When your family operates an aircraft, one of the first distinctions you will encounter is the difference between a dry lease and a wet lease.
The choice affects more than the cost. It shapes who controls the aircraft, how the Federal Aviation Administration (FAA) classifies the operation and where legal responsibility rests. Under 14 CFR, the federal regulations that govern aviation, the FAA treats these two arrangements very differently.
Who actually controls the aircraft
In a dry lease, you take full operational control of the aircraft. That means your business handles the crew, dispatch decisions and flight operations. In a wet lease, the lessor retains control and provides a flight crew.
Operational control is a defined term under federal law, and it determines who is accountable to the FAA. Knowing which party holds that role helps you understand your business’s regulatory obligations.
How the FAA classifies the operation itself
A dry lease typically allows your business to operate the aircraft under its own certificate, whether commercial or noncommercial. A wet lease often triggers Part 135, which applies stricter standards to commercial operators.
The FAA’s truth-in-leasing rule requires you to file certain leases for large aircraft directly with the agency within 24 hours. That step is easy to overlook when you are new to aircraft ownership. Misclassifying the operation can create serious regulatory exposure for your family’s business.
Where financial responsibility actually lands
In a dry lease, your business takes responsibility for maintenance, airworthiness and insurance for the full term of the agreement. In a wet lease, those obligations typically stay with the lessor.
The contract language determines exactly where liability rests. Under federal law, someone must always be accountable for ensuring the aircraft meets FAA airworthiness standards regardless of lease type. The lease agreement defines who that is.
The right structure for your business operation
The lease type your business uses is a foundational decision, not a formality. It shapes your regulatory standing with the FAA, your financial exposure and how the operation runs day to day.
Federal regulations govern these agreements no matter where your family’s business bases the aircraft. Legal counsel can help you evaluate which structure fits the operation and review the agreement language before signing. Getting the structure right from the start protects both the investment and the business.