Aircraft leasing explained: dry lease, sale-and-leaseback and the big lessors

The A320 at the gate wears your vacation airline’s colors, you know the registration from the fleet list, and still it doesn’t belong to the airline. A large share of the world’s airliners is leased: the airline flies them, while the owner is often based in Dublin and has nothing to do with day-to-day flight operations. If you understand aircraft leasing, you also understand why aircraft suddenly turn white, show up with foreign registrations or sit stored for months between two airlines. This guide explains dry lease, wet lease and sale-and-leaseback and introduces you to the big leasing companies.

Aircraft leasing: the short answer

In aircraft leasing, an owner lets an airline have an aircraft for a time against a regular payment. The owner is usually a specialized leasing company – called a “lessor” in the industry – and the airline is the “lessee.” For the airline this means: it doesn’t have to raise the full purchase price of a jet, can let its fleet grow or shrink more quickly and passes the residual value risk to the owner. The lessor earns from the payments and from later resale.

How widespread the model is shows in its development: in the mid-1970s only a tiny fraction of the jet fleet operated under an operating lease. According to industry analyses, the share was around a quarter around the year 2000 and already about 40 percent in 2017. Leasing is thus not a stopgap for cash-strapped airlines but a fixed part of fleet planning – including at large network airlines.

Dry lease, wet lease, damp lease: the three basic forms

The most important distinction in leasing is not the contract type but the question: What does the airline get besides the aircraft?

Dry lease: just the aircraft

In a dry lease, the airline takes over only the aircraft. It provides cockpit and cabin crew, maintenance, insurance and operating organization itself. The aircraft is usually entered in the register of the operator’s country and flies under the air operator certificate (AOC) of the leasing airline. Dry leases usually run for several years, for new aircraft often for a good decade. This is the normal case when aircraft leasing is mentioned – and the reason you can’t tell a leased aircraft at the fence.

Wet lease: aircraft with crew

In a wet lease, the lessor supplies the complete package: aircraft, crew, maintenance and insurance. That is where the abbreviation ACMI (Aircraft, Crew, Maintenance, Insurance) comes from. The leasing airline sells the tickets under its flight number and usually pays per block hour, and it mostly bears fuel and fees itself. Flights are operated under the lessor’s AOC. Wet leases typically bridge bottlenecks of a few weeks up to about two years – for example in the summer peak, with delayed deliveries or engine problems. The details and the EU rules are in the guide Wet lease explained.

Damp lease: the middle way

In a damp lease, the lessor provides the aircraft, cockpit crew and maintenance, and the leasing airline brings its own flight attendants. Passengers thus get the familiar service even though a different crew is flying up front. The term is mainly common in the UK.

Feature	Dry lease	Damp lease	Wet lease (ACMI)
What is supplied	just the aircraft	aircraft, cockpit crew, maintenance	aircraft, entire crew, maintenance, insurance
Operated under the AOC of	leasing airline	lessor	lessor
Typical term	several years	weeks to months	weeks to months, rarely longer
Typical lessor	leasing company, bank	airline, ACMI specialist	airline, ACMI specialist
Livery	usually full colors of the lessee airline	often lessor’s colors, possibly stickers	often lessor’s colors, possibly stickers

Operating lease and finance lease

Besides the scope of services, lease contracts are distinguished by their economic logic.

• Operating lease: The classic model of the leasing companies. The airline leases the aircraft for part of its life, after which it returns to the lessor. The owner bears the residual value and remarketing risk. For airlines this is the flexible variant.
• Finance lease: This is more about financing. The term covers a large part of the useful life, and at the end the airline often takes over the aircraft. Economically it resembles a loan in which the aircraft serves as collateral.

Previously, the operating lease had a side effect on the balance sheet: for many airlines the obligations didn’t appear as debt on the balance sheet. Under the international accounting standard IFRS 16, which has applied since 2019, lessees must show most leases on the balance sheet. Since then, the appeal of leasing lies more in flexibility and conserving capital than in the look of the balance sheet.

Sale-and-leaseback: sell and lease back

In a sale-and-leaseback, an airline sells an aircraft to a leasing company and leases it back in the same moment. Nothing changes on the apron: same livery, same crew, same registration. On the balance sheet it does – the airline gets the sale proceeds immediately and pays installments over the term for it.

The model is especially common with new deliveries. Many airlines order aircraft directly from the manufacturer, such as Airbus or Boeing, and sell them on to a lessor at takeover. That way they secure the coveted production slots without financing the full purchase price permanently. Lessors, in turn, get new aircraft this way with a lessee already lined up.

What is in a lease contract

A lease contract for an airliner is an extensive document. A few core points are enough for understanding:

• Lease rate: The monthly rent. In the industry it is often described as the lease rate factor – as a percentage of aircraft value per month. How high it comes out depends on type, age, interest rate level, demand and the airline’s creditworthiness.
• Maintenance reserves: Many contracts provide for additional payments per flight hour or cycle, which prefinance major maintenance events such as engine overhauls or heavy checks. More on the checks is explained in Aircraft maintenance from A to C check.
• Return conditions: They set out the condition in which the aircraft comes back – for example how much remaining life engines and landing gear must have until the next overhaul, what the documentation looks like and whether the livery is removed.
• Registration and security: Where the aircraft is registered and how the owner secures its rights. The 2001 Cape Town Convention with its Aircraft Protocol, in force since 2006, creates an international registry for security interests in aircraft and engines. Its seat is Ireland.

You can play through how rate and aircraft value roughly interact right here. The values are freely selectable example figures, not market prices.

The big leasing companies

The industry is highly concentrated. A handful of lessors own a large part of all leased airliners, and most of them have their seat or operational center in Ireland.

AerCap

AerCap is the world’s largest aircraft lessor. The company is based in Dublin, with its registered office in Amsterdam. Its roots go back to Irish Guinness Peat Aviation, and it has carried its current name since 2005. Two acquisitions have shaped AerCap: in 2014 the company bought the International Lease Finance Corporation (ILFC) from AIG, which had been founded in 1973 by Leslie and Louis Gonda and Steven Udvar-Házy. In November 2021 came the completion of the acquisition of GECAS, General Electric’s leasing arm. Today AerCap leases engines as well as aircraft and – through a subsidiary – helicopters.

SMBC Aviation Capital

SMBC Aviation Capital is also based in Dublin and belongs to a Japanese consortium around Sumitomo Mitsui Banking Corporation and Sumitomo Corporation. The company goes back to a firm founded in 1994, which later belonged to the Royal Bank of Scotland and operated as RBS Aviation Capital. In 2012 the Japanese owners took over the business.

Avolon

Avolon was founded in Dublin in 2010 – by a team around Dómhnal Slattery that had previously worked at RBS Aviation Capital. Today Avolon is majority-owned by Bohai Leasing, with Japan’s ORIX holding a minority stake. With the acquisition of CIT’s aircraft leasing business in 2017, Avolon grew into the industry’s top group.

Air Lease

Air Lease Corporation of Los Angeles was founded in 2010 by Steven Udvar-Házy and John Plueger – Udvar-Házy is regarded, through ILFC, as one of the pioneers of modern aircraft leasing. In September 2025, a consortium of Sumitomo Corporation, SMBC Aviation Capital, Apollo and Brookfield announced the takeover. Since completion in April 2026, the company has operated as Sumisho Air Lease Corporation.

Other names

BOC Aviation of Singapore, a subsidiary of Bank of China, also belongs to the top group. In addition there are numerous smaller lessors, bank leasing subsidiaries and investment funds, as well as specialized providers for older aircraft, freighters or engines.

Lessor	Headquarters	Key milestones	Background
AerCap	Dublin	ILFC 2014, GECAS 2021	Roots at Guinness Peat Aviation
SMBC Aviation Capital	Dublin	Japanese owners since 2012	formerly RBS Aviation Capital
Avolon	Dublin	founded 2010, CIT business 2017	Bohai Leasing and ORIX
Sumisho Air Lease	Los Angeles	founded 2010, takeover 2026	Consortium around Sumitomo and SMBC
BOC Aviation	Singapore	–	Subsidiary of Bank of China

What leasing means for you as a spotter

In everyday life you can’t tell a leased aircraft. It gets interesting in the transition phases – and those are often the most interesting sightings for spotters.

For collectors this means: a single aircraft can fly for several airlines over its life, under several registrations and in several liveries. If you organize your sightings by serial number rather than just registration, you recognize such life stories. Fleet databases such as Planespotters.net help you trace an aircraft’s history, and with the registration you can often also find out the aircraft’s age.

Ferry flights between the old and new airline are also rewarding targets. They often stand out through unusual callsigns or routes – how to track them down is explained in Tracking delivery and ferry flights.

Leasing, wet lease or own fleet? Why airlines decide differently

How heavily an airline relies on leasing depends on its business model. An overview of typical motives:

Many airlines combine all three variants. Low-cost carriers in particular and large groups such as the Lufthansa Group or Air France-KLM mix purchased, leased and sale-and-leaseback financed aircraft in the same fleet. Many listed airlines publish the respective share in their annual reports.

Typical misconceptions

• “Leased means the airline is broke.” Wrong. Financially strong airlines lease too, because it is flexible and conserves capital.
• “Wet lease and leasing are the same thing.” No. In a wet lease the airline rents a complete flight service including crew, in a dry lease only the aircraft.
• “The registration reveals the owner.” Not necessarily. The registration shows the country of registry, which usually matches the operator. The owner can be based somewhere entirely different. How the system works is explained in Understanding aircraft registrations.
• “Leased aircraft are old.” On the contrary: a large share of new deliveries goes straight to lessors or into their ownership through sale-and-leaseback.

Conclusion

Aircraft leasing separates ownership and operation: the airline flies, the lessor owns. The dry lease supplies only the aircraft and is the backbone of the industry, the wet lease brings crew and maintenance and bridges bottlenecks, and sale-and-leaseback quickly turns an owned aircraft into liquidity. At the top are a few big lessors, most of them based in Dublin. For you as a spotter, the topic becomes visible whenever an aircraft changes airlines – with a white fuselage, a new registration or a livery that still looks half like the old lessee.