Enforcement of Security over an Aircraft
17 March 2009
In the current financial climate, the question of how a bank can
enforce its security following a default under a loan secured on an
aircraft is a pertinent one. The difficulty with aircraft is that,
by their nature, they are able to fly into different jurisdictions
which may or may not be lender-friendly. Enforcement of the
bank’s security over the aircraft will not only depend upon the law
governing the mortgage over the aircraft, but also both the law of
the jurisdiction where the aircraft is situated at the time of
enforcement, and the law of the jurisdiction in which the operator
of the aircraft is incorporated. It is for this reason that a bank
will often also obtain a personal guarantee as this should ensure
that a borrower co-operates with the bank should it wish to realise
its security over the aircraft.