Five things you should know about the detention and seizure of aircraft

Aviation Legal Update

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The Civil Aviation Act 1982 sets out the powers available to airport authorities to detain an aircraft if the aircraft operator fails to pay airport charges (such as landing fees, general terminal fees or other charges related to the use of an airport), as well as the procedures they need to follow in order to secure payment. This note sets out 5 main things you should know about the process.

What?

The airport authority has the power to detain either the aircraft itself or any other aircraft operated by the person in default. This is even if the charges were not incurred by the operator of the aircraft at the time of detention. The power to detain extends to equipment, stores and documents which are on board the aircraft at the time of detention, but the airport authority loses the right to detain where there is a dispute over charges or if sufficient security has been provided.

How?

In order to exercise the statutory power of detention of an aircraft, the airport authority must carry out some sort of overt act. This need not take a particular form, and a simple declaration to the operator that the aircraft has been detained would suffice, but so would any act that would effectively prevent the aircraft from being flown from the airport, such as issuing a notice of lien. An airport authority can also obtain a statutory fleet lien against the lessor of a leased aircraft and it will fall to the lessor to pay not only the outstanding charges attributable to their aircraft, but also those due by all other aircraft in the operator’s fleet. If an operator is insolvent, however, the airport authority will need either the administrator's consent or leave of the court before exercising its right to detain the aircraft.

Where?

The airport authority can detain the aircraft at the airport where the charges were incurred or at any other airport owned or managed by the airport authority concerned.

When?

The airport authority may detain at the time the charges are incurred, or at another time when the aircraft is at an airport owned or managed by the airport authority. Once the aircraft has been detained, the aircraft operator has 56 days to pay the charges due, after which the airport authority may sell the aircraft. In order to effect a sale of the aircraft, the airport authority must obtain leave of the High Court, which requires proof that the charges are due, proof of default and that the reason for sale is the default in payment. The airport authority must notify any persons "whose interests may be affected" by the determination of the court and those persons must have the opportunity to become a party to the proceedings.

Why?

In order to ensure that the airport authority obtains payment, where leave to sell is granted by the Court, it must try to achieve the best price reasonably obtainable. Failure to comply with this requirement will not invalidate the sale, but could result in a cause of action against the airport authority from any person suffering a loss as a consequence of the sale. The proceeds of any sale are applied in specific order, starting with payment of any excise duty or VAT; then payment detention; custody and sale expenses incurred by the airport authority; payment of airport charges as determined by the Court; payment of charges for air navigation services (dealt with separately under section 73 of the Transport Act 2000) and finally any surplus is paid to persons who have been stripped of their interests in the aircraft as a result of the sale.