Curtis, Mallet-Prevost, Colt & Mosle LLP has been involved in a diverse range of international aviation transactions, including: aircraft sales, financings and leases; airport and airfleet privatizations; airline regulatory issues; and joint ventures in aviation-related enterprises. In addition, the Firm is able to provide a full spectrum of legal expertise as needed by clients in the aviation industry, for instance, in mergers & acquisitions, litigation, project finance, immigration and environmental matters.

Aircraft Sales, Purchases and Financings

The Firm has extensive experience addressing the legal issues that arise in connection with the purchase and lease of aircraft and aviation equipment. Firm attorneys have handled numerous aircraft transactions, including:

• Representation in connection with the financing of aircraft fleet purchases through privatization.
• Analysis of financing structures for the purchase and lease of aircraft, including asset-based finance and long-term lease structures.
• Determining the eligibility of aircraft transactions for credit support in the form of direct loans and/or loan guarantees from U.S. government agencies.
• Analysis of U.S. government restrictions on the export of sensitive aviation technology and sales of aircraft to foreign militaries.
• Advice regarding the international and domestic tax implications of aircraft transactions.

Airline Regulation

The Firm maintains close relationships with firms which are highly specialized in regulatory practice before such governmental agencies as the Department of Transportation, the U.S. Customs Service and the Department of State, and have experience in areas including:

• Licensing
• Noise regulation and other environmental issues
• Code sharing
• Pricing
• Charters
• Airport access
• Aircraft registration and filing of liens

Representative Transactions Include:

Aircraft Financing and Leasing

• Representation of a major Latin American bank acting as lender in connection with the sale and leaseback of a passenger aircraft by a Latin American airline.
• Representation of the leasing company subsidiary of a major Latin American bank in connection with the acquisition of a private corporate aircraft.
• Representation of a Spanish banking organization in connection with its participation in the financing of the purchasing group in the privatization of a Latin American airline.
• Representation of a major international bank in the leveraged leasing financing of jet aircraft purchased by a major Asian airline.
• Representation of a major international bank in the leveraged leasing financing of jet aircraft purchased by a state entity.
• Representation of two major corporations in their purchases of jet aircraft.
• A US$12,250,000 financing for sale-leaseback of aircraft
• Counsel to the seller in the sale of beneficial interests in twelve commercial aircraft while on lease to major U.S. commercial airlines.
• Counsel to a U.S. airline in connection with the acquisition and financing of 35 New Airbus A318 and A319, to replace its entire fleet of Boeing aircraft.
• Counsel to the lessee/sublessor in a US$75 million US leveraged lease of an MD-11 freighter.

Federal Air Transportation Stabilization Board Loan Guarantee Program

The Firm represents the Air Transportation Stabilization Board (ATSB) in the implementation of its loan guarantee program. The ATSB was established by act of Congress to issue federal loan guarantees to U.S. air carriers that suffered financial loss in the aftermath of the September 11, 2001 terrorist attacks. The Firm represented the ATSB in the structuring, negotiation, due diligence investigation and documentation for the following transactions:

• ATSB guarantee of a $1 billion senior secured bankruptcy-exit financing by Bank of America, Kitty Hawk Funding Corporation, a commercial paper conduit, and Retirement Systems of Alabama for US Airways, Inc. and the issuance to the ATSB of a warrant representing ten percent of the equity in the airline’ s parent, US Airways Group, Inc.
• ATSB guarantee of Citibank’s $429 million loan to America West Airlines, Inc. and the issuance to the ATSB of a warrant representing one-third of the equity in the airline’s publicly-held parent, America West Holdings Corporation.
• ATSB guarantee of a $168 million senior secured loan by Govco, Inc., a commercial paper conduit, and Citibank to American Trans Air, Inc. and the issuance to the ATSB of a warrant representing ten percent of the equity in the airline’s publicly-held parent, ATA Holdings Corp.
• ATSB guarantee of a $45 million senior secured loan by Govco, Inc. and Citibank to Aloha Airlines, Inc. and the issuance to the ATSB of a warrant representing ten percent of the equity in the airline’s privately-held parent, Aloha Airgroup Inc.
• ATSB guarantee of a $70 million senior secured loan by WESTLB AG and Wells Fargo Bank, N.A. to Frontier Airlines, Inc. and the issuance to the ATSB of a warrant representing ten percent of the equity in the airline, which is publicly held.
• ATSB guarantee of a $30 million loan by Govco, Inc. and Citibank to World Airways, Inc. and the issuance to the ATSB of a warrant representing ten percent of the equity in the airline, which is publicly held.

Except in the case of America West, the ATSB loans were secured by all of the carriers’ unencumbered airframes, engines, spare parts, flight simulators, ground equipment, intellectual property and unrestricted cash.

Subsequently, the Firm represented the ATSB as principal secured creditor in the Chapter 11 bankruptcy proceedings of US Airways, Aloha Airlines and ATA Airlines. This included representing the ATSB in negotiating and documenting the terms on which the ATSB’ s loan was reinstated upon US Airways’ emergence from bankruptcy and merger with America West, the related restructuring of the ATSB-backed loan to America West, and the post-closing repurchase of the ATSB’s America West warrant by the new US Airways for $115 million.

The Firm also advised the ATSB in structuring the dutch auction of the ATSB’s Frontier Airlines warrant through Merrill Lynch, in World Airways’ merger with North American Airlines, and in the ATSB’ s private placement in the secondary market of its reinstated US Airways loan.

Air Cargo Company Joint Venture

The Firm acted for General Electric Corporation/Aircraft Engine Division (GE) in connection with the investigation and establishment of an air cargo company in Abu Dhabi, United Arab Emirates. GE sought to establish a cargo company in order to satisfy various military offset obligations it had incurred which required a degree of local investment. The Firm helped identify local Abu Dhabi partners and performed the necessary due diligence to conform with applicable U.S. law. The Firm helped in the preparation, negotiation and conclusion of the various joint venture agreements related to the establishment of the local company.

Mexican Airfleet Privatization

The Firm acted as legal advisor to J.P. Morgan in connection with the 1994 privatization of the air fleet maintained by Petróleos Mexicanos (PEMEX). The privatization took the form of a joint venture under which a private company acquired 51% of a newly formed company organized to acquire the airplanes, helicopters and related spare parts owned by PEMEX and to provide air transport services to PEMEX for a period of five years. The Firm assisted in structuring the transaction, drafting agreements and administering due diligence by potential purchasers.

Mexican Airport Privatization