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OST 06-1

AIRCRAFT LEASING. OST 06-1. Type of leases. Dry leases Wet leases Damp leases. Definitions. Lessor: Entity who leases an aircraft TO another entity Lessee: Entity leasing an aircraft FROM another entity. State responsibilities. Leases Within the same State

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OST 06-1

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  1. AIRCRAFT LEASING OST 06-1

  2. Type of leases • Dry leases • Wet leases • Damp leases OST 06-1, Paris 25 - 27 January 2006

  3. Definitions • Lessor: • Entity who leases an aircraft TO another entity • Lessee: • Entity leasing an aircraft FROM another entity OST 06-1, Paris 25 - 27 January 2006

  4. 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 25 - 27 January 2006

  5. 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 25 - 27 January 2006

  6. 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 25 - 27 January 2006

  7. Annex 6, Part I, 4.2.1.1 • 4.2.1.1    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 25 - 27 January 2006

  8. Annex 6, Part I, 4.2.1.6 • 4.2.1.6    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 25 - 27 January 2006

  9. 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 25 - 27 January 2006

  10. 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 25 - 27 January 2006

  11. 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 25 - 27 January 2006

  12. 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 25 - 27 January 2006

  13. 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 25 - 27 January 2006

  14. 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 25 - 27 January 2006

  15. 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 25 - 27 January 2006

  16. 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 25 - 27 January 2006

  17. States need to consider • Regulation? • Implementation? • Responsibilities? • Procedures? • Oversight capability? OST 06-1, Paris 25 - 27 January 2006

  18. Is it that simple? • Can a leasing situation become even more complex? OST 06-1, Paris 25 - 27 January 2006

  19. Is it possible to have?… ? • An aircraft registeredin State A • An operator with an AOC from State B AND • The C of A issued by State B? • Flight crew members with licences issued by State C and validated by State B? OST 06-1, Paris 25 - 27 January 2006

  20. 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 25 - 27 January 2006

  21. 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 25 - 27 January 2006

  22. 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 25 - 27 January 2006

  23. 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 25 - 27 January 2006

  24. Article 83 bis • Caution: • Responsibilities clearly defined? • Flag of convenience? • State of the lessor capabilities? • State of the lessee capabilities? OST 06-1, Paris 25 - 27 January 2006

  25. Article 83 bis • How are States informed ? • “List of Agreements and Arrangements Concerning International Civil Aviation Registered with ICAO” • Published on the WEB: • http://www.icao.int/icao/en/leb/ • Select aeronautical agreements, all signatories and (subject) 83 bis OST 06-1, Paris 25 - 27 January 2006

  26. 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 25 - 27 January 2006

  27. Key elements • Regulations • Implementation • Scrutiny • Authorizations • Monitoring • Safety oversight • Follow-up OST 06-1, Paris 25 - 27 January 2006

  28. Most importantly • DO NOT ALLOW Commercial arrangements/agreements to interfere with safety or dilute State responsibilities OST 06-1, Paris 25 - 27 January 2006

  29. AIRCRAFT LEASING OST 06-1 - E N D -

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