The accident in the Sinai involved a Russian airline, a plane registered in Ireland and an aircraft manufactured in France. Sounds a lot like a “flag of convenience” and some have questioned whether the country of registry has the ability to assure the airworthiness of that airplane—an assertion of some currency in the United States.
The back story of why this aircraft was registered in a country with no geographical contact with the A-321 operations opens up the role of the aircraft operating lease and the finance companies which own these aircraft. These companies have considerable knowledge, capabilities and financial interests in the long term airworthiness of these leased pieces of equipment.
Metrojet is a Russian carrier and its operations are regulated by its country’s Interstate Aviation Committee, its Civil Aviation Authority. The A-321 (EI-ETJ) involved is owned by the Wilmington Trust SP Services (Dublin) Ltd and by virtue of the incorporation of this company (its parent is a US company), it is registered in Ireland. The airworthiness of El-EJT is subject to the jurisdiction of Irish Aviation Authority (IAA). That regulatory body, which has a good reputation, made the following statement with regard to this specific A-321:
“The aviation authority says that because the plane was Irish-registered, ‘in April/May 2015, the Irish Aviation Authority (IAA) conducted an annual review of the aircraft certifications in support of its annual Certificate of Airworthiness renewal process and all certifications were satisfactory at that point in time.’”
The AP article characterized this report by saying the IAA “found its safety documentation in order earlier this year.” If that was meant to be a technically accurate statement, it begs the question of whether the IAA conducted a “paper inspection” or did its airworthiness staff actually examine the aircraft?
What is the legal role of Wilmington Trust SP Services (Dublin) Ltd. in this multi-national situation?
A 2014 website lists the 50 largest aircraft leasing companies. Wilmington is included and some of the better known financial institutions are among the leaders:
|3.||SMBC Aviation Capital||Ireland|
|8.||Aviation Capital Group||USA|
|11.||Air Lease Corporation||USA|
|12.||Nordic Aviation Capital||Denmark|
|16.||Avmax Aircraft Leasing||Canada|
|18.||Avolon Aerospace Leasing||Ireland|
|19.||CDB Leasing Company||China|
|21.||Standard Chartered Aviation Finance||Ireland|
|22.||MC Aviation Partners||Japan|
|24.||Jackson Square Aviation||USA|
|25.||Hong Kong Aviation Partners||Hong Kong|
|28.||Cargo Aircraft Management||USA|
|29.||Guggenheim Aviation Partners||USA|
|34.||Apollo Aviation Group||USA|
|37.||AVIC International Leasing||China|
|43.||Saab Aircraft Leasing||USA|
These companies are headquartered in most of the world’s leading economic leaders and have assets scattered around the globe; for example a 2011 presentation by a CIT executive included this map of the location of its leased aircraft:
The inventories of the other leasing companies would show a similar array.
Operating leases are designed by financial parameters and one of the most important calculations is the value at the end of the lease. The owning company’s financial goal is to minimize the loss of future life of this airplane. Airworthiness of this “equipment” and its continuing maintenance of this Airbus or Boeing product are critical factors to that long term asset valuation.
Not surprisingly, most of these smart companies have huge libraries of the world’s CAA regulations and of the OEMs instructions for maintaining their products. In addition, their organizations include technical experts who know these rules and manuals better than the regulators, manufacturers and operators (they may be paid better?).
Anyone, who has participated in the connected transactions of ending one lease and starting with the next lessee, is all too aware of the superior knowledge of the lessors. These financial institutions will let the airline know that there are too many deferred MX items or that the cycles remaining for the AD check are short, for example, and what needs to be done by a specific date.
That description closely approximates what the traveling public assumes what the CAAs are supposed to do. It could be argued that the best leasing companies constitute a hidden safety regulator. While the country in which they are incorporated may be considered a flag of convenience, the leasing company technical operations professionals provide global airworthiness safety coverage at a very high level.
Literally the leasing companies have the greatest financial stake in the plane’s airworthiness.