/The Wet Lease Agreement

The Wet Lease Agreement

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. Despite the bankruptcy of Air Berlin and Monarch Airlines, leased aircraft were quickly placed at “normal market rates” due to traffic growth due to growth in global revenue, as passenger-kilometres increased by 7.7% year-on-year until September 2017 and Airbus is having difficulty supplying A320neos due to delays in the supply of engines. [4] According to Philips Baggaley, one of the leading credit rating agencies (Standard and Poor), airlines generally lack liquidity when it comes to developing their fleet, so buying an aircraft is generally not a viable option. Borrowing to buy planes is also not a cheap option. This is why rent and leasing are becoming increasingly popular in the aviation industry. 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. A typical dry contract lasts up to two years and has certain conditions of depreciation, maintenance, insurance, etc., depending on the geographical location, political circumstances, etc.

A water leasing is a lease agreement whereby a company (the renter) provides an aircraft, a full crew, maintenance and insurance (ACMI) to another airline or another type of company acting as an air travel agent (the taker) that pays in hours worked. The tenant provides fuel and covers airport taxes as well as all other taxes, taxes, etc. The flight uses the tenant`s flight number. Wet leasing usually lasts 1 to 24 months. Wet leasing is usually used during peak hours or during annual and heavy maintenance checks or to launch new routes. [8] A water-leased aircraft may be used to fly services in countries where the taker is no longer in service. [9] It can also be used to replace unavailable capabilities or to circumvent regulatory or policy restrictions. Aircraft leasing is a lease of airlines and other aircraft operators. Airlines lease aircraft from other airlines or leasing companies for two main reasons: operating aircraft without financial charges and allowing temporary capacity increases.

The sector has two main types of leasing: wet leasing, which is normally used for short-term leasing, and dry leasing, which is more normal for longer-term leases. The industry also uses wet and dry suits. For example, if the aircraft is leased in the water to establish new services, airline cabin crew or cabin crew may switch to a dry lease. 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. 1- At the end of the lease, the purchaser has the opportunity to acquire the equipment. 2- Total rents represent more than 90% of the total market value of the equipment. 3- The duration of the lease covers at least 75% of the equipment`s useful life. But how exactly does wet leasing work? Which airlines are using wet leasing and why is it becoming more and more popular? In order to ensure the best organization for your business and operational needs, it is important to choose a supplier with transparent conditions and proven expertise in the legal complexity of leases.

By |2020-12-19T03:46:59+00:0012월 19th, 2020|Categories: 미분류|0 Comments

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