Civil Aviation Amendment Act passes all stages

The passing this evening of the Civil Aviation (Cape Town and Other Matters) Amendment Act sees New Zealand become a party to the Cape Town Convention and associated Aircraft Protocol, which will reduce finance costs for companies purchasing and leasing aircraft.


Transport Minister Steven Joyce says this will improve certainty for investors in high-value mobile equipment such as aircraft, and reduce financing costs for aircraft operators.


"Joining the Convention means New Zealand will become part of an international system to protect commercial security interests in mobile aircraft equipment."


The Cape Town Convention and Aircraft Protocol allows lenders and lessors to register their security interests in mobile equipment on an international register. They also offer globally consistent legal remedies for financial defaults by debtors, as well as additional rights, including the ability to remove an aircraft from a national civil aircraft register and export it.


"The Convention offers greater certainty to all parties allowing lenders and lessors to offer discounted rates to aircraft operators in States that are party to the Convention," says Mr Joyce.


"This will reduce aircraft financing costs for most of the country's commercial air transport operators in future aircraft acquisitions, helping improve the bottom line for both the aviation and finance sectors."


Air New Zealand has previously announced the acquisition of 23 new aircraft over the next six years. The Aviation Industry Association has forecast that the remainder of the industry could acquire some 160 aeroplanes and over 400 helicopters in a similar period. These operators stand to benefit from accession.

Potential savings in finance costs over this period are estimated to be between $18 million (for premium reductions in the cost of export credit guarantees) and $325 million (on loan interest rates).


The Amendment Act will also result in a more streamlined civil aviation rule-making process.