ELFA Press Release
ELFA Files Public Comments with the FAA on Re-registration and Renewal of Aircraft Registrations
On February 28, 2008, the FAA proposed changes that would require the re-registration of all presently issued Certificates of Aircraft Registration and renewal of each Certificate issued after adoption every 36 months thereafter, as long as ownership is not transferred. If the certificates are not renewed within 90 days of the scheduled expiration date, then registration of the aircraft would expire and the registration number would be administratively cancelled. Docket Number FAA-2008-0188.
The ELFA, which represents companies in the $600 billion equipment finance sector, including many members who offer leasing and other financing products to commercial, corporate and general aviation owners and operators, is concerned about the risks, economic burdens and other adverse consequences that the re-registration and triennial renewal requirements proposed in the NPRM will have on aircraft financing providers.
Under current practice, aircraft financing providers have appropriately allocated to their lessees/customers all responsibility for aviation-related and other legal compliance, including any of the same relating to the operation, maintenance and registration of the aircraft.
Under this proposal as presently drafted, the rights of the financing parties could be severely jeopardized due to a customer’s non-compliance with the proposed registration requirements. These rights include the enforceability and priority of the financing party’s lien or other rights relating to the financed aircraft, the reliability of the required casualty and liability insurance policies, and the impairment of the ability of the customer to perform its financing obligations thus redounding to the financing provider’s detriment.
Although the ELFA agrees with the FAA that there is a need “to increase and maintain the accuracy of aircraft registration information in the Civil Aviation Registry,” the ELFA contends that the registration and other changes proposed in the NPRM would, if promulgated: (a) create significant burdens, expenses and risks to its financing party members with respect to existing financings and (b) could also materially impact the willingness of these financing parties to provide aircraft financings in the future.
The ELFA has suggested a number of concrete alternatives designed to meet the FAA’s policy goal without unwarranted risks and hardships to lenders and lessors in this marketplace. Specifically, the ELFA recommends amending the current Triennial Aircraft Registration Report (the Triennial) requirements by having the FAA provide appropriate notice of non-compliance with registration requirements to the owner and to lien holders or lessors of record.
The ELFA looks forward to working with the FAA on needed reforms to the aircraft registration system while protecting the rights and viability of aircraft financing providers.
ELFA comments re the NPRM are available for the media upon request; please contact Diane Zyats at dzyats@elfaonline.org
About ELFA
The Equipment Leasing and Finance Association is the trade association that represents companies in the $600 billion equipment finance sector, which includes financial services companies and manufacturers engaged in financing the utilization and investment of and in capital goods. ELFA members are the driving force behind the growth in the commercial equipment finance market and contribute to capital formation in the U.S. and abroad. Its over 700 members include independent and captive leasing and finance companies, banks, financial services corporations, broker/packagers and investment banks, as well as manufacturers and service providers.
For more information, please visit www.elfaonline.org ELFA is also the premier source for statistics and analyses covering the equipment finance sector. To access ELFA's comprehensive industry information, please visit http://www.elfaonline.org/ind/research/ # # #
Diane Helyne Zyats
Equipment Leasing and Finance Association
Phone Number: 202-238-3438
E-mail: dzyats@elfaonline.org