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Aircraft Leaseback

What is a Lease Back

What does Aircraft Leaseback entail?

 

An Aircraft Leaseback involves a management arrangement where Next Level Flight Training offers your aircraft for rental purposes. Next Level Flight Training takes care of various aspects, including:

  • Facilitating qualified pilots to rent your aircraft

  • Covering all expenses related to your aircraft such as maintenance, fuel, insurance, and hangar fees. NLFT benefits from lower fleet rates on these expenses compared to an individual.

  • Managing the collection of all revenue generated from rentals

  • Ensuring compliance with regulatory requirements through coordination of maintenance

  • Handling all scheduling for the aircraft

  • Offering an alternative aircraft if yours is booked or if another aircraft better suits your needs

  • Managing accounting for flight time, rental income, and expenses, and disbursing any generated profits to you.

Why Should I Leaseback My Aircraft?

Leaseback arrangements may not suit everyone, but there are compelling reasons to consider it:

 

- You aspire to aircraft ownership but lack the financial means to purchase one outright.

- You're positioned to leverage the tax advantages associated with aircraft ownership.

- You currently own an aircraft but aren't utilizing it frequently enough; regular flights are essential for maintaining aircraft health.

- You aim to transform your aircraft from a financial burden into a valuable asset.

- You seek to mitigate your flying expenses.

- You and/or your friends anticipate extensive flying activities and prefer to compensate yourselves for flights rather than paying external parties.

 

How the Leaseback Operates:

 

 The leaseback arrangement involves the management of your owned aircraft. You provide us with your airplane, and we handle all revenue collection and expenses. At the end of each month, if revenue exceeds expenses, we issue you a check. Conversely, if expenses surpass revenue, we send you a bill. We manage all aspects of aircraft ownership, sparing you from the hassle of administrative details.

Pros and Cons of Aircraft Leasebacks:

 

The Advantages:

  • Substantial reduction in aircraft ownership costs.

  • Access to the aircraft for the cost of fuel alone, typically ranging from $50 to $75 per hour.

  • Accumulation of equity in the aircraft as it operates, often covering the entire aircraft cost within 4 to 5 years of service.

  • Potential for significant positive cash flow.

  • Opportunity for accelerated depreciation tax credits, potentially up to $500,000 in the initial year, exceeding the actual investment by a factor of 10.

The Drawbacks:

  • Rigorous flight training service that accelerates aircraft wear; some aircraft log hundreds of flight hours annually or more.

  • Requirement to schedule flights in the aircraft like any other renter, resulting in loss of flexibility to fly your specific aircraft at any time. However, alternative aircraft options are available.

Leasebacks represent varied investment opportunities and may not suit everyone. The decision to engage in a leaseback arrangement warrants careful consideration. We meticulously track the financial performance of all our aircraft, backed by comprehensive historical data to aid informed decision-making. If you're contemplating a leaseback, reach out to us for detailed information. We're committed to collaborating with you to forecast revenue, expenses, and overall aircraft performance within our fleet. Additionally, we offer assistance in selecting the right aircraft and setting optimal rental rates to maximize your returns.

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