Friday, February 19, 2021
The purchase agreement between an aircraft manufacturer and its customer will call for the customer to pay installments of the purchase price between the time the agreement is entered into and the delivery of the aircraft. These installments are called progress payments or predelivery payments ( PDPs ) and can be significant, especially in regard to a fleet purchase over many years. Normally the aircaft buyer pays the PDPs with its own funds. It may finance the PDPs, particularly if it also wishes to conclude a longer-term debt or sale-leaseback financing for the ultimate purchase of the aircraft at delivery.