Documentary Practices

The aviation industry benefits from documentary standardisation and simplification for certain types of transactions. In particular, this is the case where the benefits of standardisation and simplification, including decreased negotiating time, reduced transaction expenses and increased efficiencies, are material. The forms of existing documents, the processes by which they are negotiated, and the nature of the particular transaction are also relevant factors in any decision to standardise.

 

Given the substantial increase in the last decade on aircraft transfers and trading, AWG, in consultation with others in the industry, produced standardised and template documents to facilitate the process related to such transfers. They are designed to (1) have minimal impact on aircraft lessees, (2) not to increase an airline's obligations, and (3) be equally acceptable to buyers and sellers of aircraft subject to existing leases. They include a template lease novation (English law) and assignment and assumption (New York law). Financing related notices of assignment are included. Any transaction parties, whether or not members of AWG, may utilise these standardised documents. Each standardised document is designated as a template document and is intended to be used as a framework for efficient negotiations. Transaction parties may modify or deviate from the terms of the standardised documents as they deem fit.

 

AWG and IATA have produced other standardised and template documents, including those addressing (a) short term emergency engine leasing, (b) warranty assignments, and (c) used aircraft purchase agreements. As with the above-mentioned lease novation type documents, these additional agreements may be used by any transaction parties, are designated as template documents -- intended to be used as a framework for efficient negotiations, and may be modified or deviated as the parties see fit they deem fit.

 

All work on documentary standardisation is undertaken in accordance with strict compliance guidelines produced by leading international counsel.

STANDARDISED NOVATION/ASSIGNMENT AND ASSUMPTION AGREEMENTS

In November 2017, AWG produced the following:

A Novation/Assignment and Assumption Agreements Guiding Principles (.docx version) document has been prepared to (1) set out underlying principles (minimum impact on lessees, no increased obligations, and intended acceptability to buyers and sellers), and (2) give practical procedural guidance relating to the novation-transfer process.

English law: New York law:

AIRCRAFT PURCHASE AGREEMENT, WARRANTY ASSIGNMENTS AND ENGINE TITLE RECOGNITION AGREEMENT

SHORT-TERM EMERGENCY ENGINE LEASE

In 2002, AWG and IATA finalised and released a form master short-term engine lease agreement (Short-Term Emergency Engine Lease, or, in short, STEEL). The STEEL was updated in 2012, mainly to reflect the entry into force of the Cape Town Convention. IATA has designated the revised STEEL as IATA Document No. 5016-01. A User Guide and Commentary (link 2) is also available for use in connection with the STEEL.