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:

• 2024 Lease Transfer Documentation – Narrative Document
• 2024 Lease Transfer Principles
• 2024 Template Transfer Provisions
• 2024 Aircraft Lease Novation and Amendment Agreement
• 2024 Aircraft Assignment and Assumption Agreement

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 releases its semi-annual 2024 update of the Cape Town Compliance Index

On 1 April 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 research fellow appointed on cross border transferability and bilateral air safety agreements (BASAs)

Mr. Eding Ying 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 publishes major suite of resource materials on the Cape Town Convention and the Aircraft Protocol (CTC) to aid courts, civil aviation authorities, practitioners, academics, and all others using or interpreting CTC

AWG publishes the following documents produced by its Legal Advisory Panel:

Principles-Based Guide to the 5th and final version of the Official Commentary (OC 5th) to the Cape Town Convention, In addition to the above-linked guide and to ensure its full functionality, download this master citation document

Civil Aviation Authorities Guide to the Cape Town Convention

Judicial Guide to the Cape Town Convention

Practitioners' Guide to the Cape Town Convention

The above are linked in the following document

AviLease joins AWG

AviLease joins AWG

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)