Aircraft & Financing Verbiage
Aviation Phonetic Alphabet
A – Alpha
B – Bravo
C – Charlie
D – Delta
E – Echo
F – Forxtrot
G – Golf
H – Hotel
I – India
J – Juliet
K – Kilo
L – Lima
M – Mike
N – November
O – Oscar
P – Papa
Q – Quebec
R – Romeo
S – Sierra
T – Tango
U – Uniform
V – Victor
W – Whiskey
X – Xray
Y – Yankee
Z – Zulu
- Asset-Based Finance – Financing extended to a borrower with primary focus on the value of the collateral, not the borrower.
- Balloon -Final payment on a lease or loan that is substantially larger than the preceding payments, expressed as a percentage of the loan amount: ex., ‘a 10% balloon.’ Interest is paid on the entire amount outstanding during repayment, but the 10% principal payment is made when the loan matures.
- Capital Lease – A capital lease is a lease in which the lessor only finances the lease, and all other rights of ownership transfer to the lessee. The lessee can only record the interest portion of a capital lease payment as expense.
- Default – An event or circumstance that, after the giving of notice or lapse of time, or both.
- Dry Lease – A short-term lease of the aircraft, not including the crew, insurance and maintenance.
- Finance Lease -A lease of an aircraft over most of its economic life. Risks and rewards of ownership belong to the lessee over time, though lessors retain the right to repossess in the event of a default.
- Guaranty – Guarantor in favor of Lender, together with all financial covenant amendments, and all other amendments.
- Lease – A contract to operate an aircraft over a specified time in exchange for rental payments. The lessee operates the aircraft, while the lessor remains the legal owner.
- Leaseback – When a company owns the aircraft, then sells it to another company only to immediately lease it back from the new owning company.
- Lessee – Individual or company who leases an aircraft from its owner.
- Lessor – The owner of an aircraft that leases it to another party.
- Operating Lease – Operating leases usually range in length from three to 10 years. In an operating lease, the lessee pays to use the aircraft during the lease term, but does not fully repay the lessor’s investment and does not own the aircraft when the lease ends.
- Per diem – Interest is the daily interest on a loan that occurs outside of the standard repayment period. Per diem interest charges may be incurred if a borrower receives their principal payment and begins the loan repayment period on a day other than the first of the month.
- Recast – When you recast your mortgage, you pay your lender a large sum toward your principal, and your loan is then re-amortized — in other words, recalculated based on your new, lower balance. Your interest rate and term stay the same, but because your principal has decreased, your monthly payments will be lower.
- Sub Lease – The lease to the end user in an asset management structure, where a third party continues to make payments on the head lease to the asset’s owner.
- Wet Lease – A short-term lease for seasonal needs, including the aircraft, crew, insurance and maintenance(ACIM) during the period of the lease.
- UCC – Shall mean the applicable Uniform Commercial Code as then in effect in the applicable jurisdiction.