Wet lease vs dry lease turns on whose air operator certificate the aircraft flies under

Under EU aviation law, which the UK retained after Brexit, a dry lease is an agreement under which the aircraft is operated under the air operator certificate (AOC) of the lessee, while a wet lease is an agreement between air carriers under which the aircraft is operated under the AOC of the lessor. That distinction decides who holds operational control, who supplies and supervises the crew, who maintains and insures the aircraft, which approvals are needed and who answers to the regulator.

In a wet lease, commonly called ACMI (aircraft, crew, maintenance and insurance), the lessor provides the aircraft together with the crew and systems that fly it and remains the operator in law. Both parties must be licensed airlines. The lessee typically sells the capacity under its own flight numbers and brand, and wet leases tend to cover short periods such as seasonal peaks, delayed deliveries or aircraft out of service. A damp lease is a variant in which the lessor supplies the flight deck crew but not the cabin crew, as the UK Civil Aviation Authority defines it.

In a dry lease, the lessor supplies only the aircraft. The lessor need not be an airline and is often a leasing company or financier, while the lessee must hold an AOC covering the aircraft type and intended operations. The lessee operates the aircraft with its own crew, maintenance arrangements and insurance and carries the rent, maintenance-reserve and redelivery obligations, which is why dry leases usually run for longer periods. Finance lawyers further split dry leasing into operating leases and finance leases.

Operational control, defined in US federal aviation regulations as the exercise of authority over initiating, conducting or terminating a flight, stays with the lessor in a wet lease and passes to the lessee in a dry lease. Regulators look to the operator whose AOC covers the flight, so a contract labelled a dry lease under which the lessor in practice supplies and controls the crew can be treated as a disguised wet lease.

In the EU, Article 13 of Regulation 1008/2008 allows carriers to use wet and dry leased aircraft. A dry lease involving an EU carrier, or a wet lease in which an EU carrier is the lessee, requires prior approval under the applicable aviation safety law, and a wet lease of a third-country-registered aircraft needs prior approval from the competent licensing authority and is subject to conditions including equivalent safety standards. The collapse of a UK ACMI carrier in April 2026 is an example of counterparty risk for wet lessees.