ACMI and Wet Lease Explained

What ACMI means

ACMI stands for Aircraft, Crew, Maintenance and Insurance: the four things the lessor provides. The lessee, usually an airline, tour operator or charterer, provides the schedule and the passengers or cargo and pays the variable costs of each flight. The aircraft is operated under the lessor's Air Operator Certificate, so the lessor keeps operational control and responsibility for flying the aircraft safely.

In practice ACMI and wet lease are used almost interchangeably. ACMI is the commercial shorthand, and wet lease is the regulatory term: both EU Regulation 1008/2008 and the UK CAA define a wet lease agreement as an agreement between air carriers under which the aircraft is operated under the AOC of the lessor. The CAA defines a damp lease as a wet-leased aircraft that includes a cockpit crew but not cabin attendants.

Wet, damp and dry leases

The three terms describe how much the lessor supplies beyond the aircraft itself.

Who pays for what

The ACMI rate covers the lessor's costs of owning, crewing, maintaining and insuring the aircraft. Almost everything that varies with the specific flight usually falls on the lessee. The exact split is set by the contract, so always check it line by line.

• Lessor, typically: the aircraft, flight and cabin crew (flight crew only on a damp lease), maintenance, and hull and liability insurance.
• Lessee, typically: fuel, landing and parking fees, ground handling, navigation and overflight charges, catering, and passenger-related charges.
• Often negotiated: crew accommodation and transport away from base, de-icing, and positioning of the aircraft to the start of the lease.

Block hours and minimum guarantees

ACMI is normally charged per block hour. Block time runs from when the aircraft first moves from its parking place for the purpose of taking off until it comes to rest on its parking position at the destination with the engines stopped, so it includes pushback and taxiing as well as time in the air.

Most longer ACMI contracts include a minimum guarantee: the lessee pays for an agreed number of block hours per month, or per period, whether or not it flies them. This protects the lessor, which has committed an aircraft and crew. For the lessee it means that a lease which looks cheap per hour can become expensive if the schedule is cut, so model realistic utilisation before agreeing the minimum.

Regulatory approval

Wet leasing between airlines is regulated, and the rules depend on where the lessor's aircraft are registered and certificated. The detail varies by authority and changes over time, so treat what follows as an overview rather than legal advice.

In the UK, the CAA states that a UK operator wet leasing in from an operator in an EU or EASA member state notifies the CAA through an online form before the lease starts, while wet leasing from a third-country operator needs three things: lease approval from the Department for Transport, lease approval from the CAA, and a permit from the CAA. The CAA adds that the UK AOC holder remains accountable for the safety of its operations when using wet-leased aircraft.

In the EU, Article 13 of Regulation (EC) No 1008/2008 requires an EU carrier to obtain prior approval from its licensing authority to wet lease an aircraft registered in a third country. The carrier must show that safety standards equivalent to EU or national law are met, and one of three justifications: exceptional needs (approval for up to seven months, renewable once for up to seven more), seasonal capacity needs that cannot reasonably be met by leasing EU-registered aircraft, or operational difficulties where leasing EU-registered aircraft is not possible or reasonable (approval of limited duration).

Allow time for these approvals when planning, particularly for third-country aircraft.

When ACMI is used

ACMI suits needs that are temporary, urgent or uncertain, where buying or dry leasing an aircraft would be too slow or too big a commitment.

• Seasonal capacity, such as summer peaks for leisure routes.
• Aircraft on ground (AOG) recovery, when a fleet aircraft is unexpectedly unserviceable.
• Cover for heavy maintenance checks or delayed aircraft deliveries.
• Testing a new route before committing fleet to it.
• Sports teams, tour operators and touring productions needing an aircraft for a season or series of events.

What to check in an ACMI contract

Two ACMI offers with the same block-hour rate can cost very different amounts once the detail is read. These are the points worth checking before signing.

• The minimum guaranteed block hours, the period they are measured over, and what happens to unused hours.
• Exactly which costs sit with the lessor and which with the lessee, including crew hotels and positioning at the start and end of the lease.
• Who provides a replacement aircraft if the leased aircraft goes unserviceable, and whether the minimum guarantee is reduced while it is out of service.
• Crew duty limits and how they fit your planned schedule, including any extra crew needed for long days.
• The approvals each party must obtain, and who bears the cost and risk if an approval is delayed.

How Oryx helps

Oryx Global Aviation sources regional, narrow-body and wide-body aircraft on ACMI or wet-lease terms, for a single rotation or a season, and handles the regulatory side, including the approvals needed to operate another carrier's aircraft on your flights.