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

OST 06-1, Paris January Type of leases  Dry leases  Wet leases  Damp leases

OST 06-1, Paris January Definitions  Lessor:  Entity who leases an aircraft TO another entity  Lessee:  Entity leasing an aircraft FROM another entity

OST 06-1, Paris January State responsibilities  Leases Within the same State  All responsibilities with one State  Between entities from different States  Each State retains some responsibilities

OST 06-1, Paris January State responsibilities  For leases agreed between two entities within the same State  The State of Registry and the State of the operator is the same  For leases agreed between two entities, each from a different State  The State of the operator is different from the State of Registry

OST 06-1, Paris January Convention and Annexes  State of Registry responsibilities  Certificate of Registration  Certificate of Airworthiness  Flight crew licenses  State of the operator responsibilities  Air Operator certification (AOC)  Surveillance

OST 06-1, Paris January Annex 6, Part I,  An operator shall not engage in commercial air transport operations unless in possession of a valid air operator certificate or equivalent document issued by the State of the Operator.

OST 06-1, Paris January Annex 6, Part I,  The State of the Operator shall establish a system for both the certification and the continued surveillance of the operator to ensure that the required standards of operations established in 4.2 are maintained.

OST 06-1, Paris January Annex 6 provisions  In Annex 6 Part I, when you read: “An operator shall…”  Should be understood as meaning: “ the State of the Operator shall require the operator to…”  The State of the operator is the State issuing the AOC as provided in Annex 6, Part I, Paragraph 4.2

OST 06-1, Paris January Dry lease  A lease under which an aircraft is leased from one entity to another entity without any crew or services  The lessee is usually responsible for operation and maintenance of the aircraft

OST 06-1, Paris January Wet lease  A lease under which an aircraft is leased from one entity to another entity with a complete crew  The lease could include some support services as detailed in the terms and conditions of the lease agreement

OST 06-1, Paris January Wet lease - Considerations  Aircraft (usually) operated under the AOC of the lessor, the crew is trained,tested for competency and use lessor procedures as required by the State of the lessor  The State of the lessor is the State of the Operator = The State having issued the AOC and being responsible for it

OST 06-1, Paris January Wet leases - Considerations  Aircraft operated under the AOC of lessee, crew must be trained and tested in accordance with the requirements of the State of the lessee  In this case, the State of the lessee would be the State of the Operator  The State of the lessor could be the State of Registry

OST 06-1, Paris January Wet leases - Considerations  When there are cascading sub- leases, any other State could be the State of Registry  Operational control resides with the operator holding the AOC under which the aircraft is operated  The State of the operator has responsibility for that AOC

OST 06-1, Paris January Wet lease & AOC  An aircraft can be operated only under ONE AOC  In any case there can be only ONE State of Registry and only;  And only ONE State of the Operator

OST 06-1, Paris January Damp lease  “Damp lease” is used to identify a lease that is not fully a dry or a wet lease. (See ICAO Circular 295 and Doc. 9626)  An aircraft being leased with a partial crew would be a damp lease  Typically, the lessor would provide the flight crew and the lessee would provide the cabin crew

OST 06-1, Paris January States need to consider  Regulation?  Implementation?  Responsibilities?  Procedures?  Oversight capability?

OST 06-1, Paris January Is it that simple?  Can a leasing situation become even more complex?

OST 06-1, Paris January Is it possible to have?… Flight crew members with licences issued by State C and validated by State B? ? An operator with an AOC from State B An aircraft registered in State A The C of A issued by State B? AND

OST 06-1, Paris January It is quite possible…  You may wish to look carefully  This could be a legitimate situation  There could be a bilateral transfer of responsibility agreement or  There could be an 83bis agreement

OST 06-1, Paris January Bilateral agreement  Bilateral agreement  Agreement between two States  Binding  Only for the involved parties  Recognition by others?  Definitely not systematically  Perhaps no recognition at all

OST 06-1, Paris January Article 83 bis  An article in the Convention  Allowing for the transfer of responsibilities  from the State of Registry  to the State of the Operator  There must be an agreement (administrative)  between both States authorities  the agreement is binding for all States having ratified 83 bis

OST 06-1, Paris January Article 83 bis  The agreement:  identifies the lessor and the lessee;  the aircraft;  the nature and scope of the responsibilities transferred;  IT MUST BE REGISTERED WITH ICAO  A copy of the agreement should preferably be on board each aircraft leased and operated pursuant to 83 bis

OST 06-1, Paris January Article 83 bis  Caution:  Responsibilities clearly defined?  Flag of convenience?  State of the lessor capabilities?  State of the lessee capabilities?

OST 06-1, Paris January Article 83 bis  How are States informed ?  “List of Agreements and Arrangements Concerning International Civil Aviation Registered with ICAO”  Published on the WEB:   Select aeronautical agreements, all signatories and (subject) 83 bis

OST 06-1, Paris January Article 83 bis  How are States informed ? (In the case of short term agreements)  Once the agreement is registered with ICAO  All States to be affected by the agreement can be informed directly by the States party to the agreement.

OST 06-1, Paris January Key elements  Regulations  Implementation  Scrutiny  Authorizations  Monitoring  Safety oversight  Follow-up

OST 06-1, Paris January Most importantly  DO NOT ALLOW Commercial arrangements/agreements to interfere with safety or dilute State responsibilities

Paris, 25 – 27 January E N D - AIRCRAFT LEASING OST 06-1