A wet lease is a lease agreement in which an airline (the lessor) provides another airline or type of company that acts as an air travel intermediary (the lessee) with an aircraft, full crew, maintenance and insurance (ACMI) that pays according to business hours. The renter provides fuel and covers airport fees as well as all other duties, taxes, etc. The flight uses the renter`s flight number. A wet lease usually takes 1 to 24 months. A wet lease is typically used during peak hours or during annual maintenance reviews or to introduce new routes. [8] A manned aircraft may be used for air services to countries where the lessee is prohibited from operating. [9] It can also be used to replace unavailable capacity or to circumvent regulatory or policy restrictions. In 2002, there were fewer than 100 aircraft leasing companies in the world, and the two largest controlled more than 40% of the market share. Only 17 years later, there are more than 150 suppliers, with the top two holding only 20% of the market share. Today`s aircraft tenants have more options than ever when choosing an aircraft leasing partner, but not all offer the same level of expertise and value. When choosing an aircraft leasing provider, look for solid legal expertise, financial stability, a history of successful transactions, and an integrated approach to ensure your leased aircraft is operating at optimal performance. Editor`s Note: For the latest developments on this topic, we refer to www.aopa.org/news-and-media/all-news/2020/march/pilot/for-the-record-who-is-in-control (February 2020) No agreement to pool, sublease or otherwise waive airframe ownership or engine or submarine machine rental agreement will in any way fulfill or reduce the Lessee`s obligations to the Lessor under this Agreement or a waiver of the constitute the rights or remedies of the Lessor under this Agreement.
Crewed leases are sometimes used for political reasons. For example, EgyptAir, an Egyptian government company, cannot fly to Israel under its own name, due to the policy of the Egyptian government. Therefore, Egyptian flights from Cairo to Tel Aviv are operated by Air Sinai, which enters into wet leases by EgyptAir to circumvent the political problem. [10] A dry lease is a lease in which an aircraft finance company (lessor) such as GECAS, AerCap or Air Lease Corporation provides an aircraft without crew, ground personnel, etc. Dry leasing is typically used by leasing companies and banks, so the lessee must place the aircraft on their own Air Operator Certificate (ATC) and present the aircraft registration. A typical dry lease has a term of more than two years and is associated with certain conditions related to depreciation, maintenance, insurance, etc., which also depend on geographical location, political circumstances, etc. They can also be considered a form of chartering when the lessor provides minimum operating services, including ACMI, and the lessee provides the rest of the services with the flight numbers. For all other forms of chartering, the lessor provides the flight numbers. Variants of a crewed lease include a codeshare agreement and a block headquarters agreement. Understanding the differences between dry leases, wet leases, and sale-leaseback agreements isn`t just about choosing the option that best suits your business needs.
Each lease agreement comes with its own regulatory requirements and obligations. Since the Federal Aviation Administration (FAA) takes a close look at each agreement, it`s important to consider all aspects of a lease agreement before proceeding. The wet lease will remove long-standing uncertainty regarding the application of the ATA`s wet lease provisions and, as such, contribute to the smooth functioning of transatlantic air relations. In the charter industry, the FAA regulates two main types of aircraft leasing: a dry lease or a wet lease. In 2007, Beijing allowed Chinese banks to start leasing units, and nine Chinese lenders were among the top 50 in 2017, led by ICBC leasing in the top ten, with the value of their fleet under management increasing by 15 percent since 2016. [5] In some cases, Chinese owners forgot that they had to enter into secondary leases and missed the time of redelivery by leaving the planes stranded for a few months. [6] One of the key issues that distinguishes a wet lease from a dry lease is the question of “who has operational control,” as defined in 14 CFR 1.1. .