EUROCONTROL Authorisation Letter Practice Points

Nathan Leavitt is an Associate in our San Francisco office

As the United Kingdom moves closer to ratifying the Cape Town Convention and the Aircraft Protocol, it remains to be seen whether the United Kingdom will preserve the so called "fleet lien" for air navigation charges, including those issued by EUROCONTROL. A fleet lien permits a lienholder to seize and sell an aircraft in satisfaction of charges owed by the aircraft's operator, whether or not the seized aircraft is owned by the operator or is even the aircraft that actually incurred the charges.1 Under Article 39 of the Cape Town Convention, the United Kingdom could make an election to preserve the priority of these non-consensual national law interests over registered international interests. Indeed, the recommendation of the UK Government to Parliament is that they do just that.2 Either way, lessors and financiers of aircraft operated in European airspace will need to continue to monitor the payment by their operators of bills issued by EUROCONTROL.

Since 1971, the EUROCONTROL Central Route Charges Office (CRCO), located in Brussels, has administered the Route Charges System, which funds the air traffic management (ATM) services related to the administration of flight routes, terminal navigation and communication services for its member states in Europe. The Route Charges System operates on a "user pays" basis. It is intended to be a regional cost-recovery system. A charge is levied for each flight in EUROCONTROL airspace.

Authorisation Letters

To monitor these statements of account, EUROCONTROL requires a letter, in a very specific format, from the operator, granting the operator's designee access to this information. Despite the specificity, there are several common leasing and financing scenarios that this letter format does not address, such as, (i) how to factor in headlease/sublease and other multi-layered structures, (ii) how to grant access to a servicer or financer rather than the actual aircraft owner/lessor, and (iii) how to remove old authorisation letters without the operator's cooperation. Time and experience with the CRCO's current practices have shown how to successfully address these and other issues in ways that satisfy the concerns of lessors, financiers, servicers and the CRCO.

In 2011, in the interests of efficiency and security, the CRCO introduced a new program for lessors and financiers that permits electronic access to route charges provided that the...