As part of an industry response to federal concerns over illegal charter flights, including those conducted under so-called ‘sham dry lease’ arrangements, the NBAA, NATA and other industry groups have published 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.
The free guide was assembled by the Aircraft Owners and Pilots Association (AOPA), Experimental Aircraft Association (EAA), General Aviation Manufacturers Association (GAMA), Helicopter Association International (HAI), NATA and NBAA.
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.
Written by veteran industry experts, 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,” says Brian Koester, 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.”
“We are pleased to provide this industry guide to ensure continued regulatory compliance for those involved in leasing,” adds Ryan Waguespack, NATA senior VP. “Dry leasing is a commonly used aviation tool and when properly executed is beneficial to the industry. However, as noted in recent FAA enforcement and industry reports to the Illegal Charter Hotline, improper and sham dry leases are a significant contributor to illegal charter flight activity. Those using dry leasing as a ruse to hide unauthorised charter operations have been put on notice that their actions are coming under increased FAA scrutiny. The Aircraft Leasing Guide clarifies how to properly construct and operate with a lease in place.”
“We came together as an industry to develop the General Aviation Dry Leasing Guide so that general and business aviation aircraft owners and operators can have a better understanding of the intricacies of dry leases. To maintain the health of our industry, it is important that we all continue operating in a safe and compliant manner,” notes Pete Bunce, GAMA president and CEO.
Information covered in the publication includes an overview of the different types of dry leases, the difference between dry and wet leases that involve the provision of crewmembers, as well as how operational control is determined, and how to maintain compliance when considering maintenance, authorisation and insurance requirements. It also includes 22 frequently asked questions that clearly and specifically address common causes of confusion for both operators and consumers.