Leasing an aircraft can be an alternative to outright purchase for a variety of reasons ranging from practicality to cash flow. There are a wide variety of leasing options available, each with specific advantages and disadvantages. In general terms, a lease is a transfer of an aircraft without transfer of title. The owner of the aircraft, or lessor, retains legal title to the aircraft, but transfers possession of the aircraft to the lessee. It is important to note that due to the broad range of options available, not all aircraft leases will meet the above definition.
Aircraft leases are also regulated by the FAA in the Federal Aviation Regulations (FARs). The FAA classifies aircraft leases as either “dry leases” of “wet leases”. Under a dry lease, the aircraft owner provides only the aircraft and no crew. If at least one crew member is provided in the lease arrangement, this becomes a wet lease as defined in the FARs. A wet lease is an exception to the simple definition of a lease because it does not involve transferring possession of the aircraft. The lessor maintains operational control of the aircraft under a wet lease. Without a specific exemption, such as a time sharing agreement, or other options found under FAR 91.501, a wet lease requires an FAA commercial operating certificate.