A comparison of the airline benefits of European-style and American-style aircraft purchase options in periods of high demand

Commercial Aircraft are commonly acquired by an airline in a contract that specifies a fixed quantity of firm orders as well as options that allow the airline to obtain additional aircraft at a future time for an agreed price. This option purchasing process allows the customer to avoid taking delivery of aircraft if economic circumstances are not favorable. However, this model can have drawbacks in circumstances when the product in question is in very high demand. Exercising a rolling-style aircraft purchase option in such circumstances may result in a delivery lag of several years, during which profitable opportunities may be lost. Shortening the time between exercising an option and taking delivery of the aircraft would allow for better timing of the delivery and reduce the effect of a significant negative event such as an economic recession or a terrorist attack occurring between the exercise date and the delivery date.