What is a “leaseback” and how does it work?
A leaseback agreement is an excellent solution for those people who want to own their own aircraft, but don’t plan on flying it enough to justify the initial cost and the ongoing operational costs.  A leaseback is common in the aviation business. An aircraft owner “leases back” the aircraft to a flight school or other aircraft operator. The flight school then rents out the plane, handles all of the day to day maintenance issues and regulatory requirements and then at the end of the month takes out a “management fee” and expenses and pays the owner any remaining net income.

What are the benefits?
Before setting up a leaseback, you should get the advise of a professional aviation accountant. Each individual’s financial situation is different. We can help direct you to accountants that specialize in aviation.
• Depending on your situation, there can be large tax advantages to a leaseback. Discuss this with your accountant.
• In most cases you will not pay sales tax on the purchase of an aircraft placed on a rental line.
• The rental of the aircraft will help offset your cost of ownership and reduce your cost of flying.
• You have full use of the aircraft at anytime. It’s still “your aircraft”. You can come and go as you please with no minimum daily rental requirement that renters face.
• All of the paperwork and maintenance is handled for you. You can just show up and fly with no hassles or worries.

What are the downside issues?
Well … other people will be flying your plane, and as much as we try, some of these people will not treat it the way you would. You have to get your head around that concept before you consider a leaseback, but that is the primary downside to the arrangement.

You will have unlimited use of the plane, however if you decide to take it on short notice you will have to cancel people out that may have had it reserved and that’s a decision you have to make on a case by case situation.

Insurance is also an issue on leaseback aircraft. You will be required to have commercial insurance that allows flight instruction and rentals. This can be substantially more than private insurance and will have to be offset by the rental income. However, if you are a low time pilot the difference may not be that much. Every situation is different. Call or come by the office for details.

If I’m interested in a leaseback arrangement, what’s the next step?
Call our office at 305-537-9430 and speak to either Tina Oborny or Kerry Hackney. We will let you know if we currently have a need for another aircraft or if we are anticipating one. We can get you in touch with the appropriate people at the aircraft manufacturers and set you up with aviation accountant and legal advice. In many cases, the long wait for delivery can be eliminated. Some aircraft manufactures set aside delivery positions for aircraft destined for schools. We will also go over your anticipated potential income and your expenses and explain the differences in insurance coverages required.