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Kenya Airways...why ignore..
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VituVingiSana
#7171 Posted : Saturday, March 11, 2017 12:12:01 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,382
Location: Nairobi
Why would KQ sell & then lease back aircraft for 18 months when they will be scrapped after the lease expires?
http://m.atwonline.com/l...sale-and-leaseback-deal
Why even sell them?
Selling them means a commission was paid. Then leasing them back means another fee is paid. Lease payments include financing costs. Finally when scrapped, KQ might get nothing.
Couldn't KQ sweat the aircraft over 2 years before scrapping them?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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alotoftalk
#7172 Posted : Saturday, March 11, 2017 2:03:53 AM
Rank: Member

Joined: 8/27/2015
Posts: 138
Location: Harare
VituVingiSana wrote:
Why would KQ sell & then lease back aircraft for 18 months when they will be scrapped after the lease expires?
http://m.atwonline.com/l...sale-and-leaseback-deal
Why even sell them?
Selling them means a commission was paid. Then leasing them back means another fee is paid. Lease payments include financing costs. Finally when scrapped, KQ might get nothing.
Couldn't KQ sweat the aircraft over 2 years before scrapping them?


Financial engineering 101 through lease accounting.
Investment philosophy development in progress...
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obiero
#7173 Posted : Saturday, March 11, 2017 8:12:43 AM
Rank: Elder

Joined: 6/23/2009
Posts: 14,324
Location: nairobi
alotoftalk wrote:
VituVingiSana wrote:
Why would KQ sell & then lease back aircraft for 18 months when they will be scrapped after the lease expires?
http://m.atwonline.com/l...sale-and-leaseback-deal
Why even sell them?
Selling them means a commission was paid. Then leasing them back means another fee is paid. Lease payments include financing costs. Finally when scrapped, KQ might get nothing.
Couldn't KQ sweat the aircraft over 2 years before scrapping them?


Financial engineering 101 through lease accounting.

Some people are beyond redemption
COOP, IMH, KEGN, KQ, MTNU
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Horton
#7174 Posted : Saturday, March 11, 2017 8:17:28 AM
Rank: Veteran

Joined: 8/30/2007
Posts: 1,558
Location: Nairobi
obiero wrote:
alotoftalk wrote:
VituVingiSana wrote:
Why would KQ sell & then lease back aircraft for 18 months when they will be scrapped after the lease expires?
http://m.atwonline.com/l...sale-and-leaseback-deal
Why even sell them?
Selling them means a commission was paid. Then leasing them back means another fee is paid. Lease payments include financing costs. Finally when scrapped, KQ might get nothing.
Couldn't KQ sweat the aircraft over 2 years before scrapping them?


Financial engineering 101 through lease accounting.

Some people are beyond redemption


https://beta.theglobeand....com&service=mobile

So Air Canada doing something similar and turning a profit. Only difference is these are B787s vs B737
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maka
#7175 Posted : Saturday, March 11, 2017 10:11:22 AM
Rank: Elder

Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
https://youtu.be/KxRsy3Y4THQ
possunt quia posse videntur
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Ericsson
#7176 Posted : Saturday, March 11, 2017 11:34:22 AM
Rank: Elder

Joined: 12/4/2009
Posts: 10,820
Location: NAIROBI
obiero wrote:
alotoftalk wrote:
VituVingiSana wrote:
Why would KQ sell & then lease back aircraft for 18 months when they will be scrapped after the lease expires?
http://m.atwonline.com/l...sale-and-leaseback-deal
Why even sell them?
Selling them means a commission was paid. Then leasing them back means another fee is paid. Lease payments include financing costs. Finally when scrapped, KQ might get nothing.
Couldn't KQ sweat the aircraft over 2 years before scrapping them?


Financial engineering 101 through lease accounting.

Some people are beyond redemption


@VVS
Obiero is a see no evil and hear no evil.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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obiero
#7177 Posted : Saturday, March 11, 2017 1:42:28 PM
Rank: Elder

Joined: 6/23/2009
Posts: 14,324
Location: nairobi
Ericsson wrote:
obiero wrote:
alotoftalk wrote:
VituVingiSana wrote:
Why would KQ sell & then lease back aircraft for 18 months when they will be scrapped after the lease expires?
http://m.atwonline.com/l...sale-and-leaseback-deal
Why even sell them?
Selling them means a commission was paid. Then leasing them back means another fee is paid. Lease payments include financing costs. Finally when scrapped, KQ might get nothing.
Couldn't KQ sweat the aircraft over 2 years before scrapping them?


Financial engineering 101 through lease accounting.

Some people are beyond redemption


@VVS
Obiero is a see no evil and hear no evil.

The shuttles were a bad idea.. I said it right here
COOP, IMH, KEGN, KQ, MTNU
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VituVingiSana
#7178 Posted : Saturday, March 11, 2017 2:11:19 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,382
Location: Nairobi
Horton wrote:
obiero wrote:
alotoftalk wrote:
VituVingiSana wrote:
Why would KQ sell & then lease back aircraft for 18 months when they will be scrapped after the lease expires?
http://m.atwonline.com/l...sale-and-leaseback-deal
Why even sell them?
Selling them means a commission was paid. Then leasing them back means another fee is paid. Lease payments include financing costs. Finally when scrapped, KQ might get nothing.
Couldn't KQ sweat the aircraft over 2 years before scrapping them?


Financial engineering 101 through lease accounting.

Some people are beyond redemption


https://beta.theglobeand....com&service=mobile

So Air Canada doing something similar and turning a profit. Only difference is these are B787s vs B737

The 787s are new aircraft and have another 15 yrs life. These 737s are almost dead. The article says they will be retired/scrapped after KQ is done ie in 18 months.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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obiero
#7179 Posted : Saturday, March 11, 2017 2:59:26 PM
Rank: Elder

Joined: 6/23/2009
Posts: 14,324
Location: nairobi
VituVingiSana wrote:
Horton wrote:
obiero wrote:
alotoftalk wrote:
VituVingiSana wrote:
Why would KQ sell & then lease back aircraft for 18 months when they will be scrapped after the lease expires?
http://m.atwonline.com/l...sale-and-leaseback-deal
Why even sell them?
Selling them means a commission was paid. Then leasing them back means another fee is paid. Lease payments include financing costs. Finally when scrapped, KQ might get nothing.
Couldn't KQ sweat the aircraft over 2 years before scrapping them?


Financial engineering 101 through lease accounting.

Some people are beyond redemption


https://beta.theglobeand....com&service=mobile

So Air Canada doing something similar and turning a profit. Only difference is these are B787s vs B737

The 787s are new aircraft and have another 15 yrs life. These 737s are almost dead. The article says they will be retired/scrapped after KQ is done ie in 18 months.

So let me understand.. You would have preferred that KQ holds on to the depreciating craft for an extra 2 years so that they sell at a total loss and at the same time, keep incurring finance costs
COOP, IMH, KEGN, KQ, MTNU
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Impunity
#7180 Posted : Saturday, March 11, 2017 11:15:02 PM
Rank: Elder

Joined: 3/2/2009
Posts: 26,334
Location: Masada
obiero wrote:
VituVingiSana wrote:
Horton wrote:
obiero wrote:
alotoftalk wrote:
VituVingiSana wrote:
Why would KQ sell & then lease back aircraft for 18 months when they will be scrapped after the lease expires?
http://m.atwonline.com/l...sale-and-leaseback-deal
Why even sell them?
Selling them means a commission was paid. Then leasing them back means another fee is paid. Lease payments include financing costs. Finally when scrapped, KQ might get nothing.
Couldn't KQ sweat the aircraft over 2 years before scrapping them?


Financial engineering 101 through lease accounting.

Some people are beyond redemption


https://beta.theglobeand....com&service=mobile

So Air Canada doing something similar and turning a profit. Only difference is these are B787s vs B737

The 787s are new aircraft and have another 15 yrs life. These 737s are almost dead. The article says they will be retired/scrapped after KQ is done ie in 18 months.

So let me understand.. You would have preferred that KQ holds on to the depreciating craft for an extra 2 years so that they sell at a total loss and at the same time, keep incurring finance costs


You don't need to explain some facts to some people.
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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