Short and Long Range Charters

Short and Long Range Charters

Some types of charter flights are those in which an airplane is rented in order not to stick to the schedules of the commercial routes, or the rent of an airplane in order to take a group of people in exclusive. It may also happen that a commercial flight may contain only a few places in charter, such as a number of seats sold to a tour operator at a lower price in order to be a component of a package tour, while other places are normally marketed.

  • Sales
  • Rental
  • Acmi Lease
  • Wet Lease
  • Dramp Lease
  • Dry Lease

International Modes of the Aircraft Rental Agreement:

Acmi Lease

The LESSOR provides the aircraft, complete crew, including wages and per diems, airplane maintenance, and insurance that usually includes helmet and damage to third parties. The lessor will charge for hours, and depending on the type of aircraft, a minimum of monthly operating hours will be guaranteed. If the aircraft flies or not, the LESSEE must pay the minimum guaranteed hours.

The LESSEE shall provide the fuel, landing fees, handling, parking, and expenses related to the flight of the crew, including their travel expenses, transportation, visa expenses, customs taxes, and local taxes where applicable.

In addition the LESSEE, will provide space for passengers, luggage, and cargo, and in those cases where necessary, cover the cost of belligerent irrigation. In addition the LESSEE will pay the charges of overflight and navigation expenses.

In general, the lessee is required to have a flight number to identify his / her overflight operations, and to bear the corresponding costs.

Wet Lease

It is basically ACMI, explained before. The Period can go from 1 month to normally one or two years. Periods shorter than one month are considered charter flights.

Damp Lease

It is similar to ACMI and Wet Lease, however without cabin crew. The LESSEE shall provide the cabin crew. This can be done only if the cabin crew receives SEP (Safety and Emergency Procedures) training by the LESSEE in order to familiarize the crew with the differences and characteristics of the aircraft.

Dry Lease

It is the basic rent of the aircraft including insurance, crew, and maintenance. Usually dry lease is used by banks and leasing companies.

A dry lease requires the LESSEE, to place the aircraft under its own AOC and to provide a record to the aircraft in its name.

A typical dry lease begins with two years in the future, and insure hedging certain future effects such as depreciation, maintenance, insurance, etc. This will depend on the geographical location, political circumstances, etc.

There are generally two types of dry lease, one financial and one operational:

  • Operative Lease: An Operative lease is commonly used to operate aircraft for a term of 2-7 years. With an Operative lease, the aircraft does not appear on the lessee's balance sheet.
  • Financial Lease: Also known as Capital lease, is defined when one of the following conditions occurs:
    a. At the end of the Lease term, the LESSEE has the option to purchase the aircraft in a previously agreed upon amount.
    b. When the value of the Lease exceeds 90% of the value of the aircraft in the Market.
    c. When the lease term exceeds 75% of the life of the aircraft.
    With a Financial Lease the aircraft appears in the commercial balance of the LESSEE, as if it were an acquisition.