Dry Lease

Definition: A dry lease is a lease of an aircraft without a crew. Typically in a dry lease the lessee is responsible for hiring the flight crew and has operational control of the aircraft. In these cases the lease is considered to be noncommercial and the lessee and the lessor are not required to hold an FAA-issued operator’s certificate as long as the lessee is not carrying persons or property for compensation or hire. The IRS agrees with the FAA on dry leases and the commercial FET is not due on the lease payments between the lessee and lessor.