Aircraft lease

From Wikipedia, the free encyclopedia
  (Redirected from Dry-lease)
Jump to: navigation, search

Aircraft leases are leases used by airlines and other aircraft operators. Airlines lease aircraft from other airlines or leasing companies for two main reasons: to operate aircraft without the financial burden of buying them, and to provide temporary increase in capacity. The industry has two main leasing types: wet-leasing, which is normally used for short-term leasing, and dry-leasing which is more normal for longer-term leases. The industry also uses combinations of wet and dry. For example, when the aircraft is wet-leased to establish new services, then as the airline's flight or cabin crews become trained, they can be switched to a dry lease.

50% of global lessor set are based in Ireland and in 2015 over $120b of new commercial aircraft was delivered worldwide.[1] Operating leases of jet airliner accounted for less than 2% of the fleet in 1976, then 15% in the early 1990s, 25% in 2000 and 40% in 2017, with lessors involved in 62% of second hand mid-life aircraft transactions since 2000: 42% in Europe and 29% in North America.[2]

Wet lease[edit]

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 shorter duration would be considered an ad hoc charter. A wet lease is typically utilized during peak traffic seasons or annual heavy maintenance checks, or to initiate new routes.[3] A wet-leased aircraft may be used to fly services into countries where the lessee is banned from operating.[4]

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 and a block seat agreement.

Wet leases are occasionally used for political reasons. For instance, EgyptAir, an Egyptian government enterprise, cannot fly to Israel under its own name, as a matter of Egyptian government policy. Therefore, Egyptian flights from Cairo to Tel Aviv are operated by Air Sinai, which wet-leases from EgyptAir to get around the political issue.[5]

In the United Kingdom, a wet lease is when an aircraft is operated under the air operator's certificate (AOC) of the lessor.[6]

Damp lease[edit]

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".[3]

Dry lease[edit]

A dry lease is a leasing arrangement whereby an aircraft financing entity (lessor), such as GECAS or AerCap, 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 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 USA. 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 dry lease is when an aircraft is operated under the AOC of the lessee.[6]

At the end of July 2015, the top 50 aircraft lessors managed 8,184 aircraft : 511 turboprop regional airliners, 792 regional jets, 5,612 narrowbody and 1,253 widebody airliners.[7]

Top 20 lessors by number of aircraft in 2015[7]
Rank Lessor Total Turboprop Regional Jet Narrow-body Wide-body
1 GECAS 1,608 31 374 1,035 168
2 AerCap 1,279 - 4 970 305
3 BBAM (incl NBB & FLY Leasing) 413 - 2 357 54
4 SMBC Aviation Capital 393 - 7 378 8
5 CIT Aerospace 313 - 30 235 48
6 AWAS 295 - - 242 53
7 Aviation Capital Group 273 - - 264 9
8 BOC Aviation 256 - 16 204 36
9 Air Lease Corporation 251 18 27 162 44
10 Nordic Aviation Capital 249 219 19 11 -
11 Macquarie AirFinance 176 - 4 160 12
12 ICBC Leasing 173 - 13 131 29
13 Avolon 166 - 6 140 20
14 Orix Aviation 148 - 2 132 14
15 Aircastle 141 - 5 77 59
16 Avmax 136 89 47 - -
17 China Development Bank Leasing 120 - 20 68 32
18 Pembroke Group Ltd 119 - - 96 23
19 Jackson Square Aviation 110 - - 97 13
20 MC Aviation Partners 92 - - 69 23


External links[edit]