Sourcing – Buy/Sell
By following historical market trends and using an analytical approach, MDI is able to identify aircraft in the 10-15 plus year age-range, that not only have remaining PAX life but also have potential to cross-over into MDI Engine Investment and Cargo Investment platforms. The sources for PAX acquisitions include airlines, banks, aircraft leasing companies, and after-market aircraft companies. Sourcing opportunities present themselves on aircraft, engines, and parts. Through mandates and agreements, MDI sources buyers and sellers for assets that have been identified for having a high-upside or fit customer needs.
Leasing of Aircraft
Airlines lease aircraft for one of two reasons, to temporarily increase capacity, through short to medium length leases, or to lessen the financial burden of the outright purchase of an aircraft. MDI concentrates on short-term leasing as a tool to drive down residual cost and to support MDI’s other investment platforms. There are several types of leases:
Dry Lease – Common type of operating lease. In a dry lease, the lessor provides the aircraft without crew, maintenance obligations and passes all operational control to the lease. Under a dry lease, the lessee must include the aircraft on its own operating certificate and maintain all required registration and insurance. In a dry lease, the lessee will remit the monthly rental payment and reserves to the lessor for the use of the aircraft. More commonly used in the Long-Term lease structure.
Wet Lease – In addition to an aircraft, the crew, maintenance, and insurance are provided by the lessor. Under a wet lease arrangement, the lessee will remit monthly payments to the lessor. (Short-Term)
•ACMI – Providing aircraft, crews, maintenance and insurance.
•Damp Lease – Providing aircraft, limited crew, maintenance and insurance.
•Moist Lease – Providing aircraft, no crews, maintenance and insurance.
Sale and Leaseback – Under a sale and leaseback transaction, an airline, as owner of an aircraft will sell its aircraft to MDI at an agreed upon price and immediately undertake an agreement to lease the aircraft back on previously agreed upon terms.
Attractive deals sometimes present themselves as airlines transition and modernize their fleets. The airlines will sell off entire fleets of aircraft. With most “bulk” purchases, the aircraft may be available at lower prices if a full or partial fleet is acquired. MDI analyzes and re-markets the aircraft upon procurement, both individually or together to maximize return. In certain scenarios, the aircraft can be parted-out, the engines moved into the Engine Investment Platform or converted into freighters.