Aviation Law: Contracts, Financing and International Interest

The cross-border nature of the aviation industry requires international conventions, financing mechanisms, sector-specific regulation and national laws to be considered together.

Even a single aircraft purchase or lease may involve several legal systems. The State of registration, the jurisdictions of the owner and lessee, the financier’s jurisdiction and the law chosen in the contract may differ.

Aircraft sales, finance and operating leases, engine leases, maintenance, repair and overhaul (MRO), insurance and financing agreements therefore require careful treatment of ownership, security, registration, default, insurance, delivery and redelivery, alongside commercial terms.

The Cape Town System and Aviation Finance

The 2001 Convention on International Interests in Mobile Equipment and its Protocol on Matters Specific to Aircraft Equipment are important instruments of international aviation finance.

The system seeks to provide international legal certainty for certain rights in high-value mobile assets, including qualifying airframes, aircraft engines and helicopters.

In financing and leasing transactions, the following may form important parts of the legal structure:

• creation and registration of international interests;

• remedies available following default;

• mechanisms for aircraft deregistration and export;

• creditors’ rights in insolvency.

Aviation financing may consequently require legal analysis extending beyond a conventional financing agreement.

Carrier Liability

Liability arising from international carriage by air is another important dimension of aviation law. The Montreal Convention of 1999 is a principal international instrument governing certain aspects of liability for the carriage of passengers, baggage and cargo.

An aviation company’s legal risk assessment therefore extends beyond aircraft financing and leasing. Passenger and cargo operations, operational liabilities, insurance, maintenance contracts and relationships with third parties must also be considered.

Key Contractual Issues

Depending on the transaction, particular attention may be needed for governing law, jurisdiction or arbitration, events of default, transfer of title and risk, insurance, maintenance standards, delivery and redelivery, sanctions and export controls, and force majeure.

Effective contract management in aviation is therefore a risk management process beginning with the structuring of the transaction, rather than only after a dispute arises.

Türkiye is a party to the Cape Town Convention and the Aircraft Protocol. Their application to a particular transaction nevertheless requires consideration of the qualifying asset criteria and relevant State declarations; registration and default mechanisms do not produce identical results in every transaction.

Sources

ICAO — Cape Town Convention and Protocol (2001): sistemin kapsamı / framework

UNIDROIT — Aircraft Protocol: sözleşme metni / treaty text

UNIDROIT — Aircraft Protocol: taraf devletler ve beyanlar / States Parties and declarations

ICAO — Montreal Convention (1999): resmî hukuki belgeler / official legal materials

2920 sayılı Türk Sivil Havacılık Kanunu — SSB resmî mevzuat dizini / official legislation index

This article has been prepared on the basis of legislation in force and official sources available as of 28 September 2026. It is intended for general information purposes only and does not constitute legal advice in relation to any specific transaction or dispute. The State of registration of the aircraft, the jurisdictions of the parties, the nature of the transaction, the governing law, applicable international conventions, the financing and security structure, and the particular circumstances of the matter may affect the applicable legal framework and outcome.