Air travel in Kenya and the world over has seen a tremendous growth and uptake in the last decade. Investors and businesses are now increasingly partnering in the provision of air travel and related services. However, given the complex and sensitive nature of the management of aircraft operations, navigation, purchase, leasing and resale of aircraft parts, you need experienced lawyers in the aviation law industry to guarantee your legal protection in an Air Service Agreement.
How to Draft Air Service Agreements and Aircraft Services Agreements in Aviation Law
In this segment, FM Law delves into Air Service Agreements and Aircraft Services Agreements;
Air Service Agreements
An Air Service Agreement is a bilateral agreement to allow international commercial air transport services between signatories.
The following are the key steps towards a successful Air Service Agreement (ASA):-
- Background policy and market research
It is important to conduct market research and the prevailing economic and policy strategies relating to aviation before venturing into an ASA. Accordingly, it is imperative to analyze traffic routes and frequency in order to inform the choice of airline to partner with. During market research, it is also advisable to engage with other airlines to gain insights on how best to craft the ASA in line with the current aviation trends and practice.
- Draft the ASA
A comprehensive and well drafted ASA takes into account the International Civil Aviation Organization (ICAO) standards and practice as well as the national aviation policies, laws and regulations. It also contains specific clauses describing in detail the airlines, their route allocations, traffic and aviation rights, capacity and frequency of the flights and the air traffic rights of the airlines.
- Review and execution of the ASA
After drafting the ASA, the partner countries engage each other by involving legal and aviation experts to advise on technical and regulatory and compliance. The main component of the review discussions is to negotiate the scope of market access for both countries’ airlines, focusing on balance and competitiveness.
Partner countries also consider international compliance with safety regulations, including those set by the Kenya Civil Aviation Authority Lastly, the partner countries must settle on an appropriate dispute resolution mechanism to address any potential disputes arising from the operation of the ASA.
Aircraft Agreements
In Aviation Law Kenya, there are various types of Aircraft Agreement which contracting parties may enter into to govern their relationship with regard to aircrafts. An Aircraft Agreement may for instance relate to lease of an aircraft or purchase of an aircraft either through security or otherwise.
A well drafted Aircraft Service Agreement should contain important clauses such as the specific period of lease of the aircraft, the provision of security deposit by the lessee, a clause on the party responsible for taking out the aircraft’s insurance during the term of the lease, the geographical scope within which the aircraft may be flown by the lessee, the maximum and/or minimum allowable carrier capacity of the aircraft and the relevant and applicable aviation laws and regulations.
With regard to Aircraft Financing Agreements, the key clauses are identification of the specific security and/or collateral against which the purchase of the aircraft is being done, the facility being advanced, the repayment terms and period, default and the conditions attached to default on the part of the borrower.
Keen to offer the best legal services in the aviation sector in Kenya and internationally, F.M. Muteti & Co. Advocates is a leading Law Firm in the aviation space. The Commercial Law Department at FM Law has been pivotal in the steady growth and success in our entry into the Civil Aviation sector.
We advise our Clients on drafting aircraft and aircraft service agreements for sale of aircrafts, leasing of aircrafts, sale of aircraft spares and parts and advisory to airlines on compliance with international and local aviation laws and regulations.
Disclaimer: The information provided in this article is provided for information purposes only and does not constitute a legal advisory. We advise prospective Clients to get in touch with us for more comprehensive and contextualized legal advice.
