Australia will sign up to the Cape Town Convention in a move that should provide access to lower cost aircraft finance, Minister for Infrastructure and Transport, Anthony Albanese, announced at the annual RAAA conference this morning.
From 2014, when the government expects the treaty will be brought into law, it is claimed airlines could save around $330,000 on the purchase of a new ATR 72, or up to $2.5 million on an A380. Savings on the purchase of used aircraft will also be available, which the government suggests will be valuable to regional airlines.
The Cape Town Convention aims to standardise financial transactions and registration on movable assets including aircraft, rail stock and space equipment. Lower cost finance is facilitated through the treaty by providing creditors with an internationally-recognised set of rights in the event of default by a debtor, and allows creditors to register their interests in an international register that guarantees priority of their claim against other parties.
Today’s announcement, which was welcomed by RAAA Chairman Michael Bridge, culminates four years’ of work on accession to the Convention by the federal government. It follows a consultation paper issued in 2010 seeking stakeholder views on whether to accede to the Convention.
Around 50 countries are now parties to the Convention, which came into force from 2004.