Buying AircraftOperating Regulations

Private Jet Dry Leasing

By July 1, 2020 No Comments
Aircraft Dry Lease

You are looking for a safe way to travel with your family and business associates.  You are considering “dry leasing” a jet to skip the airlines, charters, and jet cards.

First, you want to know if a jet dry lease fits your travel needs and then make sure you know what a dry lease is and isn’t.  Next, you need to know the FAA’s definition of a dry lease, not what the person leasing you a jet thinks it is.  Ask questions and either read the lease documents or hire an aviation attorney to review the lease on your behalf.

Ask Yourself These Questions before Dry Leasing a Jet

  • Will I fly on business trips or personal trips or both?
  • Where are my most frequent destinations?
  • How many passengers are usually on board?
  • How much luggage is usually on board (do you travel with skis, golf clubs, or a lot of luggage)?
  • Do I travel with any pets?
  • Do I want exclusive use of a leased aircraft?

Now that you have an idea of your needs, do some research to determine what aircraft are available for lease.   Leasing an aircraft is different than chartering an aircraft.  When “dry leasing” an aircraft, you, as the lessee (not the pilot and not the company that provided the pilot) have operational control of the aircraft.   Operational Control means you have the responsibility and liability for the flight.  When you charter an aircraft, you are a passenger and do not have operational control or the accompanying responsibility or liability.

Ask the Lessor Questions Before You Lease A Jet

Financial Questions to Ask Before Leasing a Jet

  • Will I receive a written lease to review prior to being asked to sign the lease?
  • Is a deposit required?
  • How much is the deposit and who holds the deposit?
  • Is the deposit held in a segregated account?
  • When is the deposit returned?
  • Will the deposit ever be applied to pay for any costs?
  • I understand that I buy fuel.  How do I buy fuel?  Will they take my credit card?
  • How much is fuel?
  • Are there other expenses I must pay, like landing fees, ramp fees, cleaning charges, de-icing, internet, catering, and pilot travel costs?
  • What are these other charges?
  • How much are these other charges?
  • Are there any federal or state taxes owed by the Lessee?
  • Is the aircraft financed?  If so, does the lender know about this lease and has the lender consented to this lease?
  • Is the owner current on its payments to the lender?  Will the lender confirm whether the owner is not in default?

Lease Hour Questions to Ask Before Leasing a Jet

  • If I buy a block of flight hours, when do I pay for the hours?
  • Is the prepaid amount for the hours held in a segregated account?
  • How long do I have to utilize the flight hours?
  • What if I don’t utilize my hours in time, do they expire, or can I carry them over if I buy more hours during the next term?
  • What happens if I fly more hours than I leased?
  • How is taxi time counted?
  • Who tracks the leased hours and how do they track them?
  • Who repositions the aircraft for the start of my flight?
  • Do the repositioning hours count against my leased hours?
  • Do I hire the pilots and pay the landing fees to reposition the jet for my flight?
  • Can I keep the plane parked and available for me for a week while I am at my second home?

Ownership and Flight Questions to Ask Before Leasing a Jet

  • Does the lessor in my lease own the jet I am leasing?
  • Do I lease hours in a specific aircraft?
  • Can I lease a different aircraft in the fleet if the leased aircraft is unavailable when I want to fly?
  • What happens if the owner sells the aircraft before I have flown all my leased hours?
  • How many leases (leased hours) are there for the aircraft?
  • How do I find pilots to fly my leased aircraft?
  • How do I schedule flights on the leased aircraft?
  • Who has priority if there are scheduling conflicts?
  • Will this make/model of aircraft fit my flight needs?

Condition of the Jet Questions to Ask Before Leasing a Jet

  • Who maintains the aircraft?
  • Is there a representation from the lessor about the maintenance?
  • Can I have my own aviation technician review the maintenance records before I lease the aircraft?
  • Do I pay any charges for maintenance programs?
  • Can I take a demo flight in the aircraft before I lease the aircraft?
  • Does the aircraft have Wi-Fi?  Is the Wi-Fi included in the lease?  How fast is the Wi-Fi?
  • Can I take my pet, drink red wine, and smoke on the plane?
  • How much baggage can the aircraft hold?
  • How many passengers can the aircraft hold?
  • Will this plane require a stop when flying to and from my most frequent destinations?
  • Can this plane land at the airport at my most frequent destination?
  • What happens if the plane is unable to complete my trip?  How do I get home?  How does the plane get to maintenance?

Liability Questions to Ask Before Leasing a Jet

  • Who obtains the insurance?  Am I covered by the insurance?  How much liability insurance is provided?  Will I receive a certificate from an insurance company showing my liability insurance coverage?
  • Who is responsible if there is an accident?
  • Who is responsible if another aircraft runs into my aircraft on the ground?
  • Who is responsible if my child colors the seat with a permanent marker?

Yes, there are many questions to ask and you should also ask additional follow-up questions.  Leasing a jet is not like renting an Airbnb.  Aviation is a highly regulated industry and penalties for failing to comply with FAA regulations can be steep.  Even straightforward FAA regulatory issues can be complex.  The help of an attorney experienced in business aviation can help reduce costs and ensure regulatory compliance.

Michelle M. Wade is a partner with the law firm of Jetstream Aviation Law and counsels clients on the acquisition, financing, and operation of corporate jets operated under Part 91 and Part 135 of the Federal Aviation Regulations.  Jetstream Aviation Law can be found at www.JetstreamLaw.com.

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