College of Business (WBUAD)
Aircraft and Airline Financing
The financial issues facing airlines and the markets available to them are different than those for any other industry. Being in a highly capital intensive and cyclical industry with volatile cash flows, airlines have very special financing requirements. Access to capital is a key concern faced by many airlines. The course provides an in depth review of the airline financing market and tools. Specific topics include: airline credit risk assessment; fleet financing tools (commercial loans, operating and financial leases, tax leases, export credit, securitization, etc.); aircraft valuation, the asset risk, and residual value guaranties; state of the financing market and availability of financing tools; leasing companies (market dynamics, size and depth of market); banking market (major players in aircraft financing, market evolution); legal environment and tax considerations (repossession, bankruptcy law, and jurisdictional tax impact); structure of a lease document; structure of a loan facility document; and risk management and insurance in airlines (what risks are covered, insurance markets, and jurisdictional considerations).
This course is designed to develop a critical analysis and understanding of aircraft andairline financing markets, airline credit risks, availability and structure of fleet financingvehicles, legal and tax issues in airline and aircraft financing, as well as assetmanagement risk and insurance. The students are provided with knowledge and skillsrequired for the analysis of airline and aircraft financing challenges and opportunities.
Upon completion of the course the student will:1. Be able to categorize and compare fleet financing tools.2. Be able to analyze information necessary to make intelligent assessment of airlinecredit risks in diverse market conditions.3. Develop analytical skills and critical thinking necessary to value airline assets.4. Develop advanced knowledge of airline and aircraft financing markets includingtheir dynamics, size, depth, and major players.5. Be able to evaluate legal environment related to fleet financing, including interpreting Capetown convention, repossession, bankruptcy law, and other appropriate laws and regulations.6.Contrast tax implications of fleet financing, including all key taxationconsiderations on origination, during lease/ownership and on transfers of aircraft,as well as jurisdictional tax impact.7.Be able to explain and justify the importance of risk management in airline andaircraft financing, including the analysis of insurance markets and jurisdictionalconsiderations.
Located on the Daytona Beach Campus, the Jack R. Hunt Library is the primary library for all students of the Worldwide Campus. The Chief Academic Officer strongly recommends that every faculty member, where appropriate, require all students in his or her classes to access the Hunt Library or a comparable college-level local library for research. The results of this research can be used for class projects such as research papers, group discussion, or individual presentations. Students should feel comfortable with using the resources of the library.
Web & Chat: http://huntlibrary.erau.edu
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