The trading and financing of aircraft equipment subject to leases is an increasingly important part of the aviation industry. In recent years, as the number of trades has significantly increased, inefficiencies have developed. That has resulted in wasted time and resources for airlines, lessors and financiers alike. AWG is addressing these inefficiencies through its development of the Global Aircraft Trading System (GATS), a system designed to modernize aircraft equipment trading and financing.
The main purposes of GATS are to facilitate the trading and financing of aircraft equipment by reducing the burdens on lessees, lessors and financiers and to promote aircraft equipment trading and financing in an efficient, secure and predictable manner which, above all, protects the rights of all parties involved, including and especially the lessee’s rights under the lease. GATS will increase the transparency of and confidence in aircraft trading, and further protect rights, by introducing a secure, live and searchable electronic ledger displaying details of ownership and security interests in GATS.
The rights of lessees will be protected in particular by prohibiting transfers unless agreed conditions in favor of the lessee have been satisfied or waived. GATS further reinforces the ‘no increased obligations’ lease provisions in favor of lessees.
GATS is a fully electronic system, with e-signatures, e-delivery of documents and use of a secure e-ledger to record transactions. It is a voluntary system open to all industry players.
Guidance materials for GATS along with the GATS instruments for each jurisdiction are available on the GATS platform.
The GATS platform contains numerous instructional and education videos.
A list of trust companies cleared by AWG as trustees for the GATS system can be found here.
The criteria for approval of GATS trustees can be found here.
On 16 March, 2020, the Office of the Aeronautical Center, Central Region Counsel, Federal Aviation Administration, issued an opinion concluding that the GATS initial transitional trust documents complied with applicable federal law, were in due form for filing, and will support aircraft registration in the name of a GATS trustee. In line with the efficiency objectives of GATS, that opinion is a ‘global opinion’, which intends to cover any specific GATS transaction (using the electronic, non-amendable GATS documents), coupled with needed certification.
On 22 May 2020, the Office of the Aeronautical Center, Central Region Counsel Federal Aviation Administration, completed its review of the GATS digital signature format and issued an opinion concluding that the GATS digital signature satisfied the criteria outlined in the FAA’s 13 April 2016 notice of policy clarification for acceptance of documents with digital signatures (policy clarification).
The GATS Platform streamlines document production and execution, in part by leveraging the benefits of digital signature technology. The GATS Platform digital signature technology is:
(a) designed and developed to highest industry standards, and
(b) complies with the policy clarification.
The GATS platform has a legal advisory board (GP-LAB) formed under the auspices of the Aviation Working Group. The GP-LAB functions are:
All work of the GP-LAB is purely advisory in nature and not transaction-specific. AWG may accept or follow the foregoing or not in its sole discretion.
Members of the GP-LAB are:
The initial administrator of the GP-LAB is Dominic Pearson of WFW.
AWG has a tax advisory board (TAB). One of its core functions is to assist and advise AWG on general tax issues related GATS.
The main objective is to have a consistent view on core taxation items relating to GATS, for AWG’s general planning and for the benefit of the industry.
All such work is purely advisory in nature and not transaction specific.
KPMG, PwC, Deloitte, and EY are members of TAB.
The current coordinator of TAB is KPMG (Joe O’Mara).
The GATS Platform will have a technology advisory board (GP-TECH-AB) formed under the auspices of the Aviation Working Group.
The GP – TECH-AB functions are:
All such work is purely advisory in nature and not transaction-specific. AWG may accept or follow the foregoing or not in its sole discretion.
Members of the GP-TECH-AB will be announced shortly.
GATS business aircraft group has been formed to assist on assessment and analysis of GATS. McAfee & Taft will coordinate that group.
While created at AWG’s request, this group does not operate under the auspices of AWG.