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Define Wet Lease Agreement

09 Apr Posted by in Uncategorized | Comments
Define Wet Lease Agreement

A dry leasing (which is not a term defined by the Federal Aviation Regulations (FARs) is a little different: the owner always makes an aircraft available to the tenant – but without a crew. No possession of the aircraft is carried out under the conditions of a wet lease, making it an exception to a typical lease. As part of a wet lease, the owner has control of the operation. And if there are no exceptions, a wet leasing indicates the need for an FAA commercial operating certificate. Water leasing is a normal part of Part 135 compliant operation, while leasing aircraft that are shared under Part 91 generally include dry leases. A wet lease is an agreement under which the lessor agrees to make one or more cabin crew members available to the taker. In addition, as part of this agreement, the leaser is also responsible for the greater maintenance of the aircraft and the assurance that may be required to operate the equipment. Airlines that cannot afford to do good business with direct factory aircraft or airlines that wish to maintain flexibility can lease their aircraft using a lease or financing lease. The owner makes available the aircraft and sometimes the service of the cabin crew.

This crew may include cabin crew members, engineers, etc. The owner could even bear his months` salary, but the daily allowance is not covered. The owner is also required to pay for insurance and alimony. According to the agreement, the owner charges block hours, i.e. whether the plane flies or not, the tenant is responsible for paying the minimum guaranteed block hours. The global wet leasing market is expected to grow from $7.35 billion in 2019 to $10.9 billion in 2029, representing a 4.1% TURNOVER. Now, the inevitable question – why would an airline want to rent a plane? There are two main reasons for this. In 2007, Beijing allowed Chinese banks to launch leasing units and nine Chinese lenders were among the top 50 in 2017, led by ICBC Leasing in the top 10, with the value of their managed fleet increasing by 15% since 2016. [5] In some cases, Chinese owners forgot that they had to receive a secondary lease and missed the time of re-delivery when they failed planes for a few months.

[6] Under the layman`s objective, leasing simply means the transfer of an aircraft without transferring its title. The owner (also known as the owner) retains the title – but the property is transferred to the tenant. Why would an operator want to rent planes? In the charter industry, the FAA regulates two main types of aircraft leasing: a “dry lease” or a “wet water lease.” Wet leasing means that the organization or person to which the aircraft belongs makes the aircraft and one or more crew members available to the taker. More importantly, the owner also promises to perform proper maintenance and obtain the necessary insurance for the operation. A dry lease is a lease agreement in which an aeronautical finance company (lease), such as GECAS, AerCap or Air Lease Corporation, provides an unmanned aircraft, ground personnel, etc. Dry leasing is generally used by leasing companies and banks, with the taker required to put the aircraft on their own Air Transport Operator (AOC) certificate and allow aircraft to be registered.

 

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