Direct Answer
A wet lease provides an entire aircraft plus at least one crewmember (the definition in 14 CFR §110.2); a dry lease provides the aircraft alone and the lessee brings its own crew. The difference decides who holds operational control — the §1.1 authority over initiating, conducting, or terminating a flight. In a real dry lease the lessee controls the flights and can operate under Part 91; in a wet lease the lessor normally does, and providing aircraft-plus-crew for compensation is the kind of operation that needs a Part 135 certificate.
The danger is the sham dry lease: paper that says “dry” while the lessor really supplies the pilots, controls the schedule, and prices the deal like a charter. The FAA looks at substance over form — under the common-carriage framework in 14 CFR §119.1 and Advisory Circular 120-12A, a disguised charter is still a charter, and §119.5 prohibits operating without the certificate.
Whether your lease is legitimate is a fact-specific legal question for an aviation attorney. FileFlo does not structure leases or decide operational control. What it does is keep the records that prove a legitimate dry lease — the lease, the operational-control designation, the crew records, and the §91.23 filings — organized and audit-ready.
One Word Decides Everything: “Crew”
Strip away the jargon and the dry-vs-wet question is almost embarrassingly simple at the surface: does the lease come with crew? If the lessor hands over the airplane and a pilot, it is a wet lease. If the lessor hands over the airplane alone and the lessee brings its own pilot, it is a dry lease. The reason this matters so much is that crew sourcing is the most reliable real-world signal of operational control — and operational control is the line between flying privately under Part 91 and conducting commercial air transportation that requires certification.
Only one of these terms is actually defined in the regulations. “Wet lease” appears in 14 CFR §110.2 as “any leasing arrangement whereby a person agrees to provide an entire aircraft and at least one crewmember.” “Dry lease” is not defined in §110.2 or §1.1 — it is the industry and FAA-guidance shorthand for the aircraft-only arrangement that a wet lease is not. That asymmetry is worth remembering: when people argue about whether a lease is “really dry,” they are arguing about a term with no regulatory definition, which is exactly why the FAA decides it on the facts rather than the label.
This article is about that decision — dry vs wet, who controls, and the sham-dry-lease trap. It is the companion to our deeper dive on the records and filings side. If what you need is the §91.23 truth-in-leasing clause, the FAA filing, the copy carried aboard, and the 48-hour first-flight notice, start with truth-in-leasing aircraft lease records (§91.23). If what you need is the underlying control doctrine, see what operational control means in Part 135.
This is a legal question — defer it to counsel
Whether an arrangement is a legitimate dry lease, a wet lease, or a sham has been litigated and interpreted by the FAA for decades, and the outcomes are fact-specific. Nothing here is legal or tax advice. If there is any chance your lease involves the lessor providing or directing crew, or any compensation tied to the flying, get a written determination from a qualified aviation attorney (and a tax advisor on the tax side) before the flight — not after an FAA inquiry. FileFlo is the records layer for operators who already know how their arrangement is characterized; it does not assess your lease or render legal opinions.
Dry Lease vs Wet Lease, Side by Side
Here is the practical comparison. Notice that almost every row is really a restatement of one underlying question — who controls the flight — expressed through a different concrete fact.
| Question | Dry lease | Wet lease |
|---|---|---|
| What is provided? | Aircraft only | Entire aircraft + at least one crewmember (§110.2) |
| Who provides the crew? | The lessee (hires or directly contracts its own pilots) | The lessor |
| Who holds operational control (§1.1)? | The lessee | Normally the lessor |
| Who bears operating cost & risk? | The lessee | Effectively the lessor through the package |
| Typical operating rule, done correctly | Part 91 (lessee flying for its own purposes) | Requires Part 119 certificate (Part 135 / 121) |
| Is the term defined in the CFR? | No — guidance/industry shorthand | Yes — 14 CFR §110.2 |
What a legitimate dry lease looks like
- Lessee takes possession of the aircraft alone — no crew comes with it.
- Lessee hires or directly contracts its own qualified pilots.
- Lessee decides whether, when, and where the aircraft flies.
- Lessee pays the direct operating costs and carries the operational risk.
- Lessee is named as the person responsible for operational control.
- Rent is for the asset, not priced per-flight like a charter fare.
Red flags that it is really a wet lease / sham
- The lessor "provides," "recommends," or arranges the pilots.
- The lessor controls scheduling or dispatch decisions.
- The lessor (or its management company) runs the aircraft day to day.
- The price moves with hours flown and looks like a charter rate.
- The "lessee" is a rotating set of passengers, not one operator.
- A management agreement quietly puts the lessor back in control.
Two structures sit right on this line and deserve their own attention: the aircraft management company arrangement and the leaseback. Both can be perfectly legitimate, and both can quietly hand operational control back to the party that is being paid. See aircraft management company vs charter and the flight department company trap for the two places these lease structures most often go wrong.
Operational Control Is the Whole Ballgame
Every dry-vs-wet question collapses into a single concept: operational control, defined in 14 CFR §1.1 as “the exercise of authority over initiating, conducting or terminating a flight.” In a genuine dry lease, the lessee holds that authority. In a wet lease, the lessor — who brought the crew — normally does. The FAA cares because operational control is what separates a private operator flying its own aircraft (Part 91) from a person furnishing transportation to others (which, for compensation and holding out, requires a Part 135 certificate).
The reason crew sourcing is such a strong signal is that the related §110.2 concept of a direct air carrier is defined as “a person who provides or offers to provide air transportation and who has control over the operational functions performed in providing that transportation.” Whoever controls the operational functions — crew, dispatch, maintenance decisions, scheduling — is exercising operational control. When the lessor supplies the crew, the lessor is usually the one controlling those functions, which is precisely why a wet lease normally pulls operational control to the lessor.
Questions the FAA asks to find operational control
Answer those honestly and you usually know which lease you have — regardless of the title on the document. A “dry lease” where the answers all point back to the lessor is not a dry lease in the FAA’s eyes; it is a wet lease or a sham, and the operation needs certification. This is the same control doctrine that runs through every leasing dispute, which is why operational control gets its own deep dive: see what is operational control in Part 135.
“Wet lease” is defined; “operational control” is defined; “dry lease” is not
Wet lease lives in §110.2 and operational control lives in §1.1 — both are regulatory text you can cite. “Dry lease” is not defined in either, so there is no CFR section that says “a dry lease is legal.” Its legitimacy is entirely a function of whether the lessee actually holds operational control. That is why you cannot defend a structure by pointing to the word “dry” on the contract — there is nothing in the regulations attached to that word to defend.
If the FAA asked who controlled that flight, could you prove it?
FileFlo does not structure your lease or decide who holds operational control — that is your aviation attorney’s job. What it does is the records work that makes a legitimate dry lease provable: classifying, version-controlling, and tracking expirations on the lease itself, the operational-control designation, your crew qualification records, and the §91.23 filings — so they are audit-ready, not reconstructed in a panic. Starter at $89/mo, Professional at $299/mo. 5-day free trial, no credit card required.
The Sham Dry Lease: How a “Lease” Becomes an Illegal Charter
A sham dry lease is the structure that gives the whole category a bad name. On paper it is a dry lease — aircraft only, lessee supposedly in control. In reality, the lessor (often through an affiliated management company or a “recommended” crew) supplies the pilots, runs the schedule, manages the airplane, and prices the deal so the “rent” behaves like a per-flight charter fare. The lessee is really just a passenger paying for transportation. The FAA evaluates substance over form, so it disregards the label and asks what is actually happening.
When the facts show the lessor providing aircraft-plus-crew (or directing the crew) for compensation while holding out, the arrangement satisfies the FAA’s four-element test for common carriage, framed in Advisory Circular 120-12A, “Private Carriage Versus Common Carriage of Persons or Property.” That guidance describes a common carrier as one engaged in (1) a holding out of a willingness to (2) transport persons or property (3) from place to place (4) for compensation or hire. This four-element test is FAA guidance and decades of legal interpretation — not a numbered CFR section. The hard regulatory anchors are §119.1 (who must hold a certificate) and §119.5(g), which provides that “no person may operate as a direct air carrier or as a commercial operator without, or in violation of, an appropriate certificate and appropriate operations specifications.”
You cannot label your way out of operational control
Operators sometimes believe that titling an agreement “dry lease,” adding a “membership” wrapper, or routing crew through a separate company makes the charter analysis disappear. It does not — the FAA looks at substance over form. If the practical reality is that the lessor runs the flying and collects value for it, the word “dry” on the contract will not save the arrangement. Whether your specific structure crosses the line is a fact-specific legal question for aviation counsel.
The anatomy of a sham, step by step
The paper says dry
A lease is drafted as aircraft-only, naming the customer as lessee and as the party with operational control. So far, so legitimate-looking.
But the crew comes from the lessor
The lessor "provides," "recommends," or contractually steers the customer to specific pilots — often the lessor's own crew or a captive management company. Crew sourcing has just shifted control back to the lessor.
And the lessor runs the operation
The lessor schedules, dispatches, maintains, and makes the airworthiness call. The "lessee" simply requests trips. Every operational function the §110.2 direct-air-carrier definition cares about is performed by the lessor.
The money looks like a fare
The "rent" is priced per flight hour and tracks usage like a charter rate, not a fixed lease of an asset. Value flows to the lessor for the transportation itself.
The FAA calls it what it is
Substance over form: aircraft + crew + compensation + holding out = common carriage requiring a Part 135 certificate. Operating it without one violates §119.5(g) — an illegal charter.
This is the exact pattern at the center of the FAA’s illegal-charter enforcement. For the full picture of how the agency pursues it — and why brokers and intermediaries are caught up in it too — see the FAA’s grey-charter crackdown, and for the broader “am I even allowed to charge for this?” question, Part 91 vs Part 135: compensation or hire and do I need a Part 135 certificate to charter my plane.
Why the Sham Dry Lease Is a Serious Risk, Not a Technicality
The sham dry lease is not an academic worry. The FAA has made illegal “grey” charter — flights flown for compensation outside a Part 119/Part 135 structure — a sustained enforcement priority, and sham lease agreements used to disguise charter are one of its central targets. The agency evaluates lease arrangements for who truly holds operational control, and where it finds the lessor running the flying for value, it treats each non-compliant flight as an uncertificated commercial operation.
We are deliberately not quoting a precise running penalty total here, because those figures move and are often proposed rather than final. The durable point is the exposure. A finding of illegal charter can bring civil penalties, certificate action against the pilots who flew the operations, and scrutiny of everyone who arranged the flights. And the consequences are not only regulatory — they are financial and personal in a way that dwarfs the convenience the structure was meant to provide.
FAA enforcement
Civil penalties for operating without the required certificate, possible certificate action against the pilots, and per-flight exposure — each flight under a sham lease can add to the count.
Insurance & liability
Insurers routinely investigate who held operational control after an incident. A lease that misstates control can put coverage in question — and an accident on an uncertificated for-hire flight is a worst-case scenario on every axis.
Enforcement framing reflects FAA guidance and publicly reported enforcement activity; specific penalty figures are proposed and subject to change. The §91.23 truth-in-leasing clause exists in part to force the parties to name the one person responsible for operational control — covered in detail in truth-in-leasing aircraft lease records (§91.23).
Proving a Legitimate Dry Lease: The Records That Show, Not Argue
Here is where the legal question hands off to a documentation one — and where FileFlo fits. The decision of whether your arrangement is a real dry lease belongs to your aviation attorney. But a legitimate dry lease lives or dies on its paper trail. When the FAA, an insurer, or a charter broker asks “who controlled that flight?”, the operator who can produce the documents on demand is in an entirely different position from the one reconstructing them after the question is asked. These are the record families that prove a dry lease is real, and how FileFlo keeps them audit-ready.
The executed lease & operational-control designation
Why it proves the lease is real
The lease itself, and — for large aircraft over 12,500 lbs — the §91.23 truth-in-leasing clause that names, in large print, the one person responsible for operational control. This is the document that says, on its face, that the lessee controls the flights.
How FileFlo keeps it audit-ready
FileFlo classifies and version-controls the lease and its truth-in-leasing clause, with effective dates and a retained history so the operative version is never in doubt.
Crew sourcing & qualification records (lessee side)
Why it proves the lease is real
Evidence that the lessee — not the lessor — employs or directly contracts the pilots, plus the pilots' certificate, medical, and currency records. Crew sourcing is the strongest factual signal of who holds operational control.
How FileFlo keeps it audit-ready
FileFlo indexes crew qualification and currency records and tracks their expirations, so the lessee can show its own crew chain at a glance.
Operating-cost & risk documentation
Why it proves the lease is real
Records showing the lessee bears the direct operating costs and the operational risk — fuel, operating expenses, and insurance naming the lessee as operator — consistent with a lessee that genuinely controls the operation rather than a passenger paying a fare.
How FileFlo keeps it audit-ready
FileFlo organizes the supporting cost and insurance documents alongside the lease so the operational-control story is complete and retrievable.
FAA filing & 48-hour notification proof (large aircraft)
Why it proves the lease is real
For large aircraft, proof of the FAA filing of the compliant lease, the copy carried aboard, and a contemporaneous record of the at-least-48-hour notification to the responsible Flight Standards office before the first flight under the lease.
How FileFlo keeps it audit-ready
FileFlo stores the filing confirmation and a dated record of the Flight Standards notification, keeping the §91.23 operating-condition trail intact for the life of the lease.
Related reading: Truth-in-leasing aircraft lease records (§91.23) · What operational control means in Part 135 · What records a Part 135 operator must keep · Single-aircraft Part 135 charter · Aircraft leaseback and Part 135 · What is “holding out” in aviation
FileFlo is the records layer — not legal counsel, not your tax advisor, not the certification team
To be unambiguous: FileFlo is a compliance document intelligence platform that classifies, indexes, version-controls, and tracks expirations on your compliance documents. It does not structure your entity or lease, decide who holds operational control, determine whether your arrangement is a dry lease or a charter, obtain your certificate, file your application, broker any deal, or provide legal, financial, or tax advice. The dry-vs-wet and operational-control determinations belong to your aviation attorney; tax questions belong to your tax advisor; certification belongs to your certification team and your FAA Flight Standards office. Once you know your arrangement is a legitimate dry lease, keeping the records that prove it — complete, current, and audit-ready — is the document problem FileFlo solves. (FileFlo does not claim SOC 2 certification.)
Frequently Asked Questions
What is the difference between a dry lease and a wet lease?
A wet lease is defined in 14 CFR §110.2 as any leasing arrangement whereby a person agrees to provide an entire aircraft and at least one crewmember. A dry lease is the opposite: the lessor provides the aircraft alone — no crew — and the lessee supplies its own pilots. The whole legal weight of the distinction rests on who holds operational control, which 14 CFR §1.1 defines as the exercise of authority over initiating, conducting, or terminating a flight. In a genuine dry lease the lessee controls the flights; in a wet lease the lessor (who brought the crew) normally does. Note the asymmetry: 'wet lease' is a defined regulatory term, but 'dry lease' is not defined in §110.2 or §1.1 — it is industry and FAA-guidance shorthand for an aircraft-only lease. The label on the document does not decide anything; the FAA looks at who actually runs the flights.
What is a dry lease aircraft, and how does a dry lease work?
A dry lease aircraft is one leased without crew. The lessee takes possession of the airplane, provides its own qualified pilots, exercises operational control — deciding whether, when, and where it flies — and bears the operating costs and operational risk. Done correctly, a dry lease lets the lessee operate the aircraft for its own purposes under Part 91, because no one is providing transportation to anyone else for compensation. How it works in practice: the lessee, not the lessor, hires or directly contracts the flight crew (not crew the lessor 'arranges'), pays the direct operating costs, carries the operational liability, and is named as the person responsible for operational control. If the lessor is really supplying the crew, scheduling the flights, and pricing the deal like a charter, the FAA will treat it as a wet lease or a sham dry lease no matter what the paper says.
What is a sham dry lease, and why does the FAA enforce against it?
A sham dry lease is a lease the parties call 'dry' on paper, but where the lessor in fact retains operational control — supplying the pilots, controlling scheduling, managing the aircraft, and pricing the arrangement like a charter — while collecting compensation. The FAA evaluates substance over form: if the facts show the lessor is providing aircraft plus crew (or effectively directing the crew) for value, the agency treats the flights as common carriage requiring an air carrier or operating certificate under 14 CFR Part 119. Per the four-element common-carriage framework in Advisory Circular 120-12A, a person holding out a willingness to transport persons or property from place to place for compensation is a common carrier — and §119.5(g) provides that no person may operate as a direct air carrier or commercial operator without an appropriate certificate. The sham-dry-lease structure is a central target of the FAA's illegal-charter ('grey charter') enforcement because it is the most common way operators try to disguise uncertificated charter as a private operation.
Who provides the crew in a dry lease versus a wet lease?
In a wet lease, the lessor provides at least one crewmember along with the aircraft — that is the defining feature under 14 CFR §110.2 ('an entire aircraft and at least one crewmember'). In a dry lease, the lessee provides its own crew. This single fact is the most reliable practical signal of which lease you actually have, because crew sourcing tracks operational control. The trap operators fall into is providing crew through a 'recommended' pilot, a management company, or a side arrangement while calling the lease dry. If the lessor selects, employs, pays, or effectively directs the pilots, the FAA can find that the lessor — not the lessee — holds operational control, converting the deal into a wet lease or sham dry lease that needs Part 135 certification. The cleanest dry leases have the lessee hire or directly contract the crew with no involvement from the lessor.
Is a dry lease legal, and do I need a Part 135 certificate for one?
A genuine dry lease is legal and common — it is a normal way to make an aircraft available to someone who will operate it themselves under Part 91, with no certificate required. You do NOT need a Part 135 certificate for a true dry lease, precisely because the lessee (not you) holds operational control and no one is being carried for compensation by the aircraft provider. You DO need Part 135 (and the certificate that 14 CFR §119.5 requires) when the arrangement is really a wet lease or a sham dry lease — when you provide the aircraft plus crew, or retain operational control, and collect compensation while holding out. Whether your specific arrangement qualifies as a legitimate dry lease is a fact-specific legal determination that turns on operational control, holding out, and compensation; confirm it with an aviation attorney before you fly. FileFlo does not make that call — it keeps the records that prove a legitimate dry lease, once you know which side of the line you are on.
Can you make money on a dry lease?
Yes — a dry lease can charge rent for the use of the aircraft. The lessor leasing out an airplane it owns can receive lease payments without being treated as conducting commercial air transportation, because the lessor is not providing transportation to anyone — it is providing an asset. What you cannot do is charge for the flying while also controlling the flying. The moment the 'rent' starts to look like a per-flight charter fee, the lessor supplies or directs the crew, and value flows for the transportation itself, the FAA's compensation and operational-control analysis pulls the arrangement toward Part 135. There are also narrow Part 91 Subpart F structures (time-sharing and interchange agreements under §91.501) with their own cost rules and truth-in-leasing implications. The line between a legitimate aircraft-rental dry lease and disguised charter is exactly where illegal-charter cases are won and lost — get the structure reviewed by aviation counsel and a tax advisor.
Does truth-in-leasing under §91.23 apply to a dry lease?
It can. 14 CFR §91.23 (truth-in-leasing) applies to leases and conditional-sales contracts involving U.S.-registered LARGE civil aircraft — aircraft of more than 12,500 pounds maximum certificated takeoff weight under §1.1 — and §91.23 defines a lease broadly to include arrangements furnishing an aircraft for compensation or hire, with or without crew. So a dry lease of a large aircraft is generally covered: it must carry the written truth-in-leasing clause in large print, name the person responsible for operational control, be filed with the FAA, carried aboard, and the responsible Flight Standards office must be notified at least 48 hours before the first flight. For aircraft at or under 12,500 pounds, the §91.23 clause and filing requirements do not apply — but the underlying operational-control analysis that determines dry-vs-wet still does. The §91.23 mechanics (the clause, the filings, the records) are a separate topic; this article is about the dry-vs-wet decision and the sham-dry-lease trap. See our dedicated truth-in-leasing guide for the records side.
How does FileFlo help prove a dry lease is legitimate?
FileFlo does not structure your lease, decide who holds operational control, or give legal or tax advice — those belong to your aviation attorney and tax advisor. What FileFlo does is the documentation work that makes a legitimate dry lease provable when the FAA, an insurer, or a charter broker asks. A real dry lease lives or dies on its paper trail: the executed lease itself, the document naming the person responsible for operational control, evidence that the lessee (not the lessor) employs or directly contracts the crew, crew qualification and currency records on the lessee's side, the §91.23 truth-in-leasing clause and filing proof for large aircraft, and a contemporaneous record of the 48-hour Flight Standards notification. FileFlo is a compliance document intelligence platform that classifies, indexes, version-controls, and tracks expirations on exactly those records — so when someone questions who controlled the flight, you can show, not argue. FileFlo does not provide legal, financial, or tax advice and does not claim SOC 2 certification.
Structure it with counsel — then prove it with records
Whether your lease is a legitimate dry lease, a wet lease, or a sham is a legal call for your aviation attorney, and the cost/tax side is a question for your tax advisor. The day-to-day job of proving a legitimate dry lease — showing who held operational control, who supplied the crew, and that the §91.23 filings were made — is a records problem, and that is what FileFlo solves. AI document classification. 600+ document types. One-click FAA-ready binder. Starter at $89/mo, Professional at $299/mo. No credit card required for the 5-day free trial. FileFlo does not give legal or tax advice or get you certified — it organizes and proves your compliance documents.
5-day free trial · No credit card required · Cancel anytime
Continue your aviation leasing & certification reading
Reviewed by Chad Griffith, Founder, FileFlo — compliance document intelligence. Last reviewed June 15, 2026. The wet-lease definition (“an entire aircraft and at least one crewmember”) is verified against 14 CFR §110.2, operational control against §1.1, the certificate prohibition against §119.5, and the applicability rule against §119.1, all via the Cornell Legal Information Institute. “Dry lease” is not defined in §110.2 or §1.1. The four-element common-carriage test and the meaning of “holding out” reflect FAA guidance in Advisory Circular 120-12A and longstanding FAA legal interpretation — guidance, not regulatory text. Enforcement references reflect publicly reported FAA activity; specific penalty figures are proposed and subject to change. This article is a compliance-document perspective and is not legal, financial, or tax advice; whether a specific lease is a legitimate dry lease, a wet lease, or a sham is a determination for a qualified aviation attorney (and a tax advisor on tax questions) and your FAA Flight Standards office.