The “General Aviation Dry Leasing Guide,” Which Breaks Down Key Regulatory Information Related To The Proper Use Of Leases

As part of a comprehensive industry response to federal concerns over illegal charter flights – including those conducted under so-called “sham dry lease” arrangements – the NBAA and other leading industry groups have announced the publication of the “General Aviation Dry Leasing Guide,” which breaks down key regulatory information related to the proper use of leases and how improper use, whether intentional or inadvertent, can lead to illegal operations.

Nearly all general aviation flights – including those conducted under dry leasing arrangements – take place in compliance with FAA regulations and other applicable laws. Aircraft dry leases are commonly used in the industry, and when properly implemented, they are compliant with the regulations. In simplest terms, a dry lease is one in which the lessor simply provides an aircraft, leaving it to the lessee to obtain crewmembers, and also to assume operational control of a flight.

That said, the FAA’s increased scrutiny over illegal charter flights using “sham dry leases” to disguise the true commercial nature of a flight – which has taken shape largely under the agency’s Safe Air Charter initiative – has led aircraft owners and lessors to seek greater clarity on the arrangements, in order to fully ensure proper compliance.  

The “General Aviation Dry Leasing Guide” offers a detailed breakdown of the best practices for proper use of dry leases, clarifying how aircraft owners can derive benefits from the arrangement, while enhancing the industry’s vigilance against practitioners of illegal charter.

“Dry leases serve as an important business tool frequently used with key business assets,” said Brian Koester, CAM, NBAA’s director of flight operations and regulations. “NBAA has long been at the forefront of helping aircraft operators develop compliant leasing agreements. We believe this guide will provide operators much-needed clarity for developing and executing inherently complex dry leasing arrangements.”

Information covered in the publication includes an overview of the different types of dry leases, the difference between dry and wet leases (which involve the provision of crewmembers), as well as how “operational control” is determined, and how to maintain compliance when considering maintenance, authorization and insurance requirements. It also includes 22 frequently asked questions that clearly and specifically address common causes of confusion for both operators and consumers.

FMI: www.nbaa.org, https://nbaa.org/wp-content/uploads/flight-department-administration/aircraft-operating/leasing/NBAA-General-Aviation-Dry-Leasing-Guide.pdf