Paris, 25 – 27 January 2006 OST 06-1 AIRCRAFT LEASING.

Paris, 25 – 27 January 2006

OST 06-1

AIRCRAFT LEASING

OST 06-1, Paris 25 - 27 January 2006 2

Type of leasesType of leases

Dry leasesDry leases

Wet leasesWet leases

Damp leasesDamp leases


DefinitionsDefinitions

Lessor:Lessor:Entity who leases an aircraft Entity who leases an aircraft TOTO another another

entityentity

Lessee:Lessee:Entity leasing an aircraft Entity leasing an aircraft FROMFROM another another

entityentity


State responsibilitiesState responsibilities

Leases Within the same StateLeases Within the same State

All responsibilities with one StateAll responsibilities with one State

Between entities from different StatesBetween entities from different States

Each State retains some responsibilitiesEach State retains some responsibilities


State responsibilitiesState responsibilities

For leases agreed between two For leases agreed between two entities within the same Stateentities within the same StateThe State of Registry and the State of The State of Registry and the State of

the operator is the samethe operator is the same

For leases agreed between two For leases agreed between two entities, each from a different Stateentities, each from a different StateThe State of the operator is different The State of the operator is different

from the State of Registryfrom the State of Registry


Convention and AnnexesConvention and Annexes

State of Registry responsibilities State of Registry responsibilities Certificate of RegistrationCertificate of RegistrationCertificate of AirworthinessCertificate of AirworthinessFlight crew licensesFlight crew licenses

State of the operator responsibilitiesState of the operator responsibilitiesAir Operator certification (AOC)Air Operator certification (AOC)SurveillanceSurveillance


Annex 6, Part I, 4.2.1.1Annex 6, Part I, 4.2.1.1

4.2.1.1 An operator shall not engage 4.2.1.1 An operator shall not engage

in commercial air transport in commercial air transport

operations unless in possession of a operations unless in possession of a

valid air operator certificate or valid air operator certificate or

equivalent document issued by the equivalent document issued by the

State of the Operator.State of the Operator.


Annex 6, Part I, 4.2.1.6Annex 6, Part I, 4.2.1.6

4.2.1.6 The State of the Operator 4.2.1.6 The State of the Operator

shall establish a system for both the shall establish a system for both the

certification and the continued certification and the continued

surveillance of the operator to ensure surveillance of the operator to ensure

that the required standards of that the required standards of

operations established in 4.2 are operations established in 4.2 are

maintained.maintained.


Annex 6 provisionsAnnex 6 provisions

In Annex 6 Part I, when you read: In Annex 6 Part I, when you read: “An operator shall…”“An operator shall…”

Should be understood as meaning:Should be understood as meaning:“ the State of the Operator “ the State of the Operator shall shall require the operator to…”require the operator to…”

The State of the operator is the State The State of the operator is the State issuing the AOC as provided in Annex 6, issuing the AOC as provided in Annex 6, Part I, Paragraph 4.2Part I, Paragraph 4.2


Dry leaseDry lease

A lease under which an aircraft is A lease under which an aircraft is

leased from one entity to another leased from one entity to another

entity without any crew or servicesentity without any crew or services

The lessee is usually responsible for The lessee is usually responsible for

operation and maintenance of the operation and maintenance of the

aircraftaircraft


Wet leaseWet lease

A lease under which an aircraft is A lease under which an aircraft is

leased from one entity to another leased from one entity to another

entity with a complete crewentity with a complete crew

The lease could include some support The lease could include some support

services as detailed in the terms and services as detailed in the terms and

conditions of the lease agreementconditions of the lease agreement


Wet lease - ConsiderationsWet lease - Considerations

Aircraft (usually) operated under the Aircraft (usually) operated under the AOC of the lessor, the crew is AOC of the lessor, the crew is trained,tested for competency and trained,tested for competency and use lessor procedures as required by use lessor procedures as required by the State of the lessor the State of the lessor

The State of the lessor is the State of The State of the lessor is the State of the Operator = The State having the Operator = The State having issued the AOC and being issued the AOC and being responsible for itresponsible for it


Wet leases - ConsiderationsWet leases - Considerations

Aircraft operated under the AOC of Aircraft operated under the AOC of lessee, crew must be trained and lessee, crew must be trained and tested in accordance with the tested in accordance with the requirements of the State of the requirements of the State of the lesseelessee

In this case, the State of the lessee In this case, the State of the lessee would be the State of the Operator would be the State of the Operator

The State of the lessor could be the The State of the lessor could be the State of RegistryState of Registry


Wet leases - ConsiderationsWet leases - Considerations

When there are cascading sub-When there are cascading sub-leases, any other State could be the leases, any other State could be the State of Registry State of Registry

Operational control resides with the Operational control resides with the operator holding the AOC under operator holding the AOC under which the aircraft is operatedwhich the aircraft is operated

The State of the operator has The State of the operator has responsibility for that AOCresponsibility for that AOC


Wet lease & AOCWet lease & AOC

An aircraft can be operated only An aircraft can be operated only under under ONEONE AOC AOC

In any case there can be only In any case there can be only ONEONE State of Registry and only;State of Registry and only;

And only And only ONEONE State of the Operator State of the Operator


Damp leaseDamp lease

““Damp lease” is used to identify a Damp lease” is used to identify a lease that is not fully a dry or a wet lease that is not fully a dry or a wet lease. (See ICAO Circular 295 and lease. (See ICAO Circular 295 and Doc. 9626)Doc. 9626)

An aircraft being leased with a partial An aircraft being leased with a partial crew would be a damp leasecrew would be a damp leaseTypically, the lessor would provide the Typically, the lessor would provide the

flight crew and the lessee would provide flight crew and the lessee would provide the cabin crew the cabin crew


States need to considerStates need to consider

Regulation?Regulation?Implementation?Implementation?Responsibilities?Responsibilities?Procedures?Procedures?Oversight capability?Oversight capability?


Is it that simple?Is it that simple?

Can a leasing situation Can a leasing situation become even more complex?become even more complex?


Is it possible to have?…Is it possible to have?…

•Flight crew members with licences issued by State C and validated by State B?•Flight crew members with licences issued by State C and validated by State B?

?•An operator with an

AOC from State B•An operator with an

AOC from State B

• An aircraft registeredin State A• An aircraft registered

in State A

•The C of A issued by State B?•The C of A issued by State B?

AND


It is quite possible…It is quite possible…

You may wish to look carefullyYou may wish to look carefully

This could be a legitimate situationThis could be a legitimate situation

There could be a bilateral transfer of There could be a bilateral transfer of responsibility agreementresponsibility agreement

oror

There could be an 83There could be an 83bisbis agreement agreement


Bilateral agreementBilateral agreement

Bilateral agreementBilateral agreementAgreement between two StatesAgreement between two States

Binding Binding Only for the involved partiesOnly for the involved parties

Recognition by others?Recognition by others?Definitely not systematicallyDefinitely not systematicallyPerhaps no recognition at allPerhaps no recognition at all


Article 83 Article 83 bisbis

An article in the ConventionAn article in the ConventionAllowing for the transfer of Allowing for the transfer of

responsibilitiesresponsibilitiesfrom the State of Registryfrom the State of Registryto the State of the Operatorto the State of the Operator

There must be an agreement (administrative)There must be an agreement (administrative)between both States authoritiesbetween both States authoritiesthe agreement is binding for all States the agreement is binding for all States

having ratified 83 having ratified 83 bisbis



The agreement:The agreement:identifies the lessor and the lessee;identifies the lessor and the lessee;the aircraft;the aircraft;the nature and scope of the responsibilities the nature and scope of the responsibilities

transferred;transferred;

IT MUST BE REGISTERED WITH ICAOIT MUST BE REGISTERED WITH ICAOA copy of the agreement A copy of the agreement shouldshould

preferably be on board each aircraft preferably be on board each aircraft leased and operated leased and operated pursuant to 83 pursuant to 83 bisbis



Caution:Caution:

Responsibilities clearly defined?Responsibilities clearly defined?

Flag of convenience?Flag of convenience?

State of the lessor capabilities?State of the lessor capabilities?

State of the lessee capabilities?State of the lessee capabilities?



How are States informed ?How are States informed ?

““List of Agreements and List of Agreements and Arrangements Concerning Arrangements Concerning International Civil Aviation Registered International Civil Aviation Registered with ICAO”with ICAO”

Published on the WEB:Published on the WEB:

http://www.icao.int/icao/en/leb/http://www.icao.int/icao/en/leb/

Select aeronautical agreements, all Select aeronautical agreements, all signatories and (subject) 83 signatories and (subject) 83 bisbis



How are States informed ?How are States informed ?

(In the case of short term agreements)(In the case of short term agreements)

Once the agreement is registered with Once the agreement is registered with ICAOICAO

All States to be affected by the All States to be affected by the agreement can be informed directly by agreement can be informed directly by the States party to the agreement. the States party to the agreement.


Key elementsKey elements

RegulationsRegulationsImplementationImplementation

ScrutinyScrutinyAuthorizationsAuthorizationsMonitoringMonitoring

Safety oversightSafety oversightFollow-upFollow-up


Most importantlyMost importantly

DO NOT ALLOWDO NOT ALLOW

Commercial Commercial

arrangements/agreements to arrangements/agreements to

interfere with safety or dilute State interfere with safety or dilute State

responsibilitiesresponsibilities

Paris, 25 – 27 January 2006

- E N D -- E N D -

AIRCRAFT LEASING

OST 06-1

Paris, 25 – 27 January 2006 OST 06-1 AIRCRAFT LEASING.

Documents

Transcript of Paris, 25 – 27 January 2006 OST 06-1 AIRCRAFT LEASING.