Aviation & Aircraft Leasing

Aviation is a high-value, highly regulated industry where every transaction crosses borders. Whether you are an airline growing its fleet, a lessor placing aircraft in the Kingdom, or a financier securing its position, you need advisers who understand both the commercial realities of your business and the legal framework around it.

• Leasing has become the main way airlines build their fleets. Operating leases made up less than 5% of the market in the 1980s and have grown significantly since. The International Air Transport Association (IATA) expects about half of all aircraft worldwide to be under an operating lease in the next decade. Leasing lets airlines add aircraft for a set period without the economic risk of owning them. Every lease, however, carries significant legal, technical and financial exposure.
• IATA notes that there is no uniform protocol for aircraft leases. It also notes that because leasing is often the lessor's core expertise, an airline can find itself at a disadvantage, especially when a multinational leasing company is dealing with a smaller airline. Our role is to close that gap. We draw on the IATA Guidance Material and Best Practices for Aircraft Leases and on recognized market practice to give our clients a clear, balanced position from the letter of intent through to redelivery.

• Letter of intent and term sheet. We negotiate the key commercial and technical terms at the start, because the letter of intent deserves the same care as the final lease, if not more. These terms include delivery and redelivery conditions, insurance, rent and deposits, maintenance compensation, sublease rights and governing law.
• Lease negotiation and drafting. We negotiate operating, finance, wet and dry leases, as well as sale-and-leaseback transactions. Key provisions include:
  • representations and warranties
  • conditions precedent
  • security deposits and commitment fees
  • maintenance reserves and end-of-lease compensation
  • events of default and grace periods
• Delivery and acceptance. We advise on delivery conditions, protection against delays and the certificate of acceptance. This matters because aircraft are usually accepted "as is, where is," which leaves the incoming lessee with little recourse once acceptance is signed.
• Regulatory transfer. We handle aircraft registration, airworthiness certification and import requirements when an aircraft moves between jurisdictions.
• Cape Town Convention protection. We advise on international interests, IDERAs and creditor remedies, which give lessors and financiers an internationally recognized security position and help lower funding costs.
• Redelivery and end of lease. We advise on redelivery conditions, late-return exposure, end-of-lease payments and de-registration. Late-return rent increases of 100% or more are not uncommon.
• Defaults, repossession and restructuring. We advise on enforcement, repossession and insolvency-related risk. The governing law of the lease determines whether a default has occurred, but the law of the lessee's jurisdiction determines whether and when a lessor can enforce in a bankruptcy.

In the Kingdom, the General Authority of Civil Aviation (GACA) governs air transport, safety standards, economic regulation and airport operations. We help clients with GACA licensing, approvals, aircraft registration and compliance. We also advise on how Saudi requirements interact with the FAA and EASA airworthiness standards that lessors commonly require.

Our advice is grounded in the three treaties at the core of international aviation:

• The Chicago Convention (1944) governs aircraft registration, airworthiness and crew licensing, and established ICAO.
• The Montreal Convention (1999) governs airline liability to passengers and shippers on international flights.
• The Cape Town Convention (2001) protects lessors and financiers of airframes, aircraft engines and helicopters.

• Regulatory and compliance: operator approvals, airworthiness and certification matters, and passenger rights compliance.
• Liability and disputes: passenger, baggage and cargo claims, accident response, and aviation litigation and arbitration.
• Transactions and investment: mergers and acquisitions, joint ventures, and investments in airlines, airports, maintenance providers and ground handling.
• Emerging areas: drones and unmanned aircraft systems, and environmental frameworks such as CORSIA.

• Leasing expertise informed by industry practice. Our lease advice follows IATA best practice and recognized international market standards.
• Local strength, international reach. We know Saudi law, the courts and the regulator, and we work comfortably within the global aviation framework.
• Commercial focus. We focus on what protects value: your aircraft, your cash flow and your ability to operate.
• Bilingual service. We advise in Arabic and English.

• Lease Restructuring & Negotiations: Acted as KSA co-counsel alongside specialized UK aviation law firms to advise an international aircraft lessor on restructuring and negotiating long-term operating lease agreements for narrow-body commercial airframes placed within the Kingdom.
• Cross-Border Regulatory Alignment: Collaborated with international legal counsel to guide a multinational carrier through General Authority of Civil Aviation (GACA) regulatory compliance, ensuring foreign airworthiness and registration requirements seamlessly aligned with local Saudi civil aviation frameworks.
• International Asset Security: Served as local counsel pairing with international transactional teams to structure security interests under the Cape Town Convention, overseeing the localized protection of international interests and IDERA filings to secure foreign financiers against regional default risks.
• Delivery & Technical Risk Allocation: Worked jointly with lead international aviation counsel to safeguard an incoming lessee during complex "as is, where is" delivery negotiations, cross-referencing IATA master terms with local commercial codes to insulate the client from late-return rent liabilities.