Aircraft Leasing

An aircraft leasing model captures the cash flows, financing, and equity returns of an operating-lease portfolio from the lessor (equity sponsor) perspective. The workbook lays out a 10-aircraft narrowbody fleet - 50M per aircraft, 500M total cost, an 8-year levered hold - across nine sheets: Cover, Assumptions, Fleet, Lease_Income, Debt, Cash_Flow, Returns, Sensitivity, Checks. Every input is a named-range cell, every formula is one or two operations long, and the workbook passes static-value, self-reference, dead-assumption, and unused-named-range scans.

The Fleet sheet runs the net book value roll-forward. NBV opens at zero, takes the full fleet cost as an acquisition in Year 0, and depreciates by a constant straight-line charge each operating year (cost net of a 15% accounting residual, spread over a 25-year useful life). Closing NBV equals opening plus acquisitions plus depreciation. At the end of the hold the fleet is marked to an exit residual value (72% of original cost), and the gain or loss on sale is the difference between that market value and the depreciated closing book value.

The Lease_Income sheet walks the operating result. Annual rental per aircraft equals the lease rate factor times twelve times aircraft cost; lease revenue equals aircraft on lease (fleet times 96% utilisation) times the annual rental, escalated 1.5% each year. Operating expenses are 8% of revenue; EBITDA is revenue less opex. Depreciation, interest expense, and the gain or loss on sale carry down to pre-tax income, which is taxed at 21% to give net income.

The Debt sheet schedules the senior facility: a 65% loan-to-value drawdown at acquisition (325M), straight-line amortisation over a 12-year schedule, and a balloon repaid from sale proceeds at exit. Interest accrues on the declining opening balance, so debt service falls each year. The Cash_Flow sheet builds operating cash flow (EBITDA less cash taxes less interest), then the levered (equity) cash flow that adds the Year-0 acquisition outflow, debt drawdown, debt repayment, and exit sale proceeds, plus a cumulative equity cash flow and a separate unlevered cash flow view that strips out all debt items.

The Returns sheet reports the levered IRR off the equity cash flow stream (~8.5%), the equity multiple of distributions to equity invested (~1.8x), the average operating cash yield, and the unlevered IRR off the asset cash flow (~4.0%) - with the levered IRR exceeding the unlevered IRR because the debt cost sits below the asset return. The exit summary shows sale proceeds, debt outstanding at exit, net exit equity, and total cash returned to equity. The Sensitivity sheet flexes a 5x5 grid of net lease yield on cost against lease rate factor and utilisation offsets. The Checks sheet runs seven validation checks: debt fully repaid at exit, net book value never negative, equity ties to sources, the Year-0 equity outflow equals equity invested, loan-to-value and utilisation within bounds, and accumulated depreciation reconciles to fleet cost less closing NBV.

Target users are aircraft lessors, aviation finance and structured-finance teams, infrastructure and asset-backed funds, and lenders sizing senior facilities against narrowbody fleets. Useful for acquisition underwriting (does a fleet purchase clear the equity return hurdle), leverage structuring (how loan-to-value and amortisation reshape the equity IRR), and residual-value stress testing (what a soft secondary market at sale does to the equity multiple). Calibrate against lessor 20-F filings from AerCap and Air Lease Corporation, Cirium fleet values, and aircraft appraiser residual-value curves.