Ocean Home

May/June 2010

Ocean Home magazine is for people who love the luxury oceanfront lifestyle, from home design and decor to world-class beach resorts, villas, hotels, and destinations.

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Page 50 of 96

TRAVELER | STRATEGY It’s Time To Jet Now is the time to opt into jet leasing—provided the contract is worded in your favor. By Diane M. Byrne When the economy collapsed in September 2008, many people divested themselves of the private aircraft they owned or leased. These days, it’s a dif- ferent story, at least the way Michael Moore of Moore & Company sees it. “We’re at the end stage of divestment, so there’s nowhere to go but up,” he says. Considering the fact that he has been an attorney in aviation and maritime law since the 1970s, he knows of what he speaks. But Moore warns that the private-aviation industry is still much less developed than other busi- nesses. Therefore, it’s key to understand what contracts do—and don’t—cover. Moore, who is listed in Who’s Who in American Law and a Fellow of the American Bar Association, provides the following insight. There’s no standard contract. While a few books are go-to sources for contract language, Moore says, “There’s no real body of work where people turn to and say, ‘That’s the standard.’” The marine world, on the other hand, has “literally thousands of forms.” Weigh “wet lease” versus “dry lease.” Even with the lack of standardization, Moore says there are two basic frame- works. A wet lease includes the airplane plus pilot and crew, insurance coverage, fuel, and other necessities. Dry leas- ing is essentially equivalent to being an owner/operator: you hire the crew, obtain insurance and fuel, and ensure the plane is properly maintained. In other words, “You need to provide liter- ally everything,” Moore says. “There are 48 oceanhomemag.com may + june 2010 some lease agreements in between, but they’re more or less ad hoc,” he adds, giving the example of using the lessor’s insurance company if it is less expen- sive and has a good track record. Negotiate, negotiate, negotiate. “This is the best environment I’ve seen in 30 years for the end user to dictate the terms,” Moore says. Companies are more willing to let you stipulate changes regarding time schedules and locations for landing, for example. As long as they don’t conflict with FAA safety requirements, Moore says, “Everything is up for negotiation.” Fuel provisions cause the most con- flicts. Fuel is the number-one cost related to jets, plus, “There’s a lot of variables to fuel consumption,” Moore explains. It affects the weight of the aircraft, as well as the altitude at which it can fly. “You should strive to negoti- ate an ‘all-in’ price,” he says, much like a ticket on a commercial airline. Illustration by tomer hanuka

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