Leasing can help you experiment, scale, and remain competitive. As a result, it’s a popular choice. About half of the world’s commercial aircraft fleet is leased.
A wet lease is a full-service option, while a dry lease involves just the aircraft. Misunderstanding this key difference can lead to financial overruns, operational shortfalls, or regulatory noncompliance.
In this article, we’ll break down the two formats and examine the risks and benefits of each. You’ll have a clear framework to use when choosing the right leasing structure for your needs.
Comparison: Wet Lease vs. Dry Lease
| factor | wet lease (acmi / full service) | dry lease |
|---|---|---|
| What’s Included | Aircraft + Crew + Maintenance + Insurance | Aircraft only |
| Operational Control | Lessors retain control | Lessee holds controls |
| Lessee Cost / Risk | Higher all-in rate, lower risk | Lower base cost, more risk and overhead |
| Lease Term | Typically short-to-medium | Typically long term |
| Ideal For / Use Case | Seasonal demand, capacity gaps | Stable operators expanding fleet |
| Regulatory / Compliance | Simpler for lessee (less responsibility) | Requires full lessee infrastructure and oversight |
Risk allocation sets these two options apart. A wet lease provides a comprehensive, lower-risk solution where the lessor maintains control and responsibility, while a dry lease transfers all operational burdens, including maintenance and crew, to the lessee for a lower base cost.
The key distinction isn’t just what’s in the contract, but who holds the operational risk. With a wet lease, you’re buying a complete transportation service; with a dry lease, you’re merely renting the tool you use to provide your own service.
What Is a Wet Lease?
In a wet lease, the owner (the lessor) provides the lessee with an aircraft and a crew, and the lessor provides maintenance and insurance. This form of lease is sometimes referred to as an ACMI policy (aircraft, crew, maintenance, and insurance).
The lessor provides full operational services, while the lessee pays for items such as airport fees and fuel.
Responsibilities (Lessor vs. Lessee)
In a wet lease, the lessor retains operational control and is responsible for the following:
- Crew
- Maintenance
- Insurance
- Certifications
A lessee gets a turnkey solution and is only responsible for these:
- Scheduling
- Variable costs (such as fuel, airport charges, and taxes)
- Ground operations
- Passenger handling
Pros & Cons of Wet Leasing
The benefits of wet leasing for the lessee include the following:
- Immediate capacity
- Low risk
- Reduced overhead costs
- Regulatory simplicity
The drawbacks of wet leasing for the lessee include the following:
- Higher hourly costs
- Lack of control
- Limited timeframe (typically)
Typical Wet Lease Use Cases & Examples
A wet lease is an ideal way to scale capacity during a period of high demand. If you’re entering the busy holiday season, for example, a wet lease allows you to serve passengers very quickly.
A wet lease can also be helpful when your aircraft is grounded due to needed repairs or replacements. You could also use a wet lease to test out a different type of aircraft or experiment with offering services in a new market.
What Is a Dry Lease?
A dry lease involves just the aircraft without crew or insurance. In these lease arrangements, the lessee must have an appropriate air operator certificate or the proper operational authority.
Responsibilities & Risks of the Lessee
In a dry lease, the lessee is responsible for the following:
- Flight specifics, such as scheduling and route planning
- Maintenance
- Insurance
- Regulatory compliance
- Operational risks (and associated costs)
Pros & Cons of Dry Leasing
The benefits of dry leasing for the lessee include these:
- Lower base costs
- Increased control
- Financial flexibility
The challenges of dry leasing for the lessee include the following:
- Higher overhead
- Regulatory burdens
- High capital commitments
Dry Lease Use Cases & Examples
A dry lease makes sense for an established operator considering fleet expansion. You can scale up and add aircraft while maintaining the quality and control your customers expect. Integration with your fleet is so seamless that your customers won’t notice the shift.
Operators need the necessary licenses and crews to make this lease pay off over the long term, but it can be a good choice for some.
Wet Lease vs. Dry Lease Cost Comparison
A wet lease and a dry lease come with different cost structures. We’ll illustrate how the fees are different between these two leases, along with how they also come with different risks and responsibilities.
This table compares two lease types for a mid-sized business jet operating for approximately 400 to 500 hours per year:
| cost component | wet lease | dry lease |
|---|---|---|
| Base Lease Rate (per hour) | $12,000 | $2,000 |
| Crew Salaries | Included | $3,000 |
| Maintenance & Repair | Included | $3,000 + variable overruns |
| Insurance | Included | $500 |
| Fuel, Airport, Handling, Fees | Paid by lessee | Same (lessee) |
| Unexpected / Downtime Buffer | Built into rate | 10-20% reserve (or more) |
| Estimated All-In Hourly Cost | $12,000 | $8,500 |
While the dry lease option we’ve outlined includes significant hourly savings, that benefit only applies if the operation runs smoothly. If anything changes (such as an unexpected maintenance issue), the lessee bears that financial burden.
How to Choose the Right Lease Option for Your Situation
Several criteria should factor into your choice between a wet and a dry lease. These are a few factors to consider:
- Capability: If you already have a license, crew, and insurance, you may not need a full-service lease.
- Control: Only one type of lease allows you to maintain control over the crew.
- Cost: Significant fee differences separate these lease types.
- Compliance: A turnkey lease is a good choice if you don’t have current licenses.
- Demand: A wet lease could be a good option for those who need to scale quickly.
When deciding between wet and dry leasing, the question I always ask clients is: ‘Do you want turnkey certainty or do you prefer to own every operational detail?’ Your answer determines your risk exposure and long-term cost profile.
Leasing Risks & Pitfalls to Watch Out For
Once you choose your lease structure, you must examine the terms and conditions carefully. These are typical risks to watch for:
- Control: Understand who makes critical decisions and who pays for problems.
- Regulations: Ensure that the lessee hasn’t signed a so-called functionally wet contract with hidden regulatory needs.
- Liabilities: Understand the maintenance reserves, insurance coverage, and downtime required.
- Scheduling: Know who should pay for overtime, and know what happens when the aircraft is grounded due to maintenance needs.
Best Practices When Setting Up a Lease
The following tips can be useful as you work up an aircraft lease:
- Read the rules and regulations that govern these agreements.
- Define responsibilities and performance metrics clearly.
- Clearly define the formula for maintenance reserves and minimum insurance limits (hull, liability).
- Build in specific clauses for early termination (with penalties) or options for extending the term to adapt to changing market demands.
- Perform scenario stress testing and ensure cost and responsibility are clearly allocated.
- Establish a formal, routine review process between the lessor and lessee to monitor aircraft condition, maintenance status, and operational performance metrics.
Simplify Aircraft Leasing With Element Aviation
The choice between a wet and a dry lease involves a careful calculation between convenience and cost. A wet lease is safer for those who want a short-term, low-risk solution. A dry lease is better for those who have a long-term need and developed infrastructure.
At Element Aviation, we can help you understand the risks and benefits of both options and make a smart decision for your future. Reach out today to discuss your options.
Fact Checked & Reviewed By:
Kevin White worked as an executive sales director for a leading aircraft acquisitions company for many years. There, he developed an intuitive understanding of what elite aircraft buyers and sellers expect. He also developed close ties with some of the world’s most prominent aircraft brokers. His extensive knowledge of the market ensures smooth aircraft transactions.
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Last modified 05 Dec 2025