Document Type

Closed Project

Publication Date

Fall 2004


Timothy Anderson

Course Title

Engineering Economic Analysis

Course Number

EMGT 535/635


Lease or buy decisions -- Effect on airline industry, Lease or buy decisions -- Effect on semiconductor industry, Technological innovations, Engineering -- Management -- Financial aspects


Throughout the last decade of the 20th century also in developing countries leasing became very popular in the business environment. Besides the financial factors, the usage of the lease option depends on many market factors. Companies can choose leasing or purchasing options by examining the market in which they take place. The enterprises in huge industries used the lease option more often to compete with the leaders of the industries. Today’s business environment, leasing can be seen in every industry for capital acquisition although; some companies are still refusing to use or evaluate this option.

The airline industry is one of the huge industries in which leasing plays a big role. In airline industry leasing has a very common usage and almost all companies in airline industry more or less lease aircrafts. Financial Institutions, banks, and leasing companies are the main providers for the leasing option but sometimes some manufacturers can offer lease option directly to the airline companies in the industry.

Comparing with the airline industry, we could not say semiconductor industry has a big lease option usage but it can be seen that the industry gained acceleration in last five years about leasing. In the future if the industry does not loose this acceleration, leasing will become the most important option for the semiconductor companies.

In this paper, we will first explain the lease option in general, including its advantages, disadvantages, and types of leasing. In addition, we are going to exhibit the Airline and the Semiconductor Industries by examining their current situations and financial aspects.


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