ACMI leasing: The winning strategy
LAUNCH DATE : MAR 2017
PRIMARY TARGET : Airlines
PROJECT FUNCTIONAL AREA : Network Planning & Flight Operations, Aircraft Lease, Contract Management
PROJECT FOCUS : Flight Operations, Airline Strategy, Other, Legal Affairs, Aircraft Leasing (ACMI & Dry)
PROJECT SPONSOR : Airsource Partners
While ACMI is most commonly thought of as a temporary way to provide extra capacity in unforeseen or emergency situations, ACMI leasing can also reveal to be an integrant part of a well-thought out, longer term, strategy of an airline.
Airsource Partners has selected a limited number of hand-picked ACMI experts and ACMI carriers operating under the highest standards of excellence offering airlines a customized and financially attractive ACMI solutions particularly adapted to airlines willing to make full use of the strategic potential of ACMI.
what is acmi leasing?
This project is about helping airlines finding out about the tactical and strategic aspects of ACMI leasing.
ACMI experts and operators selected by Airsource Partners will come up with the most adapted operational, financial and strategic ACMI solutions.
At times, airlines need to find a substitute for their passenger lift capacity. The need is usually triggered by operational constraints: AOG situations, airline placement on the EU ban list, late delivery of new or replacement aircraft, etc .. When extra seat capacity is needed with short notice and for short periods of time, airlines typically request the services of ACMI operators. Any airline, one day or the other, needs the short-term services of an ACMI lessor.
In some other instances however, ACMI leasing can present a much more strategic dimension where ACMI is part of a long term, well thought out strategic plan judiciously placed on the development curve of the company.
ACMI leases (and operating leases in general) offer a wealth of benefits potentially very valuable to airlines during the various phases of their development.
The list of benefits includes:
- Reduced capital investment requirement
- Increase fleet plan flexibility
- Early delivery / availability of the aircraft
- Minimized impact on financial statement
- Flexibility in payment terms.
To be fair one has to say here that ACMI leases also come with a few drawbacks, the biggest of which being the possible recall of the leased aircraft in case of financial difficulty, thus leaving the airline with less or no aircraft at all to operate.
Such carefully planned ACMI agreements typically cover a longer period of time (sometimes up to 2 years). There are several cases when airlines can find themselves in a need for this type of ACMI leases:
- Start ups in urgent need for aircraft to start operations
- Capital available too limited to buy own aircraft
- Airlines wishing to test new markets without impacting their current operations
- Delivery of new aircraft delayed
- Other fiscal and accounting considerations (balance sheet structure)
In case of the longer term strategic ACMI leases the relationship between the lessor and the lessee becomes the key to success.
As a start, the airline-lessee needs to be fully cognizant of the potential benefits of ACMI and recognize the lessor as a long term partner rather than a supplier for the duration of the agreement. The resulting lease MUST be a win-win agreement leaving both parties (lessor and lessee) happy at the end.
On the other side, the ACMI operator/lessor must be experienced in this type of agreement. It must show flexibility and adaptability to the lessee’s needs and environment. Above all, it must be able to consistently provide the highest standards of operational excellence throughout the leasing period. As part of the agreement the lessor can also offer additional support and services that will relieve the airline staff from some of its current work load and challenges (training, dispatch, ground services, flight operations for example) and give the management team of the airline more time to focus its attention on other pressing issues.
Last but not least, if properly negotiated and operated, ACMI medium/longer-term deals can be financially attractive options too.
Airsource Partners has added a (voluntarily) limited number of ACMI lessors to its Aviation Expertise Marketplace. The lessors have been selected on the basis of their capacity to deliver superior customer service while maintaining operations excellence through a full adherence to the most stringent operational and safety requirements. They all understand the long-term strategic potential of ACMI and are used to dealing with small and medium size airlines.
For more details see the documents in attachment at the beginning of this Project description.
Experts / companies available for this project
This ACMI operator based in Southern Europe offers medium/long term ACMI solutions highly customized to the needs of its clients. This airline has been selected by Airsource Partners on the basis of its ability to deliver superior customer service in full adherence to the most stringent operational and safety requirements.
This ACMI operator based in Western Europe offers medium/long term ACMI solutions highly customized to the needs of their clients. This ACMI operator has been selected by Airsource Partners on the basis of its ability to deliver superior customer service in full adherence to the most stringent operational and safety requirements.
This ACMI Operator based in Central/Eastern Europe offers medium/long term ACMI solutions highly customized to the needs of its clients. This airline has been selected by Airsource Partners on the basis of its ability to deliver superior customer service in full adherence to the most stringent operational and safety requirements.