The European Union, through its aviation safety authority (EASA) has taken steps to address the future VTOL traffic management challenge with the development of an unmanned traffic management system, called the “U-Space.”… Continue Reading
“Fly along with me,” sings Dave Grohl, “I can’t quite make it alone.” We can imagine eVTOL developers singing along to this as they work towards autonomous flight, as so many of the vehicle models will have to commence operations – however briefly – with a pilot onboard. But the ultimate viability of the eVTOL … Continue Reading
As the global economy becomes more interconnected, aviation takes on an increasingly central role in our collective economic growth. The aviation industry supports 65 million jobs and enables the best part of $3 trillion in global GDP annually. If aviation were a country, it would rank among the world’s largest economies. With the loss of … Continue Reading
Developments in environmental regulation for the aviation industry have gathered momentum over the last year, notwithstanding the challenges arising from the pandemic and the related groundings. Last month saw the publication of plans for the UK Emissions Trading System, which is proposed to take the place of the European Union Emissions Trading System when the … Continue Reading
On 24 May 2020, the German government announced that it had agreed an extensive €9 billion rescue package for Lufthansa, including a significant recapitalisation leading to a government shareholding of 20 per cent. The European Commission indicated that any approval of the proposed bail out would be subject to slot divestitures at Lufthansa’s Frankfurt and … Continue Reading
The impact of COVID-19 (“Coronavirus”) on aviation is becoming more pronounced by the day, with the International Air Transport Association (“IATA”) yesterday asking that airport slot allocation rules be suspended to prevent airlines from losing their take-off and landing slots on the basis of failure to meet the required 80% usage rates, as flights continue … Continue Reading
Background Leasing has been a staple of the aviation industry for more than 40 years, and has become increasingly attractive to the shipping industry over the last five years, particularly given the scarcity of traditional bank finance. Until 2017, Chinese money was the dominant force – particularly in aviation finance. However, the Chinese government has … Continue Reading
Speed read A party should not assume that the failure of its counterpart to provide or satisfy conditions precedent gives rise to an automatic right to terminate or not perform a contingent obligation, where it could have obtained or satisfied those conditions precedent itself. Summary The recent Odyssey Aviation Ltd v GFG 737 Limited[1] in … Continue Reading
It turned out to be an unhappy Valentine’s Day for the Airbus A380 and her admirers, as Airbus announced the scrapping of the A380 programme, with the last deliveries scheduled for 2021. It’s hardly a shock, however, after the fleet’s first retirement last year and with two of them already being parted out. The economics of … Continue Reading
At the end of last year I wrote a published piece entitled “The Allure of Investing in Aviation”. A client asked me this week whether, a year later, I stood by what I’d written. To answer that, you have to decide whether or not you think 2018 was a good year for the airline industry … Continue Reading
The Hong Kong conferences are over for another year, and our Aviation Finance team had another very productive week at the various sessions. It was great to see so many familiar faces and connect with new people, and doing so in what is fast becoming one of the world’s new aviation finance powerhouse jurisdictions gave … Continue Reading
In this blog post we take a brief look at export credit agency (“ECA”) supported finance in the asset finance industry, and the development of a new template loan agreement by the UK’s Loan Market Association. The role of the ECAs ECA finance describes transactions where states (whether by direct sovereign bodies or by separately … Continue Reading
Summary In last week’s case of Triple 7 MSN 27251 Ltd v. Azman Air Services Ltd,[1] Azman Air Services argued that two aircraft lease agreements were void under the English law doctrine of common mistake. The High Court considered this question and found that common mistake is only sufficient to void a lease agreement (or … Continue Reading
The sale and leaseback (“SLB”) model has been a key source of funding and portfolio management for lessors and airlines alike for some time now. There are two principal SLB transaction structures employed for new aircraft, as illustrated below. The first is the “back to back” sale, whereby an airline pays for and takes delivery … Continue Reading
What a year it has been! At the start of 2017, Reed Smith had no aviation finance team. We have now established teams in London, New York and Abu Dhabi (and we’re not done yet!). Across the board we have structured and closed a diverse range of transactions for lenders, lessors and operators alike (and … Continue Reading
As we open our Advent Calendars each December, thoughts inevitably turn to Christmas, the New Year, and to what the next year will bring. But this year we are also looking 12 months ahead to New Year 2019. Why? Because January 2019 will see International Accounting Standard (IAS) 17 replaced by International Financial Reporting Standard … Continue Reading
The Reed Smith aviation team have returned to their offices in London, New York and Hong Kong but memories of this year’s Airline Economics “Growth Frontiers” Hong Kong conference are still fresh in the memory (or as fresh as they can be with jet lag!). Hong Kong’s Grand Hyatt was packed to the rafters with … Continue Reading
