UK in EU airline insolvencies wrangle
Commons committee reveals struggle over moves to seize aircraft when airlines become insolvent
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.