A decade defining review – CAA call for evidence on aircraft leasing in the UK

The CAA has launched a call for evidence on aircraft leasing arrangements, with a particular focus on the use of wet leasing by UK carriers. The last significant review of this kind concluded in 2015: since then, the operational and regulatory landscape has evolved dramatically, most notably in the wake of Brexit, the Covid-19 pandemic and the invasion of Ukraine, and a detailed review of the regime has been anticipated for some time.

The evidence gathered will ultimately feed into the CAA’s assessment of whether the current UK regulatory framework governing leasing remains fit for purpose, which may result in recommendations for reform or further formal consultation. This consultation therefore provides an invaluable opportunity for lessors and airlines alike to have their say.

Background to aircraft leasing

Aircraft leasing is a core operational tool for airlines, with nearly 50% of the global commercial passenger aircraft leased rather than owned. 

Wet leasing (or ACMI leasing, which stands for Aircraft, Crew, Maintenance, and Insurance) allows carriers to manage short to medium-term capacity needs, seasonal demand and operational disruption, including fleet and crew availability issues, efficiently and flexibly without the need for major capital investment. Their use is becoming increasingly important for operators facing significant operational constraints caused by maintenance bottlenecks and lengthy delivery delays for new aircraft and engines from OEMs.

The most common form of aircraft operating lease is a dry lease, where an aircraft without crew, maintenance or insurance is provided typically on a long-term basis. This can assist with fleet expansion or planning, as well as with securing an Air Operator Certificate (AOC) for new airlines. A less common version of a wet lease is a so-called damp lease, which is a hybrid arrangement whereby the airline provides its own cabin crew, allowing for quick capacity increases such as handling seasonal demand.

The current leasing framework in place in the UK is the result of various UK regulations and CAA guidance and policies ultimately derived from EU law. Approval is required from the CAA before a UK carrier is permitted to lease an aircraft on either a dry or wet lease basis. In outline, UK carriers must:

• hold a UK AOC and Operating Licence, the latter which may be granted if the carrier has at least one aircraft at its disposal through outright ownership or a dry lease agreement; and
• ensure their Operations Manual reflects the leasing activities required for their operations.

To be operated by a UK airline, the starting position is that a dry or wet-leased aircraft must be registered in the UK or the EU (and, in the case of a wet lease, ideally from a country on the CAA’s ‘White List’). Aircraft can be leased from further afield in exceptional circumstances but, in the case of wet leases specifically, the provider must possess a valid Part-TCO (Third Country Operator) authorisation issued by the CAA. 

Focus of the consultation 

The CAA’s call for evidence covers all forms of aircraft operating leases used by UK airlines. This includes dry leases and rapid dry leases at one end of the spectrum, through to wet leases, damp leases, and emergency wet leases at the other. It does not include aircraft finance leases, and so does not cover complex structures like JOLCOs.

The CAA is seeking input from stakeholders from across the industry to better understand how leasing arrangements function in practice and to consider whether existing oversight mechanisms remain appropriate for the UK market. The call for evidence seeks information in 10 key areas: 

1. Sourcing and resilience – the interplay between leasing and operational resilience (i.e. what are the main drivers behind leasing and what criteria are applied to determine leasing arrangements).
2. Regulatory framework and approval process – the adequacy of the current leasing framework, including how easy it is to understand and what changes could be made to enhance the model.
3. Safety and compliance oversight – whether existing regulatory mechanisms are sufficient to ensure parity between UK and third-country registered aircraft operating under wet lease arrangements.
4. Commercial and consumer considerations – commercial advantages / disadvantages of wet leasing versus dry leasing arrangements, and how much information passengers receive about different services.
5. Sustainability and environmental impact – adherence to emission standards and opportunities for greener / more efficient practices.
6. Planned wet leasing – the reasons that wet leasing is utilised and the significance of it within a given business’s operating model.
7. Emergency wet lease-in – the adequacy of the current emergency wet lease-in procedure.
8. Dry lease-in – if other states wished to enter into agreements with the CAA, would air carriers have an interest in either (a) ICAO Annex 6 transfers; or (b) Article 83 bis transfers under the Chicago Convention.
9. Rapid dry leasing (in or out) – whether there are scenarios where rapid dry leasing would be beneficial to operations.
10. Request for specific wet leasing evidence – a year-by-year breakdown of information for the wet leasing of aircraft for 2016-2019 and 2022-2026 respectively, including what proportion of a given fleet was made up of leased aircraft.

It is clear from these topics that the CAA’s focus is primarily on wet leasing. This is unsurprising given the increasing importance of ACMI solutions for UK airlines. It is also noteworthy that the CAA is seeking information on how leasing is understood by consumers, something that may take on greater significance following the implementation of the Digital Markets, Competition and Consumers Act 2024 (DMCCA 2024) in the UK.

Potential regulatory direction

While this exercise is framed as evidence-gathering, it signals that the CAA may be considering whether changes to the current approval framework for leasing arrangements are warranted.

Areas where increased regulatory scrutiny could emerge include:

• Greater restrictions or conditions on wet leasing from non-UK operators, particularly where used for extended periods rather than temporary capacity needs.
• Enhanced approval or reporting requirements for UK airlines entering ACMI arrangements.
• Consumer disclosure obligations, e.g. ensuring passengers are clearly informed where flights are operated by a different carrier.
• Consideration of competition and labour market impacts, particularly where foreign operators supply crewed aircraft on a recurring basis.

For airlines and lessors, any tightening of the regulatory approach could affect the availability, structure and cost of cross-border ACMI arrangements. 

Why this matters for industry participants

For UK airlines, the review could affect the extent to which wet leasing remains a flexible capacity management tool, particularly during peak travel seasons or periods of operational disruption.

For ACMI providers and aircraft lessors, the review may influence the regulatory conditions under which aircraft and crew can be supplied to UK carriers, potentially affecting contract structures, approval timelines and market access.

Next steps

This call for evidence is highly relevant for all lessors and airlines that are involved in the aircraft leasing market in the UK. For ACMI providers in particular, the chance to contribute to the consultation provides a rare opportunity to shape the UK’s wet leasing framework and ensure that operational realities are reflected in any future regulatory approach.

The call for evidence closes on 11 May 2026. The CAA then intends to publish a decision on next steps “by the end of 2026”. 

If you would like further information about the consultation, including how to participate, please contact Chloe Challinor, Patrick Bettle, or your usual contact in the Burges Salmon aviation team.

This article was written by Patrick Bettle and William Bainbridge.