Abandoned Aircraft and Statutory Liens
Reports have recently appeared in the media regarding three Boeing 747 aircraft that have been seemingly ‘abandoned’ at Kuala Lumpur International Airport (KLIA), Malaysia. The incident in Malaysia highlights the rights available to airport owners that allow them to detain and sell aircraft in order to satisfy outstanding charges.
The aircraft, bearing registration numbers TF-ARM, TF-ARN and TF-ARH, were all previously operated by Air Atlanta Icelandic until 2010, when they were reportedly returned to their owner. In a recent effort to find the owners of the unclaimed aircraft the airport owners, Malaysia Airports Holdings Bhd, placed adverts in local newspapers, stating that if the owners “fail to collect the aircraft within 14 days…, we reserve the right to sell or otherwise dispose of the aircraft”. As a result of the adverts being placed, Swift Air Cargo, publicly announced their ownership of the aircraft, stating that they had purchased the aircraft from a company based in Hong Kong in June 2015 and had been in ongoing negotiations with the airport owner.
What is the position in the UK for airport authorities?
In the UK, managers of many of the country’s key airports benefit from longstanding statutory rights afforded to them under s.88(1) Civil Aviation Act 1982. This legislation entitles an airport authority to enforce a statutory lien over aircraft where airport charges are outstanding. The legislation allows the airport to detain, pending payment, the aircraft, and if payment is not received within 56 days of the date that the detention begins, the airport can (with the permission of the courts) sell the aircraft in order to satisfy the outstanding charges.
These powers are not limited to the operator of the aircraft at the time the charges were incurred, nor are they limited to the particular aircraft in relation to which the outstanding charges were incurred. In other words, an operator can have its aircraft grounded by an airport as a consequence of a previous operator’s default in paying the airport’s charges. Additionally, the offending operator can suffer other aircraft in its fleet being grounded and possibly sold pending payment of the outstanding charges.
This incident highlights how airport authorities should ensure that they are aware of their right to enforce a statutory lien against abandoned aircraft where storage charges have been incurred against them. Equally, aircraft owners should also be aware of the right for airport owners to enforce a statutory lien against abandoned aircraft where airport charges remain outstanding.
If you have any queries about whether you may be entitled to enforce a statutory lien or about the consequences of an owner abandoning aircraft or letting a lessee abandon an aircraft and the impact of statutory liens, please contact a member of our Aviation team.
Author: Chris Wilson, Solicitor, Aviation
Published: 17 Dec 2015