Aircraft Wet Lease Agreement

An aircraft wet lease agreement is an arrangement where an airline leases an aircraft from another airline, which includes both the aircraft and crew. This arrangement is particularly useful for airlines that need to quickly expand their fleet or address unexpected maintenance issues with their existing aircraft.

Wet lease agreements are often used by airlines during peak seasons, such as holidays, when demand for air travel is high. It is also used by airlines to maintain their schedules even if one of their planes has been grounded for maintenance or repairs.

The key benefits of wet lease agreements are flexibility, speed, and cost-effectiveness. With a wet lease agreement, an airline can quickly increase capacity and respond to changes in demand without having to invest significantly in new aircraft or crew. This can help airlines remain competitive and maintain their market share.

Wet lease agreements can also be cost-effective for airlines. Rather than incurring the steep costs of purchasing an aircraft and employing a full crew, a wet lease agreement allows an airline to pay for only the services they need, saving money in the long run.

From a regulatory standpoint, wet lease agreements can be complex, both domestically and internationally. In the United States, federal regulations require airlines to obtain a foreign air carrier permit and to comply with the Department of Transportation’s fitness requirements when entering into a wet lease agreement with a foreign airline. In the European Union, the European Aviation Safety Agency regulates wet lease agreements.

When negotiating a wet lease agreement, airlines need to ensure that they understand the terms and conditions of the agreement, including details about the aircraft and its crew, insurance coverage, and the duration of the lease. It is also important to establish clear communication and coordination between the two airlines to ensure smooth operations.

In summary, aircraft wet lease agreements offer airlines a flexible, cost-effective way to increase capacity and maintain schedules. However, to ensure a successful partnership, airlines should carefully consider the terms of the agreement and establish clear communication and coordination with the leasing airline.