A dry lease taker may operate under 14 CFR Part 91 and is not required to meet many of the more restrictive and costly requirements of Parts 121 or 135. And the state excise duty is not payable on the sums the lesseer pays to the lessor, although VAT is often levied on the leasing rate. These benefits are considerable for private operators. However, they must also be weighed against the responsibilities and potential responsibilities that accompany the operational control of a 14 CFR Part 91 dry rental business. In 2002, there were fewer than 100 aircraft leasing companies worldwide, and the two largest controlled more than 40% of the market share. Only 17 years later, there are more than 150 suppliers, the first two holding only 20% of the market share. Today`s aircraft leasing partners have more opportunities than ever in choosing an aircraft rental partner – but they don`t all offer the same level of know-how and value. When selecting an aircraft leasing provider, ensure strong legal know-how, financial stability, a balance sheet for successful transactions and an integrated approach to ensure that your leasing aircraft operates at a high level. Now, the inevitable question – why would an airline want to rent a plane? There are two main reasons for this. Editor`s Note: For the latest developments on this topic, please read www.aopa.org/news-and-media/all-news/2020/march/pilot/for-the-record-who-is-in-control (February 2020) 1- At the end of the lease, the tenant has the option to purchase the equipment.
2- Total rents represent more than 90% of the total market value of the equipment. 3- The duration of the lease covers at least 75% of the equipment`s useful life. One example is the need for many airlines operating the 737 MAX to find replacements to meet flight schedules, as the aircraft remains on the ground. As a result, Scoot will lease Airbus A320 aircraft to compensate for MAX`s grounding. Operating lease: is usually a short-term lease relative to the economic life of the aircraft. As part of operational leasing, equipment is generally purchased for a period of 2 to 7 years.