Most readers are likely not aware that the aircraft they are using for the upcoming vacation may not be owned by the airline they are flying. It may have Air-something on the ticket and on the aircraft, but the actual owner is someone else or in some other country. Like leasing a car, leasing airplanes offers many benefits to certain operators. Last Friday’s crash of Cubana de Aviación Flight 972 killing 111 people was a leased-aircraft owned by a Mexican company and operated by a Mexican crew.
The aircraft, a Boeing 737-201 (XA-UHZ), was being operated by Cubana de Aviación, but the aircraft was owned by Aerolíneas Damojh, a Mexican air charter company. There are hundreds of such companies based in México. The aircrew, the pilots and the stewardesses, were Mexican citizens all working as part of the lease arrangement for Cubana de Aviación.
The lease arrangement is what is known in the industry as a “wet lease.” There are generally two types of leases for large transport aircraft used by airlines to ferry passengers. A “dry lease” is for airlines using a leased aircraft for their operations but providing aircrews and aircraft maintenance. The airline just uses the aircraft they leased.
In a “wet lease” type of arrangement, the aircraft and the aircrew are leased as a unit to the airline. The crews come as a package. In the case of the Cubana de Aviación aircraft, the Boeing 737 was owned and operated by a Mexican company. The aircraft was leased to Cubana to fly its passengers under its colors.
There are thousands of aircraft leasing companies in the world. Passenger traffic is rising at about 5% each year and aircraft manufacturers are building aircraft as fast as they can. But the smaller airlines are facing the problem that many of them operate transport services for only a few months a year, leaving them saddled with paying large bills for aircraft and crews that are not generating revenues for them.
For example, an airline may be busy during the summer in Europe but has little use of some of its aircraft during the off season. Likewise, an Asian air carrier may have a passenger spike in Asia during the winter but not have the need for additional aircraft during the summer.
In this case, both airlines “wet lease” their aircraft during their busy seasons and return them when they are not needed. Because aircraft requires a crew qualified for the specific aircraft, the “wet lease” gives the operators the package deal of aircraft and flight crews.
I first became aware of “wet leases” when looking for a job as a pilot. There were many times when I was looking at XYZ Airline only to learn that I needed to apply to another company. At first it seemed just like a case of a parent company managing employees, while flying aircraft through a subsidiary. But there were many times when I had to pause my interest in the company because it required that acquire a visa to another country to work, although the airline was based in México, or the United States. I soon learned that the company that hired the aircrews was the owner of the aircraft, who leased the airplane and the aircrews to the airline, I thought I would be flying for.
Global Air, the parent company for Aerolíneas Damojh, had its permits suspended while Mexican authorities investigate the crash. Under international agreements, the crash will be investigated by Cuban, Mexican and U.S. authorities. Cuba, because the aircraft crashed in Cuba and was operated by a Cuban company. Mexican investigators are involved because the aircraft was owned by a Mexican company and operated by a Mexican crew. The United States is involved because Boeing, the aircraft manufacturer, is an American company.
The Boeing 737-201 (s/n: 21816) is almost 39 years old. It first flew on July 15, 1979 as N769N. It first flew for Piedmont Airlines, then for US Airways and then for a Canadian airline company. In 2001, the aircraft was leased by the United States Navy until 2005, when Magnicharters of México bought the aircraft. In 2007, Global Air, the Mexican company, began leasing the aircraft to various airlines, including Cubana.
It is still too early to tell what led to the crash and whether the age of the aircraft, the crew, or a combination of these led to the fatalities. But as you prepare for the next vacation, you might want to be curious and find out who really owns the airplane you are about to board, and who the crew works for.
Here are two interesting tidbits that many of you may not know.
The first is that Donald Trump’s airplane (Boeing 757 – N757AF) was owned by TAESA, a Mexican low-cost carrier, before Trump bought it.
The second is that the Mexican Air Force One, a Boeing 787-8 Dreamliner that has been dubbed as the world’s most expensive airplane, is currently under a 15-year lease which will transfer in full to the Mexican government at the completion of the lease.