France has signed and ratified the Chicago Convention of 1944 on International Civil Aviation (the Chicago Convention); The 1948 Convention on International Recognition of Rights in Aircraft (the Geneva Convention); The 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention); France is not a party to the Convention on International Interests in Mobile Equipment and The Protocol to the Convention on Matters Specific to Aircraft Equipment (the Cape Town Convention); France is not a party to the 1933 Convention for the Unification of Certain Rules Relating to the Precautionary Arrest of Aircraft (the 1933 Rome Convention).

France is not a party to the Cape Town Convention.

a. Lease

A French court will uphold the choice of a foreign governing law in respect of an aircraft sales and purchase agreement and in respect of an aircraft lease agreement, unless the choice of foreign law is contrary to the European regulations on law applicable to contractual obligations, or to international conventions and treaties to which France is a party, or to French public order rules.

b. Security document (for example, mortgage)

In order to be given a priority right in France, any mortgage created on a French registered aircraft should be governed by the French transportation code and registered on the French aircraft register.

Subject to the above, mortgages on aircraft registered outside France will be recognized and enforced by the French courts if they are not contrary to French public policy rules or to any international treaty to which France is a party, such as the Geneva Convention, or to mandatory provisions of the 593/2008 European Regulation on law applicable to contractual obligations.

It is customary in France for an aircraft lender to create and register an aircraft mortgage  (“hypothèque”) on a French registered aircraft in order to have priority over unsecured creditors.

Foreign judgments are recognized and enforceable in France by French courts unless they are tainted by fraud, contrary to French public order, or unless the court had no competent jurisdiction.

Judgments issued by courts of European member States are directly enforceable in France  without a French court judgment in accordance with and subject to the provisions of  the European Council Regulation 1215/2012.

The French aircraft registry is an owner register and does not register the interests of an aircraft operator.

The aircraft owner must be a national of a State member of the European Economic Space or must be a company whose registered office or main establishment is located in a member State of the European Economic Space.

Filing is made on a standard written form with the French aircraft registry.

Must be attached to the request, mainly :

• documents evidencing the identity and nationality of the aircraft owner,
• bill of sale,
• certificate of cancellation of the former registration outside France,
• import licence and proof of the payment of any import tax and duty.

The French ministry of aviation may also in certain cases authorise the registration of an aircraft whose owner does not comply with the above rule when such aircraft is operated by a French airline company.

The aircraft registration is evidenced by a Certificate of Registration issued by the French aircraft register.

Aircraft mortgages (“hypothèques”) governed by French law on French registered aircraft are registered on the French aircraft register after the mortgagee has completed a standard form and filed an original copy of the mortgage instrument. An election of domicile must be made by the mortgagee inside the territorial jurisdiction of the civil courts having territorial jurisdiction over the town of the aircraft register (currently the civil court of Evry).

a. Ownership interest (for example, proof of title to third parties of ownership)

The aircraft certificate of registration is prima facie evidence of the aircraft ownership.

b. Lease (for example, perfects the status of the Lessor under the Lease)

Registration of a lease by the aircraft owner will only protect the owner against its potential liability for damages caused by the aircraft while it is on lease.

c. Security document (for example, secures priority over later registered security)

A registered mortgage will prevail over any subsequently registered mortgage and over any privileged claims such as taxes or social security contributions when such privileged claims are originating after the registration date of the mortgage.

Claims which may rank prior to a registered mortgage are, mainly, judicial costs incurred for the judicial sale of the aircraft, costs incurred for the rescue of the aircraft, and necessary costs incurred for the conservation of the aircraft.

Some statutory liens may take preference over a registered mortgage, such as mechanics liens.

An aircraft lease will have to be translated into French before it is produced before a French court.

There are no special formalities required to perfect Lessors’ rights. However, it is advisable to register aircraft leases with the companies register of Lessees in order to protect Lessors’ rights in case of Lessees’ bankruptcies.

There is no aircraft engines register in France. However, However, it is advisable to register aircraft engines leases with the companies register of Lessees in order to protect Lessors’ rights in case of Lessees’ bankruptcies.

In France, the typical security over French registered aircraft is a French aircraft Mortgage (“hypothèque”).

The mortgage document must indicate the amount of the secured debt, the contractual interest and the repayment terms.

When filing the request for registering the aircraft mortgage with the aircraft register, the mortgagee will have to provide the aircraft register with, inter alia, proof of its legal existence,  and evidence that the signatory of the request is duly empowered.

Captive insurance companies governed by French law are almost ignored in practice.

Cut-through clauses are legally effective in France.

The minimum requirements for the amount of third party liability cover are set at the European Union level and apply to all airlines of the European Union and also to all flights departing from or to the destination of a member State of the European Union.

The minimum coverage for damages suffered by passengers is currently 250,000 Special Drawing Rights (SDR), i.e. USD 350,000 at the rate of 1 SDR for USD 1.40.

In France, court orders are necessary for repossessing aircraft against the will of Lessees who are in default of payment. Summary proceedings are the quickest and usual  way. The leases are generally required to be translated, and proof of Lessees’ defaults and lease terminations must also be produced in court.

A mortgage governed by foreign law on a French registered aircraft will be given no priority in France.

Mortgages on aircraft registered in a State party to the Geneva Convention and created in accordance with the law of that State will be recognized and enforceable in France.

Deregistration of an aircraft from the French aircraft register may be made only at the request of its owner upon filing a standard form indicating the reason for the deregistration. All mortgages and any other registered right must be released and all registered leases must be deregistered. In case the owner is not the registered owner, a bill of sale must be produced.

Repossession and deregistration could mainly be prevented by the government in case of fraud, crime, or violation of the provisions of the transportation code.

Repossession may be opposed by the lessee in case it can show that the lessor has breached its obligations under the lease agreement.

In case repossession by a Lessor needs a court order, the summary proceedings may be very quick, and the documentation required is mainly the lease, proof of the lessee’s default and of the lease termination. It should be noted that in case the French lessee is bankrupt, the trustee in bankruptcy may in certain cases oppose the repossession.

Legal title is transferred when the aircraft sales price has been agreed between the seller and the purchaser. Registration of the owner with the aircraft register is prima facie evidence of ownership.

Enforcement and foreclosures of registered aircraft mortgages are made through court proceedings. Upon a judgment of foreclosure, the aircraft is sold in a public auction.

Enforcement and foreclosures of registered aircraft mortgages are made through court proceedings. Upon a judgment of foreclosure, the aircraft is sold in a public auction.

A 20% Value Added Tax is payable on the sales price of an aircraft sold in France, unless the sold aircraft is due to be immediately exported outside the European Union, or unless the sold aircraft is due to be used by an airline company which is flying at least 80% international flights.

Value Added Tax and customs duties are generally payable upon import of an aircraft, subject to exemptions depending on the tax and customs regime of the aircraft and on the future use of the aircraft.

There are generally no restrictions on transfers of funds through the banking system.

Foreign lessors may repossess their aircraft very quickly when there is no serious defense on the side of the lessee.

There are no reform currently in discussion in the aviation sector.

It is interesting to note that in 2003 a judgment by the State Council (“Conseil d’Etat”) has decided that ownership rights were guaranteed by the French constitution and that the Paris airports could not retain aircraft for default of payment of airport charges due by the lessees when the aircraft  leases had been terminated by the aircraft lessors. Judging the contrary would have unlawfully deprived aircraft owners of their rights to repossess their aircraft.

The French government has decided to postpone the due date of certain taxes payable by the French airline companies, has granted to Air France a State guarantee for 4 billion euros banking loans and has decided to directly lend 3 billion euros to that company.

The State guaranteed loan has been fully reimbursed by Air France in March 2023.

The European Commission authorized France to compensate Air France for part of its losses due to Covid travel restrictions up to a maximum of 1.4 billion euros.
The State aid authorised by the Commission under the recapitalisation plan has been fully reimbursed in April 2023.