Dry Lease Agreement

The global wet rental market is expected to grow from $7.35 billion in 2019 to $10.9 billion in 2029, for a CAGR of 4.1%. There are many situations in which an operator wants to make their aircraft available to a third party. As a rule, this can be done by a non-exclusive Dry Lease. The lessor provides the aircraft and sometimes the services of the cabin crew. This crew may include cabin crew, engineers, etc. The owner can even bear his monthly salaries, but the daily allowance is not covered. The owner is also required to pay for insurance and maintenance. In accordance with the agreement, the lessor calculates block hours, which means that the lessee is responsible for paying the guaranteed minimum block hours, whether the aircraft is flying or not. Despite the bankruptcies of Air Berlin and Monarch Airlines, their leased aircraft were quickly placed at „normal market prices“ due to traffic growth, given that global passenger-kilometres increased by 7.7% year-on-year in September 2017 and Airbus is struggling to deliver A320nöos due to delays in engine supply. [4] According to Philips Baggaley, managing director of one of the leading rating companies (Standard and Poor), airlines are generally short of fleet expansion and therefore buying an aircraft is generally not a viable option. Borrowing for the purchase of aircraft is also not a cheap option.

This is the reason why rent and lease is becoming more and more popular in the aviation industry. A „Dry Lease“ agreement for private aircraft is subject to fewer operating restrictions and is subject to 14 C.F.R. Part 91. In the case of non-exclusive lease agreements, the owner may deliver the aircraft to more than one lessee during the same lease period, with the operation management alternating between the lessor and any flight lessee. Dry Leases and payments paid by lessees can be set monthly, daily or even hourly….