Wet Lease Vs Dry Lease of Private Jets

Private jet engine looking back

In the world of private aviation, leasing a jet can be a more flexible and cost-effective alternative to outright ownership. Especially in terms of not tying up millions of dollars in a depreciating asset.

Private jet leasing comes in two primary forms: wet lease and dry lease. These two options cater to different needs and preferences, offering varying levels of control, responsibility, and services included in the agreement.

This article aims to provide a comprehensive comparison between wet lease and dry lease options, outlining their key differences, positives, and negatives.

Additionally, we will delve into the benefits and drawbacks of leasing versus buying a private jet, helping you make an informed decision tailored to your unique requirements.

Many companies offer the option to lease a private jet, such as Exclusive Aircraft and VistaJet.

Private jet lease taking off

What is Leasing of a Private Jet?

Leasing a private jet is a contractual arrangement in which an individual or a company (the lessee) rents an aircraft from an aircraft owner or leasing company (the lessor) for a specified period.

In contrast to purchasing a private jet, leasing allows clients to access the benefits of private aviation without the substantial upfront investment and ongoing responsibilities associated with ownership.

There are two primary types of private jet leases: wet lease and dry lease. Wet leases include not only the aircraft but also a full range of services, such as crew, maintenance, insurance, and sometimes additional amenities like catering or ground transportation.

Gulfstream G800 Exterior

Dry leases, on the other hand, involve renting the aircraft itself without any additional services, leaving the lessee responsible for sourcing and managing the operational aspects of the jet.

Leasing a private jet offers various advantages, such as lower initial investment, flexibility in terms of aircraft choice and lease duration, and reduced risks associated with ownership. However, it also comes with some drawbacks, such as ongoing lease payments, limited customization options, and potential restrictions on usage.

In order to make an informed decision, prospective clients should carefully consider their unique needs, preferences, and budget constraints, taking into account factors such as lease type, duration, aircraft model, and associated services.

By leveraging detailed information, impartial advice, and real-time data, individuals and companies can navigate the private aviation industry with confidence and find the leasing solution that best aligns with their goals and requirements.

Wet Lease

Wet leasing is a type of private jet lease agreement that includes not only the aircraft itself but also a comprehensive range of services and operational support.

In a wet lease arrangement, the lessor (aircraft owner) provides the lessee (client) with a fully crewed, maintained, and insured aircraft for a specified period.

The term “wet” refers to the fact that the lease includes everything required to operate the aircraft, such as fuel, crew, maintenance, and insurance.

This means that the lessee does not have to worry about managing these aspects, as they are all taken care of by the lessor.

Some wet lease agreements may also include additional services like catering, ground transportation, or flight planning assistance, depending on the terms of the contract.

Wet leases typically have a shorter duration, ranging from a few days to several months, making them ideal for clients who need a temporary solution or want to test out different aircraft models before committing to a long-term lease or purchase.

This type of lease offers convenience, time-saving benefits, and flexibility, as the lessee can focus on their travel needs without having to deal with the operational and logistical aspects of private aviation. However, it’s essential to keep in mind that wet leases generally come at a higher cost than dry leases due to the inclusion of crew, maintenance, and other services.

Benefits of Wet Leasing

Wet leasing comes with numerous benefits, primarily ease of use and reduced responsibilities.

  1. Convenience and time-saving: With a wet lease, the lessor takes care of all operational aspects, including crew, maintenance, and insurance. This allows the lessee to focus on their travel needs without worrying about the logistics of managing a private jet.
  2. Access to crew and maintenance services: Wet leasing agreements include a professional crew (pilots, flight attendants) and maintenance services, ensuring a high level of safety and smooth operation of the aircraft.
  3. Flexibility: Wet leases offer flexibility in terms of aircraft choice, allowing clients to select the most suitable model for their specific travel needs. Additionally, wet leases often have shorter durations, making them ideal for temporary or seasonal requirements.
  4. Cost predictability: The all-inclusive nature of wet leases means that the lessee can easily predict the total cost of their private jet usage, as most expenses are bundled into the lease agreement.
  5. Reduced responsibilities: Since the lessor handles most of the operational aspects, the lessee has fewer responsibilities and liabilities, allowing for a more hassle-free private aviation experience.
  6. No long-term commitment: Wet leases typically have shorter durations, which means clients can avoid being locked into a long-term contract and have the freedom to explore other options as their needs evolve.
Private jet lease handshake on tarmac

Drawbacks of Wet Leasing

However, like with most things in life, wet leasing comes with a number of drawbacks as well.

  1. Higher costs: Wet leases generally come at a higher cost compared to dry leases due to the inclusion of crew, maintenance, and other services. This might make them less suitable for clients with budget constraints or those looking for long-term solutions.
  2. Limited control: With a wet lease, the lessee has limited control over the aircraft and crew selection, as these aspects are managed by the lessor. This might be a drawback for clients who prefer to have more direct influence over their private aviation experience.
  3. Availability issues: During peak travel seasons, it might be challenging to secure a wet lease on short notice, as demand for such services increases significantly.
  4. Customization limitations: Wet leased aircraft typically come with standard configurations and may not offer the same level of customization options as dry leased or owned aircraft. Clients with specific interior or exterior design preferences may find this restrictive.
  5. Less cost-effective for long-term use: While wet leases offer convenience and flexibility for short-term needs, they may not be as cost-effective for clients who require a private jet for an extended period. In such cases, a dry lease or purchasing an aircraft might be more financially viable.
  6. Dependence on the lessor: Since the lessor manages the operational aspects of the aircraft, the lessee is dependent on their ability to provide high-quality services. If the lessor fails to meet expectations, it could negatively impact the lessee’s private aviation experience.

Dry Lease

Dry leasing is an alternative type of private jet lease agreement in which the lessee (client) rents the aircraft itself without additional services such as crew, maintenance, or insurance.

In a dry lease arrangement, the lessor (aircraft owner) provides the aircraft for a specified period, while the lessee takes on the responsibility of sourcing and managing the operational aspects of the jet.

The term “dry” refers to the fact that the lease does not include any of the services required to operate the aircraft. This means that the lessee has to independently source and manage the crew, maintenance services, insurance, and other operational components.

Dry leases typically have a longer duration than wet leases, ranging from several months to a few years, making them suitable for clients who require a private jet for an extended period or those who prefer greater control over their aviation experience.

Benefits of Dry Leasing

There are, of course, benefits that come with dry leasing a private jet. The top benefits are as follows.

  1. Lower costs: Dry leases typically have lower costs compared to wet leases, as they do not include crew, maintenance, and other services. This makes them more cost-effective for clients who prefer to manage these aspects themselves or require a private jet for an extended period.
  2. Greater control: With a dry lease, the lessee has more control over the aircraft and crew selection, allowing them to tailor their private aviation experience according to their preferences and requirements.
  3. Customization options: Dry leased aircraft offer greater opportunities for customization, both in terms of interior design and exterior branding. This allows clients to create a personalized environment that aligns with their tastes and corporate identity.
  4. Long-term solutions: Dry leases usually have longer durations, making them suitable for clients who need a private jet for an extended period or those looking for a more stable and long-term solution.
pilatus pc-24 water ingestion test - are private jets safer than commercial

Drawbacks of Dry Leasing

Naturally, dry leasing a private jet also comes with a series of drawbacks.

  1. Additional responsibilities: In a dry lease arrangement, the lessee takes on the responsibility of managing the operational aspects of the private jet, including sourcing and coordinating crew, maintenance services, and ensuring compliance with regulatory requirements. This can be time-consuming and may require a higher level of expertise in the private aviation industry.
  2. Sourcing crew and maintenance services: The lessee is responsible for independently sourcing qualified crew members and reliable maintenance services, which can be challenging and require additional effort to ensure a high level of safety and smooth operation of the aircraft.
  3. Higher upfront costs: While dry leases generally have lower ongoing costs compared to wet leases, they may come with higher upfront expenses. The lessee is responsible for obtaining insurance coverage and necessary certifications to operate the aircraft, which can be costly.
  4. Regulatory compliance: Dry leasing a private jet requires the lessee to stay up-to-date with current aviation regulations and ensure that their operations comply with all applicable laws and standards. This can be complex and time-consuming, particularly for clients without prior experience in the industry.
  5. Risk management: The lessee is responsible for managing the risks associated with operating a private jet, such as ensuring the aircraft is adequately insured, properly maintained, and safely operated by qualified crew members. Failure to effectively manage these risks could result in significant financial consequences or legal liabilities.
  6. Limited availability: Depending on market conditions and demand, it may be challenging to find a suitable dry lease option that meets the client’s specific requirements in terms of aircraft model, lease duration, and other preferences.

Leasing Versus Buying a Private Jet

In the private aviation industry, prospective clients often face the critical decision of whether to lease or buy a private jet.

Both options come with their unique benefits and drawbacks, and understanding these differences is essential for making an informed choice tailored to one’s specific needs and preferences.

This comprehensive overview aims to provide detailed information, impartial advice, and relevant real-time data, enabling readers to navigate the complexities of leasing versus buying a private jet.

Leasing a Private Jet

Leasing a private jet is a contractual arrangement where an individual or a company (the lessee) rents an aircraft from an aircraft owner or leasing company (the lessor) for a specified period.

Leasing offers advantages such as lower initial investment, flexibility in terms of aircraft choice and lease duration, and reduced risks associated with ownership. However, it also comes with some drawbacks, such as ongoing lease payments, limited customization options, and potential restrictions on usage.

There are two primary types of private jet leases: wet lease, which includes the aircraft along with various services like crew, maintenance, and insurance; and dry lease, where the lessee rents the aircraft itself without additional services and is responsible for managing the operational aspects of the jet.

Buying a Private Jet

Buying a private jet involves purchasing the aircraft outright, granting the owner full control over its utilization, customization, and management.

Owning a private jet provides several benefits, including complete control over the aircraft’s interior and exterior design, the potential for increased asset value, and no concerns about lease expiration or renewal.

However, buying a private jet also comes with its challenges, such as high initial investment, depreciation and maintenance costs, and the responsibility of managing crew and maintenance services.

Dassault 900LX Exterior

Benefits of Leasing Over Buying

Leasing in general comes with a number of key benefits, such as:

  1. Lower initial investment: Leasing a private jet requires a significantly lower initial investment compared to purchasing one outright, making it more accessible for clients with budget constraints or those who prefer not to tie up capital in an asset.
  2. Flexibility: Leasing offers greater flexibility in terms of aircraft choice, allowing clients to select the most suitable model for their specific travel needs. Additionally, lease durations can be tailored to client’s requirements, providing options for both short-term and long-term usage.
  3. Reduced risks: Leasing a private jet involves fewer risks associated with ownership, such as depreciation, maintenance costs, and potential fluctuations in the market value of the aircraft.
  4. Cost predictability: With leasing, clients can better predict the total cost of their private jet usage, as most expenses are bundled into the lease agreement, particularly in the case of wet leases.
  5. No long-term commitment: Leasing allows clients to avoid being locked into a long-term commitment, providing the freedom to explore other options as their needs evolve or market conditions change.
  6. Less responsibility: Leasing a private jet, especially through a wet lease agreement, reduces the lessee’s responsibilities and liabilities related to crew management, maintenance, and regulatory compliance, offering a more hassle-free private aviation experience.
  7. Opportunity to try different models: Leasing provides an excellent opportunity for clients to test different aircraft models before committing to a long-term lease or purchase, ensuring they make an informed decision based on firsthand experience.

Benefits of Buying Over Leasing

When it comes to buying over leasing there are numerous benefits, including the following:

  1. Complete control: Purchasing a private jet grants the owner full control over the aircraft’s utilization, customization, and management, allowing them to tailor their private aviation experience according to their preferences and requirements.
  2. Customization options: Owning a private jet provides extensive opportunities for personalizing the aircraft’s interior design and exterior branding, creating a unique environment that reflects the owner’s tastes and corporate identity.
  3. Potential for increased asset value: As the owner of a private jet, there is potential for the aircraft to appreciate in value over time, depending on market conditions and other factors, offering an opportunity for a return on investment.
  4. No lease expiration or renewal concerns: When owning a private jet, there are no worries about lease expiration or renewals, ensuring uninterrupted and hassle-free access to the aircraft as long as it remains in the owner’s possession.
  5. Unrestricted usage: Private jet owners have the freedom to use their aircraft without any restrictions imposed by leasing agreements, such as limitations on flight hours or destinations, providing greater flexibility for travel arrangements.
  6. Cost savings over time: While purchasing a private jet involves a high initial investment, the ongoing costs can be more manageable compared to leasing, especially for frequent users. Over time, the cost of ownership may become more cost-effective than leasing.
  7. Tax advantages: Owning a private jet may offer potential tax benefits, such as depreciation deductions and the ability to offset certain expenses against income, depending on the owner’s jurisdiction and particular tax situation.
Bombardier Global 5000 Exterior

Summary

To summarize, in the private aviation industry, clients often face the decision of choosing between wet leases and dry leases, as well as whether to lease or buy a private jet.

Wet Lease vs. Dry Lease: Wet leasing is a type of private jet lease that includes the aircraft along with various services such as crew, maintenance, and insurance, offering convenience and time-saving benefits.

On the other hand, dry leasing involves renting the aircraft itself without additional services, granting the lessee greater control over the operational aspects but also requiring more responsibility.

While wet leases typically come at a higher cost and may have limited customization options, they offer flexibility and reduced responsibilities for the lessee. Conversely, dry leases have lower costs and provide customization opportunities, but demand increased responsibilities and management efforts from the lessee.

Leasing vs. Buying a Private Jet: Leasing a private jet offers advantages such as lower initial investment, flexibility, reduced risks associated with ownership, and the opportunity to try different aircraft models before committing to a long-term lease or purchase.

However, leasing also comes with drawbacks, such as ongoing lease payments, limited customization options, and potential restrictions on usage. Buying a private jet provides complete control over the aircraft’s utilization and customization, potential for increased asset value, and uninterrupted access to the aircraft without lease expiration concerns.

However, purchasing a private jet requires a high initial investment and entails responsibilities related to crew management, maintenance, and regulatory compliance.