Final answer:
A sale and lease-back arrangement in the aviation industry is a financial transaction that helps in financing aircraft purchases by selling an asset and leasing it back.
Step-by-step explanation:
A sale and lease-back arrangement is a financial transaction where an entity sells an asset and then leases it from the new owner. It's often a method used by companies, including those in the aviation industry, to free up capital or finance the purchase of new assets such as aircraft. This type of arrangement allows the seller to gain capital while retaining the use of the asset.
In historical context, similar strategies have been used, such as the Lend-Lease Act of 1941, where the US provided military aid in exchange for the use of foreign bases. Such financial tools are designed to balance immediate monetary needs with long-term asset utilization and can pose benefits and risks depending on the transaction's structure and terms.