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What is wet leasing of aircraft, for which govt has relaxed rules

What is wet leasing, and why have rules on it been relaxed? Why do airlines want to lease aircraft? Here's a quick explainer.

wet lease, what is wet lease, DCGA, wet lease rules, IndiGo, indian express, express explainedIndiGo said it has plans to induct B777 aircraft on wet/damp lease basis during the current winter schedule. (File)

In efforts to boost international air traffic, the civil aviation ministry has allowed Indian airlines to take wide-body planes on wet lease for up to one year.

A senior ministry official said on Sunday that the rules had been relaxed, allowing the wet leasing for a year as opposed to the six months permitted so far.

What is wet leasing?

Wet leasing means renting the plane along with operating crew and engineers, while dry leasing refers to taking only the aircraft on rent.

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OAG, a global travel data provider, says on its website, “The technical term for wet leasing is ACMI which stands for aircraft, crew, maintenance and insurance. These are the aspects of the operation that the wet lease airline takes care of, while the airline client will still be responsible for paying for direct operating costs such catering and fuel as well as fees such as airport fees, ground handling charges and navigation fees.”

Operations of an aircraft on wet lease is not encouraged by the Directorate General of Civil Aviation (DGCA) as the crew is often not approved by Indian authorities. Also, wet leasing is generally a short-term arrangement, as it is more expensive than a dry lease.

Why limit extended

The country’s largest airline, IndiGo, has announced it plans to wet lease some aircraft. “We have plans for inducting B777 aircraft on wet/damp lease basis during the current winter schedule,” the airline said.

The relaxation will be available to all Indian carriers and will be granted based on international destinations they wish to operate to.

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With Covid-related restrictions lifting, international travel is picking up, and the wet leasing will allow airlines add more flights at a short notice. Wide-body planes can accommodate more passengers and fly longer flights, thereby, boosting revenue.

Also, as most airlines acquire more aircraft to scale up operations, there is a shortage of planes, and wet leasing is sometimes the only solution available

Why airlines lease aircraft

A lot of planes used by airlines in India are not owned but leased. Airlines and aircraft operators prefer leasing planes in order to avoid massive lump sum payments that buying them would entail, and to quickly increase capacity, perhaps temporarily, on certain routes or sectors.

First published on: 29-11-2022 at 09:06 IST
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