Our lawyers have been at the forefront of aircraft financing and operating leases while only a few lawyers in China are able to provide legal services in this field. So far, we have advised many well-known domestic and international financial institutions, airlines, leasing companies and manufacturers in cross-border or domestic lease transactions of aircraft, engines and other equipment. As a result of the excellent legal services we provide, we have received high praise from clients and in doing so earned a good reputation in this field. These are some of the many deals we have been involved in:
·Japanese leveraged leases
·Financing of Boeing aircraft guaranteed by the Export & Import Bank of the United States of America
·Financing of Airbus aircraft supported by Export Credit Agencies (ECA) of Europe
·U.S.tax-based leases, like ETI and LKE
·German leveraged leases
·France tax-optimized leases
·Japanese operating leases
·Operating leases and sale and leaseback
·Offshore securitizations of the aircraft assets subject to leases into China
·Cross-border aircraft leases with financings provided by banks in China
·Setting up joint ventures engaging in airline operation,aircraft leasing, and aircraft maintenance
We have participated in nearly every type of aircraft financing lease in Chinese civil aviation industry and are quite familiar with the structures, features, background details and merits of different transaction types. Having represented many major international and domestic banks, leasing companies, aircraft manufacturers and domestic lessees for such a long time, we fully understand the requirements and practices of each client in different transactions and are well aware of the risks and major concerns of every party to a transaction. We have assisted in the importation of more than 600 aircraft into China, including not only large and medium sized passenger and cargo jets but also small private jets and helicopters. In addition we have represented engine manufacturers and engine leasing companies in many lease or sale-leaseback transactions relating to Pratt & Whitney, GE and Rolls-Royce engines. Clients and legal professionals at home and abroad recognize the quality of our services.
Run Ming has set a new record in aircraft financing and leasing in the year 2007. Run Ming has provided legal services for the deliveries, financing and leasing of about 150 aircraft, among which, the representative deals are the French tax leases with Air China, China Southern Airlines, Shanghai Airlines, China Cargo Airlines and the sales of various aircraft assets in China or securitizations by foreign operating lessors and financial institutions. Furthermore, we have also advised our clients in structuring new transaction models, including assisting two Chinese leasing companies in their offshore financing of nearly 10 aircraft and subsequent operating leases with several Chinese airlines. One of the high profile securitizations, the Airspeed securitization (its asset pool includes one aircraft on lease to Hainan Airlines) initiated by RBS Aviation Capital, to which we have been involved as PRC counsel, has been awarded by AirFinance Journal, a Euro Money publication, as Most Innovative Deal of the Year. In addition, in the high profile deal of purchasing 21 aircraft (including one on lease to China Southern Airlines) by Dubai Aerospace Enterprise (DAE)，we have been acting as the PRC legal counsel to both DAE and Barclays Capital.
Arranging appropriate transaction structures for clients
Aircraft purchasing, financing and leasing are by nature cross-border or trans-national and the structures thereof are generally accepted internationally. As the economic and legal system in China is still evolving , current transaction types used by foreign parties inevitably face certain restrictions under existing Chinese laws. Similarly, domestic banks, lease companies and certain airlines lack the experience in or even knowledge of international common practices due to their limited participation in such transactions and have to learn to use existing international models and adapt them to their needs.Therefore, certain changes have to be made to existing transaction structures and models to some extent so as to meet the specific requirements in China and the particular needs of clients. Based on our extensive knowledge and clear understanding of Chinese laws (especially specific regulations relating to finance, foreign debts, foreign exchange, taxes, insurances, civil aviation, customs, etc.) and our large wealth of experience and understanding in foreign legal systems and related international common practices, we are capable of providing our clients at home and abroad with the most accurate and complete information as well as correct advice with regards to the circumstances of specific transactions to assist them in establishing, at the beginning of a transaction, an appropriate structure either suitable to the situation in China or which comply with international practices.
Participating in negotiations, resolving disputes and making registering aircraft rights for the purpose of protecting client's rights and interests
An aircraft is a high cost item,thus large-scale financing and loan arrangements are necessary for its ownership and use. Meanwhile, an aircraft is also a high-tech means of transportation with a large operation risk. Accordingly each party to an aircraft transaction will face high business risk. How to protect the aircraft itself and the rights and interests of the owner and investor, relevant lending banks and other financial institutions and the Chinese aircraft operator through legal and commercial arrangements, is the basic responsibility of the lawyers concerned, especially in cross-border transactions. With our extensive experience in commercial negotiation, dispute settlement and risk handling, we are able to timely and effectively protect our client's interests and endeavour to balance the interests of all parties to the transaction.
In addition, thanks to our full breadth of experience and in-depth knowledge, we are highly valued by the relevant authorities and agencies in China with which we have always maintained a close relationship. We have also been party to the development of the Chinese registration system of aircraft rights, and know what the relevant specific provisions are and fully understand what is intended by the particular legislation . We can take full advantage of this to ensure that the rights and interests of the parties concerned and the aircraft asset are legally protected in a timely and efficient manner, by promptly and fully completing the initial registration, registration amendment and deregistration of the ownership, mortgage right, possession right and priority right in or with respect to the aircraft.
Updating the laws of different jurisdictions and representing new transactions
A key factor that can affect the transaction structure of the financing or leasing of an aircraft is tax-related regulations under the jurisdiction of the owner or lender of the aircraft. New tax regulations are emerging from time to time with continued economic development. We keep a close eye on dynamic developments relating to tax regulations in the main jurisdictions (e.g. USA, Germany, France and Japan) and dedicate ourselves to providing a better service to domestic or foreign clients by taking advantage of such new developments. Within China , our lawyers handled the first Japanese Leveraged Lease (JLL), the first German Leveraged Lease and the first and only ETI and LKE Structured Financing Lease approved by the Internal Revenue Services of the USA. Ours is the legal team in China which has participated most frequently, most deeply and most extensively in new aircraft financing or leasing transactions recently carried out in China, such as France Optimized Lease and Japanese Operating Lease (JOL) and even the back-trip operating leases of domestic entities' offshore SPV.