Avoid Illegal Charter Trap: Structuring Aircraft Dry Leases

Dry leasing under Part 91 can be lawful—but only if structured with precision. This CLE session examines how well-intentioned leasing arrangements can morph into illegal charter operations, exposing owners and operators to enforcement actions, insurance denials, and tax consequences. Learn why the FAA closely monitors dry leases, especially non-exclusive arrangements and LLC ownership structures, and how to help clients stay compliant.

Key learning outcomes from this course include:

• Distinguishing between dry leases and wet leases under 14 CFR Part 91 and Part 135 regulations.
• Understanding the critical concept of operational control and determining who holds legal responsibility for a flight.
• Identifying the risks and regulatory traps of using single-purpose entities or Flight Department Companies as operators.
• Analyzing the differences between exclusive and non-exclusive lease agreements and their proper applications.
• Evaluating the impact of leasing structures on insurance validity, Federal Excise Tax (FET) obligations, and liability shielding.
• Reviewing FAA enforcement trends, including how inspectors identify illegal charters and the severe penalties for non-compliance.
• Implementing best practices for documentation, Truth in Leasing notices for large aircraft, and record-keeping to withstand regulatory audits.

Whether you are advising high-net-worth individuals, managing aircraft operations, or structuring business aviation assets, this course offers essential insights into creating robust, compliant leasing structures that withstand regulatory scrutiny.