Aircraft leases are a number of types of 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 the longer term leases. The industry also uses combinations of wet and dry when for example the aircraft is wet-leased to establish new services then as the airlines flight or cabin crews become trained they can be switched to a dry lease.
A wet lease is a leasing arrangement whereby one airline (lessor) provides an aircraft, complete crew, maintenance, and insurance (ACMI) to another airline (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 one month to two years; anything less 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. A wet leased aircraft may be used to fly services into countries where the lessee is banned from operating.
They can also be considered as 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.
When an air carrier provides less than an entire aircraft crew, the wet lease occasionally is also sometimes referred to as a damp lease, especially in the UK. A wet lease without crew is occasionally referred to as a "moist lease".
A dry lease is a leasing arrangement whereby an aircraft financing entity, such as GECAS and ILFC (lessor), provides an aircraft without insurance, crew, ground staff, supporting equipment, maintenance, 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 starts from two years onwards 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 used by a major airline and a regional operator, in which 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. This saves the major airline the expense of training personnel to fly and maintain the aircraft, along with other considerations. Fedex Express uses an arrangement of this type for its feeder operations, contracting to companies such as Empire Airlines, Mountain Air Cargo, and others to operate its single and twin-engined turbo-prop "feeder" aircraft. DHL has a joint venture in the United States with Polar Air Cargo, a subsidiary of Atlas Air, to operate their domestic deliveries.