Key Points -
- A court in London has ruled that the London branch of a German bank, which had issued confirmations of letters of credit issued by a Russian bank as security provided by Russian airlines for leases of...more
Key Points -
- Insurance companies are bracing themselves for years of legal disputes over liability for total losses claimed by lessors to aircraft stranded in Russia as a result of sanctions over Russia's invasion of...more
1/3/2023
/ Air Carriers ,
Aircraft ,
Aircraft Financing ,
Airlines ,
Aviation Industry ,
Federal Aviation Administration (FAA) ,
Insurance Claims ,
Insurance Industry ,
Insurance Litigation ,
Lessor ,
Popular ,
Transportation Industry
Key Points -
- The US Department of Justice reported that it obtained a warrant for the seizure of a Boeing 737-7EM aircraft for the alleged violation of US export controls on Russia (rather than because of ownership of...more
Key Points -
- Hong Kong Airlines (HKA) has announced that it is seeking to implement a restructuring of its aircraft lease obligations and other liabilities by court action in the UK and Hong Kong.
- The plan...more
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- The rights of an aircraft lessor or lender financing the conversion of a passenger aircraft to a freighter aircraft will be specified in agreements between the borrower, financer and conversion facility....more
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- In an August 2 press release, the US Commerce Department updated its list of aircraft that have flown into Russia or Belarus in apparent violation of Export Administration Regulations by adding the first 25...more
Key Points -
- The use by Malaysia Airlines' subsidiary, MAB Leasing Ltd. (incorporated in Malaysia) ("MABL"), in 2021, of an English Scheme of Arrangement (a "Scheme") to compromise its aircraft lease obligations proved...more
Key Points -
- In an April 7 press release, the US Department of Commerce's Bureau of Industry and Security (BIS) announced orders suspending the export privileges of three Russian airlines — Aeroflot, Azur Air, and UTair...more
Key Points -
- In a March 30 press release, the US Commerce Department updated its March 18 list of aircraft that have flown into Russia in apparent violation of Export Administration Regulations by adding 73 aircraft and...more
Key Points -
- A recent Commerce Department Press Release clarifies that the Department's restrictions on aviation exports to Russia issued in the wake of the invasion of Ukraine apply to whole aircraft, and not just to as...more
Key Points -
- Replacing the owner trustee of a US-registered aircraft that is on lease requires submitting a new application to register that aircraft.
- Submitting the application to reregister the aircraft restricts...more
The leasing of a commercial aircraft to an airline in a foreign jurisdiction presents risks to the lessor and its secured lender, including whether an aircraft may readily be repossessed if a lease event of default occurs....more
6/22/2021
/ Aircraft ,
Aircraft Equipment ,
Aircraft Financing ,
Aircraft Sales ,
Airlines ,
Aviation Industry ,
Cape Town Convention ,
Commercial Bankruptcy ,
Cross-Border Transactions ,
Debt Restructuring ,
Debtors-in-Possession ,
Finance Lease Contract ,
Insolvency ,
Repossess
Key Points -
- Populating a template lease summary is an effective way to confirm significant commercial, legal and technical provisions in lease due diligence.
- Comprehensive seller and lessee representations may be...more
Key Points -
The risk that prepetition lease payments made by a lessee that is a debtor in a US bankruptcy will be clawed back from an aircraft lessor can be reduced if:
- the lease is a true lease rather than a...more
Introduction This Aviation Advisory considers the desirability of registering a new international interest at the International Registry corresponding to the extension of the term of a lease of an aircraft, airframe or...more
The purchase agreement between an aircraft manufacturer and its customer will call for the customer to pay installments of the purchase price between the time the agreement is entered into and the delivery of the aircraft....more
Often an aircraft financer will structure a secured aircraft loan as a full payout lease in order to facilitate the exercise of remedies in the case of a default by the borrower airline. Specifying that the lease is governed...more
Countries around the world are putting in place a more accurate system of tracking aircraft in the skies called Automatic Dependent Surveillance-Broadcast (ADS-B). This technology will eventually replace radar as the primary...more
An important source of income for an aircraft lessor is maintenance reserve payments or equivalent end-of-term return compensation for engine overhaul or performance restoration. This is particularly true if the lessor can...more
In our last Aviation advisory, "Toward a Rational Debt-Equity Framework in Leveraged Aircraft Leases," we discussed issues that an equity investor should consider in negotiating credit documents with the lender in a leveraged...more
A non-recourse leveraged lease presents issues of how much say an equity investor or sponsor — as opposed to the secured lender — should have against a defaulting lessee airline. There is no definitive template. Each...more
In the current market, the sale-leaseback can be an effective tool for airlines to raise cash, transition an aircraft model out of the fleet, or manage residual-value risk. For example, it has been reported that (1) Southwest...more
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The US Treasury Department and several US passenger airlines have agreed on basic terms of payroll support to be provided under the CARES Act. This advisory will -
- Summarize the general terms for...more
On Wednesday, March 25, the United States Senate passed by unanimous vote the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The Cares Act marks the third round of economic stimulus in response to the outbreak...more
With the advent of the COVID-19 pandemic, our industry is forced to confront many challenges, including broad government mandates of indefinite duration restricting the movements of vast amounts of the global population. This...more