Leasing rolling stock assets can offer several advantages for operators, especially in terms of flexibility, cost-efficiency, and risk reduction. By leasing, operators can access the latest technology and equipment without having to commit to large upfront capital expenditures. They can also adjust their fleet size and composition according to the changing demand and market conditions, and avoid the depreciation and obsolescence of their assets. Leasing can also reduce the operational and maintenance costs, as well as the regulatory and environmental compliance risks, as these are usually borne by the lessor.
However, leasing rolling stock assets also has some drawbacks, such as higher long-term costs, limited customization, and dependency on the lessor. Leasing can be more expensive than owning in the long run, as the operator has to pay a premium for the use of the assets and may incur additional fees or penalties for early termination, damage, or overuse. Leasing can also limit the operator's ability to customize and upgrade their assets to suit their specific needs and preferences, as they have to follow the lessor's specifications and standards. Moreover, leasing can create a dependency on the lessor's availability, reliability, and quality of service, which can affect the operator's performance and reputation.
Owning rolling stock assets can also have some benefits for operators, such as greater control, stability, and asset value. By owning, operators can have full ownership and control over their assets, and decide how to use, maintain, and dispose of them. They can also customize and upgrade their assets to meet their operational and customer requirements, and enhance their brand image and identity. Owning can also provide more stability and predictability for the operator's cash flow and budgeting, as they do not have to deal with fluctuating lease rates or contractual terms. Additionally, owning can generate asset value and equity for the operator, as they can benefit from the residual value and depreciation of their assets, and use them as collateral or sell them in the secondary market.
On the other hand, owning rolling stock assets also has some drawbacks, such as higher upfront costs, lower flexibility, and higher risk exposure. By owning, operators have to incur large initial capital outlays to acquire their assets, which can strain their financial resources and limit their investment opportunities. They also have to bear the full responsibility and cost of operating and maintaining their assets, which can be complex and costly, especially as the assets age and require more repairs and replacements. Owning can also expose the operator to more risks, such as market volatility, technological obsolescence, regulatory changes, and environmental impacts, which can affect the value and performance of their assets.
Whether leasing or owning rolling stock assets, operators need to implement effective asset management and life cycle strategies to optimize their asset utilization, performance, and profitability. Asset management involves planning, acquiring, operating, maintaining, and disposing of assets in a systematic and efficient way, aligned with the operator's objectives and stakeholder expectations. Asset life cycle refers to the stages that an asset goes through from its conception to its retirement, such as design, procurement, commissioning, operation, maintenance, refurbishment, and decommissioning. By applying asset management and life cycle principles and practices, operators can ensure that their assets deliver value and service throughout their life span, and that they make informed and rational decisions regarding their asset portfolio.