

Today, a decision has been made to form a united aircraft manufacturing company that could successfully compete with leading foreign aircraft manufacturers. It is assumed that the creation of a unified, centralized management system on a new legal and organizational basis will make it possible to combine the interests of the state and the owners of aircraft assets. The subject of special concern will be the rational use of consolidated private-public resources, optimization of activities through the merger of structures, reduction of competition, closure of unprofitable enterprises, etc. Unfortunately, the previous experience of privatization of aircraft production in Russia has a negative connotation, so the creation of such a structure requires especially careful study.

The TsAGI forecast gives fairly close values ​​for the number of required aircraft. Zhukovsky. Based on these conditions, the main problem becomes to ensure the normal functioning of the established serial production of specific domestic aircraft. It is necessary to use a mechanism for the return of capital investments for projects previously included in the Federal Target Program “Development of Civil Aviation Equipment in Russia in 2002-2010 and for the period until 2015.” First of all, normal serial production of Il-96-300 (15-20 aircraft), Tu-204, Tu-214 (60-70 aircraft), Tu-334 (15-20 aircraft), PS-90A engines should be organized , basic systems and their components for organizing operation and uninterrupted maintenance in Russian airlines.

Basic concepts when drawing up an aviation leasing agreement.

To study leasing in civil aviation, it is first necessary to study the conceptual apparatus of an aviation leasing agreement, which includes:

• * the subject of aviation leasing is civil aviation equipment: aircraft, their on-board equipment and assemblies, engines, simulators, ground-based radar equipment for air traffic control, navigation, landing and communications, as well as ground support equipment for aircraft and ground infrastructure;
• * aviation leasing is a type of activity associated with the acquisition of aviation leasing items at the expense of one’s own or borrowed funds and their transfer to individuals and legal entities on the basis of an aviation leasing agreement for a certain fee, for a certain period and on certain conditions stipulated by the aviation leasing agreement, with right of redemption or without right of redemption;
• * aviation leasing agreement - an agreement under which the lessor undertakes to acquire ownership of the aircraft lease item specified by the lessee and provide the lessee with this aircraft lease item for a fee for temporary possession and use for business purposes with the right of redemption or without the right of redemption.

The aviation leasing agreement contains the following participants:

• 1) the lessor (LD) of aviation leasing items (hereinafter referred to as the lessor) - a leasing company that, at the expense of borrowed or own funds, acquires ownership of aviation leasing items in accordance with a purchase and sale agreement or other agreement and provides them to the lessee for a certain amount payment for a certain period and under certain conditions for temporary possession and use with the right to buy it out by the lessee;
• 2) the lessee (LP) of the aviation leasing items (hereinafter referred to as the lessee) - an individual or legal entity that has a license to carry out aviation activities and who, in accordance with the aviation leasing agreement, is obliged to accept the aviation leasing item for temporary possession and use for a certain fee, for a certain period and under certain conditions;
• 3) seller of aviation leasing items (hereinafter referred to as the seller) - an individual or legal entity, regardless of the organizational and legal form and form of ownership, which, in accordance with the agreement, transfers ownership of the aircraft leasing item to the lessor for their subsequent transfer to the lessee.

Leasing transactions for the acquisition of aircraft equipment have complex schemes, covering a large number of leasing entities, but the simplest ones can be presented as follows (Fig. 12.5).

Types of leasing.

There are various types of leasing, but financial and operational leasing are more acceptable for Russian airlines.

Financial leasing is a form of long-term lending by a bank to the leased object (aviation equipment), in which the lessee, by making lease payments, repays the cost of the property and also reimburses the services of the leasing company. A financial leasing agreement is usually concluded for 8-16 years, and at the end of this period, upon full payment of the leasing fee, the leased object becomes the property of the airline.

Operating leasing offers the airline the use of an aircraft for the period specified in the leasing agreement for a set rental fee. At the end of the operational leasing, the leased aircraft does not become the property of the airline, but is returned back to the lessor.

Financial leasing is different in that it does not provide for maintenance of the property by the lessor and does not allow early termination of the contract. Its implementation involves the selection of the necessary equipment by the potential lessee, negotiations with the manufacturer on the price and delivery time, the purchase of equipment by the leasing company and obtaining a bank loan (Fig. 10).

In financial leasing with additional attraction of funds, the issues of collateral, insurance, guarantees and the procedure for acquiring leased property become important. In practice, there are three main options for relations when buying and selling a leased asset:

• * the lessee independently selects the seller and the leased item, and the lessor only pays for the purchase and sale transaction and transfers the right of use to the lessee;
• * the seller is chosen by the lessor, then he is responsible to the lessee for fulfilling the obligations under the purchase and sale agreement for the leased object;
• * the lessor appoints the lessee as its agent for ordering goods from the supplier.

Operational leasing - involves the lessor's ability to rent out his property, which he purchases at his own peril and risk, repeatedly during the standard period of its service.

• 1. The lessee orders the necessary equipment.
• 2. The lessee asks the lessor about the main terms of the leasing agreement, and at the same time provides documents characterizing the financial condition and production capabilities of the lessee (project business plan and other documents).
• 3. Signing a leasing agreement.
• 4. The lessor pays under the purchase and sale agreement for the declared property to its manufacturer or supplies the lessee with previously used equipment. By agreement of the parties, the manufacturer may carry out maintenance and repair of equipment.
• 5. Insurance of the leased object is carried out by one of the parties by agreement.
• 6. The lessee makes lease payments.
• 7. Insurance of the lessee's liability.
• 8. The lessee returns the object of the transaction due to the expiration of the term (leasing agreement).

At the end of the leasing contract, the lessee may be given three options:

• * extend the term of the contract for the same or a different period, but on more favorable terms for the lessee;
• * return the object of the transaction to the lessor;
• * purchase equipment from the lessor at a relatively high residual value, which is primarily beneficial to the leasing company.

With operational leasing, the lessee seeks to avoid or reduce the risks associated with owning property as an owner, as well as to eliminate direct and indirect non-productive costs, which most often arise with the need for repairs or in case of equipment downtime. Therefore, the lessee prefers operational leasing to other forms of purchasing equipment and machinery in cases where:

• * the expected income from operating the leased equipment does not cover its initial price;
• * the object of the transaction is required by the lessee only for a short period of time (for example, for a period of seasonal work or one-time, intended use);
• * leasing equipment requires special maintenance and/or the lessee does not have its own technical specialists to operate it;
• * the object of a leasing transaction can be either unique new equipment that has not been tested in operation, or equipment that has already been used, perhaps more than once.

A condition for the widespread use of operational leasing is the presence of a market for partially worn-out equipment, as well as the need for secondary leasing of the leased asset for a lower fee.

Operating leasing is also associated with the fact that lessors, as a rule, have a reasonably narrow product specialization, and therefore are able to provide a wide range of technical services.

To distinguish between financial and operational leasing, the following scheme 13 is used.

Leaseback (sale-and-leaseback - sale and leaseback - releasing) is a system of interconnected agreements, in a form of financing close to banking, in which an airline sells aircraft (its property) to a bank or leasing company with the simultaneous conclusion of an agreement on long-term lease of former own aircraft on leasing terms (Fig. 14).

The lessor can be a bank, an insurance company, a leasing company, or an individual investor. Leaseback is beneficial to both parties, since the lessor includes its profit in the amount of leasing payments, and the lessee has the opportunity to attribute leasing payments to the cost of production.

In its external form, a leaseback is similar to a mortgage of property, since there is no physical movement of the property sold to the lessor. This type of leasing allows an enterprise to receive a significant amount of money through the sale of property, but at the same time, having concluded a leasing agreement, continue to use it, i.e., increase capital and preserve assets.

Leaseback can be used if the solvency of the airline does not meet the requirements of the lending organization. Leaseback is successfully used to balance the balance due to the sale by the enterprise of aircraft equipment not at book value, but at market value. When the market value exceeds the original cost of the aircraft, this operation allows the airline to bring its balance sheet into line with the market situation, increasing its financial potential.

In order to stabilize the financial position of an enterprise, the use of leaseback is especially important in conditions of reduced business activity.

According to global practice, the development of strategies for the development of leasing projects by airlines and aviation enterprises in order to obtain a positive financial result should be based on the sequential acquisition of aircraft (Fig. 15). That is, if one aircraft purchased under leasing is purchased and after that the airline acquires a second aircraft under leasing, the financial result of operating the two aircraft will be positive.

It is more difficult to lease two aircraft at once (Fig. 16) when there are no purchased aircraft of this type; in this case, lease payments have to be paid twice as much, and the likelihood of making a profit becomes less than with the sequential option.

Example. Let's calculate lease payments from the lessor's position using the following initial data.

The cost of the aircraft was $118 million including VAT, without VAT - $100 million.

With a depreciation rate for an aircraft of 10%, the minimum leasing period for the lessee is 10 years:

A distinctive feature of the acquisition of aviation equipment on leasing terms is the possibility, enshrined in law, of applying accelerated depreciation up to a coefficient equal to 3. For the presented example, we apply an accelerated depreciation coefficient equal to 2.5, then the depreciation rate will be equal to 25%: At = 10% H 2.5 = 25%.

With the resulting depreciation rate, the depreciation period (write-off) of the aircraft will be 4 years:

T= = = 4 years.

Calculation of the average annual cost of an aircraft is presented in table. 17.

Based on the obtained values ​​of the average annual cost of aircraft, the property tax and margin (income) of the leasing company were calculated in table. 18.

Since the cost of the aircraft is huge ($100 million excluding VAT) and the lessor does not have available funds in this amount, the leasing company must use borrowed funds in the form of a bank loan to purchase the aircraft. The total amount of interest for the use of borrowed funds for 4 years will be $32.5 million (Table 19).

When summarizing the general results in table. 20, we initially obtain the total costs of the leasing company excluding VAT in the amount of $146.9 million.

Then it is necessary to calculate the value added tax depending on the total costs of the leasing company without VAT, we get $26.44 million and, summing up the two considered values, we calculate the required “Leasing company costs with VAT”, the value of which was $173.34 million for 4 years of leasing .

Thus, the leasing cost of the aircraft exceeded the original one by 1.47 times (173.34/118 = 1.47), which is quite justified by the inclusion in leasing payments of interest for using a bank loan and the lessor’s income (margin).

When calculating using the annuity method, leasing payments per year for the lessee (airline) will be equal to $43.3 million (173.34/4) and, accordingly, per month = $3.61 million, or 93.86 million rubles.

Tax advantages of a leasing transaction.

In accordance with current Russian legislative and regulatory acts, as well as business customs, the most significant economic benefits from the use of leasing include the following:

• 1. The possibility for participants in a leasing operation to use a mechanism for accelerating depreciation of property with a coefficient not exceeding 3 (with linear and non-linear methods of calculating depreciation).
• 2. Possibility of recording the leased asset on the balance sheet of the lessor or lessee by mutual agreement. Having chosen the method of accounting for property on the balance sheet of a leasing company, the organization, financing its capital investments through leasing, does not change the structure of the balance sheet - the ratio of the company's equity and borrowed capital. If an organization has benefits for paying property tax, the method of accounting for property on the balance sheet of the lessee leads to a decrease in the cost of leasing.
• 3. Savings on the enterprise’s deductions when paying property tax, the tax base for which, with accelerated depreciation, becomes a rapidly decreasing residual value.
• 4. Attribution of the listed leasing payments to the expenses (cost of production) of the lessee, which allows the taxpayer to reduce deductions for income tax.
• 5. The possibility of the lessor receiving tax benefits based on decisions of governing bodies of the constituent entities of the Federation (within the limits established by federal and regional legislation).
• 6. The lessee (airline), using the property, applies installment payment.
• 7. Leasing has the following advantage over bank lending. For many companies, a source of financing such as bank lending is not available. A number of banks do not finance projects that are being implemented “from scratch” or that do not have sufficient collateral, i.e., high-risk projects.

Many banks refuse to lend to small financing transactions. Since the activities of leasing companies, unlike banks, are not subject to strict regulation, the procedure for leasing equipment is simpler than obtaining a loan. Naturally, the cost of leasing will be higher than when financing less risky projects.

Example. Let's consider how much it is possible to reduce the tax base of a million dollars when purchasing an aircraft on leasing terms using accelerated linear depreciation (coefficient of 2.5) in comparison with the operation of purchasing an aircraft using your own funds.

The aircraft leasing period is 4 years, annual depreciation charges are equal to $25 million. When purchasing an aircraft using your own funds, accelerated depreciation is not applied, therefore, depreciation charges will be carried out for 10 years and amount to $10 million. Table. 21. The calculation of the reduction in income tax due to the use of accelerated depreciation is given.

Let's consider reducing property taxes through the use of accelerated depreciation. Initially, we will calculate the property tax when purchasing an aircraft using our own funds. The duration of the depreciation period is 10 years (Table 22).

In table 23 we will calculate the reduction in property tax when using accelerated depreciation.

From the table Figure 23 shows that by using accelerated depreciation when purchasing an aircraft under leasing, you can save $2.64 million on property taxes over 4 years.

When designing a leasing transaction, it is necessary to take into account that, in contrast to the scheme for obtaining a commercial loan, interest on the loan paid by the lessor to the bank, property insurance payments and property tax payments (if it is on the lessor’s balance sheet), which are components of the total amount of leasing payments , are subject to VAT. The legislation allows for VAT paid to be accepted for reimbursement.

In the example, the airline will submit 26.44 million rubles for reimbursement. when purchasing aircraft on leasing terms. When purchasing an aircraft at its own expense, the airline will submit $18 million for reimbursement. Thus, the reduction in the tax base in the first case will be 26.44 - 18 = $8.44 million.

To compare the leasing operation and the operation of purchasing an aircraft using own funds, it is necessary to use the cost of the aircraft and the leasing fee without VAT, respectively, the cost of the aircraft without VAT is $100 million, the leasing fee without VAT is $146.9 million. The excess of the leasing fee is 146.9 - 100 = $46.9 million.

The tax advantage of a leasing transaction over an acquisition using own funds is 14.4 + 2.64 + 8.44 = 25.48 million rubles.

Thus, the excess lease payment will decrease by 25.48 million rubles. and will amount to 46.9 - 25.48 = 21.4 million rubles.

Conclusion: the impact of the reduced tax base during a leasing operation reduces the lease payment to $121.42 million. Thus, the excess over the original cost without VAT ($100 million) is 21.4%

What is “wet” leasing in aviation? What is it for? We will answer these and other questions in the article. Aviation leasing is the version of leasing used to purchase and operate steel birds and their associated equipment and infrastructure. This discipline combines project royalty and marine lease systems.

Operating lease

It is known that “wet” leasing is an integral part of operational leasing. Airline enterprises and manufacturers use several different systems for supplying aircraft for lease. There are two basic ones: financial leasing and operational leasing.

Commercial ones are often leased through Commercial aircraft sales and leasing (CASL), the two most powerful of which are GE Capital Aviation Services (GECAS) and International Lease Finance Corporation (ILFC).

Operating leases are usually short-term. It lasts less than ten years, which makes it attractive when the liner is needed to launch a project (company) or a trial expansion of an official transporter.

Thanks to the short operating lease period, airliners are protected from wear and tear. This point is critical in most countries due to frequently modified environmental and noise laws. What about countries where airlines are less creditworthy (for example, the countries of the former USSR)? Here, operating leasing is the only way to purchase an aircraft for an airline company.

In addition, with the help of it, the company gains flexibility: it becomes able to manage the composition and size of the fleet, reduce and expand it in accordance with demand.

Depreciation

In operating leasing, aircraft equipment is not fully depreciated during the lease period. After its expiration, it can be rented out again or returned to the owner. On the other hand, the residual price of the aircraft at the end of the lease is important for the owner. The owner may request that the returned equipment undergo maintenance (for example, C-check) in order to speed up the transfer to the next operator. Just like in other leasing areas, aircraft leasing often requires a security deposit.

How does “wet” leasing work in Russia? In an operating lease, the delivery period for aircraft is no more than seven, sometimes ten years. The customer must pay leasing payments monthly, their amount depends on the term of the contract.

Special shape

So, what is “wet” leasing? This is a special type of operating operation, when the aircraft is rented out along with the crew. That is, when the aircraft, its crew, insurance (ACMI) and maintenance are entrusted by one airline (the lessor) to another or another type of business that acts as an air travel intermediary (the lessee), paying for the administration by the hour.

The lessee supplies fuel, payments also include taxes, airport taxes, any other duties, and so on. His flight number applies. “Wet” leasing, as usual, lasts from 1 to 24 months. A shorter rental is considered a short-term charter flight on behalf of the client.

Practice

“Wet leasing” is usually used during peak transportation seasons, either when new flights are opened, or during massive annual inspections of the technical situation. Aircraft obtained through this type of lease can operate in countries where lessees are prohibited from operating.

This discipline can also be a form of charter under which the lessor provides basic operational services, including ACMI, and the lessee matches the assistance received with voyage numbers. In all other forms of charter, the lessor also issues flight numbers. Different options for “wet” leasing may also have code sharing with seat reservations.

Political reasons

Wet leasing is a great tool. It may be used for political reasons. For example, EgyptAir, an Egyptian state-owned company, cannot transport passengers to Israel under its own name due to the policies of its state. As a result, Air Sinai operates flights from Cairo to Tel Aviv in this country. To avoid this political issue, it is the company that provides wet leasing to EgyptAir.

In the UK, this discipline refers to the operation of an aircraft under the lessor's air operator certificate (AOC).

Qualities

What else is good about “wet” aircraft leasing? It consists of mandatory equipment maintenance, repairs, insurance and other operations for which the lessor is responsible. At the request of the tenant, in addition to these services, the owner can train qualified personnel, engage in marketing, supply raw materials, and so on.

The subject of this type of leasing is most often complex specific devices. Wet leasing in most cases is used either by their manufacturers or wholesalers. Banks and financial institutions rarely resort to this type of transaction, since they do not have the necessary technical base at their disposal.

In practice, there are many forms of leasing agreements, but they cannot be considered as separate types of rental transactions.

Forms of rental

“Wet” leasing involves many different nuances. In international practice, the following forms of lease transactions have become the most common:

• In accordance with leasing to the “Supplier”, the seller of the equipment also turns into a lessee, as in the return transaction. But the rented property is not used by him, but by another tenant, whom he must find and hand over the object of the contract to him. Sublease is a mandatory condition of such contracts.
• “Standard” leasing involves the sale of the object of the transaction to a financing organization, which, through its leasing enterprises, rents it out to consumers.
• In a renewable form, the agreement provides for the periodic replacement of equipment at the request of the tenant with newer models.
• General leasing refers to the right of the lessee to increase the list of equipment received without concluding new contracts.
• Shareholder (group) leasing - leasing of large objects (towers, ships, aircraft). In such transactions, the owner of the equipment is several enterprises.
• Contract leasing is a special form of leasing in which the tenant is provided with complete fleets of cars, tractors, road construction and agricultural equipment.
• When the lessor obtains a long-term loan from one or more lenders for up to 80% of the assets being leased, an equity leasing occurs. Here, the lenders are large investment and commercial banks that own impressive resources attracted for a long term. Leasing transactions are financed by banks through a loan or the acquisition of liabilities.

These are just the most popular forms of leasing contracts. In practice, it is possible to combine different forms of agreements, which increases their number.

Commercial aircraft

And yet, why is aircraft leasing necessary? It is used due to the high cost of airliners. For example, the Boeing 737 Next Generation in 2008 cost about $58.5-69.5 million. It is used by Ryanair and Southwest Airlines. In general, few airlines can afford to pay for their fleet in cash, as they have low profits.

Commercial steelhead are purchased by airlines through more complex financing and leasing techniques (leveraging and borrowing). The most popular financing schemes for commercial aircraft are financial and operating leasing and secured loans. An example of a “wet” leasing agreement can be obtained from any relevant company. There are other options for paying for planes:

• bank loan or financial lease;
• real funds;
• operator leasing and sale or finance lease;
• manufacturer support;
• tax leasing;
• EETCs (Equipment Trust Certificates).

These schemes primarily relate to tax and accounting. They include interest, tax depreciation amortization and operating expenses, which can reduce tax liability for the financier, operator and lessor.

Private airliners

Leasing for the purchase of a private jet is identical to a car loan or mortgage. A basic transaction for a corporate or small personal aircraft can be done as follows:

• the borrower provides basic information about the expected aircraft and himself to the lender;
• the lender finds out the price of the aircraft;
• the lender searches the property using its registration number to find problems with ownership;
• the lender prepares materials for the transaction: a security agreement, from a third party (if the borrower turns out to be less creditworthy).

When concluding such a transaction, loan documents are drawn up, ownership and funds are transferred.