When it comes to aircraft leasing, specifically wet-leasing, the most popular type of agreement, signed between the operator (i.e. the airline) and the customer (i.e. travel agency, private individual, airline), is ACMI, which stands for:
The aircraft that will be operated on behalf of the customer
The crew is part of the agreement and is provided by the operator
All maintenance work is included and is performed by the operator
This covers the hull/hull war, passenger liability and war risk
The ACMI model covers all operational aspects of the aircraft operation to be conducted on behalf of the customer. This type of agreement is best suited for short-term (e.g. 1-6 month period), seasonal demand due to its highly flexible structure coupled with fast execution. Due to its flexibility the ACMI model can also be utilized for longer term projects without breaking the feasibility of the project.
There are several customer groups that employ the ACMI model for their business, this includes:
Utilize the ACMI model to facilitate air transport for their customers during seasonal demand.
Make use of ACMI agreements to cover capacity shortfalls during peak demand for both passengers and cargo.
Employ the ACMI model to transport attendees to various large corporate events around the world.
Resort to ACMI during the initial start-up phase prior to gaining all necessary certifications and financial stability.
The ACMI model can be tailored to each individual customer. The standard commercial format for this type of agreement involves minimum guaranteed hours(MGH) which is usually on a monthly basis but could vary. Each block hour (BH)is then charged at an hourly rate which is subject to negotiation. What makes the ACMI model unique and flexible is that the customer can choose different combinations of elements (i.e. AMI, CMI, AI, AC, ACM etc.). Furthermore, the customer also has the commercial flexibility, for example, depending on the circumstances the customer can opt to not commit any MGH which essentially provides a pay-as-you-go structure.