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24 November 20202 minute read

Aviation industry disruption and cross-border restructuring

Ireland has become one of the major centres in the world for aircraft leasing multinationals. It is estimated that over 60% of all leased aircraft worldwide are managed by Irish-based leasing companies; with more than 50 aircraft leasing companies, including 14 of the world’s top 15 lessors, based in Ireland.

Before COVID-19 restrictions, that market share translated into an Irish leased aircraft taking off somewhere in the world every two seconds. With over EUR100 billion of assets being managed by Irish-based lessors, the issues faced by the airline sector in light of COVID-19 presents both challenges and opportunities for clients, many of whom have operations in both Ireland and elsewhere.

An increase in restructurings is predicted for the aviation sector, with further cross-border solutions through the use of Chapter 11, Irish examinership and/or Irish statutory schemes of arrangement likely.

As the only law firm in Ireland with both US and international aviation and restructuring capabilities, we are uniquely placed to assist lessors through such processes. Having recently assisted Investec on the examinership of Irish airline, CityJet, we are also well placed to advise creditors and/or investors dealing with distressed situations or looking at distressed opportunities.

Interestingly, with the airline sector facing significant cash flow challenges for the foreseeable future, the trend towards leasing may actually grow in the short to medium term, as carriers seek further flexibility due to fluctuating demand. Indeed, we are already seeing substantial opportunities to assist multinational clients (whether lessors or lenders) in new or restructured leasing transactions.

If you or your clients would like more information on our aviation or restructuring practices, or require assistance in either area, please contact Conor Houlihan and Liam Mills.

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