Aviation Industry Groups Release Guidance on Aircraft Leasing Best Practices

As part of a response to federal concerns over illegal charter flights — including those conducted under so-called “sham dry lease” arrangements — the General Aviation Manufacturers Association and other industry groups 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, the Experimental Aircraft Association, the General Aviation Manufacturers Association, the Helicopter Association International, the National Air Transportation Association and the National Business Aviation Association.

Nearly all general aviation flights — including those conducted under dry leasing arrangements — take place in compliance with Federal Aviation Administration (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 to assume operational control of a flight.

With that written, 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 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.

“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,” Pete Bunce, president and CEO of GAMA, said.

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 address common causes of confusion for both operators and consumers.

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