The nature and structure of the global aviation industry has fundamentally changed over the past four decades for reasons such as deregulation and reduced levels of governmental financial support. Operators have also adopted more outsourcing of aircraft flight operations and ground handling across international borders and are using code-sharing, alliances and leasing to gain operational flexibility and reduce capital outlays.
Due to these changes, an aircraft is increasingly likely to have multiple transfers of nationality over the course of its useful life, yet many regulations and related processes continue to implicitly assume that operators own and retain an aircraft for most or all of its useful life. AWG refers to such changes in nationality as a ‘cross-border transfer’ or “an XBT” of an aircraft and the related field of regulation and practice as ‘cross-border transferability’ or simply ‘XBT’.
The overriding objective of AWG work on XBT is to seek alignment of international regulation, national law, and best practices with the realities of cross-border transfers while at all times maintaining or improving the highest standards of safety through processes that reduce regulatory overlap and duplication and promote consistency, accuracy and simplicity. That entails working with all impacted constituencies to significantly accelerate current efforts (mainly undertaken through regional efforts and bi-lateral agreements) to develop harmonized regulations and procedures that streamline aircraft importations and re-registrations, confirmations of airworthiness and issuance of applicable certifications.
A side benefit of such alignment is a reduction of the significant costs and operational burdens currently imposed on regulators, owners and operators which do not enhance aviation safety. AWG commissioned an economic impact assessment in the field of regulatory requirements impacting XBTs. The study, carried out by SGI Aviation, concludes that, over a 20-year period, the cost of dissimilar but not safety-related regulatory requirements impacting XBTs could exceed as much as USD 7 billion. The study includes several recommendations designed to reduce such costs without compromising, and in some respects even enhancing, safety.
Antiquated and inconsistent XBT regulations and processes have been addressed by certain jurisdictions through bi-lateral agreements on aviation safety (BASAs). AWG notes with approval the 2008 EU – US bilateral agreement on aviation safety (Agreement between the United States of America and the European Community on cooperation in the regulation of civil aviation safety). AWG has contributed to implementation of this landmark agreement through work in the technical bodies created under that agreement. Moreover, this BASA has provided a useful framework for much of the work being done by the International Civil Aviation Organization (ICAO) and the ICAO XBT Task Force discussed below.
Building on 10 years of work with the industry, regulators, and international organizations, AWG will commence work (feasibility and content) on a practitioners’ guide on the cross-border transferability of aircraft (guide). The guide would bring together, develop, advance, and seek to secure recognition of, best practices when changing aircraft nationality (XBT), including in fleet changes in the context of C-19 return to service. It would also address calendar age-based restrictions relating to changes of nationality. The reference standard for such best practices would be rules and guidance issued or given by ICAO, FAA, and EASA. The guide would refer to such standards and rules and differences between them. It would also, over time, add country-specific annotations to its transfer document checklist for many other aviation countries around the world and would summarize requirements, interpretations, and lessons learned in such countries.
The guide would be designed for use by industry in XBT activities, especially day-to-day transfers and regulatory interfaces.
AWG has retained Blake, Cassels & Graydon to provide support over the next year for its work on the guide.
For more than 10 years AWG has been leading, or contributing materially to, numerous ICAO and industry projects that have improved particular key processes and regulations bearing on XBT. All of these projects, as well as AWG’s work with the ICAO XBT Task Force discussed in the next section, have revolved around simplifying XBT processes and regulations and encouraging global harmonization of those processes and regulations, in all cases incorporating best practices on safety and efficiency. Our work prior to the formation of the ICAO XBT Task Force is summarized below and depicted in this schematic.
Creation of an international repository of import requirements
Harmonization of transfer record requirements is critical to XBT process simplification, but progress can be advanced in the meantime by assuring that participants in an XBT are fully aware of the importing country’s then prevailing requirements, particularly any that are unique to such country. To that end, AWG supported development of the repository of national import requirements established in 2013 by ICAO as part of its database on matters covered by Circular 95. AWG considers ICAO to be uniquely positioned to organize and support such an international repository, and that the repository can be a valuable tool to advance ICAO’s mission of developing harmonized safety standards in international civil aviation.
The repository is a vehicle for accessing national import requirements and creates a context of general transparency. This transparency, in turn, establishes an important foundation for development of international norms and standards based on best practices and, in due course, should itself promote harmonization and standardization of import requirements.
In addition to providing input on the repository’s structure and content, AWG commissioned and funded a project to populate the repository with granular, and thus useful, information from a number of representative states. Member state commitment to assuring the on-going accuracy of the database will be essential to the realization of cross-border transfer safety enhancements and efficiencies by states and their aircraft operators and owners.
Acceptance of electronic forms of records
AWG supports the universal use of records created or stored in an electronic format (electronic records) and their acceptance by regulators and industry stakeholders as the functional equivalent of paper records in connection with the transfer of aircraft registration. Such acceptance by regulators would remove a barrier to greater use of electronic records by operators, which constrains their ability to realize the safety benefits and cost efficiencies throughout their operations (i.e., not just in connection with XBTs). Full realization of such benefits and efficiencies will also require development of protocols allowing records to be efficiently interchanged between different electronic systems.
Simplification and standardization of transfer record requirements
AWG supports cooperative work among regulators, operators, lessors, and other impacted stakeholders in the development of simplified and standardized transfer record requirements. In many cases such enhancements can be rapidly accomplished through applicable industry trade associations, thus facilitating and expediting important aspects of two objectives above. AWG’s work with ICAO and IATA on a transfer document list in the ICAO Airworthiness Manuals, and publication by AWG and IATA of the template incident/accident clearance statement and lease transition records checklist are examples of work in this area.
Adherence to type certificate life limitations, including elimination of calendar age-based import and use restrictions
Some jurisdictions have imposed actual or de facto limitations on importation and/or use of aircraft based on calendar age that are more restrictive than the data-driven and approved airworthiness criteria established in the applicable type certification.
An AWG-commissioned study by Professor John Hansman of MIT, “Analysis of Impact of Aircraft Age on Safety for Air Transport Jet Airplanes”, concludes (at p. 19) that there is no correlation between ‘fatal accident rates and aircraft age up to 27 years of age for commercial jet aircraft’ and ‘the evidence does not support age-based import restrictions as an effective measure to increase aviation safety’ assuming proper regulation. For ease of reference, Professor Hansman prepared a PowerPoint summarizing the study.
In light of Professor Hansman’s study, AWG believes that ICAO guidance materials (including the Airworthiness Manual) should expressly support adherence to type certificate criteria and discourage age-based import or use restrictions.
ICAO has completed or is working on numerous initiatives that directly and indirectly contribute to improving XBT processes, including creation of the Circular 95 Database, development of a globally harmonized approach to approved maintenance organizations (AMOs), electronic aircraft maintenance records (EAMR), publication of a manual covering Article 83bis practices (Article 83bis manual) and others.
AWG long believed that its XBT principles and objectives outlined in the previous section would be accelerated through ICAO XBT guidance materials that support harmonizing a range of items impacting cross-border transferability. These include the following features:
- standardizing the list of documents and information to be required by an importing state in order for it to process an application for accepting registration of an aircraft and issuing a certificate of airworthiness (with any exceptions being timely posted to the Circular 95 Database)
- where possible, standardizing the content and form of such documents, particularly export certificates of airworthiness and release certificates
- encouraging and facilitating use and acceptance of electronic records
- facilitating aviation authority use of a delegation mechanism in discharging XBT functions in order to promote more global consistency in processes and relieve resource pressures and enhance efficiencies
- promoting reconsideration of calendar age-based import restrictions in light of the reduced resource strains the foregoing features will enable as well as aircraft technology improvements that have essentially eliminated correlation between aircraft age and accident rates
Prompted in part from interest generated by extensive AWG consultations in 2015 and early 2016 with ICAO, certain member states and international organizations such as IATA, ICAO convened an XBT experts meeting on 8/9 June 2016. AWG submitted a working paper for, and was actively engaged at, such meeting. The 34 national and organizational participants at the meeting agreed on a variety of conclusions and recommendations that were consistent with and expanded upon the AWG principles and projects described above.
The ICAO 39th Assembly, held from 27 September to 7 October 2016, supported actions proposed in working papers on XBT submitted by AWG and United States (and related working papers submitted by France and IATA), including AWG’s proposal to accept the conclusions and recommendations of the 8/9 June XBT experts meeting. Such recommendations contemplate, among other things, the formation of an ICAO Secretariat XBT Task Force to coordinate numerous existing and proposed ICAO, industry and other stakeholder activities related to enhancing the safety and efficiency of the XBT process.
In March 2017, the ICAO Council accepted the Assembly’s recommendations, including formation of an XBT Task Force. The XBT Task Force has met three times since formation, most recently 29 January to 01 February 2019, and anticipates holding a final session in the first quarter of 2020 to complete new XBT guidance materials and plan an XBT symposium tentatively scheduled for the third quarter of 2020 at ICAO Headquarters in Montreal. AWG has participated actively in all of these meetings and to the work advanced between meetings by all subgroups of the XBT Task Force.
As explained below, the guidance materials developed by the XBT Task Force are expected to incorporate substantially all the features for which AWG has advocated.
XBT guidance materials
From the beginning of AWG’s XBT work, a major objective has been to consolidate all ICAO XBT guidance material into a single, identifiable document, with a very strong preference for that document to be a manual (under ICAO procedures manuals are more easily amendable). However, when XBT Task Force working groups began drafting sections for such a stand-alone XBT manual, it became apparent that a stand-alone XBT manual would of necessity repeat large sections of the ICAO Airworthiness Manual (Doc 9760) (Airworthiness Manual), most likely complicating, rather than simplifying, the XBT process. Recognizing this, the XBT Task Force E (with AWG concurrence) accepted a recommendation of the ICAO Secretariat to move the guidance pertaining to registration currently in the Airworthiness Manual into a new Registration Manual, and develop separate sections or appendices in each of those Manuals containing guidance covering special considerations in the airworthiness certification and registration processes arising in XBT situations.
AWG’s suggestion to use checklists or indices of the documents necessary to accomplish specific elements of an XBT-related registration or airworthiness assessment has been tentatively accepted after lengthy discussions and continued reservations by some XBT Task Force participants.
We have explained the benefits commercial parties have realized from adoption of the AWG/IATA transfer document checklist and its application of standard sequencing, numbering and naming conventions. AWG will continue active advocacy for, and likely propose drafts of, key checklists, for inclusion in the new Manuals and/or auxiliary materials.
Standardized document forms
The new XBT guidance material will recommend that States adopt standard forms for certain documents, including several that reflect important AWG input. Significant efficiency and safety improvements are expected from a revision to the model form of export certificate of airworthiness that eliminates the past practice of having the exporting CAA certify that the aircraft complies with airworthiness requirements of the importing county (an XBT Task Force recommendation that has now been approved by the ICAO Airworthiness Panel).
A useful model form certificate of de-registration being worked on by a separate Article 21 Task Force is also expected to be included. We anticipate that the push for adoption of electronic documents and platforms described below will accelerate document standardization, which will in turn lead to efficiency and reduce safety risks arising from inconsistent terminology, interpretations and standards.
Significant efficiency and safety improvements are expected from a revision to the model form of export certificate of airworthiness that eliminates the past practice of having the exporting CAA certify that the aircraft complies with airworthiness requirements of the importing county (an XBT Task Force recommendation that has now been approved by the ICAO Airworthiness Panel). A useful model form certificate of de-registration being worked on by a separate Article 21 Task Force is also expected to be included. We anticipate that the push for adoption of electronic documents and platforms described below will accelerate document standardization, which will in turn lead to efficiency and reduce safety risks arising from inconsistent terminology, interpretations and standards.
Although existing ICAO provisions contemplate delegation, the potential efficiency and safety benefits therefrom are not being fully realized, especially in the areas of import due diligence and ongoing maintenance and oversight. The European model of continuing airworthiness maintenance organizations (CAMOs), and, more broadly, procedures used in BASAs offer the core best practices for outlining a global delegation mechanism.
AWG has argued that the new XBT guidance materials should include step-by-step advice on when States should consider delegation, how to provide appropriate oversight and putting in place any necessary legislative and regulatory authorizations. Although the XBT Task Force working group handling delegation drafted no detailed guidance materials for the most recent XBT Task Force meeting, AWG submitted working paper calling for fully developed guidance on an XBT delegation mechanism as originally contemplated by the relevant XBT Task Force task card and terms of reference. AWG also volunteered specific language to the ICAO Secretariat that has been largely incorporated into the first draft.
Calendar age-based import restrictions
At the third meeting of the XBT Task Force, AWG submitted a draft section for the new XBT guidance material that discourages use of calendar age-based import restrictions and instead promotes data-based criteria more dependably assuring airworthiness. The AWG draft discusses the Hansman and other studies showing a lack of correlation between calendar age and safety and encourages States to reconsider existing import restrictions adopted as a means of coping with resource constraints.
A survey conducted by the XBT Task Force revealed that some jurisdictions’ age-based limitations reflect concerns about having resources sufficient to assess the accuracy and completeness of records kept under the supervision of other jurisdictions.
The new guidance materials are expected to observe that those concerns will be significantly addressed by simplification arising from greater global consistency and standardization, expanded use of electronic records and implantation of processes enabling States to meet their Chicago Convention oversight responsibilities though delegation of certain XBT functions and duties to ICAO-certified entities or individuals.
With guidance of this nature, AWG is better-positioned to work with States in developing importation rules that have a data-based foundation and strategies that address their resource issues. For example, India recently eased its calendar age-based restrictions (from 15 to 18 years in the case of commercial passenger aircraft) citing the analysis AWG provided to the XBT Task Force.
Electronic records and platforms
At the outset of XBT Task Force, AWG was primarily advocating for greater use of electronic records by operators and acceptance by regulators in connection with XBTs and for keeping the Circular 95 Database up to date. As the work of the XBT Task Force progressed, the ambitions for greatly expanded use of electronic records and platforms expanded to development of a comprehensive electronic tool to facilitate the XBT process. The XBT Task Force proposed that the initial version of the tool focus on information and guidance for the aircraft owner as contemplated by AWG’s original objectives. However, Phase 2 would result in an advanced concept tool enabling the XBT process to be conducted electronically. There may also be potential links to, or synergies with, the GATS platform.
Unregistered aircraft; baseline airworthiness standards
AWG drafted proposed guidance material on so-called ‘stateless aircraft’, that is, aircraft which have been de-registered by an exporting state but not promptly re-registered in an importing state. On a related subject, a document prepared by AWG for submission by the XBT Task Force to the AIRP calls for a clarification of what baseline airworthiness standards should be applied to an aircraft that has been off-registry for any extended period of time, and by which aviation authority. This paper explains that no Certificate of Airworthiness can be issued unless an aircraft is on a registry, and, therefore, has an applicable standard of airworthiness against which to be assessed, and a regulator who has the authority to make such assessment. This issue can arise in the context of an aircraft deregistered pursuant to an IDERA before a new jurisdiction of registry has been selected. Difficulties in conducting maintenance and obtaining authority to fly the aircraft can arise quickly in that and other contexts. We will be pursuing this item provided, always, that there is no risk to limiting the automaticity of IDERA based de-registration under the Cape Town Convention.
AWG maintains working relations with a wide range of governments, international organizations, and industry groups seeking cooperative work on cross-border transferability. These relations will be broadened and deepened, as AWG’s work in this field develops.
Parties and groups with which AWG consults on XBT include:
- the International Civil Aviation Organization (ICAO)
- European Aviation Safety Agency (EASA)
- the Federal Aviation Administration (FAA)
- civil aviation authorities in many other countries
- the International Air Transport Association (IATA); see attached AWG statement on select IATA documentation
- regional aircraft associations
- the International Society of Transport Aircraft Trading (ISTAT)
- aviation industry bodies involved in MRO activities