In this paper we analyze the implication of how the new accounting standard on leases will affect an airline’s balance sheet and performance ratios and its implication for the aircraft leasing industry. Effective January 1, 2019 the new lease standard requires nearly all leases to be reported on the airline’s balance sheet as assets and liabilities. This new lease standard is expected to have an effect on airline’s financial ratios, debt covenants, airline ratings, airline’s borrowing costs and is expected to increase airline’s currency volatility. Leases may have to be renegotiated and there is concern that the volume of leasing would tend to fall. In order to glean the impact of these changes, we look at a sample of airlines in the United States and examine how transferring operating leases to an airline’s balance sheet would affect the liquidity, profitability and leverage ratios, commonly used by rating agencies, to assign ratings. Our finding show that while airlines such as Jet Blue, American and Southwest airlines will experience minimal impact from the new accounting standard, other airlines such as United, Delta and Spirit will see a marked deterioration in their ratios.