UK in EU airline insolvencies wrangle

The UK is in a wrangle with the EU over measures to seize aircraft when airlines become insolvent.

A Cape Town convention agreed in 2001 specifies the moves to seize aircraft, but ratification of the move has become bogged down in rows over competence over insolvency rules.

The UK, France, Italy and Germany signed the convention, but the EU initially backed off.

The Commission maintains member states should not make declarations on remedies on insolvency, while the UK and other member states want to be free to do so.

A draft declaration confirming member states retain competence over the substantive rules for insolvency was agreed to enable the Commission to ratify the convention, but the issue has not yet been resolved, according to a report from the Commons EU committee.

Their report said the convention on the extent to which the security of asset finance for aircraft or other high value assets is recognised in national laws is required to reduce risks to the financier and cut the cost of asset-based financing.