<Li> Extendible operating lease: Although an EOL resembles a finance lease, the lessee generally has the option to terminate the lease at specified points (e.g. every three years); thus, the lease can also be conceptualized as an operating lease . Whether EOLs qualify as operating leases depends on the timing of the termination right and the accounting rules applicable to the companies . </Li> <Li> US leveraged lease: Used by foreign airlines importing aircraft from the United States . In a US lease, a Foreign Sales Corporation (FSC) purchases and leases the aircraft, and is tax - exempt so long as at least 50% of the aircraft is made in the US, and at least 50% of its flight miles are flown outside the US . Because of the extensive documentation required for these leases, they have only been used for very expensive aircraft being operated entirely outside the US, such as Boeing 747s purchased for domestic routes within Japan . </Li> <Li> Japanese leveraged lease: A JLL requires the establishment of a special purpose company to acquire the aircraft, and at least 20% of the equity in the company must be held by Japanese nationals . Widebody aircraft are leased for 12 years, while narrowbody aircraft are leased for 10 years . Under a JLL, the airline receives tax deductions in its home country, and the Japanese investors are exempt from taxation on their investment . JLLs were encouraged in the early 1990s as a form of re-exporting currency generated by Japan's trade surplus . </Li> <Li> Hong Kong leveraged lease: In Hong Kong, where income taxes are low in comparison to other countries, leveraged leasing to local operators is common . In such transactions, a locally incorporated lessor acquires an aircraft through a combination of non-recourse debt, recourse debt, and equity (generally in a 49 - 16 - 35 proportion), and thus be able to claim depreciation allowances despite only being liable for half of the purchase price . Its high tax losses can then be set off against profits from leasing the aircraft to a local carrier . Due to local tax laws, these investments are set up as general partnerships, in which the investors' liability is mainly limited by insurance and by contract with the operator . </Li>

Discuss the various options available to finance the purchase of an aircraft