5 BENEFITS OF BUSINESS AIRCRAFT DRY LEASING AND 4 ESSENTIAL TIPS OPENING LINES Source: nbaa.org, Editor, First Published Aug 13th, 2025 With all the discussion of the potential pitfalls of dry leasing in business aviation, it’s also important to remember the benefits dry leasing offers. For lessees, dry leasing can allow them to enjoy the pluses of operating an aircraft without the added ownership responsibilities. The benefits include operational flexibility, cost savings and reduced capital expenditure. For aircraft owners, dry leases offer a way to reduce the costs of ownership and utilization by allowing them to offer their aircraft to operators without providing crew or maintenance. “A dry lease is a method that affords you the ability to have appropriate shared use on an aircraft and still be able to operate under Part 91, as opposed to a wet lease, which typically is going to trigger the requirement to do a Part 135 (charter) operation,” said David Norton, an attorney with Shackelford, McKinley & Norton LLP, who was the first chair of NBAA’s Domestic Operations Committee and currently serves on the Tax Committee and the Regulatory Issues Advisory Group (RIAG). AS AN EXAMPLE, NORTON OFFERS THE FOLLOWING SCENARIO: “I have three businesses or three individuals that all would love to fly around in a $3 million airplane, but they only want to spend a million bucks a piece and use the airplane,” he explained. “Well, I can put the airplane in a holding company that is formed by those three individuals, and then I can dry lease the aircraft out of the holding company.” Via the dry lease, these three individuals or their companies assume responsibility for their respective operation of the aircraft, including staffing, maintenance, scheduling and more.“So, they’re on the hook to the FAA and the civil courts when they’re flying the airplane.” In short, a dry lease is used to transfer possession and control of an aircraft used for flights from an owner to another operator. “They’re also used for FAA compliance purposes, as well as for tax and other regulatory purposes,” said Joanne Barbera, an attorney and founding partner with Barbera & Watkins LLC.“We see them used for everything from a local FBO renting aircraft for pilot training, or for a pilot to fly an aircraft for that pilot’s own use, to a big company setting up a single-purpose entity to own an aircraft and transferring the operational control of that aircraft to the proper operating company.” 5 BENEFITS OF BUSINESS AIRCRAFT DRY LEASING Fractional aircraft programs also typically include dry leases between fractional owners, said Barbera, who also serves as vice chair of NBAA’s RIAG and past chair of the tax committee. Potential reasons to consider dry leasing include: • Operational flexibility: Dry leases allow the lessee to manage all aspects of the aircraft’s operation, including crew, maintenance and scheduling, providing greater control and tailoring to their needs. • Cost savings: By managing operations in-house, lessees can potentially reduce crew costs, maintenance expenses and insurance premiums. • Reduced capital expenditure: Dry leases offer a more affordable alternative to purchasing an aircraft, allowing businesses to allocate capital to other areas. • Longer-term solutions: Dry leases typically are longer-term, providing lessee’s a stable solution for fleet expansion or replacing aircraft without the high upfront costs of purchasing. 13 BUSINESS VIEW MAGAZINE VOLUME 12, ISSUE 08
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