Aircraft Leaseback Programs

An aircraft lease back program enables the airplane owner to systematically defray the cost of ownership by allowing the airplane to be rented out when not in use. The owner/lessor purchases the plane. It is equipped and furnished to the owner/lessor’s specifications as their taste and needs dictate. The plane is then placed into a management program with a managing company that allows other pilots to rent the plane on an hourly basis. Essentially, this program puts the lessor in the aircraft rental business, regardless of the number of leased planes involved, thereby allowing an individual owner to have access to business deductions and tax incentives not otherwise available to aircraft owners. These deductions and incentives significantly reduce the owner/lessor’s net cost of operating the aircraft.

Other than the deductions and incentives, rental income is being generated. Some management companies take the hassles and worries of ownership out of the lessor’s hands – like fuel and hangar fees, for example – by taking a percentage of the rental fee. Some leases can generate as much as 80% of the rental rate returned to the owner. This process is similar to buying a vacation home and renting it out during the times when the owner is not using it. A variety of lease back programs are now available and coupled with the options each one offers, aircraft ownership is more accessible to individual owners.