In response to the growing level of fraudulent charters in business aviation, a half-dozen aviation associations have published a free online guide to help newcomers and others interested in chartering understand key regulations. The General Aviation Dry Leasing Guide breaks down laws, regulations and other information related to the proper use of leases.
“Aircraft dry leases are commonly used in the industry, and when properly implemented, they are compliant with [FAA] regulations,” said National Business Aviation Association in its statement. “In simplest terms, a dry lease is one in which the lessor simply provides an aircraft, leaving it to the lessee to obtain crewmembers, and also to assume operational control of a flight.” While the guide isn’t the most compelling reading, it is designed to keep you from being the fall guy if what appears to be a legitimate aircraft charter is actually illegal.
The associations have said that the FAA’s increased scrutiny over illegal charter flights using “sham dry leases” to “disguise the true commercial nature of a flight has led aircraft owners and lessors to seek greater clarity on the arrangements, in order to fully ensure proper compliance.” The FAA’s Safe Air Charter initiative came in response to the growing number of illegal charters, especially in the age of Covid-19, prompted by many newcomers to business aviation.
“As the holidays approach, travelers are turning to private aviation for its enhanced cleaning protocols and limited exposure to unknowns,” Ryan Waguespack, senior vice president of the National Air Transportation Association, told Robb Report. “It’s vital that these newcomers aren’t placing themselves or their assets at risk from illegal charter activity.”
Several European aviation associations have reported a rise in bogus websites that advertise charter aircraft with legitimate tail numbers. But after clients have paid for the charters, the websites disappear, leaving the clients with no flight and no recourse for refunds.
Waguespack hasn’t witnessed the website scam in the US, but he has seen the growth of “gray charters” where operators are using private aircraft that do not have Part 135 certification—the required FAA rating for charter aircraft—or pilots who are not type-certified for that particular aircraft. Unsuspecting clients who tend to shop by price—as they would on any commercial airline—may buy into these charters without suspecting they’re illegal.
“Besides higher levels of safety and training, Part 135 charter operators are also required by the Dept. of Transportation to hold a minimum level of insurance coverage,” said Waguespack. “Operators chartering aircraft illegally may have insurance policies that are not sufficient to cover commercial activities. In the event of an accident, passengers may find their own corporate and estate assets at risk.”
The publication discusses different types of dry leases and how operational control is determined, and how to maintain compliance when considering maintenance, authorization and insurance requirements. It has a list of frequently asked questions that address confusing areas for both operators and consumers. “Dry leases serve as an important business tool frequently used with key business assets,” added Brian Koester, NBAA’s director of flight operations and regulations. “We believe this guide will provide operators much-needed clarity for developing and executing inherently complex dry leasing arrangements.”
The guide was assembled by NBAA, the Aircraft Owners and Pilots Association (AOPA), Experimental Aircraft Association (EAA), General Aviation Manufacturers Association (GAMA), Helicopter Association International (HAI), and National Air Transportation Association (NATA).