In reality, a large share of wet-leasing in Europe – and this is the share that is booming ­– has little to do with sudden growth or unforeseen short-term needs. It is a business strategy to replace airlines’ own operations at a lower cost. Wet-lease providers like CityJet, Go2Sky, Adria Airways, Danish Air Transport & Air Atlanta promise airlines flexibility, a better commercial risk management and lower operating costs for both equipment and aircrew. This “bonus-effect” of wet-lease is boosting its popularity, making it a desirable feature for many European airlines.
Wet-leasing translates into lower terms and conditions for aircrew across the industry and gives a boost to atypical employment schemes.
In a Guide on safety risks related to new business models by EASA, the Agency acknowledges the potential safety hazards of wet-leasing. The Agency therefore recommends operators to consider a range of safety probes and assessments with regards to longer-term wet-lease agreements. For example, EASA operators are expected to assess the reporting culture of the lessor and consider evaluation of data: e.g. average number of reports by crew, ground handling agents, refuelling companies, etc. In addition, EASA recommends regular exchange of information between safety managers of the lessor and the lessee and an analysis of hazard identification logs and internal audits into the service provider’s evaluation. Not a simple task, but a fundamental one.
From an industrial perspective, an obvious loophole is allowing airlines to break their employees’ strikes using short term wet-leasing – the latest example being Finnair wet-leasing from Danish Air Transport. Aside from that long-term wet-leasing also poses challenges. For example, when Slovenian pilots flying for Adria Airways perform work outside of their Home Base in Slovenia on a permanent basis – which is the case for long-term wet-leasing contracts – these pilots should be regarded as posted workers. This means they should be subject to the labour law of the countries to which they are transferred under the wet-lease agreement. Also, they should be holding a special social security certificate (A1) for social contributions. But in practice, A1 certificates for crew are rarely issued. Only 700 A1 certificates on posting of pilots and cabin crew were issued in a population of over 250.000 individuals over the course of 2 years (Source: Posting of workers Report on A1 Portable Documents issued 2015 & 2016). Wet-leasing may be booming, but the application of EU rules is still desperately lagging behind.
There is a ray of light. The Court of Justice of the European Union (CJEU) recently ruled (Case C-532/17) that an air carrier (lessor) that operated a delayed flight under a wet-lease agreement but did not bear the operational responsibility for the flight, is not liable to the passengers for the delay. Instead the carrier hiring an aircraft and flight crew (lessee) bears the ultimate responsibility for its operation and must therefore pay compensation to passengers under EU Reg. 261/2004. The Court concluded that the responsibility lays with the lessee when it comes to commercial matters. Court cases like this one show that legislators and authorities face the challenge of finding the right balance of shared responsibility and accountability of both lessor and lessee when it comes to safety, operations and oversight.
Until this balance is found, wet-lease operators will continue to pitch their ‘smart business low-cost solution’ to other airlines. It is unclear if and when legislation will catch up. However what is clear, is that as long as legislation and oversight are not applied properly, ‘irresponsible’ wet-lease can continue to blossom and will be do so in a way that risks being neither sustainable, nor socially responsible – and perhaps even unsafe.