ACG primarily invests in narrowbody aircraft with a broad operator base, which it believes will retain value over time. The broad operator base typically will ensure ease of remarketing. The diversification of its portfolio is expected to create placement opportunities with new customers when aircraft leases mature.


Why Lease?

First of all, it makes sense. By leasing, carriers can plan for uncertainty,
lay off residual risk and maximize returns on valuable capital resources.

Secondly, more and more carriers are seeing how a well-capitalized lessor
such as ACG can deliver value.

Because of the breadth of our inventory and the wealth of our experience, we
are well versed in structuring leases to meet a wide variety of individual
requirements.

Operating Leases in General

A Brief History.
Aircraft operating leases were used in limited numbers as early as the 1970s
- at that time almost exclusively for older used aircraft. In 1980,
operating leases represented a miniscule 3 percent of the total aircraft
financing market, with large and medium-sized carriers preferring to buy
aircraft outright, using debt or tax-based leasing products to finance these
purchases.

Increasing Popularity.
By 1988, 14 percent of the world's commercial jet aircraft were on operating
lease. Between 1986 and 1996, while operating leasing's market share grew to
19 percent, the proportion of airlines operating fleets of all leased
aircraft grew from 15 percent to 42 percent. Over the same period, the
number of airlines that owned their entire fleets dropped from 41 percent to
16 percent.

Operating vs. Financial Leases.
Operating leases usually range in length from three to 10 years. In an
operating lease, the lessee pays to use the aircraft during the lease term,
but does not fully repay the lessor's investment and does not own the
aircraft when the lease ends. Financial leases refer to a long-term debt
arrangement - typically 12 to 25 years - and usually require the aircraft's
full value to be repaid to the lessor over the lease term. At the end of a
financial lease, the lessee usually owns the aircraft.

Tailored to Needs.
Airline leasing requirements differ widely based on criteria such as the
destinations and routes an airline flies, the makeup of its existing fleets,
the strength of its financial resources, and the tax and accounting rules
under which it operates. Therefore each lease transaction must be tailored
to the specific needs of an airline customer.