A dry lease is an aircraft rental agreement where the lessor provides only the aircraft, with the lessee responsible for all crew, maintenance, insurance, and operational control, similar to renting a car without a driver; it transfers legal responsibility for flight operations to the lessee, who often needs their own air operator certificate (AOC) for commercial use. This arrangement offers cost control and operational flexibility for the lessee but places a greater burden for compliance with aviation regulations on them.
Under a dry lease, the compensation being paid is typi- cally in the form of a rental payment in exchange for the lessee's own use (whether the lessee is a pilot or a passenger who has hired a pilot) of the equipment being rented, analogous to obtaining a rental car for one's ground transportation needs.
Disadvantages of Dry Lease
Dry lease: In a dry lease, the owner provides the aircraft to the lessee without a crew. Neither party is required to have an air carrier certificate so long as the aircraft does not carry people or property for compensation or hire.
The 90% rule in leasing is an accounting guideline for classifying leases, stating that if the present value (PV) of a lessee's minimum lease payments equals or exceeds 90% of the leased asset's fair market value (FMV), the lease should be treated as a finance lease (or capital lease) rather than an operating lease, reflecting essentially a purchase for accounting purposes. This rule helps determine if the lease transfers substantially all the risks and rewards of ownership, requiring balance sheet recognition of the asset and liability.
Wet 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.
A dry lease furnishes an aircraft, but the lessor provides no crew. (A lease that includes crew is called a “wet lease,” and requires an FAA commercial certificate – unless specifically authorized under FAR 91.501 or FAR 91.321.)
However, they offer the benefit of reduced operational responsibilities for the lessee. Dry leases, while less costly, place the burden of crew, and often maintenance and insurance, on the lessee, which may require additional resources and infrastructure.
Lease agreements generally fall into one of the following: • Dry lease – a lease arrangement whereby a lessor provides an aircraft without crew to the lessee. Wet lease – a lease arrangement whereby a lessor provides an aircraft with crew to the lessee.
Here are some red flags to watch out for when signing a lease: Unclear terms: Ensure every term in the lease is clear. Vague language can lead to misunderstandings about responsibilities and rights. Maintenance responsibilities: Check who handles repairs.
A dry lease is an arrangement where the aircraft owner provides just the jet, without any crew, maintenance, or insurance. In this setup, the lessee takes full operational control, meaning they are responsible for hiring pilots, ensuring proper maintenance, and covering insurance.
For retirees, buying a car offers long-term savings, no mileage limits, and eventual ownership, but it requires more upfront cost. Leasing can ease budgeting with lower monthly payments and access to newer models with better safety features.
The FAA issues strict rules to ensure that all aircraft meet the same safety standards, no matter how old. So even if your airplane has been flying for decades, you can be confident it's still being held to high regulatory oversight.
Soggy Lease
You lease a locomotive and we take care of the heavy maintenance. You are responsible for other maintenance and repair services.
Leasing offers more financial flexibility, including requiring a smaller upfront investment and avoiding the long-term commitment of aircraft ownership. You do, however, have recurring monthly payments and usage fees to contend with. While those expenses are predictable, they do not build equity for you.
The benefits include operational flexibility, cost savings and reduced capital expenditure. For aircraft owners, dry leases offer a way to reduce the costs of ownership and utilization by allowing them to offer their aircraft to operators without providing crew or maintenance.
In aviation, Airworthiness Directives (ADs) are mandatory, legally-enforceable orders from aviation authorities (like the FAA) to fix unsafe conditions, while Service Bulletins (SBs) are optional, recommended notices from manufacturers for improvements or maintenance, though SBs can become mandatory if referenced in an AD. The key difference: ADs are regulatory orders requiring action for continued flight safety, whereas SBs are manufacturer suggestions that become required only when an AD mandates them, making ADs legally binding and SBs generally advisory.
Leasing an apartment may be a good fit in the following situations: You're looking for long-term stability. Most leases last a year, so if you plan to stay in the same location for a while, leasing might make more sense than renting month-to-month. You want predictable budgeting.
Another common pitfall to be aware of is the “sham dry lease” or the “wet lease in disguise.” This situation occurs when one or more parties act in concert to provide an aircraft and at least one crewmember to a potential passenger.
“The owner of the aircraft must remain removed from helping to schedule or provide flight crew. This requires the lessee to have operational knowledge and understanding of the regulations to properly express their 'operational control' during dry lease flights.”
The average hourly rental rate of the Boeing 777-200 is around 28,500 USD per hour. The average purchase price of a new Boeing 777-200 is 261,000,000 USD. The average purchase price of a pre-owned Boeing 777-200 is 8,250,000 USD.
Rates And What They Mean
Generally, most FBOs will list an hourly rate for a rental. The rate may be specified as a “wet” or “dry” hourly price. Simply put, a “wet” rate includes fuel, and a “dry” rate does not.