The world of private aircrafts is an interesting one, full of unique business models and opportunities. One such opportunity is the possibility of leasing a private jet from the owner.
Leasing offers value to both the lessee and the lessor, affording budget-minded businesses and individuals the ability to rent or lease a private jet “as needed” without the overhead of owning, operating and maintaining their own aircraft and flight staff. On the other side of the coin, private jet owners can offset their expenses by earning revenue from these leases.
When it comes to leasing private aircrafts, two major types of leases exist: a “Wet Lease” and a “Dry Lease”. For those unfamiliar with the market, these two types of leases often cause some degree of confusion amongst those interested in leasing an aircraft.
This guide will take you through the ins and outs of each type of lease, helping you understand what to expect and determine which might be more appealing given your situation and goals.
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Why Would Anyone be Interested in Leasing a Jet?
Leasing an aircraft is a common means of transferring possession of an aircraft to another individual (lessee) by the owner (lessor). In such cases, the owner retains legal title and ownership of the jet, but physical possession transfers to the lessee.
Why would an individual or business be interested in this type of deal?
1. Increase Capacity to Meet Demand Spikes
Private jet companies, businesses and individuals may find themselves facing an increased need or demand for additional jet capacity. In many cases, this demand spike is temporary and would not justify the outright purchase of a new aircraft.
2. Ongoing Expenses, Upkeep and Maintenance
In other cases, a budget might not exist to cover the cost of a new jet. Aircrafts represent a large investment that some individuals and businesses might not be able to float or finance. This makes leasing an attractive option that
Wet vs. Dry Leases
“Wet” and “Dry” leases differ in a number of ways. In the private jet industry, the type of lease is regulated by the FAA and is largely defined in 14 CFR 1.1 of the Electronic Code of Federal Regulations. Under these regulations, who maintains “operational control” is a key distinguishing factor between the two types of leases.
Wet Lease Jets
With a wet lease, the lessor (owner of the aircraft) provides both the crew (or at least one crew member) and the aircraft to the lessee (individual or entity leasing the aircraft). With a wet lease, the lessor maintains control of the aircraft’s operation and controls all pre-post and in-flight operations. In addition to maintaining operational control over the aircraft and flight crew, with a “wet lease”, the owner also guarantees to conduct and carry out all applicable maintenance of the aircraft for safety as well as obtain and maintain adequate insurance necessary to operate. Parties interested in wet leasing arrangements are required under FAA regulations to hold an FAA commercial operating certificate. Check out the Top Private Jet Airports to begin choosing your next destination.
In many circumstances, parties entering into these types of leasing arrangements are charter operators conducting business under 14 CFR Part 135, or licensed commercial air carriers operating under 14 CFR Part 121.
For example, at one point, Norwegian Air leased several aircrafts in order to adequately meet a temporary demand spike in travel.
Dry Lease Jets
Under Federal Aviation Regulations (FARs), a dry lease differs from a wet lease in a number of ways. Although the owner of the aircraft still provides the lessee with the jet, they do not supply a crew or pilot as part of the leasing arrangement. In contrast to a wet lease, neither the lessee nor the lessor are required by law to hold an “air carrier certificate”.
Similar to a wet lease, actual ownership of title over the aircraft remains with the lessor or leasing company, and the lessee simply takes over temporary use and operational management of the aircraft for a designated and agreed upon period of time.
Dry leases generally are for short durations up to a two-year period, and take into consideration such aspects as: aircraft condition, depreciation, maintenance, insurance and more.
As opposed to a “wet lease”, dry leases provide commercial airlines and independent operators total control over operations, flight crew, pilots, and the customer experience. This is important for those organizations that have spent considerable effort in creating an “experience” for their clientele that is expected and relied upon.
Both wet and dry leases of aircrafts are governed and regulated by the Federal Aviation Administration (FAA). Although the parties involved may label a lease as either “wet” or “dry”, the FAA in their review of such an agreement will make the final determination. Each has its own separate regulatory requirements and obligations, making this determination an important one. For this reason, it is critically important that you deal with a company that has extensive experience navigating the sometimes complex and costly regulatory measures in place. Check out the Different Types of Jet Aircraft to see which one you like best.
Are you Ready to Explore Aircraft Leasing or Charter Options for you or Your Business?
At Bitlux we’ve built a long-standing reputation as a leader among charter jet companies, providing a myriad of high-value services to individuals and businesses seeking to rent, lease, charter or buy private jets. From massive Bizliners perfect for corporate, executive and international travel, to light jets designed as luxury air taxis, we have you covered.
Whether you need a long-term solution or to book a private jet for your next big business meeting or conference, we can help match and book you with a private jet expertly selected and outfitted to meet your needs and exceed expectations.
Reach out today and get connected with an expert who can help you navigate your options quickly and efficiently. Our team is standing by and eager to learn more about how we can assist. In the meantime find out the Cost to Rent a Jet One For a Day
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