When airlines purchase planes new they usually pay about 50% of ‘list’ price. But what about used aircraft? And how do airlines actually pay for their purchase?
A receipt has surfaced for an actual used aircraft acquisition – Swift Air’s $8 million 2014 deal for then-29 year old ex-US Airways Boeing 737-400 registration N418US:
I imagine aircraft purchases going down more like Lamar Muse and Rollin King getting on the phone with Boeing during a break in a meeting with the Douglas Aircraft Company, and bluffing Boeing that they could either take startup Southwest’s terms on 3 Boeing 737-200s right then within the hour or they’d buy DC-9s instead… or like Harrison Ford buying a helicopter in Clear and Present Danger.
Instead, Swift Air paid for the entire price with a corporate American Express card.
The aircraft flew from Miami to Greensboro in late November 2022 to be put into storage.
Suggestions on Reddit include completing the purchase online through Rakuten for additional cash back or Membership Rewards points, and bundling the plane’s insurance with home and auto to save even more. I’d add credit card extended warranty coverage! In fact, the transaction is probably more like:
- a big stack of documents in a conference room,
- inspecting the aircraft and making the seller fix a number of items, prior to
- actual payment.
However it’s striking that Swift Air paid with a corporate charge card, rather than electronic funds transfer, and that they were in a position to be paying in full in cash equivalent rather than leasing.
And Amex approved the charge! It’s technically air travel spend, right? But the corporate card doesn’t earn 5x like the Platinum card does.
(HT: Golden Rule Travel)