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13. Aircraft lease security deposits

A security deposit is held with the lessor to secure the lessee’s fulfilment of its obligations in full, on a timely basis and in good faith. The security deposit is transferred to the lessor by instalments or in a single instalment. The security deposit is usually equal to three monthly lease payments. The lessee has the right to replace the security deposit, in full or in part, with a letter of credit. The security deposit can be offset against the last lease payment or any payment if there is any non-fulfilment of obligations by the lessee. The security deposit is returned subsequent to the lease agreement’s termination/cancellation or return of the aircraft immediately after the date of lease termination and fulfilment by the lessee of its obligations. The security deposits under aircraft lease agreements are recorded at amortised cost using an average market yield of 5.0% to 9.5% in 2013 (2012: 5.0% to 9.5%).

As at 31 December 2013 and 31 December 2012, security deposits under aircraft lease agreements are neither past due nor impaired.

Analysis of aircraft lease security deposits by their credit quality:

Notes in Consolidated Statements:

Consolidated Statement of Financial Position