Originally Posted by
sbm12
OK...XJet leases them from CO, which means CO is on the hook to pay for them if XJet goes under, right? I had thought that CO owned them but if CO is leasing from someone else it might be even worse, as the costs to continue the leases or buy them out might be an issue.
Yep, CO is on the hook for all of the ERJs, since it leases them from someone else and in turn, leases them to XJT. Its leases with XJT permit XJT to walk away from the airplanes that CO withdraws from the CPA. That's what I thought XJT would do with the 69 planes withdrawn last time. Instead, XJT elected to retain them and by doing so, agreed to pay CO a higher lease rate than it had been paying.
I don't expect XJT to make that same mistake again.
