Wet-Leasing and ACMI Operations: When and Why Carriers Use Them

The previous post in this series introduced the broad landscape of aircraft lease structures, with most of the attention focused on dry operating leases and sale-leaseback transactions, which together account for the bulk of commercial aircraft financing in Asian regional aviation. This article turns to the other side of the lease spectrum: wet leasing and ACMI operations, which sit between pure dry lease and full charter, and which have become an increasingly important strategic tool for carriers managing capacity volatility, delivery delays, and seasonal peaks.

Wet lease and ACMI are not primary fleet financing structures. No major airline runs its core operations on wet leased aircraft as a business model. But almost every commercial operator at scale uses wet lease or ACMI capacity at some point in any given year, and the carriers that use these tools strategically gain real operational flexibility that pure dry-lease operators do not have. The 2025-2026 period in particular has demonstrated how essential ACMI capacity has become to industry resilience, against a backdrop of persistent manufacturer delivery delays and significant capacity shortfalls.

1. What ACMI actually means

The acronym ACMI stands for Aircraft, Crew, Maintenance, Insurance, and it identifies the four elements the lessor provides to the lessee in this lease structure. A pure dry lease provides only the aircraft itself; a pure wet lease provides all four ACMI components; and damp leases sit between, providing the aircraft, crew, and maintenance, but with the lessee providing insurance and certain other operational services.

The terminology varies somewhat by jurisdiction:

In most regulatory frameworks (including FAA Part 121 and EU OPS), ACMI and wet lease are used interchangeably; they describe the same arrangement. The lessee operates under the lessor’s Air Operator Certificate, the lessor’s flight crews fly the aircraft, the lessor’s maintenance organisation supports the aircraft, and the lessor’s insurance covers the aircraft.

In some commercial usage, “wet lease” refers more specifically to short-term arrangements (under 24 months) while “ACMI lease” is reserved for longer or more structured engagements. The distinction is industry vocabulary rather than regulatory definition.

Damp lease is used where the lessee airline wants to operate under its own AOC and provide its own insurance, but takes the aircraft, crew, and maintenance from the lessor. SpiceJet’s recent (June 2026) induction of three Airbus A320 aircraft on damp lease, with deliveries planned from July 2026, illustrates the structure: the aircraft and certain services come from the lessor, while SpiceJet provides its own flight crew and operates under its own AOC.

The economic key is that the block-hour rate in a wet lease includes all four ACMI elements. The lessee pays per hour flown, not per month or per asset. This makes wet lease financially unsuitable for permanent use (the block-hour rate is substantially higher than the all-in equivalent on a dry lease), but financially attractive for short-term, defined-duration needs where the operator wants to avoid the permanent commitment of dry lease or ownership.

2. The strategic use cases

Wet lease and ACMI fit a small number of specific operating cases. The list is short but important, because misapplying the structure (using it for cases it does not fit) is one of the most common errors in fleet planning.

The first and most established use case is seasonal peak capacity. Carriers facing predictable demand spikes (Lunar New Year, Hajj season, Eid al-Fitr, summer European holiday peaks, end-of-year holiday travel) sometimes wet lease additional aircraft for the peak weeks, returning them when demand normalises. The Hajj market is particularly significant in this category. Saudia’s mainline operation handles the majority of Hajj traffic into Jeddah and Medina, but capacity surges during the pilgrim peaks require wet-lease support flights to be built into the network model. For 2026, Saudi Arabia activated airlift capacity for over one million pilgrim seats, with national carrier Saudia coordinating directly with Hajj and Umrah Ministry authorities, and supplementary ACMI providers covering the seasonal surge. Other operators, notably flyadeal which wet-leased an Airbus A330-300 for 2026 Hajj operations, deploy similar models.

The second use case is bridging delivery delays. This has become acute in 2025-2026 as manufacturer delivery delays have persisted at levels not seen since the post-COVID supply chain disruptions. Airbus deliveries in Q1 2026 declined by approximately 16% due to a combination of CFM LEAP engine production constraints, a delayed $175 million forging press installation, ongoing component shortages, and certain quality issues. Boeing’s 737 MAX 10 remains uncertified more than five years behind schedule, with operators including United, Delta, and Alaska still waiting for deliveries originally expected in 2020-2022. Carriers facing these gaps have increasingly turned to wet lease to maintain planned capacity. Air Peace in Nigeria, for example, operates six wet-leased Boeing 737-800 aircraft (five from AirExplore and one from KlasJet) as part of a fleet that explicitly relies on wet lease to maintain operational flexibility while permanent capacity additions work through the supply chain.

The third use case is new route trials and market entry. A carrier launching a new route may wet-lease an aircraft for the first months while it determines whether the route warrants permanent capacity commitment. The economics are deliberately structured: the wet lease costs more per hour than dry lease, but the carrier avoids the multi-year commitment of dry-leasing or buying an aircraft that may turn out unsuitable. After 6-12 months, if the route is performing, the carrier transitions to dry lease or owned capacity; if the route is failing, the wet lease ends and the operator walks away with limited sunk cost.

The fourth use case is AOG (Aircraft on Ground) coverage and crisis recovery. When a carrier loses operational capacity due to unforeseen events (a major incident affecting fleet availability, a fleet-wide safety grounding, a sudden labour disruption), wet lease provides rapid replacement capacity. The Alaska Airlines door plug incident in early 2024 and the subsequent grounding of all 79 of Alaska’s 737-9 MAX jets is an illustrative example: while not all of Alaska’s response involved wet lease, the principle that wet lease provides rapid lift in a crisis is well established across the industry.

The fifth use case is fleet transition gaps. When a carrier is in the process of transitioning between aircraft types (retiring older fleet, taking delivery of newer fleet), wet lease can cover the gap between retirement and delivery if the timing does not perfectly align. This category has grown materially in 2025-2026 with the broader delivery-delay environment.

3. The ACMI provider landscape

Wet lease and ACMI capacity is supplied by a specialised set of operators whose business model is built around providing short-term lift. Unlike dry-lease lessors (AerCap, SMBC, Avolon and others) whose business is financial, ACMI providers are operating airlines themselves, holding their own AOCs in multiple jurisdictions, employing their own flight crews, and managing their own maintenance organisations.

The dominant force in global ACMI is Avia Solutions Group, a Lithuanian-based aviation services holding company headquartered in Ireland that has grown into the world’s largest ACMI and charter services provider. Avia Solutions reports approximately 8% of total global block-hour ACMI market share, with subsidiaries holding multiple AOCs across Europe and increasingly Asia-Pacific. Its constituent ACMI airlines include Avion Express (Lithuania and Malta), AirExplore (Slovakia), BBN Indonesia, KlasJet, Bluebird Nordic, and Magma Aviation. The group’s Asia expansion through Avia Management Group Asia (AMGA), established in 2024, manages BBN Airlines Indonesia, Thai SmartLynx, and Avion Express Philippines, positioning these subsidiaries to provide ACMI capacity directly within the Asian market rather than ferrying aircraft from Europe.

The competitive landscape beyond Avia Solutions includes:

Hi Fly, the Portugal-based wet lease operator that has historically provided long-haul widebody ACMI capacity, including specialised configurations for Hajj operations and emergency relief flights. Hi Fly’s fleet of Airbus widebodies (A330, A340) has supported carriers across Asia and Africa for over two decades.

Atlas Air, the US-based cargo and ACMI provider, focused primarily on widebody freight and large passenger operations including for the express parcel industry.

Titan Airways (UK), GetJet Airlines (Lithuania), euroAtlantic Airways (Portugal), and various other regional ACMI operators providing more specialised capacity, often serving specific geographic niches or specific operational categories.

Air Atlanta Icelandic and ASL Aviation Holdings, which focus heavily on cargo ACMI for the e-commerce and express parcel sectors.

A significant industry development to note: SmartLynx Airlines, the Latvia-based ACMI operator that had been a major player in European wet lease for over three decades, ceased operations on 24 November 2025. The group’s restructuring under Avia Solutions Group reflects the broader pressure even established ACMI providers face in managing capital costs, crew availability, and operational complexity during periods of supply chain disruption.

4. Contract structures and what they cover

ACMI contracts are operationally complex compared to dry leases, because they must specify not just the asset but the entire operational package. Standard contract elements:

Block-hour rate. The headline price, expressed in dollars per block hour flown, covering the aircraft, crew, maintenance, and insurance package. Block-hour rates vary by aircraft type, route geography, regulatory complexity, and contract duration; a short-term widebody wet lease for Hajj typically commands a higher block-hour rate than a year-long narrowbody ACMI to a European charter operator. Typical 2025-2026 ranges run from approximately $4,500-7,000 per block hour for narrowbody (A320-family) ACMI through to $12,000-18,000+ per block hour for widebody operations, though specific contracts vary significantly with negotiations and operational complexity.

Minimum block hours per month. ACMI contracts typically guarantee a minimum block hour utilisation per aircraft per month (often in the range of 250-350 block hours), with the lessee paying for the minimum regardless of actual flying. This protects the lessor’s revenue assumptions for a capacity asset that has limited alternative deployment in the contract period.

Operational responsibilities. The contract must specify who handles ground operations, who pays landing fees and en-route charges, who is responsible for fuel uplift, who arranges crew accommodation away from base, and who covers de-icing and other operational costs. These elements alone can shift the total cost of an ACMI engagement by 10-20%.

Aircraft livery and branding. ACMI aircraft may operate in the lessor’s livery, the lessee’s livery, or a hybrid configuration. Major ACMI providers offer livery painting as a contracted service, with paint and depaint costs typically borne by the lessee.

Regulatory and operational compliance. The ACMI lessor operates under its own AOC, but the operation must comply with the regulations of the State of the Operator (the lessor) and any State to which the aircraft flies. Cross-jurisdictional ACMI operations require careful regulatory mapping, including any required approvals from the destination state’s civil aviation authority.

Termination provisions. Both early termination (if the lessee no longer needs the capacity) and lessor protections (if the lessee defaults on payment) are heavily negotiated. ACMI contracts typically include minimum notice periods and termination fees calibrated to the residual contract value.

5. Why the economics work

A frequent question about wet lease is why anyone would pay block-hour rates substantially higher than the equivalent dry lease plus crew and maintenance cost. The answer is in the time dimension.

A dry lease typically runs 6-12 years for new aircraft. Even short-term dry leases are usually 24 months minimum, partly because lessors do not want to bear the remarketing risk and partly because most lessees do not want the disruption of frequent fleet changes. For a carrier needing 6 weeks of additional Hajj capacity, or 4 months of bridging capacity while a delayed delivery resolves, or 6 months of trial capacity on a new route, a 2-year dry lease commitment makes no economic sense even if the per-hour cost is lower.

The wet lease commercial offer is matched to these short-duration needs. The lessor accepts that the aircraft will need to be redeployed to a different lessee in 6 months, builds its commercial team around continuous remarketing, employs crews on contracts that allow flexibility across multiple deployments, and prices block hours accordingly. The aircraft achieves higher hourly utilisation across multiple short-term lessees per year than it would on a single dry lease with one operator, which compensates for the higher operational overhead.

For the lessee, the calculation is straightforward: the higher block-hour rate is paid for only as long as the capacity is actually needed. The total cost over a 6-month engagement, even at premium block-hour rates, is far below the cost of a 24-month dry lease where 18 months of capacity would be unused. The premium pricing is the cost of optionality, and optionality is exactly what carriers facing seasonal peaks, delivery delays, or market uncertainty need.

6. The Asian regional context

Wet lease and ACMI in Asia-Pacific has historically been less developed than in Europe and North America, partly because of regulatory complexity (each ASEAN state has its own foreign carrier permit process), partly because demand patterns have been less seasonal than European holiday traffic, and partly because Asian LCC growth has been built primarily on dry-lease fleet financing rather than ACMI capacity.

This is changing rapidly. Several developments are reshaping the Asian regional ACMI landscape:

Manufacturer delivery delays have pushed Asian carriers, like their European and North American counterparts, toward wet-lease bridging. India’s SpiceJet damp-lease arrangement (announced June 2026, deliveries from July 2026) is a recent example, with three A320 aircraft inducted on damp lease to expand capacity for the second half of 2026 travel demand. The damp-lease structure (aircraft, crew, maintenance from the lessor; insurance and AOC from SpiceJet) reflects the regulatory and operational preference of an Indian operator that wants to maintain its own AOC for the operation.

Avia Solutions Group’s expansion into Asia-Pacific through AMGA is establishing local ACMI infrastructure that did not previously exist. BBN Airlines Indonesia and Thai SmartLynx allow Asian carriers to source ACMI capacity from operators with local AOCs and local crew bases, rather than ferrying European-registered aircraft to Asia for short-term engagements. This significantly reduces the cost and complexity of Asian ACMI operations.

The Hajj market in Asia continues to drive seasonal ACMI demand. Indonesian, Malaysian, Pakistani, and Bangladeshi carriers operating Hajj flights for their nationals routinely supplement their owned and dry-leased capacity with wet-leased widebodies, often A330 family aircraft from European or Middle Eastern ACMI providers. The Saudi CAA restriction on aircraft over 20 years for Hajj operations limits the available pool, sustaining premium pricing for compliant ACMI capacity.

Cargo ACMI is a separate and growing market segment in Asia-Pacific, driven by e-commerce volumes (with global parcel shipments projected to exceed 236 billion in 2026, of which roughly 60% originate in China and broader Asia-Pacific) and demand for express freight capacity. Operators including Atlas Air, Bluebird Nordic, and various regional ACMI freighters service this market, with capacity often deployed on long-term engagements rather than the short-term model that characterises passenger ACMI.

7. The risks worth understanding

ACMI is not a free option. The structure carries real risks that the lessee airline needs to understand and price.

Operational reliability is the lessor’s responsibility, but reliability problems hit the lessee airline. If the ACMI lessor’s aircraft has technical issues, crew shortages, or maintenance delays, the lessee airline’s schedule suffers and the lessee bears the brand and commercial damage. Contracts include reliability guarantees, but execution depends on the lessor’s actual operational quality, which varies significantly across providers.

Crew language and procedural compatibility. ACMI crews are typically the lessor’s, with their training standards, language capabilities, and operational procedures. For passenger ACMI in markets where local-language cabin announcements matter, or where regulatory requirements specify certain crew qualifications, the operational fit may not be perfect.

Regulatory delay risk. ACMI operations crossing borders require approvals from the destination state’s civil aviation authority. These approvals can take weeks or months. A wet lease arrangement that is operationally ready but regulatorily delayed provides no capacity benefit to the lessee. Carriers using ACMI for time-sensitive capacity (Hajj, new route trial) should build regulatory approval timelines into their planning.

Counterparty risk. The lessor’s financial stability matters. The SmartLynx Airlines cessation of operations in November 2025 is a reminder that even established ACMI providers can fail, leaving lessees with mid-contract capacity gaps that must be filled urgently from alternative sources. Diversifying across multiple ACMI providers, or contracting with the largest and most financially stable providers, is the standard mitigation.

Cost escalation. Block-hour rates have risen significantly in 2024-2026 as the post-COVID recovery, manufacturer delivery delays, and supply chain disruption have all squeezed available ACMI capacity. A carrier signing an ACMI contract in 2026 will likely pay 20-30% more in block-hour terms than the same arrangement would have cost in 2021-2022. This trend may persist as long as new aircraft delivery constraints continue.

8. Three rules for the wet lease decision

For carriers evaluating whether to use wet lease for a specific capacity need, three working rules:

Rule 1: Match the lease duration to the actual capacity need. Wet lease wins on short, defined-duration capacity needs; it loses on permanent capacity needs. A carrier finding itself extending a wet lease repeatedly should re-evaluate whether dry lease or owned capacity better fits the use case.

Rule 2: Diversify ACMI provider relationships. A carrier with a single ACMI provider relationship is exposed to that provider’s operational and financial reliability. Mature ACMI users maintain multiple provider relationships, allowing rapid switching if any single provider experiences problems.

Rule 3: Price the regulatory timeline alongside the block-hour rate. A 30% lower block-hour rate from a provider whose regulatory approvals take 3 months longer is not a saving; it is a delay risk. Total cost of ACMI includes both the contract price and the time-to-operation, and the latter is often the binding constraint for carriers with urgent capacity needs.

Closing

Wet lease and ACMI are not the financial backbone of commercial aviation. The backbone is dry operating leases and ownership, which together account for the bulk of fleet financing. But wet lease and ACMI are increasingly the operational flexibility layer that sits on top of the backbone, allowing carriers to manage volatility, bridge delivery delays, capture seasonal peaks, and trial new routes without permanent commitment.

The 2025-2026 environment, with its persistent delivery delays, capacity shortfalls, and regional demand recoveries, has demonstrated how essential this flexibility layer has become to industry resilience. The carriers that build sophisticated ACMI relationships into their capacity planning, with diversified provider portfolios and disciplined commercial terms, operate with real strategic advantages over carriers that treat wet lease as an emergency tool of last resort.

The next post in this series will turn to charter and scheduled operations, examining the regulatory and commercial distinctions between the two categories and the operating cases where each makes sense.

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This article describes general wet lease and ACMI lease structures used in commercial aviation. Specific contract terms, regulatory treatments, and pricing vary by jurisdiction and by transaction. Block-hour rate ranges cited are illustrative industry approximations for 2025-2026 and not specific quotations. Practitioners should consult qualified aviation legal and finance advisers before structuring ACMI arrangements. Lessor identities, operational examples, and recent industry developments cited reflect publicly reported information as of mid-2026 and are subject to change.