Second, an owner may negotiate an option to purchase the aircraft at the end of the lease or terminate the lease prematurely. However, these additional improvements are not free. They often affect the monthly rental rate. They also change the client`s tax position because, as mentioned above, the ability to purchase the aircraft at the end of the life, changes the lease into a form of ownership. First, as with any financing, there is an integrated premium that the client must be willing to pay in return for the privilege of not having to pay his own money at the time of purchase. Lenders clearly have the advantage of having years of research to predict the value of an aircraft at the end of the leasing period. Given that many lenders have been in an unfavourable position during the economic recession of recent years, rental conditions are more conservative and favour the lender more than in previous years. The email address cannot be subscribed. Please, do it again. In recent years, many customers have expressed interest in leasing a new or used aircraft. Aircraft leasing is generally structured as an operational leasing, sometimes referred to as tax leasing. In the case of an operational lease, the lender is the rightful owner of the aircraft and is entitled to the benefits of tax amortization. An operational lease also allows the purchaser to return the aircraft to the lender at the end of the lease without risking a loss of the aircraft`s value.

This is often a good alternative for customers who are not at risk. While it is not economically possible for an airline to operate the aircraft in the midst of the pandemic, it is not illegal for the taker to meet its obligations arising from the lease of the aircraft. At the time of the letter, the Malaysian government`s Movement Control Regulation (MCO) does not limit international and domestic air operations3, although there are various restrictions on the movement of persons. At present, the Malaysian government has not declared that the flight bans are illegal and it is important to note that the decision to cancel flights is made by the airlines concerned. Therefore, this pandemic is unlikely to fall within the definition of an „illegal event” or to constitute a „change in the law.” In Malaysia, an agreement to do an act that subsequently becomes impossible or illegal could be considered frustrating and non-sharp, in accordance with Section 57 (2) of the Contracts Act 1950, which provides that it is customary for an aircraft lease to include an „illegal event” clause in which the „illegal event” occurs as a result of a change in the law and becomes or becomes illegal. , illegally or impossible for the taker to fulfil its obligations under the lease agreement. When it comes to debts, beware of the cardinal sin of the seller in a sales contract: the display that your plane is „navigable”. You really don`t know! That`s what the buyer`s mechanic is all about. Standard tenancy and financing agreements would generally allow a creditor (.dem lessor or financier) to declare that a default occurred when a „substantial negative change” in the debtor`s financial situation occurred (i.e..