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
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Aviation Dictionary
Finance Definitions
Usage Definitions
Aircraft Definitions
All Definitions
Finance Definitions
- 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.
Usage Definitions
- FAR Part 91 – Federal Aviation Regulation; created and mandated by the FAA. An aircraft maintained FAR Part 91 cannot be used to generate a profit; cannot be used for charter, transporting freight for a fee, sightseeing tours, parachute jumping, etc… FAR Part 91 certification is generally used for corporate and privately-operated aircraft with a passenger capacity of 19 or less; used for executive and/or personal transportation.
- FAR Part 121 – Federal Aviation Regulation; created and mandated by the FAA applicable to Air Carriers and Commercial Operators – Commercial Use (Same as FAR Part 135, but used for aircraft with a passenger capacity of over 19.)
- FAR Part 129 – Federal Aviation Regulation; created and mandated by the FAA applicable to Foreign Operators and Foreign Carriers.
- FAR Part 133 – Federal Aviation Regulation; created and mandated by the FAA applicable to Rotorcraft (helicopter) external-load operations (Firefighting, Search & Rescue, Agricultural, etc…).
- FAR Part 135 – An aircraft maintained FAR Part 135 can be used to generate a profit; can be used for charter, transporting freight for a fee, sightseeing tours, parachute jumping, etc… FAR Part 135 certification is generally used for aircraft with a passenger capacity of 19 or less for the above purposes. However, corporate and/or privately-operated aircraft used for executive and/or personal transportation can be FAR Part 135 certified; the aircraft is generally considered safer and worth more at resale time due to additional and more frequent inspections required by this certification. The aircraft must be flown by a commercially-rated pilot.
- FAR Part 145 – Federal Aviation Regulation; created and mandated by the FAA. A certificate or rating issued to a repair station. A person who meets the requirements is entitled to a repair station certificate for aircraft maintenance. There are certain requirements that are necessary such as employee training.
Aircraft Definitions
- FAA: The Federal Aviation Administration (FAA) is a governmental body of the United States with powers to regulate all aspects of civil aviation in that nation as well as over its surrounding international waters. Its powers include the construction and operation of airports, air traffic management, the certification of personnel and aircraft, and the protection of U.S. assets during the launch or re-entry of commercial space vehicles. Powers over neighboring international waters were delegated to the FAA by authority of the International Civil Aviation Organization.
- FARs: The Federal Aviation Regulations and any Special Federal Aviation Regulations.
- Guaranty: Guarantor in favor of Lender, together with all financial covenant amendments, and all other amendments.
- Helicopter – Any of a class of heavier-than-air craft that are lifted and sustained in the air horizontally by rotating wings or blades turning on vertical axes through power supplied by an engine. A type of rotorcraft in which lift and thrust are supplied by rotors.
- IDERA: A request to cancel an aircraft’s registration due to its export from the United States must be made by the last registered owner, the last owner of record, the foreign purchaser when supported by evidence of ownership, or by the authorized party under an Irrevocable De-Registration and Export Request Authorization.
- International Registry (IR): The International Registry permits individuals and organizations to register and search financial interests in aircraft assets. Our customers use the Registry to electronically record international interests for the purpose of establishing the priority of those interests.
- Jet Aircraft – Propelled by jet engines, (nearly always a fixed-wing aircraft) (jet propulsion).
- Piston Engine Aircraft – Piston airplanes have one or more piston-powered engines connected to the propeller(s), which provide thrust to move the aircraft on the ground and through the air.
- Turbo Prop – A turboprop engine is a turbine engine that drives an aircraft propeller. In contrast to a turbojet, the engine’s exhaust gases do not contain enough energy to create significant thrust, since almost all of the engine’s power is used to drive the propeller.
Registry: The FAA Civil Aviation Registry, Aircraft Registration Branch, or any successor registry having an essentially similar purpose pertinent to the ownership registration of the Aircraft pursuant to the Registration Requirements.
All Definitions
- 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.
- Dry Lease – A short-term lease of the aircraft, not including the crew, insurance and maintenance.
- FAR Part 91 – Federal Aviation Regulation; created and mandated by the FAA. An aircraft maintained FAR Part 91 cannot be used to generate a profit; cannot be used for charter, transporting freight for a fee, sightseeing tours, parachute jumping, etc… FAR Part 91 certification is generally used for corporate and privately-operated aircraft with a passenger capacity of 19 or less; used for executive and/or personal transportation.
- FAR Part 121 – Federal Aviation Regulation; created and mandated by the FAA applicable to Air Carriers and Commercial Operators – Commercial Use (Same as FAR Part 135, but used for aircraft with a passenger capacity of over 19.)
- FAR Part 129 – Federal Aviation Regulation; created and mandated by the FAA applicable to Foreign Operators and Foreign Carriers.
- FAR Part 133 – Federal Aviation Regulation; created and mandated by the FAA applicable to Rotorcraft (helicopter) external-load operations (Firefighting, Search & Rescue, Agricultural, etc…).
- FAR Part 135 – An aircraft maintained FAR Part 135 can be used to generate a profit; can be used for charter, transporting freight for a fee, sightseeing tours, parachute jumping, etc… FAR Part 135 certification is generally used for aircraft with a passenger capacity of 19 or less for the above purposes. However, corporate and/or privately-operated aircraft used for executive and/or personal transportation can be FAR Part 135 certified; the aircraft is generally considered safer and worth more at resale time due to additional and more frequent inspections required by this certification. The aircraft must be flown by a commercially-rated pilot.
- FAR Part 145 – Federal Aviation Regulation; created and mandated by the FAA. A certificate or rating issued to a repair station. A person who meets the requirements is entitled to a repair station certificate for aircraft maintenance. There are certain requirements that are necessary such as employee training.
- 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.
- Helicopter – Any of a class of heavier-than-air craft that are lifted and sustained in the air horizontally by rotating wings or blades turning on vertical axes through power supplied by an engine. A type of rotorcraft in which lift and thrust are supplied by rotors.
- Jet Aircraft – Propelled by jet engines, (nearly always a fixed-wing aircraft) (jet propulsion).
- 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.
- Piston Engine Aircraft – Piston airplanes have one or more piston-powered engines connected to the propeller(s), which provide thrust to move the aircraft on the ground and through the air.
- 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.
- Turbo Prop – A turboprop engine is a turbine engine that drives an aircraft propeller. In contrast to a turbojet, the engine’s exhaust gases do not contain enough energy to create significant thrust, since almost all of the engine’s power is used to drive the propeller.
- Wet Lease – A short-term lease for seasonal needs, including the aircraft, crew, insurance and maintenance(ACIM) during the period of the lease.
