What is an operational lease model?

The operational lease model is characterized by a structure where the lessee pays a monthly rental fee for the asset, typically an aircraft, along with maintenance reserves. This type of lease is commonly used in aviation and other industries where the asset may have significant depreciation or maintenance needs. Under an operational lease, the lessee does not gain ownership of the asset at the end of the lease term, which allows for greater flexibility and reduced risk associated with asset ownership.

This model often appeals to businesses looking for an efficient way to use equipment without the burdens and responsibilities of ownership, including managing depreciation and long-term capital expenditure. By incorporating maintenance reserves, the lessee is also ensuring that the asset is properly maintained, promoting operational efficiency throughout the lease period.