Lease Management Program
Before 2019 US companies used to be able to roll over their capital gains on the sale of an aircraft into the next purchase by using a 1031 exchange. US tax law has changed and 1031 exchanges are no longer available for Aircraft. They are only available for Real Estate. Therefore many aircraft owners are exploring leasing their aircraft so they do not have to recapture the gain on a sale.
Jet Auditors Lease Management Program helps you find a qualified candidate to lease the aircraft then we manage and monitor the lessee to ensure that your aircraft is being cared for. We ensure that your engine programs are being paid, that the aircraft remains insured, and that maintenance is being performed. We also help the lessee make sure that the management company operating the aircraft is being reasonable in their charges. As part of the lease management we are reviewing the management companies invoices so often times we can highlight charges to the lessee that seem out of the ordinary. While we are working for the aircraft owner we provide a value to the aircraft lessor as well.
Vetting the Lessor
Jet Auditors collects information on the lease candidate and presents the information to you to make a decision on their qualification. We discus the deposit requirement and the terms of the lease. The decision to lease or not lease is entirely up to you. Your aircrafts serial number and tail number can even be hidden during the search for a lessee to obscure the aircraft owners identity.
What About Default?
Sometimes lessee’s default on their obligations. We put steps in place to ensure that in the event of a default we are in a good spot act of your behalf to secure the aircraft and make the necessary arrangements so that the aircraft comes back into your control. Often this is something that an aircraft owner does not have the time or the knowledge to handle. If the Lessee does default then we will begin the process of finding an alternative lessee for your aircraft and we will waive our lease origination fee on your next lease.
We are founded by a former Aircraft Manager who has run and worked for some of the largest and most respected management companies in the United States. We know aircraft management and can leverage that expertise to mitigate your lease risks and generate revenue from your aircraft.
What we Do
We Manage Your Lease Risk
Vendor Invoice Review
As part of our process we verify that your aircraft programs are being paid so that a suspension or cessation of the programs does not occur.
As a part of our service we ensure that your aircraft’s major inspections are being scheduled and complied with.
Management Company Oversight
As an added benefit to the lessee we can identify any discrepancies that we notice in the management reports that we review. While we cannot guarantee we will find everything we will suggest when to get more detailed information.
aThings To Consider
Is your Aircraft a Good Lease Candidate?
There are generally a few reasons that aircraft owners decide to lease their aircraft. First and foremost is that they do not have a need for it anymore… perhaps they purchased a new one or their travel requirements have changed. The second is that selling the aircraft is not desirable. Perhaps they owe more than its worht or they do not want to take the tax hit on a sale. Each situation and owner is different.
Generally not. The older aircraft have higher maintenance cost and while each type of aircraft is different, generally really old aircraft are not desirable for long term leases.
Your aircraft does not need to be on a parts maintenance program but often times it is advantageous When an aircraft is on a program the leasee can more accurately budget their maintenance costs and there is less incentive for them to not fix something on your aircraft that is broken . We can also verify that the program is being paid.
Engine Programs Y/N?
Engine maintenance is a very sizable cost that often only comes due every few years depending on the type of aircraft. If your aircraft is on an engine maintenance program then the leasee will customarily pay the cost of the program while it is on a lease. If an aircraft is not on program then an hourly rate is usually determined and paid monthly as part of the lease.