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Examine the contract below and determine whether the contract contains a lease. All information in this case study is hypothetical.

Q Airway enters into a contract with Flybus Ltd for the use of an explicitly specified cargo aircraft (i.e. a freight aircraft for the carriage of cargo only) for a two-year period. The contract details the exterior and interior specifications of the aircraft. Flybus is responsible for operating the aircraft, using its own crew. Q Airway is prohibited from hiring another operator for the aircraft or operating the aircraft itself during the period ofuse.

There are also contractual and legal restrictions in the contract on where the aircraft can fly. Subject to the restrictions, Q Airway will fly in accordance with a predetermined flight schedule which details when and where the aircraft will fly in the next two years, as well as what products/cargos will be loaded onto each flight. This schedule was negotiated between Flybus, Q Airway, and Q Airways customers WMB Cars (a high-end car company whose headquarter is in Germany but its production is scattered across a number of countries inEurope and Asia) and TC Equip (one of worlds largest medical equipment developer and manufacturer whose headquarter is in Australia but its production is based in China). Q Airway will use the aircraft exclusively for transporting the WMB cars and the cargoscontaining a variety of TC Equips medical equipment around the world in accordance with the schedule.

The contract permits Flybus to substitute the aircraft at any time during the two-yearperiod and must substitute the aircraft if it is not working. Any substitute aircraft must be the same model (i.e. model F050) as the originally specified aircraft, and meet the same exterior and interior specifications mandated in the contract. Flybus has a fleet of F050 planes and multiple sets of crew members available, and its customers also include a number of other air freight businesses.

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