Aircraft lease

A wet lease is a leasing arrangement whereby one airline (the lessor) provides an aircraft, complete crew, maintenance, and insurance (ACMI) to another airline or other type of business acting as a broker of air travel (the lessee), which pays by hours operated. The lessee provides fuel and covers airport fees, and any other duties, taxes, etc. The flight uses the flight number of the lessee. A wet lease generally lasts 1–24 months. A wet lease is typically utilized during peak traffic seasons or annual heavy maintenance checks, or to initiate new routes.[8] A wet-leased aircraft may be used to fly services into countries where the lessee is banned from operating.[9] It can also be used to replace unavailable capacity or to circumvent regulatory or political restrictions.

They can also be considered a form of charter whereby the lessor provides minimum operating services, including ACMI, and the lessee provides the balance of services along with flight numbers. In all other forms of charter, the lessor provides the flight numbers. Variations of a wet lease include a code share arrangement, a block seat agreement, and a capacity purchase agreement.

Wet leases are occasionally used for political reasons. For instance, EgyptAir, an Egyptian government enterprise, for many years was not allowed to fly to Israel under its own name, as a matter of Egyptian government policy. Hence Egyptian flights from Cairo to Tel Aviv were operated by Air Sinai, which wet-leased from EgyptAir to circumvent the political issue.[10] In 2021, Egypt changed its policy and EgyptAir started operating flights to Israel under its own banner.[11][12][13][14]

The global wet lease market is projected to grow from US$7.35 billion in 2019 to US$10.9 billion in 2029, a compound annual growth rate (CAGR) of 4.1%.

A dry lease is a leasing arrangement whereby an aircraft financing entity (lessor), such as AerCap or Air Lease Corporation, provides an aircraft without crew, ground staff, etc. Dry lease is typically used by leasing companies and banks, requiring the lessee to put the aircraft on its own air operator's certificate (AOC) and provide aircraft registration. A typical dry lease lasts upwards of two years and bears certain conditions with respect to depreciation, maintenance, insurances, etc., depending also on the geographical location, political circumstances, etc.

A dry-lease arrangement can also be made between a major airline and a regional airline, in which the major airline provides the aircraft and the regional operator provides flight crews, maintenance and other operational aspects of the aircraft, which then may be operated under the major airline's name or some similar name. A dry lease saves the major airline the expense of training personnel to fly and maintain the aircraft, along with other considerations (such as staggered union contracts, regional airport staffing, etc.). FedEx Express uses an arrangement of this type for its feeder operations, contracting to companies such as Empire Airlines, Mountain Air Cargo, Swiftair, and others to operate its single and twin-engined turbo-prop "feeder" aircraft in the US. DHL has a joint venture in the United States with Polar Air Cargo, a subsidiary of Atlas Air, to operate their domestic deliveries.

In the United Kingdom, a wet lease refers to an aircraft lease in which the aircraft is operated under the air operator's certificate (AOC) of the lessor.[15] An arrangement where the lessor provides the aircraft, flight crew and maintenance but the lessee provides the cabin crew is sometimes referred to as a "damp lease", a term especially used in the UK; it is also occasionally referred to as a "moist lease".[8] In the United Kingdom, a dry lease is when an aircraft is operated under the AOC of the lessee.[15]