leases

What is ACMI?

ACMI stands for 'Aircraft, Crew, Maintenance, Insurance'. It is a type of lease, normally (but not exclusively) between two airlines. The Lessor provides the Aircraft, one or more complete Crews (including engineers if necessary) including their salaries and allowances (usually), all Maintenance for the aircraft, and Insurance for the aircraft itself and, usually, third-party liability cover. He will charge for the aircraft by the hour, but will want a minimum number of hours per month guaranteed. For example, he may charge US$ 1000 per hour, but will want a minimum of 100 hours per month paid, whether you actually reach 100 in that month or not.

The Lessee then has to provide all fuel, landing/handling/parking fees, crew accommodation, food and transport, and pay the overflight charges. This latter point is complicated. When flights operate they use a flight number which is issued to airlines by the International Civil Aviation Organisation. In order to cover the costs of air traffic control services, states overflown will send a bill to the owner of the flight number, which can be readily identified by its code. The owner of the aircraft will probably have a code, but will not want to use it because he will end up with all the bills. So, an ACMI lease requires that the Lessee provides his own flight numbers, so that the bills can be directed to him. In order to get a code, you have to show the I.C.A.O. that you are a registered airline, so you really need to be an airline to take on an ACMI lease.

What are 'Wet Lease' and 'Dry Lease'?

'Wet Lease' means a lease of an aircraft including its crew. So it is really an 'ACMI' lease (see details above).

'Dry Lease' is the lease of the aircraft only, without crew. In this case the Lessee is responsible for everything as for an ACMI lease but, in addition, he has to supply his own crew (with all the associated costs), provide all his own maintenance, and set up his own insurances.

Owners of aircraft who 'Dry Lease' them out are understandably wary of who leases them. They need to make sure that the aircraft will be well cared for, as poor maintenance by the Lessee can lower the value of the aircraft, cost the owner a lot of money when the aircraft is returned, or even cause an accident. So the Lessee will have to provide very detailed evidence that he is in good shape to look after the aircraft and operate it properly. The qualifications and training procedures for his crews will also be an important factor.

Dry Leases are normally charged at a fixed rate per month, plus an hourly charge which the owner accrues for engine overhauls or replacements, and major checks. A typical dry lease might be between a major leasing company or a bank (who own the aircraft) and an airline, and they would normally be for two years or more.

The Lessor and the Lessee

The Lessor is the owner of the aircraft, or an airline operating it on his behalf, or an agent acting for him. If he leases it out he becomes the Lessor.

The Lessee is the person or organisation that takes the aircraft on lease from the owner (the Lessor). If you lease an aircraft from me you become the Lessee, and I become the Lessor.

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