Aircraft Leasing

Guidance on the different types of aircraft leases and the associated regulations

When a UK air carrier wishes to lease-in a foreign registered aircraft or a UK air carrier / private company wishes to lease-out a UK registered aircraft to a foreign operator, a variety of arrangements have to be made. These arrangements can involve the CAA, the Department for Transport and contact with foreign authorities.

Once the arrangements have been accepted, the CAA and, as appropriate, the DfT, will issue the necessary Approvals, Directions, Exemptions, Permissions and Licence Validations (depending on the type of lease) before the aircraft can be legally operated.

The internal procedures involved in processing a lease application are often complex. Therefore, as much notice as possible should be given to the CAA, so that the arrangements can be made before the planned start date of the lease. As other agencies are involved, some outside the UK, it is not possible to predict how long it will take to process a lease application. Experience indicates that one month is the minimum time required, but it may well be more.

Types of leases and their definitions

  • Dry Lease Agreement - An agreement between undertakings pursuant to which the aircraft is operated under the AOC of the lessee.
  • Wet Lease Agreement - An agreement between air carriers pursuant to which the aircraft is operated under the AOC of the lessor.
  • Damp Lease - A wet lease with partial crew

The definitions shown above have been taken from ICAO Document 8335 (Manual of Procedures for Operations Inspection, Certificate and Continued Surveillance) and Regulation (EC) No. 1008/2008 (common rules for the operation of air services in the Community).

International Leasing (crossing national boundaries)

International leasing involves the lease-in of any non-UK registered aircraft (including aircraft registered in other EU Member States) or where a ‘G’ Reg aircraft is being leased-out to a foreign AOC (including to other EU States). Under these arrangements, the aircraft is being leased across national boundaries, therefore State of Registry and State of Operator regulatory safety oversight responsibilities will need to be considered.

Depending upon the type of lease involved, the State of Registry and State of Operator may not be the same. (e.g. where a non-UK registered aircraft is to be operated under a UK AOC (dry lease-in), the UK CAA would become State of Operator, with the foreign authority remaining as State of Registry).

Domestic Leasing
 

Domestic leasing only involves UK registered aircraft and is an arrangement either between two UK AOC holders or from a private company (e.g. leasing company or bank) to a UK AOC. Prior lease approval is still required, but such approval may fall under the CAA’s General Approval of Leasing Agreements (in the CAA’s Official Record Series 4), provided it fit the set criteria of the General Approval.

General Approval of Leasing Agreements Entered into by a UK Air Carrier

Please see CAA General Approval of Leasing Agreements for types of leases which are approved under the general lease approval.

Note:

Please note that there is a new condition to this general approval (see paragraph 10 of ORS4 Number 966) which limits use of paragraphs 7 and 8 to a maximum of five days in a calendar month.

For example, if a UK AOC wet-leases in another community air carrier for three days without prior specific approval from the UK CAA, it would still have two days available for further wet-leasing in without prior specific approval during the rest of that calendar month.

After the five days, specific approval must be requested from the CAA Leasing Manager.