• Airlines are increasingly adopting wet and dry lease models to address the acute shortage of new aircraft worldwide, a challenge that has intensified in the aftermath of the pandemic due to supply chain disruptions.
• These leasing arrangements allow carriers to sustain operations, expand routes, and manage passenger demand despite delays in fresh aircraft deliveries.
• Under a wet lease, airlines acquire a fully operational aircraft along with pilots, cabin crew, maintenance support, and insurance. While the lessor oversees operational aspects, the lessee airline controls commercial decisions such as schedules and routes.
• This option is typically used for short-term requirements like seasonal travel surges, trial runs of new routes, or substituting for grounded aircraft. By contrast, a dry lease provides only the aircraft, with the lessee airline taking full responsibility for crew, maintenance, and insurance under DGCA regulations, making it more suitable for long-term fleet expansion.
• A third arrangement, known as damp leasing, offers a middle path. In this model, the lessor supplies the aircraft, flight crew, and maintenance, but the lessee provides its own cabin crew.
• Damp leases are often described as partial wet leases, balancing operational flexibility with regulatory compliance. While wet leasing remains less encouraged by the DGCA due to crew approval concerns, dry and damp leases are gaining prominence in India’s aviation sector as airlines work to bridge fleet gaps and modernize their operations.