Norton Rose Fulbright

This Practice Note considers the obligations the lessor will ask the lessee to undertake during operation of the aircraft and in particular covers mandatory checks and inspections, manuals and technical records, approved maintenance programmes, airworthiness directives, service bulletins and customer care programmes.

This Practice Note covers the purpose of the Cape Town Convention, registration under the Cape Town Convention, the priority of international interests, remedies and enforcement, deregistration, the Cape Town discount under the OECD Arrangement and the position post Brexit, all in the context of aviation finance transactions.

This Practice Note looks at aircraft finance leases in comparison to secured lending structures and operating leases. It covers the common types of payment required under a finance lease, calculation of interest and early termination payments, the factors which impact on the nature of payments under a finance lease (such as taxes, increased costs, market disruption and indemnities), security over the aircraft (including aircraft mortgages and assignment of the lease), insurances and possession of the aircraft and events of default under a finance lease structure.

This Practice Note explains the key characteristics of an aircraft operating lease and the key differences between an operating lease and a finance lease. It considers the key provisions in operating leases, in particular, delivery conditions, the case of ACG v Olympic, rent and deposits, the right to quiet enjoyment of the aircraft and operational indemnity together with subleasing, wet leasing, events of default and redelivery. It also includes information on Export Certificates of Airworthiness.

This Practice Note explains what tax leases are and how they are used in leveraged leasing structures in the context of aviation finance transactions. It considers Japanese operating leases, German operating leases and French tax leases as well as the risks involved in tax leasing structures and the consequences of early termination.

This Practice Note explains the role of Export Credit Agencies (ECAs) in aviation finance and looks at which ECAs are the most active in aviation finance, the nature and types of support they offer and the benefits of ECA financing. It also explains the key structures and documentation issues, including the security package, to consider in ECA financings for aviation finance.

This Practice Note covers the main principles of Islamic finance, Islamic finance structures used in aviation finance (in particular Murabaha, Ijarah and Ijarah-wa Iqtina) and the key features of an Islamic lease

This Practice Note covers pre-delivery payments (PDPs), how PDP financing is documented (particularly the terms of the aircraft purchase agreement), the structure of the PDP financing facility, common security issues, the terms of the consent agreement and the step-in structure.

This Practice Note explains the legislative background to the key emissions trading schemes relevant to the aviation industry and considers the parties and flights affected by the schemes. It covers the EU emissions trading system (the EU ETS), CORSIA (and its integration into the EU ETS) and the UK emissions trading system and explains the principal obligations of an aircraft operator under each scheme. It also covers practical issues for lessors, lessees and financiers that arise on non-compliance and in relation to wet leasing.

The impact on EU competition law of big data and the use of algorithms has been of growing importance and debate. There are two main concerns, first, that the use of algorithms processing big data may play a role in restrictive agreements, decisions or concerted practices or otherwise facilitate collusion and second, that the collection of big datasets that are valuable, unique and non-replicable may create barriers to entry and market power for the data holder. This practice note explores these concerns and the application of EU competition law to them. Following publication on 01/11/2017, this practice note has been archived and is not maintained..

This Practice Note explains the legal and structural specificities which set aviation finance apart from other types of finance such as the value of the asset, internationality, taxes and liability and insurance. It also covers the sources of funding, common transaction structures and leasing.

This Practice Note covers the process for registering a security interest in the UK at the Civil Aviation Authority (CAA), priority of mortgages, changes made to a mortgage registration, searching the register, deregistration, the Cape Town Convention and registering the security interests in other jurisdictions.

This Practice Note looks at the parties involved and the most important provisions in a purchase agreement for new aircraft, factors affecting the price of the aircraft, engine contracts and pre-delivery payments

This Practice Note considers the reasons why an aircraft must be registered with an aviation authority in order to operate internationally. It looks at the registration process and the consequences of registration. The Practice Note also considers the different types of aircraft register—‘Owner’ and ‘Operator’ registers and explains the different requirements for particular aircraft registers, in particular the Civil Aviation Authority (CAA), including mandatory insurance requirements. Finally the Practice Note sets out the steps involved in the deregistration process.

This Practice Note covers the key provisions of a purchase agreement, financing of the transaction, the sale of any aircraft which are on lease, taxes and the importance of the delivery location, as well as the Cape Town Convention.

This Practice Note covers what an aircraft mortgage is, which laws should govern the creation of an aircraft mortgage, creating a mortgage under English law, registration of aircraft mortgages in the UK and overseas, priority, claw-back and enforcing English mortgages and the alternative of structuring the transaction as a finance lease.

This Practice Note explains why residual value agreements are used in aviation finance and the key types of residual value agreement such as residual value guarantees, asset value guarantees, put options, residual value insurance policies and first loss deficiency guarantees. It also covers the common features of residual value agreements, the mechanics of making a claim under residual value guarantees and the key considerations when negotiating a residual value agreement, including the liability of the guarantor, the lease terms and the potential consequences of a failure to sell the aircraft on the open market.

This Practice Note provides an overview of insurance in aviation finance, the main concerns for aviation financiers and lessors and considers key concepts such as averaging, run-off or tail cover insurances and reinsurance. It covers the key features and terms of aviation insurance policies including the lessor’s rights in relation to the policies, certificates of insurance and the role of insurance brokers, the contract parties and the loss payable clause. This Practice Note also covers causes of third-party liability such as surface damage, negligence and damage to passengers, baggage or cargo, including the provisions of both the Warsaw Convention and the Montreal Convention.

This Practice Note covers the advantages and key structural issues to consider when using the main types of special purpose vehicle (SPV) in aviation finance and sets out the advantages of using SPV’s in an aviation finance transaction such as protections in the event of bankruptcy, tax benefits and the ring-fencing of revenue streams.