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If you follow @FakeUnitedJeff (United CEO parody account, but obviously an insider), he said this today: "I predict Airbus will abandon the A380 soon and the t

If you follow @FakeUnitedJeff (United CEO parody account, but obviously an insider), he said this today: "I predict Airbus will abandon the A380 soon and the type will phase out of non-Mideast 3 as they hit their first major maintenance check or lease end." Worth nothing that the first A380 to enter passenger service just finished its 10-year lease to Singapore Airlines. SA chose to return the plane. https://www.bloomberg.com/news/articles/2017-11-08/parked-in-the-pyrenees-an-a380-awaits-new-owner-or-scrapyard https://www.bloomberg.com/news/articles/2017-11-08/parked-in...

MBCook 9y ago
Are most planes leased? Do the manufacturers try to resell them when they come off lease or are they inspected to be used for parts for repair?
- Alupis 9y ago
  Most aircraft of that size are leased new - and then re-leased or sold to budget carriers.[1] New models come out and the airline may want to switch/upgrade, and it's a lot of capital tied up in one aircraft if they were to purchase them outright. [1] https://aviation.stackexchange.com/a/2374/2294 https://aviation.stackexchange.com/a/2374/2294
  - joezydeco 9y ago
    This Quora answer is a good resource too: https://www.quora.com/How-does-the-airplane-leasing-business-work-Why-do-airlines-buy-the-planes-then-sell-them-to-a-leasing-company-and-then-lease-it-back https://www.quora.com/How-does-the-airplane-leasing-business... The TLDR is that leasing allows the airline a lot more flexibility in acquiring aircraft (and returning them if demand changes). It's cheaper to break the lease than try to sell a used aircraft on the open market. In the case of A380, it's probably keeping a few airlines out of bankruptcy.
- kgwgk 9y ago
  They are not leased by the manufacturers but by aircraft leasing companies like AerCap and GECAS.
- Laforet 9y ago
  Depends on the airline. Most Middle Eastern airlines, for example, own the aircrafts they operate though a small number were indeed leased. A brand new A380 lists for $300 million dollars so not all airlines have the cash to pay for them upfront, enter leasing companies who put down the capital and rent the planes out to interested airlines. Normally when the lease expires it is off to another renter at a marked.down price, however in case of the 380 this may be a bit difficult since only a few airlines have enough volume out of hubs to fill the plane, and chances are they already have more aircrafts than necessary.
  - joezydeco 9y ago
    So that makes me even more curious about the fate of airlines like Emirates. The gulf states have been pouring money into these airlines and (allegedly) price-dumping seats to try and push others out of the routes. Delta has been very vocal about this: https://www.usatoday.com/story/travel/flights/todayinthesky/2015/10/29/delta-dumps-dubai-blames-subsidized-capacity-gulf-rivals/74794584/ https://www.usatoday.com/story/travel/flights/todayinthesky/... What's the endgame besides making Dubai into some kind of massive hub and spoke while sitting on a pile of A380s that nobody else wants? It seems like a financial black hole at this point as long as oil prices stay where they are.
- srinivasan 9y ago
  This is a philosophical difference, in a way - running an asset-light business vs an asset-heavy business. Hotels have mostly moved towards not owning their properties, for example. Increasingly, many new orders of aircraft are leases. However, they are not usually leased directly from the manufacturer. The airplane is usually owned by a holding company ("trust"), and tranches of the trust are sold to investors - somewhat similar to a mortgage bond. The benefits of this is that investors from all over the world can invest directly into the airplane, then lease it to the airline. The plane itself is the collateral, and international treaties make it easy for investors to retrieve the plane if the airline isn't making its lease payments. They could then choose to lease the plane to someone else, sell it to someone else, or to scrap it for parts and materials. What are the benefits for airlines? Typically, if things go south, they don't owe anything beyond giving the aircraft back. Also, given that many US airlines have gone through Chapter 11 recently, I'd assume they wouldn't get great interest rates if they actually want to buy the plane - it's likely cheaper for them to lease through an EETC. For example, American Airlines issued a bunch of EETC's the past few years. It's a fairly niche subject, so the wiki page isn't too great, but here it is: https://en.wikipedia.org/wiki/Equipment_trust_certificate https://en.wikipedia.org/wiki/Equipment_trust_certificate
- jsjohnst 9y ago
  I don’t have a source to back this up, but I’d say 99% of all commercial jets are “leased”. The question is who holds the lease. I don’t believe it’s usually the manufacturer, far far more often it’s a “holding company” that’s associated with the airline. There’s extensive articles on the web that go in depth about why airlines don’t directly own their planes and rather lease from a holding company, but Tl;dr it’s mostly due to bankruptcy and tax reasons.

MBCook 9y ago

Are most planes leased? Do the manufacturers try to resell them when they come off lease or are they inspected to be used for parts for repair?

Alupis 9y ago
Most aircraft of that size are leased new - and then re-leased or sold to budget carriers.[1] New models come out and the airline may want to switch/upgrade, and it's a lot of capital tied up in one aircraft if they were to purchase them outright. [1] https://aviation.stackexchange.com/a/2374/2294 https://aviation.stackexchange.com/a/2374/2294
- joezydeco 9y ago
  This Quora answer is a good resource too: https://www.quora.com/How-does-the-airplane-leasing-business-work-Why-do-airlines-buy-the-planes-then-sell-them-to-a-leasing-company-and-then-lease-it-back https://www.quora.com/How-does-the-airplane-leasing-business... The TLDR is that leasing allows the airline a lot more flexibility in acquiring aircraft (and returning them if demand changes). It's cheaper to break the lease than try to sell a used aircraft on the open market. In the case of A380, it's probably keeping a few airlines out of bankruptcy.
kgwgk 9y ago
They are not leased by the manufacturers but by aircraft leasing companies like AerCap and GECAS.
Laforet 9y ago
Depends on the airline. Most Middle Eastern airlines, for example, own the aircrafts they operate though a small number were indeed leased. A brand new A380 lists for $300 million dollars so not all airlines have the cash to pay for them upfront, enter leasing companies who put down the capital and rent the planes out to interested airlines. Normally when the lease expires it is off to another renter at a marked.down price, however in case of the 380 this may be a bit difficult since only a few airlines have enough volume out of hubs to fill the plane, and chances are they already have more aircrafts than necessary.
- joezydeco 9y ago
  So that makes me even more curious about the fate of airlines like Emirates. The gulf states have been pouring money into these airlines and (allegedly) price-dumping seats to try and push others out of the routes. Delta has been very vocal about this: https://www.usatoday.com/story/travel/flights/todayinthesky/2015/10/29/delta-dumps-dubai-blames-subsidized-capacity-gulf-rivals/74794584/ https://www.usatoday.com/story/travel/flights/todayinthesky/... What's the endgame besides making Dubai into some kind of massive hub and spoke while sitting on a pile of A380s that nobody else wants? It seems like a financial black hole at this point as long as oil prices stay where they are.
srinivasan 9y ago
This is a philosophical difference, in a way - running an asset-light business vs an asset-heavy business. Hotels have mostly moved towards not owning their properties, for example. Increasingly, many new orders of aircraft are leases. However, they are not usually leased directly from the manufacturer. The airplane is usually owned by a holding company ("trust"), and tranches of the trust are sold to investors - somewhat similar to a mortgage bond. The benefits of this is that investors from all over the world can invest directly into the airplane, then lease it to the airline. The plane itself is the collateral, and international treaties make it easy for investors to retrieve the plane if the airline isn't making its lease payments. They could then choose to lease the plane to someone else, sell it to someone else, or to scrap it for parts and materials. What are the benefits for airlines? Typically, if things go south, they don't owe anything beyond giving the aircraft back. Also, given that many US airlines have gone through Chapter 11 recently, I'd assume they wouldn't get great interest rates if they actually want to buy the plane - it's likely cheaper for them to lease through an EETC. For example, American Airlines issued a bunch of EETC's the past few years. It's a fairly niche subject, so the wiki page isn't too great, but here it is: https://en.wikipedia.org/wiki/Equipment_trust_certificate https://en.wikipedia.org/wiki/Equipment_trust_certificate
jsjohnst 9y ago
I don’t have a source to back this up, but I’d say 99% of all commercial jets are “leased”. The question is who holds the lease. I don’t believe it’s usually the manufacturer, far far more often it’s a “holding company” that’s associated with the airline. There’s extensive articles on the web that go in depth about why airlines don’t directly own their planes and rather lease from a holding company, but Tl;dr it’s mostly due to bankruptcy and tax reasons.