Alternative A of the Cape Town Convention [1] now has the force of law in Ireland, following signing of an Order by the Irish Government on 10 May 2017.
The Cape Town Convention was designed to establish a uniform set of rules to provide greater certainty and predictability around the protection, prioritisation and enforcement of rights in aircraft and aircraft engines. The Convention has a commercial objective, namely to facilitate efficient forms of asset-based financing.
Alternative A
Introduction
The Irish government has signed an order pursuant to the State Airports (Shannon Group) Act 2014 (the "Order") giving immediate legal effect to the "Alternative A" insolvency provisions ("Alternative A") of the Cape Town Convention on International Interests in Mobile Equipment (the "Cape Town Convention") and the associated Aircraft Protocol (the "Protocol").
In positive news for financiers and lenders, the Irish Government has signed an order which gives immediate effect to the “Alternative A” insolvency provisions of the Cape Town Convention.
The State Airports (Shannon Group) Act 2014 (the “Aviation Act”) came into force on 27 July 2014. The Aviation Act enhances Ireland’s position as a global centre for aviation finance and leasing by, among other things, introducing important reforms in the Shannon Region which will build upon the existing aviation industry of over 40 companies operating in the area.
Introduction
The State Airports (Shannon Group) Act 2014 (the “Act”) was signed into law on 27 July 2014. The Act is further evidence of the Irish government’s commitment to the aviation finance and leasing sector and further bolsters Ireland’s position as a centre of excellence in aviation.
In a May 2 2017 decree the Ministry for Economic Development started the extraordinary administration procedure for Alitalia pursuant to Law 39/2004 and appointed Luigi Gubitosi, Stefano Paleari and Enrico Laghi as commissioners to lead the company throughout the procedure. The main purpose of the extraordinary administration is to implement a recovery plan meant to preserve existing employment levels through the following alternative strategies:
Italian Decree 134/2008, which suspended competition law for crisis buyouts, thereby allowing the merger of Alitalia and Air One, has been called into question following a claim of unconstitutionality brought by consumer association Federconsumatori, Italian airline Meridiana, its subsidiary Eurofly and the province of Milan. The question of whether the Decree potentially violates Article 3 on equal treatment and Article 41 on freedom of economic activity has now been referred to the Italian Constitutional Court.
In 2010 Malta embarked on an ambitious project to introduce the Aircraft Registration Act (the “ARA”) and to accede to the Cape Town Convention and its Aircraft Protocol. A few years later, the growing presence of AOC holders in Malta and the increase in aircraft registered in the National Aircraft Register is testament to the success story of the ARA.
This notwithstanding, there still is and will always be room for improvement, as shown by the recent Act to amend the ARA which became law in October 20161. The improvements affect four broad categories:
On August 28, 2010, Compañía Mexicana de Aviación (“Mexicana”), the third oldest airline in the world and one of the most important airlines in Latin America, stopped flying.
Mexicana Airlines has reported that it has filed for bankruptcy protection in Mexico and will seek to reorganize. What does this mean for aircraft lessors and other creditors of Mexicana Airlines?
The Mexican Business Reorganization Act