Which lease type is generally associated with providing operating services such as crew and insurance?

Which lease type is generally associated with providing operating services such as crew and insurance?

• A. Dry Lease
• B. Operating/Wet Lease
• C. Finance Lease
• D. Synthetic Lease

Answer: (B)

In aviation leases, the presence of operating services like crew and insurance points to a wet lease. In this arrangement the lessor provides not only the aircraft but also the flight crew, maintenance, and insurance, allowing the lessee to operate immediately without arranging these services themselves. This is helpful for quick capacity adjustments, seasonal spikes, or testing routes. A dry lease, by contrast, covers only the aircraft; the lessee supplies the crew, maintenance, and insurance. A finance lease is focused on financing the asset with longer-term rights and obligations, not on delivering ongoing operating services. A synthetic lease is a financing arrangement designed for off-balance-sheet treatment and also doesn’t center on providing such services.

In aviation leases, the presence of operating services like crew and insurance points to a wet lease. In this arrangement the lessor provides not only the aircraft but also the flight crew, maintenance, and insurance, allowing the lessee to operate immediately without arranging these services themselves. This is helpful for quick capacity adjustments, seasonal spikes, or testing routes. A dry lease, by contrast, covers only the aircraft; the lessee supplies the crew, maintenance, and insurance. A finance lease is focused on financing the asset with longer-term rights and obligations, not on delivering ongoing operating services. A synthetic lease is a financing arrangement designed for off-balance-sheet treatment and also doesn’t center on providing such services.