What types of leasing solutions does VR Leasing offer?

Operating Lease

An Operating Lease is an agreement where the “Lessor” (VR Leasing) allows the “Lessee” to use a specified aircraft for a specified period (lease term). The lessor provides quiet enjoyment while retaining ownership of the aircraft throughout the lease period. The Lessee is responsible for all aspects and costs related to operating the aircraft but keeps all the revenue generated off the aircraft.

Sale-Leaseback

A Sale-Leaseback transaction is an arrangement where the “buyer” (VR Leasing) acquires an existing aircraft that a flight school already owns and immediately leases the acquired aircraft back to the school. The benefits of this transaction include the release of capital that was tied up in the aircraft and the securitization of fixed costs that come with leasing.

New Order Financing

VR Leasing can support Flight Schools that have existing orders with manufacturers by stepping into the order at any point in time up to delivery and leasing the aircraft back to the flight school upon delivery. Depending on the transaction this can alleviate pre-delivery payments for flight schools.

Secondary Market Acquisition and Leasing

VR Leasing assists flight schools that have identified aircraft on the secondhand market that they want to bring into their fleet by acquiring the aircraft and immediately leasing it to the flight school upon acquisition.

Common lease terms

Aircraft

When engaging in a lease with VR Leasing, all components of the aircraft are included under lease terms: Airframe, Engine, Propeller, all avionics, appliances, parts, instruments, appurtenances, accessories, furnishings, and other equipment incorporated or installed on the Aircraft.

Security Deposit

A Security Deposit of one to two month’s rent per aircraft is typical; this can vary by transaction.

Lease Period

The term of each lease varies by transaction. Typically, lease periods range from five to seven years.

Rent

Fixed Rent is paid monthly in advance and the amount varies with each transaction. The Fixed rent typically allows for 1,200 Hobbs hours per year.

Engine Maintenance Reserves

A frequent component of leases is the implementation of engine maintenance reserve payments; these payments are due monthly and are based on the number of Hobbs Hours operated per engine. These amounts are collected and tracked by VR Leasing. At the time of the engine overhaul the balance is available to the lessee to cover the cost of the engine overhaul.

Return of Aircraft

At lease expiration, the lessee is responsible for returning the aircraft to a predetermined location and meeting return conditions for the aircraft. The aircraft must be returned airworthy, all ADs cleared, fresh from Annual check and the engine must have a certain amount of time remaining until the next overhaul.