Most airlines, both passenger and commercial, lease at least some portion of their fleets.
“In the complex world of aviation, one of the key strategies airlines use to optimize their operations is leasing aircraft rather than purchasing them outright,” Industry Analyst Saif Rehman shared in the article Why Airlines Opt for Aircraft Leasing.
It’s a strategy that allows for growth and even major freight carriers, including Amazon and FedEx, to lease a portion of their airplane fleets.
“This model shifts the ownership to the lessor, enabling airlines to benefit from tax savings and reduced depreciation, ultimately improving profitability,” Rehman added.
More airplanes are leased than owned.
“Leasing has emerged as the preferred option, rising from roughly 10% of the total fleet in the 1970s to 58% at the end of 2023,” IATA.org reported.
Now, Franklin Flight Services, which leases planes to commercial carriers, has filed for Chapter 11 bankruptcy.
Franklin Flight Services files for Chapter 11 bankruptcy
Franklin Flight Services buys airplanes and leases them back to its clients. That’s a very private industry, and the company does not have a website or any public presence.
“The company operates within the global aviation finance sector, specializing in the acquisition, leasing, and management of commercial aircraft portfolios. Its primary business activity is commercial aircraft leasing and aviation asset management, maintaining a significant asset portfolio valued in the billions, though it lacks the public visibility of its larger, publicly traded peers,” RK Consulting reported.
Franklin Flight Services, as is the general practice in this industry, does not make its client list known.
The company has continued to operate since its filing.
“Franklin Flight Service Inc cited ‘untenable debt service requirements’ following a period of aggressive expansion, high interest rates, significant operational headwinds in the aviation services sector, supply chain disruptions, and increased labor costs as reasons for its filing,” added RK Consulting.
The company intends to pursue a ‘dual-track’ process, seeking a potential Section 363 sale of its core FBO assets while simultaneously negotiating a debt-for-equity swap with senior secured lenders.
The bankruptcy petition for Franklin Flight Service Inc. showed assets in the range of $100 million to $1 billion with liabilities in the same range . The company reports that the number of creditors is in the range of 50,001-100,000, according to Bankruptcy Observer.
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Franklin Flight Service Chapter 11 bankruptcy key points:
- Company: Franklin Flight Service Inc.
- Filing Type: Voluntary Chapter 11 bankruptcy (restructuring).
- Court: U.S. Bankruptcy Court for the District of Delaware.
- Filing Date:January 6, 2026.
- Case Number:26‑10011.
- Judge Assigned: Judge J. Kate Stickles.
- Approximate Assets: $100,001 to $1,000,000.
- Approximate Liabilities: $100,001 to $1,000,000.
- Creditor Count: Estimated 50,001 to 100,000 creditors according to the initial petition.
- Business Description: Franklin Flight Service Inc. listed its industry as “Other Support Services” in the filing.
Source: PacerMonitor
Airlines and commercial carriers want to grow quickly
Even huge brands like Amazon have chosen to lease aircraft rather than tying up cash in owning them. In some cases, commercial carriers have sold their owned-and-operated fleets and leased them back.
That’s a tactic I’ve seen with real estate in my 30-plus years of covering the retail industry. Most major casinos on the Las Vegas Strip, for example, have sold their properties and lease them back, with Gaming and Leisure Properties being the dominant player in that space.
Leasing offers some financial advantages.
“Leasing a 787 would cost an airline between $800,000 to $1.25 million a month, according to 24/7 Wall St., much lower than the purchase price. Meanwhile, the popular A320neo would cost an airline $370,000 a month, according to Aircraft Value News, a more realistic cost,” IATA News reported.
More Bankruptcy:
- Key auto parts and services company files Chapter 11 bankruptcy
- Key travel brand files for Chapter 11 bankruptcy
- Self-driving-car company files for Chapter 11 bankruptcy protection
- 35-year-old consumer company files Chapter 11 bankruptcy
By leasing planes, airlines and commercial carriers also gain other advantages.
“While the monthly price for a modern aircraft is not low, it does pose a far smaller capital commitment than buying the planes outright, especially for new airlines or those looking to grow drastically. However, this isn’t the only benefit of leasing planes over buying them,” IATA News shared.
“Another benefit is that airlines can keep their fleet young and lease newer aircraft more frequently. Since leases are for a fixed term, airlines are free to return them to the lessor at the stated period and take on a newer plane instead,” the website explained.
There are two types of airplane leases
- Wet lease: When an airline wet leases an aircraft, the leasing company provides everything – the aircraft itself, pilots, and cabin crew. Furthermore, the leasing company also takes care of maintenance and insurance, AeroTime reported.
- Dry lease: This is a more typical lease where the plane itself is leased and the airline or commercial carrier provides the crew and takes responsibility for maintaining the aircraft, AeroTime added.
Franklin Flight Services has not shared formal details of its bankruptcy plan beyond its plan to try to attempt to work with its creditors.
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