It is a market that has grown rapidly in recent years. And with the pandemic, many airlines have found that their aircraft fleets and crew have been grounded for a very long time, which has made this activity even more attractive. The difference between wet lease and dry leasing of aircraft is who has operational control. In a wet lease situation, the lessor retains operational control of all flights while providing the aircraft and crew, while in the case of dry lease, the lessee provides its own crew and exercises control. According to the Federal Aviation Administration (FAA), a wet lease in aviation is “any lease agreement in which a person agrees to provide an entire aircraft and at least one crew member.” In addition, the leased aircraft are covered by the leasing company with maintenance service and insurance. Airlines that offer manned aircraft only have to worry about fuel and airport fees. Airlines may offer leases to other airlines under a wet lease that includes aircraft, crew, maintenance and insurance. In general, it lasts between 1 and 24 months and is often used between high season or to introduce new roads, with the renter providing fuel and paying airport fees and other duties such as taxes. Using the renter`s flight number allows flights to countries where operations are restricted for a variety of reasons, as well as the replacement of unavailable capacity – with crewed rental variations, including code-sharing or bulk seating arrangement. The global wet-lease market is expected to grow from $7.35 billion in 2019 to $10.9 billion in 2029, representing a CAGR of 4.1%. 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. A dry lease (not a term defined by the Federal Aviation Regulations (FAR)) is slightly different: the landlord always provides an aircraft to the tenant – but without a crew. Ownership of the aircraft is not subject to a wet lease, making it an exception to a typical lease. Under a wet lease, the lessor has operational control. And unless there is an exception, a crewed lease signals the need for an FAA Commercial Operations Certificate. A wet lease is a normal part of Part 135 operation, while part 91 shared aircraft generally involve dry leases. 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. Contact AerSale today to find out how we`re helping commercial aviation customers achieve healthy fleet growth through world-class aircraft leasing, engine leasing and aircraft purchase programs.
This is where the argument between wet-leasing and dry leasing begins, as airlines have to move passengers from point A to point B, with aircraft leasing now an integral part of the aviation industry. Airlines around the world are constantly talking between the two to find the best solution. There are many situations in which an operator wishes to make his aircraft available to a third party. As a rule, this can be achieved via a non-exclusive dry rental contract. Granting exclusive ownership and use of this aircraft to the lessee, In the world of general aviation, there are two types of basic lease agreements for aircraft. The first is a “wet lease,” where a person leases an aircraft delivered with a flight crew, fuel and other services. The renter or customer simply boards and is taken to the destination without any contribution to the execution of the flight beyond the payment of a fee. The operator of flights under a wet lease agreement is required under the Federal Aviation Regulations (FAR) to hold an aviation certificate and operate flights under Part 135 of the FAR, provided that the flights are operated as “on-demand” passenger travel. Thousands of safe and legitimate charter flights are operated weekly by conscientious Part 135 operators.
These companies must have strict standards and controls in place for pilot training, maintenance, and operations. .
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