Aircraft Leasing for Major Airlines: ACMI, Dry Lease and Operating Lease Compared
For a major airline, additional capacity is not simply a question of fleet growth. Seasonal demand, delayed aircraft deliveries, technical disruptions, new routes and unexpected market opportunities can change capacity requirements within a very short time.
Aircraft leasing provides the flexibility to respond. Choosing the right structure, however, is critical. ACMI or wet lease, dry lease, AMI, damp lease and operating lease differ significantly in terms of crew provision, maintenance, insurance, operational control and the applicable AOC structure.
Lohn Aviation supports airlines worldwide in sourcing aircraft, crews and complete capacity solutions. Through our international network, clients gain access to a broad market. We develop structures for integration under the client’s own AOC as well as complete capacity solutions operated by an appropriately certificated carrier.
Why airlines lease additional aircraft
Purchasing an aircraft requires substantial capital and a long term commitment. An airline’s actual capacity requirement can change much more quickly.
Leasing allows carriers to expand or adjust their fleets without purchasing every additional aircraft.
Typical requirements include:
- seasonal traffic peaks
- short term capacity shortages
- technical aircraft disruptions and extended maintenance
- delayed aircraft deliveries
- new route launches
- the opening of additional bases
- fleet transition and retirement programmes
- additional passenger or cargo capacity
The appropriate model depends largely on whether the airline has its own Air Operator Certificate, suitable operational approvals, qualified crews and the internal resources required to operate the aircraft.
ACMI or wet lease
ACMI stands for Aircraft, Crew, Maintenance and Insurance. The provider supplies all four elements as part of the capacity solution.
The flights are normally operated under the AOC of the supplying carrier. The customer airline generally controls the commercial deployment of the capacity, including its schedule, network, distribution and marketing.
Depending on the agreement, fuel, airport charges, navigation fees, ground handling and other variable operating costs are typically borne by the customer.
ACMI is particularly suitable when capacity must be introduced quickly or when the customer does not have sufficient aircraft or crews of its own.
Common applications include:
- rapid capacity expansion
- replacement during technical aircraft disruptions
- seasonal flying programmes
- testing new routes
- bridging delayed aircraft deliveries
- operations for clients that do not hold their own AOC
The principal advantage is speed. Instead of integrating an aircraft into its own operating structure, the customer receives a largely ready to operate capacity solution.
Under Regulation (EC) No 1008/2008, wet and dry lease arrangements are distinguished by the AOC under which the aircraft is operated. Additional requirements concerning leasing agreements and regulatory approvals are contained in the EASA Easy Access Rules for Air Operations.
Dry lease
Under a dry lease, the aircraft is provided without crew. The lessee operates the aircraft under its own AOC and assumes operational control.
The airline therefore requires, among other things:
- a suitable and valid AOC
- approval to operate the relevant aircraft type
- qualified flight crews and cabin crews
- an established operational organisation
- approved maintenance and continuing airworthiness arrangements
- appropriate insurance and compliance structures
A dry lease gives the customer airline a high level of control. The aircraft can be integrated into the airline’s own network, brand and fleet operation.
This structure also requires more preparation. Aircraft registration, technical acceptance, regulatory approval, crew training and the inclusion of the aircraft in the airline’s operational documentation must all be coordinated.
Dry leasing is consequently best suited to airlines with their own AOC, established crew resources and a medium term or long term capacity requirement.
An integrated aircraft management solution can also help coordinate the technical, operational and commercial elements of a suitable operating concept.
Operating lease
An operating lease primarily describes the commercial and financial structure of the aircraft transaction.
The airline receives the right to use the aircraft for an agreed period without purchasing it. Legal ownership remains with the lessor.
In the airline market, an operating lease is frequently implemented as a longer term dry lease. The lessor supplies the aircraft, while the airline operates it with its own crews under its own AOC.
An operating lease and an ACMI agreement are therefore not direct alternatives on the same contractual level. They answer different questions.
ACMI or dry lease: Who provides the crew and operational services, and under whose AOC is the aircraft operated?
Operating lease or finance lease: How are the duration, financing and economic risks of the aircraft transaction structured?
Operating leases are commonly used for long term fleet planning. They provide access to aircraft without requiring the airline to acquire legal ownership of the asset.
The accounting, tax and legal consequences must nevertheless be assessed for each transaction. For companies applying international financial reporting standards, the relevant accounting framework is IFRS 16 Leases.
Finance lease
A finance lease is economically closer to aircraft financing or eventual ownership. A substantial proportion of the economic risks and rewards associated with the aircraft is transferred to the lessee.
This structure is generally intended for long term fleet strategies. It offers less short term flexibility than ACMI or a conventional operating lease.
A finance lease may be suitable when an airline intends to retain the aircraft for a significant period and potentially acquire it later.
AMI
AMI stands for Aircraft, Maintenance and Insurance. The customer provides its own crews, while the aircraft, maintenance and insurance form part of the agreed solution.
This can be attractive to an airline that has its own AOC and available crews but requires an additional aircraft.
Operational responsibilities must be allocated clearly in the contract and accepted by the relevant authorities.
Damp lease
In a damp lease structure, the provider will commonly supply the aircraft and flight crew, while some or all of the cabin crew are provided by the customer airline.
This can combine operational support with a customer experience aligned with the airline’s own brand.
The precise arrangement depends on applicable regulations, the AOCs involved and approval by the competent authorities.
Aircraft leasing models at a glance
ACMI or wet lease
- The provider supplies the aircraft.
- The provider supplies the flight crew and cabin crew.
- The provider supplies maintenance and insurance.
- The operation is performed under the AOC of the supplying carrier.
Damp lease
- The provider supplies the aircraft.
- Crew responsibilities are shared between provider and customer.
- The provider generally supplies maintenance and insurance.
- The operating structure depends on the agreement and regulatory approvals.
AMI
- The provider supplies the aircraft.
- The customer supplies the crew.
- The provider supplies maintenance and insurance.
- The operation is generally performed under the customer’s AOC.
Dry lease
- The lessor supplies the aircraft.
- The customer supplies the crew.
- Maintenance and insurance responsibilities are allocated by contract.
- The operation is performed under the customer’s AOC.
Operating lease
- The lessor supplies the aircraft.
- The customer frequently supplies the crew.
- Maintenance and insurance depend on the contractual structure.
- In the airline market, the operating lease is frequently structured as a dry lease.
Finance lease
- A lessor or financier supplies the aircraft.
- The customer supplies the crew.
- Further responsibilities are defined in the contract.
- The operation is performed under the customer’s AOC.
The final allocation of responsibilities is always determined by the contract and the approvals granted by the relevant aviation authorities.
Solutions for clients with their own AOC
Where the customer airline holds its own AOC, Lohn Aviation can structure a range of solutions.
These include:
- dry lease aircraft for integration into the customer’s operation
- AMI solutions where the customer has available crews
- additional flight crews or cabin crews
- ACMI capacity operated under the supplying carrier’s AOC
- short term, medium term and long term aircraft solutions
- passenger aircraft and cargo aircraft
Holding an AOC does not automatically mean that every available aircraft can be introduced immediately.
Aircraft type, registration, crew qualifications, maintenance arrangements, insurance, traffic rights and regulatory approvals must all be compatible with the planned operation. Within Europe, relevant requirements for leasing agreements are set out in Regulation (EU) No 965/2012.
Solutions for clients without their own AOC
If the customer does not hold an AOC, it cannot independently assume responsibility for commercial air transport operations. The flights must be performed under the AOC of an appropriately certificated operating carrier.
In this situation, Lohn Aviation can use its international network to structure a complete solution with a suitable AOC holder. Depending on the requirement, this may include the aircraft, flight crew, cabin crew, maintenance and insurance.
The certificated operating carrier retains operational control and regulatory responsibility.
The final structure depends on the region of operation, traffic rights, aircraft registration, required approvals and local regulations.
This also gives tour operators, corporations, public sector clients and other organisations without their own AOC access to professionally operated passenger or cargo capacity.
Global market access through the Lohn Aviation network
The market for available aircraft and crews is international, fragmented and time sensitive. Suitable capacity is not always located where it is required.
At the same time, aircraft type, range, cabin configuration, crew, maintenance status, registration, AOC and operating region must be compatible.
Lohn Aviation connects clients with aircraft owners, lessors, airlines, AOC holders, crew providers and technical partners across multiple markets.
Our approach includes:
- analysing the actual capacity requirement
- identifying suitable aircraft worldwide
- reviewing possible operator and AOC structures
- sourcing complete crews or individual crew components
- coordinating between customers, owners and operators
- supporting both short term and long term leasing solutions
Broad market access allows us to look beyond the availability of an individual aircraft and focus on a complete solution that can actually be operated.
Which leasing model is right for an airline?
The decision should not be based solely on the hourly ACMI rate or monthly lease payment.
Lead time, duration, crew availability, AOC structure, technical requirements and the desired level of operational control are equally important.
As a general guide:
- Rapidly available complete capacity: ACMI or wet lease
- Own AOC and own crews: Dry lease or AMI
- Own cabin crew but a requirement for flight crew: Damp lease
- Long term fleet integration without purchasing the aircraft: Operating lease
- Long term financing oriented structure: Finance lease
- No own AOC: Operation through an appropriately certificated carrier
Every transaction must be assessed individually. Aircraft availability, regulatory approvals, traffic rights, insurance, sanctions and local rules may affect the final structure.
A capacity solution must fit the operation
Aircraft leasing involves considerably more than supplying an asset. A viable solution brings together the aircraft, crews, maintenance, insurance, AOC, traffic rights and commercial requirements.
Lohn Aviation supports airlines and institutional clients worldwide in developing these solutions. The scope ranges from short term ACMI capacity to long term dry leases and operating leases.
Through our international network, we can approach the wider market, identify suitable aircraft and crews, and coordinate the appropriate operating structure.
Whether the aircraft is integrated under the customer’s own AOC or operated by a certificated carrier, the objective remains the same: a solution that is compliant, operationally viable and commercially sound.
Contact Lohn Aviation if you require an aircraft, a crew or a complete capacity solution for a specific flying programme.
The substance and factual content of this article come from the flying experience of our crew. AI assistance was used in drafting and structuring the text. It was reviewed and approved by our editorial team before publication.
