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Old 2nd October 2002 | 18:54
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Ben Evans
 
Joined: Sep 2002
Posts: 26
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From: London
Exclamation

tango - airlines often don't own their own aircraft. They are often managed by lease companies or large finance houses. Any debt that EZY have as a result of buying aircraft could be structured in any number of ways. Just like every other airline.

Where EZY do have an advantage is:

1) Buying in a recession. Boeing and Airbus are twisting each others arms and giving each other chinese burns in their squabble to supply EZY. You can bet they get their aircraft at a VERY good price because they are buying when nobody else is.

2) EZY are bulk buying. An order of 100 a/c with a further 100 options is a large order. Discounts that only the likes of LH, BA and AF usually see are going to be on the table.

So we have bulk discounted aircraft sold in a buyers market.

In five years time those 737-700's will probably be worth MORE than they were bought for; such is the nature of this business and the business cycle. Fancy that - aircraft as an APPRECIATING balance sheet asset!

All the above pertains to Ryanair as well and possibly more so.

Ben.
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