The inclusion of engine pooling arrangements and rigorous maintenance requirements in operating leases frequently results in engines which formed part of a leased aircraft at delivery being off-wing. Off-wing engines create complications for transaction parties attempting to execute a sale of the aircraft. While these complications are not insurmountable, the marketplace has developed different approaches to address the off-wing engine scenario.
The trading of aircraft assets between industry participants is as dynamic, legally complex and fraught with intense negotiation as ever. Although transacting parties go to great lengths to protect their pre and post-closing positions by attempting to account for all eventualities in the applicable transaction documentation, mistakes that fall outside the protective ambit of such documentation can still occur.
The Cape Town Convention allows for any state to designate an entity within its territory as the entry point through which information shall or may be transmitted to the International Registry. Where a contracting state has so designated such an entity, any registration made which seeks to circumvent the applicable entry point will be invalid. However, there is an important exception to this rule.