Aircraft financial leasing workflow (recommended useful information)

Aircraft financial leasing workflow (dry information recommendations) based on the practical operation of financial leasing，The workflow of aircraft financial leasing is divided into three stages，That is, the leasing preparation stage、Lease implementation stage and contract execution stage。one、Airlines apply for aircraft introduction (purchase) approval based on their own strategic development needs and market demand.，After determining the needs of the aircraft，Submit an application to the Civil Aviation Administration of China for the introduction of aircraft，Reviewed by the Civil Aviation Administration、later approved。

If agreed，The Civil Aviation Administration of China will issue an aircraft introduction approval document or aircraft introduction registration certificate, etc.。two、Airlines applying for foreign debt approval need to consider capital market conditions and their own financing needs.，Apply to the National Development and Reform Commission for foreign debt approval for aircraft introduction，Obtain an overseas financial lease or direct loan from an overseas bank。

Because the approval of the National Development and Reform Commission takes a long time，And there is uncertainty about the final approval，In order to avoid being unable to perform the contract due to lack of foreign debt approval after signing a financing contract with an overseas financial institution, airlines，It is generally necessary to apply for foreign debt approval one and a half years before the aircraft is delivered.。

three、Sign the aircraft purchase contract after receiving approval from the National Development and Reform Commission and the Civil Aviation Administration of China to introduce the aircraft.，Airlines can enter into aircraft purchase contracts with aircraft manufacturers。After the contract is signed，Airlines can start bidding for financing。Four、Financial leasing bidding Financial leasing is an important financing method for airlines in addition to loans，Types of financial leases include export credit finance leases、Tax finance lease、Commercial finance lease，etc.。

no matter what form，Airlines need to prepare project tender documents and project feasibility study reports，Demonstrate the feasibility of the project，and present basic financing requirements to potential financiers.

Require

。After selecting the financier and the lease term、rental cost、Payment method、Lease balance and related

cost

After the issue is agreed upon，Both parties signed a letter of intent for financial leasing，Agree on the main business conditions for financial leasing。

Lessees need to pay attention to the agreed time limit for completion of the transaction，There are certain constraints on financiers，Avoid delays in closing transactions，difficult to control。five、Financing options evaluated by airlines according to various banks、Financing proposals from investors and leasing companies，List the major terms and compare them one by one，Conduct a comprehensive evaluation of each proposal，Assessment includes financing costs、Structure and potential risks，Financing term，Currency and exchange rate risks and the creditworthiness of the bidder, etc.。

If the amount of the subject matter is large or the number of aircraft is large,，It takes two or three rounds，Gradually narrow the scope of considerations，And negotiate with the bidders one by one，Choose an economy、Safety、Reliable solution，and signed a letter of intent for financing。This work should generally be completed about half a year before the aircraft is delivered.。six、The financial lease contract negotiation is carried out after both parties sign the letter of intent for the financial lease project.，Entering the contract negotiation stage，Details of the agreed transaction。

Airlines generally hire law firms with international influence and experience in aircraft leasing.，Review the financial lease documents drafted by the lessor together and negotiate with the financier/investor。Review of finance lease documents should be comprehensive，Avoid unnecessary or unforeseen risks and losses to airlines due to the omission of a few clauses。

Negotiations usually go through multiple rounds，Negotiations can be conducted in the early stage via email and conference calls.，When the positions of all parties are close or time is pressing，All parties still need to conduct face-to-face negotiations to resolve the remaining key issues。The basic contents generally included in the negotiation of a financial lease contract include:：

1. Define the parties to the transaction，Usually includes the lessor、lessee、Lenders etc.。
2. Define rental properties，i.e. aircraft specifications、Price and delivery time etc.。
3. Agreed withdrawal arrangements。
4. Agreed lease period。
5. Agreed lease rate。
6. Agree on rent payment method、
7. Agreement on lease guarantee matters。
8. Agree on the final payment of the lease and the lease method。
9. Agree on insurance matters。
10. agreed deal

cost

commitment。

1. Registration of agreed aircraft、operations、Maintenance and other matters。
2. Agreed agreement termination event、tax liability、Governing laws and other matters 7、Signing the financing contract solves all problems、After determining the structure and content of the contract text，All parties formally signed a contract related to financial leasing.。

The main documents for an aircraft finance lease transaction usually include the lease contract、loan contract、purchase transfer contract、insurance transfer contract、Interest rate options and swap contracts、Aircraft Warranty Transfer Contract、aircraft mortgage contract、Equity transfer contract、Account pledge contract and equity pledge contract, etc.。

Different methods and structures of financial leasing，There may be other documents that need to be signed.、The aircraft is delivered after signing the lease agreement，If the lessor is an overseas company，The lessee needs to go to the local foreign exchange management department to complete the foreign debt registration and withdrawal registration procedures.，Obtain foreign debt registration certificate。

A few working days before expected delivery，The airline must notify the lessor of the aircraft delivery date in accordance with the contract.；The lessor immediately sends a withdrawal notice to the financiers and investors，Agree on the amount and time of withdrawal；Financiers and investors rely on the time and amount in the withdrawal notice.，Provide funds to lessors。

One day before the scheduled delivery date of the aircraft，The lessee sends personnel to the aircraft delivery location to conduct technical inspections of the aircraft.，Including document acceptance and test flight, etc.，After technical acceptance is completed，The lessee notifies the lessor to pay the aircraft price to the aircraft manufacturer and the lawyers of all parties have an online conference call，Airlines confirm aircraft is ready for delivery，The aircraft manufacturer delivers the aircraft to the lessor after receiving full payment，The lessor delivers it to the lessee randomly，The lessee will send the unit to transfer the machine back。

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