Buying a Used Single Engine Aircraft
Engine Research & Installation
Avionics Research & Installation
Air Frame Repair
Finding a Flight School
Negotiating a Lease Back Agreement
Cash Flow Analysis
Negotiating a lease back agreement is simple and straightforward, but it can
be intimidating to the first time owner with little negotiation experience. Many
agreements I have studied are quite lengthy, but I am for short one page
agreements like the following:
AIRCRAFT LEASE AGREEMENT
FOLLOWING AGREEMENT IS BETWEEN XYZ AVIATION AND ABC CORPORATION THE OWNER OF A
1968 C-150H AIRCRAFT FAA REGISTRATION NUMBER (TAIL NUMBER).
AIRCRAFT OWNER AGREES TO LEASE AIRCRAFT TO XYZ AVIATION. MONTHLY LEASE
PAYMENTS WILL BE CALCULATED BY THE MONTHLY HOBBS METER READING. LESS ANY HOBBS
METER READINGS DUE TO NORMAL AND REASONABLE MAINTENANCE OPERATIONS.
NON-MAINTENANCE HOURS FOR CALCULATION OF LEASE PAYMENT WILL BE CALCULATED UPON
A RATE OF $65 PER HOUR.
AGREES TO BE SOLEY RESPONSIBLE FOR MAINTENANCE, SERVICE, AND THE UPKEEP OF THE
AIRCRAFT, INCLUDING FUEL, OIL, INSURANCE, AIRPORT TIEDOWN FEES, AND ALL
MAINTENANCE EXPENSES. OWNER AGREES THAT THE AIRCARFT WILL BE AT ALL TIMES BE
PROPERLY REGISTERED, MAINTAINED, AIRWORTHY, AND IN ACCORDANCE WITH THE RULES
AND REGULATIONS OF THE FAA AND THE STATE OF OHIO. LEASEBACK REPORT WILL BE
COMPLETED NO LATER THAN THE 15TH OF EACH MONTH. PAYMENT TO EITHER
PARTY TO BE NO LATER THAN THE 20TH OF THE MONTH.
AGREES THAT (TAIL NUMBER) WILL BE OPERATED IN ACCORDANCE WITH THE LIMITS OF
LIABLILITY OF THE ABC AVIATION, INC. FLIGHT SCHOOL INSURANCE POLICY AND THAT
XYZ CORPORATION WILL BE PROVIDED A CERTIFICATE OF INSURANCE FROM THE INSURANCE
AGENCY INDICATING THAT OIC IS THE OWNER OF (TAIL NUMBER).
LEASE SHALL CONTINUE UNTIL TERMINATED. THE LEASE CAN BE TERMINATED BY EITHER
PARTY FOR ANY REASON UPON 30 DAYS WRITTEN NOTICE TO THE OTHER PARTY.
ABC CORPORATION XYZ AVIATION,INC.
BOB JONES TOM ARNOLD
Once the leaseback agreement is
completed, you have a foundation to do business with the flight school. Now it
is just a matter of the Flight School and the Owner keeping there ends of the
The flight school is going to
provide a Net Sheet each month that will look something like the following: