We have a comprehensive understanding of the jet charter industry and more specifically business aviation at Air Charter Access, and know that sometimes the private jet charter world can confusing to consumers, even those who have flown extensively in the past. We know a knowledgeable consumer is our best client, and will make better decisions and save money at the same time on their travel, which is why we so hard to educate our clients on private jet charter. The topic of this post is aircraft leasing, and what it means to you, the paying customer.
Why Do Operators Lease Aircraft?
Let’s start by defining a lease itself. A lease is basically a transfer of an aircraft without transfer of title. The owner of the plane, the lessor, retains title to the aircraft, but transfers possession of the aircraft to the lessee. You might ask why operators lease aircraft from owners in the first place. The first reason is to provide a temporary increase in capacity. This happens more frequently with commercial airlines, though a short-term need for extra capacity can occur with charter jet operators as well.
The second reason is quite easy to recognize – money. Leasing an aircraft is an alternative to outright aircraft purchase for a variety of reasons ranging from frequency of use to cash flow. A perfectly understandable situation, flying without the financial burden of actually purchasing an aircraft appeals to many operators. However, when the lease is set up with the intent of circumventing FAA rules and regulations is where the problem comes in.
Wet vs. Dry Leases
The FAA regulates two primary types of aircraft leases when relating to private jet charter. These are the “wet” lease and the “dry” lease. A “wet lease” is a business arrangement where a person or organization that owns an aircraft (the lessor) agrees to provide it and at least one crew member to the lessee, and more critically the lessor also agrees to provide the proper maintenance for the plane and the necessary insurance for the flight(s) as well.
A wet lease is actually an exception to the very simple definition of a lease because it does not involve transferring possession of the aircraft itself. The lessor maintains operational control of the aircraft under a wet lease, which under the Federal Aviation Regulations (FARs), requires that they hold a Part 135 commercial operating certificate.
By contrast, under a “dry lease”, a term not directly defined in Federal Aviation Regulations, the individual or company provides the lessee an aircraft without a crew.
A wet lease is typical of a compliant Part 135 operation; in contrast leased aircraft shared under Part 91 typically involve dry leases. The trouble comes up when some operators try to use aircraft sharing as a cover for chartering out their aircraft without the benefit – or demands – of a Part 135 certificate. They circumvent the regulations by dry leasing their aircraft through one company under their control, and then supplying the lessee with pilots through a separate company also under their financial control. They are essentially providing a “wet” lease, while at the same time, avoiding responsibility for proper maintenance, insurance and other components of a Part 135 charter. A very clever scheme, but also illegal.
The lessee (user) must always have the independent right to select the crew under FAA regulations. All “transportation packages” – the same person offering an aircraft dry lease and a separate pilot services agreement – is viewed by the FAA as an illegal charter. The FAA has gone further by stating that a scheme may be illegal if the entity leasing the plane simply directs the use of any specific crew without direct customer input, even if they aren’t connected to them in any way, financially or otherwise.
If your private jet charter does not follow these rules and regulations it is an illegal flight. This is important for you — the consumer — to understand since the safety and maintenance requirements, training and qualifications for the crew, insurance, and a number of other critical items have not been verified and/or guaranteed on the flight you have chartered, and in many cases not even known by the operator. Thus, a dry lease can be quite risky. We always believe that the safe flying of you and your fellow travelers deserves better than taking an illegal charter, and you deserve to know if your charter is illegal – with so many absent or undisclosed (and vital) details about your flight, your aircraft and your crew, to say nothing of the potential consequences of flying without any of the proper insurance.
We believe that you should always receive the best return for your investment for your traveling budget when flying jet charter. This means always flying on the safest and most appropriate aircraft for your charter flight. At Air Charter Access, we will only work with fully compliant Part 135 aircraft operators, who have been vetted for safety by leading auditors – Wyvern and ARG/US – to ensure the proper safety and integrity of their operation. We pride ourselves on our mission to educate our clients about their operator and every other aspect of their jet charter, while also staying constantly informed of our vendor’s progress on every charter flight that we arrange – and staying in constant contact with you our valued client at the same time.