How are new aircraft financed?

[johnny kat]

I am just curious if anyone can tell how new aircraft are financed...ie what is the down payment? What is the mortgage per month? What kind of warranty? How long is the term of repayment?

I ask because I've heard that US is paying cash for outright ownership of new A-321s'.

 

[FWAAA]

I am just curious if anyone can tell how new aircraft are financed...ie what is the down payment? What is the mortgage per month? What kind of warranty? How long is the term of repayment?

I don't have those details, as airlines and the manufacturers tend to keep quiet about specifics like those.

I ask because I've heard that US is paying cash for outright ownership of new A-321s'.

It may look like US is paying cash for those new planes but its filings with the SEC show that it is borrowing money to finance them. My guess is that it looks like this: US hands Airbus a check for the plane at delivery (minus the initial deposits and progress payments already made) and Airbus hands US the title to the plane and the plane itself. Moments later, US hands the title to the plane to the lender who hands US a check.

US is not buying any planes free and clear. All planes in the fleet that are not leased are collateral for financing arrangements.

 

[UPNAWAY]

In most cases US and other airlines (Except for SWA) tend to buy them (with traditional financing) and then turns around and sells them to a Aircraft Leasing company like GECAS and leases the aircraft back. I think warranties tend to apply at the actual component level (And MFG) and not necessarily to the entire AC like a car.

 

[BlueStar]

I ask because I've heard that US is paying cash for outright ownership of new A-321s'.

Who says?

It's unusual for an airline to purchase their aircraft outright. Usually, so far as I remember when purchasing new aircraft the manufacturer provides favorable financing, like when you buy a car... kind of. There are exceptions.

This would be unfavorable timing on USAir's part to purchase Airbus aircraft with cash so I'm calling... Who says?

 

[A320 Driver]

Who says?

It's unusual for an airline to purchase their aircraft outright. Usually, so far as I remember when purchasing new aircraft the manufacturer provides favorable financing, like when you buy a car... kind of. There are exceptions.

This would be unfavorable timing on USAir's part to purchase Airbus aircraft with cash so I'm calling... Who says?

Seems like one of the Crew News had someone in leadership stating that LCC was having to put up 20% in cash. I think the last two A330 were financed by Airbus and Rolls Royce. We WERE getting 100% financing at one point, but that stopped when the banking industry became stressed.

Driver...

 

[ContUNITEus]

"How are new aircraft financed?"



You have a group of approx. 4000 employees on substandard/unlivable wages for over 10 years and then you can afford aircraft, mergers and even spectacular DUI's.

That's how....


...on the backs of AWA flight attendants...

 

[wings396]

Another intelligent reply.....

 

[UPNAWAY]

What is an unlivable wage? Do you die if you earn one?
What a mindless idiot you are.

 

[UPNAWAY]

PS why 4,000 not 32,000? Only care about yourself I guess....