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Leasing of aircrafts in Brazilian regular air transportation market

Author(s): Fábio Anderson Batista dos Santos

Journal: Journal of Transport Literature
ISSN 2238-1031

Volume: 5;
Issue: 3;
Start page: 210;
Date: 2011;
Original page

Keywords: leasing | air transport | elasticities

Leasing has been increasingly used by airlines to obtain aircrafts. It represents a significant portion of airline’s costs. The leasing cost is substantially associated with exchange rate fluctuations because most of contracts are made with foreign leasing companies. In this work, Brazilian airlines’ leasing cost was modeled according to, among other variables, the exchange rate. As conclusion, a “exchange rate-elasticity” of leasing cost equal to 0.24% was estimated. Thus, it can be said that a percentage increase in the exchange rate implies an increase of 0.24% of the airlines’ leasing cost.
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