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Global aircraft trading system (GATS)Modernizing aircraft transfers
© Aviation Working Group. ALL RIGHTS RESERVED.
Aglobal aircraft trading systemdeveloped by the Aviation Working GroupFully electronic, with e-signatures, e-delivery of documents, and use of a secure e-ledger to record transactionsMakes the buying, selling, and financing of aircraft and engines on lease simpler and more efficientMain purpose is reducing the burdens on airlines, lessors, and financiers from aircraft tradingFuture electronic applications of GATS platform to substantially facilitate aircraft and engine sale, leasing, and financing transactions
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What is GATS
© Aviation Working Group. ALL RIGHTS RESERVED.
Each aircraft will be owned by a trust – created online –in aUS, Irish or Singapore branch. Trust structures have been used for decades covering a substantial part of the industry, and have proved efficientSale of aircraft equipment will be effected by an electronic transfer of the beneficial interest in a trust – rather than a metal transfer, leaving the lease and other basic transaction documents in placeNo need for a lease novation, thus significantly reducing time and cost burdensTransfer and related documents will be standardized, simple, and executed and delivered electronicallyAny ‘advanced requirement’ to a transfer or financing, agreed between the airline and its lessor, may be integrated into an electronic GATS transaction, preserving all rights and protecting all partiesVoluntary system open to all industry players
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© Aviation Working Group. ALL RIGHTS RESERVED.
How will GATS work
GATS avoids lease novations, substantially reducing time, cost, and burdenGATS uses standard and fully electronic form documents and processes for simple, consistent transfersGATS includesprotective ‘advanced conditions’which may enhance an airlines positionGATSreinforces the ‘no increased obligations’lease provision in favor of airlinesFuture uses of the GATS platform, such as on sub-leasing approvals, may improve airline efficiencies
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What are the benefits of GATS to airlines
© Aviation Working Group. ALL RIGHTS RESERVED.
GATS does not change any lease condition. It permits any agreed ‘advance requirements’ to transfers to become part of the electronic process, providing legal protections and substantially increasing efficiency
GATS avoids lease novations, substantially reducing time, cost, and burdenGATS uses standard and fully electronic form documents and processes for simple, consistent transfersStandardization and e-ledger increase liquidity in aircraft trading markets, producing economic benefits for the industry as a whole, including those related to contract terms and asset valuesClarity of legal rights in aircraft and engines in an easy-to-use, efficient, electronic ledger, based on secure technology, will strengthen rights under national lawAdditional security for banks in GATS transactionsGATS will increase the global acceptance of trusts for use in aircraft leasingGATS retains local tax considerations applicable to ownership transfersEfforts to strengthen tax treaty treatment of trust-based transactions
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What are the benefits of GATS to lessors and financiers
© Aviation Working Group. ALL RIGHTS RESERVED.
GATS is expected to launch at the end of Q2 of 2020, after which GATS e-form documentation may be usedTransition period now commencing (same forms but manual execution). Seewww.awg.aeroExisting trusts may be migrated into GATS by adopting GATS formsAWG is consulting with select airlines to ensure that GATS is designed to benefit airlinesAll of this is subject to final documentation and agreement, and updates will be provided over the coming monthsQueries relating to GATS should be directed [email protected]
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What is the timing of and process to implement GATS
© Aviation Working Group. ALL RIGHTS RESERVED.
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