Reference no: EM131608916

You are the general manager of a medium-size FBO which conducts a busy flight training division in addition to customary FBO services for transient aircraft and would like very much to open a maintenance facility that would service single and twin-engine light aircraft as well as medium size corporate jets.

It has been your practice to purchase your training aircraft outright, mostly single engine Cessnas and Pipers. Your strategy has been to fly them for a few years and then trade them on new aircraft while they were still relatively low-time and current models. Now, your intent to initiate construction of a maintenance facility is going to require a great deal of investment which will deplete much of your cash reserves. You will also need to rely on bank loans to complete the project.

What can be done to keep your aircraft fleet fresh and up to date? Would it be a good idea to initiate a lease-back program? Would it be better to continue to operate your current aircraft and rely on the new maintenance center to keep them up-to-date? Would the lease-back program compromise your control of the aircraft? Would you still have a say in how the aircraft are scheduled and maintained?