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

Source: The post is based on the article “What is wet leasing of aircraft, for which govt has relaxed rules” published in Livemint on 30th November 2022.

What is the News?

The Ministry of Civil Aviation has relaxed rules related to the wet leasing of aircraft. It has allowed 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 the operating crew and engineers while dry leasing refers to taking only the aircraft on rent.

The technical term for wet leasing is ACMI which stands for aircraft, crew, maintenance and insurance.

Operations of an aircraft on wet lease are 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 do 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 the massive lump sum payments that buying them would entail and to quickly increase capacity, perhaps temporarily, on certain routes or sectors.