AWG releases a Statement on Tariffs and the Aviation Sector
Aviation Working Group (AWG) releases a detailed Statement, with policy recommendations, on tariffs and the aviation sector.
The Statement sets out and applies fundamental AWG principles (market primacy, level playing field, predictable international trading rules, and aviation safety) to recommend and support the continuation and strengthening of a zero-tariff system applicable to aviation assets (new and existing) and aviation activities.
The Statement concludes by noting that the aviation sector stands out as a unique and highly valuable field of trade, which itself facilitates high levels of economic activity. It is anchored in international rules that have served global commerce well. It has not seen the types of trade imbalances that might warrant a costly and unpredictable change from the relied upon, and highly successful, zero-tariff regime.
Cape Town Convention – India
AWG releases white paper on the interpretation of The Protection of Interests in Aircraft Objects Act, 2025
AWG welcomes and applauds the recent passage of the Protection of Interests in Aircraft Objects Act, 2025 (the CTC Act), critically important legislation designed to give full force and effect to, and ensures the primacy over inconsistent law of, CTC.
To maximize the consistent and correct interpretation of the CTC Act, AWG has released an interpretative white paper relating to the Act (white paper No. 1). Its content has been agreed by AWG's Indian Contact Group.
AWG releases updated short form model legislation to implement and give effect to the Cape Town Convention and Aircraft Protocol
AWG releases updated short form model legislation to implement and give effect to the Cape Town Convention and Aircraft Protocol (CTC). It is for considerations and use by countries and others involved in the ratification of, or accession to CTC.
The model legislation consists of:
- Declarations under the CTC
- Regulations relating to the deregistration and export under an IDERA
- Court rules relating to judicial procedures under CTC
- Procedures for exercising possessory related non-judicial remedies under CTC
AWG research fellow appointed on financing in special economic zones (SEZs)
Maria Soussan has been appointed as an AWG research fellow. Ms. Soussan, in her final year of study at Hebrew Univerisity of Jerusalem, Faculty of Law, will be conducting research on financings in special economic zones (SEZs). She will be researching matters relating to AWG's model law on the same subject, considering (1) electronic registry to prioritize property interests, and/or (2) legal problems relating to the use of that model law in one or more specific countries.
Release of Manual on Best Practice under Interpretation of the EU Taxonomy for Sustainable Activities
Aviation Working Group (AWG) has released the 1st Edition of the Manual on Best Practice under Interpretation of the EU Taxonomy for Sustainable Activities, 15 January 2025 (the EU Taxonomy).
The Best Practice Manual is issued jointly by AWG and the International Air Transport Association (IATA). Summarised in an accompanying PPT, it addresses the Technical Screening Criteria for the manufacturing of aircraft, the leasing of aircraft, and the passenger and freight air transport.
The Best Practice Manual, has been produced following extensive consultations among aviation industry members and engagement with relevant regulators and assessors. Without limiting its other uses, this guidance document has been prepared in the context of reporting requirements under the EU's CSRD regime.
The contributing industry members include 350 airline members of IATA, a number of lessor and manufacturer members of AWG, and a number of non-affiliated airlines and industry members.
The Best Practice Manual, which will be updated by IATA and AWG (reflecting engagement with industry members, regulators, and external auditors) from time to time as events warrant, will play a key role in connecting requirements of the EU Taxonomy to industry practices, with a developed analysis. The approach is to provide detailed and consistent rules, applied through the lifecycle of covered assets in view of customary operations and transactions.
We are pleased to coordinate this contribution to help promote the aims and purposes of the critically important EU Taxonomy, a cornerstone of the EU's sustainable finance framework, as a core pillar of the industry's transition to net zero and in support of the broader environmental and sustainability aviation activities.
We wish to thank the law firm Watson Farley & Williams for support in preparing the Best Practice Manual, including its central role in drafting and working through textual issues.
Aviation Working Group enhances bank membership
AWG enhances its bank membership, effective January 2025. That enhancement includes an increased number of banks, coupled with expanded geographical participation, strengthening AWG's role as the leading global forum for assessing, and acting on, banking issues and related regulations which may impact aviation finance.
Joining our current bank members - AFIC, BNP Paribas, DBJ, Deutsche Bank, Goldman Sachs, JP Morgan, KfW, and Morgan Stanley, are the following new members: Commonwealth Bank of Australia, Crédit Agricole, Hamburg Commercial Bank, ING, Investec, MUFG, Société General, and Standard Chartered.
First symposium under the transnational commercial and leasing law project (AWG-Trinity College Dublin, Faculty of Law)
The transnational commercial and leasing law project (under the auspices of the AWG's Irish Contact Group in association with Trinity College Dublin (TCD), Faculty of Law) is holding its first symposium on 16 January 2025.
The symposium - on the Past, Present, and Future of International Leasing of Personal Property - includes TCD students, academics, legal, and business experts.
The foundational outline for the symposium addresses: (a) Nature, History, and Economic Impact of Leasing, (b) Liability for Damages Caused by Leased Property, (c) Conflict of Laws in International Leasing Transactions, and (d) The Impact of Insolvency Laws on Leasing Transactions.
Willis Lease Finance Corporation joins the Aviation Working Group
Willis Lease Finance Corporation joins AWG.
AWG releases its semi-annual 2024 update of the Cape Town Compliance Index
On 25 November 2024, AWG released its semi-annual 2024 update of the AWG Cape Town Compliance Index.
The release includes the update of AWG's assessment as to whether countries meet the substantive standard for eligibility for the ‘CTC discount’ set out in the Aircraft Sector Understanding. AWG's assessment is accessible via the main link.
AWG releases model court rules for disputes governed by the Cape Town Convention
AWG releases model court rules for disputes governed by the Cape Town Convention. These are available for adoption by the highest court or other regulators in Contracting States. They may take the form of binding court rules, regulations, circulars, or practice directives. They are attached in word.
The model court rules have been endorsed by the executive committee of AWG’s legal advisory panel.
The model court rules set out key procedural items required for compliance with the convention and its aircraft protocol.
AWG publishes a set of lease transfer principles and an updated standard set of lease transfer documentation for promotion and usage within the industry
In order to streamline documentary negotiations between lessors and airlines when dealing with the transfer of leases in connection with an aircraft sale, the AWG has published a set of lease transfer principles and an updated standard set of lease transfer documentation for promotion and usage within the industry (2024 lease transfer documentation).
The 2024 lease transfer documentation, embodying customary industry terms, seeks to make the process for transferring leases more efficient for all parties involved both from a time and costs perspective, reducing the level of legal commentary required on the documents and reflective of a balanced position between lessors and airlines.
The 2024 lease transfer documentation consists of the following:
AWG releases statement of principles relating to economic sanctions impacting international aviation finance
AWG releases a statement of principles which should be considered in connection with the formulation of any future economic sanctions which may affect the aviation industry. This statement of principles has been prepared as a general policy document.
Establishment of a transnational commercial and leasing law project in association with the School of Law, Trinity College Dublin
AWG is pleased to announce that, effective 1 September 2024, through its Irish Contact Group*, a transnational commercial and leasing law project will be established in association with the School of Law, Trinity College Dublin (the project).
The project, which will run for an initial period of three years, will focus on the study of (1) legal development and theory, (2) transactional and dispute resolution practices, (3) public policy, and (4) legal education. It will have an inter-disciplinary aspect (business, economics, political science, and international affairs).
A 'participatory advisory board' for the project will be formed with senior leaders from the Dublin legal community and select others. It will be actively involved in the project. As will the students from Trinity College Dublin.
A first symposium under the project will be held on 16 January 2025. Its title will be:
'Past, present, and future of the international leasing of personal property'. It will have these sub-parts:
(a) history of leasing law, legal-conceptual terms, and its economic impacts
(b) liability of lessors and lessee for damage to third parties caused by leased property
(c) conflict of laws issues in international leasing transactions
(d) insolvency issues in international leasing transactions
AWG's secretary general, Jeffrey Wool, will lead the project, working with others in the Irish Contact Group and Trinity College Dublin, including in his capacity as an adjunct professor for the latter.
*/ A&L Goodbody, Arthur Cox, Mason Hayes Curran, Matheson, and McCann FitzGerald
Independent expert opinion concerning the application of CTC under Chapter 11 of the US Bankruptcy code involving a non-US debtor
An independent expert opinion has been issued on the application of CTC under Chapter 11 of the US Bankruptcy code involving a non-US debtor.
It concludes that the courts of the United States, including courts having jurisdiction over a non-US Airline Chapter 11 bankruptcy case (or over any other case under the Bankruptcy Code), are obligated to apply Protocol Article XI Alternative A in conformity with the declaration made by the State which is that airline’s primary insolvency jurisdiction (where its center of main interests are situated and whether or not insolvency proceedings are under way in that State) without further legislation or implementation by the United States.
The independent expert opinion may only be used in full, as its must be read as a whole.
AWG research fellow appointed on cross border transferability and bilateral air safety agreements (BASAs)
Mr. Eding Yi is the AWG research fellow on XBT and BASA. The research will focus on the use of AI tools in researching this topic in depth.
ICAO and AWG to take steps on enhancing the cross-border transferability of aircraft and compliance with the Cape Town Convention
Recognizing the importance of harmonized regulations, practices, and streamlined processes in the context of cross-border aircraft transactions, a new agreement between the International Civil Aviation Organization (ICAO) and AWG will facilitate capacity building initiatives for states, particularly in developing regions, to further enhance safety and efficiency in these processes.
This work will focus on the critical areas of cross-border transferability of aircraft and compliance with the Convention on International Interests in Mobile Equipment and its Aircraft Protocol (the Cape Town Convention). It builds upon longstanding cooperation between the two organizations.
This new agreement reflects the two organizations' joint commitment to supporting states in unlocking the sustainable development benefits of aviation by enhancing the efficiency of aircraft-backed financial transactions.
For more detail, see ICAO announcement.
Cross Border Transferability (XBT) Handbook
AWG releases its first update of its cross border transferability (XBT) handbook. It addresses best practices to promote safety, simplification, and global harmonization in connection with changes of aircraft registration and nationality. AWG views the handbook (among other things) as a companion to the recently published ICAO XBT guidance. The handbook will continue to be reviewed and updated regularly.
AWG releases updated study on Loss Given Default for aircraft-backed loans
AWG releases an update to its 2016 study on loss given defaults for aircraft-backed loans (LGDs).
That update confirms the continuation of low LGDs.
The update, for use by regulators and banks in implementing, apply or interpreting, or considering reforms or modifications to the Basel III framework, can be found here.
A summary presentation on the unique features and data supporting low LGDs for aircraft-backed loans can be found here.
AWG appoints three research fellows
AWG appoints three research fellows they are:
Arnold Agaba (PhD candidate, McGill University) researching implementation and compliance in a wide range of treaties areas
Emily Davis (Masters candidate, Cambridge University) researching liens and detention rights
Deng Haoyue (Masters candidate, Leiden University) researching enforcement of Cape Town Convention interest under Chinese law and practice
AWG submits comment letter on EU Taxonomy as applied to Aviation
AWG submits comment letter on EU Taxonomy as applied to Aviation (Commission’s draft Delegated Act supplementing Regulation (EU) 2020/852 and amending Delegated Regulation (EU) 2021/2178)
