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robsaw
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 5:14 am

vfw614 wrote:
German law is absolutely relevant for airberlin. Isavia can park as many snowploughs in front of the aircraft as they want, airberlin, under German insolvency law, is simply not legally allowed to pay debt from the time period before the insolvency proceedings to Isavia (or any other creditor).

And I am pretty sure that this is not a German pecularity, but a universal principle of insolvency law as long as the rule of law stands. Because otherwise, it would give rise to such cowboy antics as shown by Isavia everytime a company is put under adminstration as most creditors would try to extort money from the company under administration at the detriment of other creditors.

Isavia was under no obligation to give airberlin credit in the past. They did and so took the risk at a time when the dire straits of airberlin were well-known. They took a gamble and lost.


German law is relevant to the release of this specific aircraft ONLY IF Iceland is party to a treaty that allows for German insolvency law to be enforced in Iceland (you have not cited any clear evidence that such is the case, and I do not know the answer for certain either).

No it is not a German peculiarity and it is quite general, however, the matter of jurisdiction is paramount. In the absence of a treaty, German insolvency law is irrelevant in Iceland. Yes, you are quite right - creditors would and DO pull this sort of maneouvre (it isn't "extortion", it is lawful seizure to enforce payment of a debt). When an insolvent company does not either by virtue of treaty or by filing parallel creditor protection in multiple jurisdictions to protect against such seizure it is the insolvent company that has failed to protect its assets properly.

This is nothing to do with gambling and losing, it is purely a matter of debt and collection of such debt when the debtor is insolvent and doing so in accordance with the laws which can be enforced in any particular jurisdiction.

If you want to argue the law, then argue law, which means cited legislation, treaties and regulations - principles alone won't win in a court of law.
 
robsaw
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 5:20 am

planemanofnz wrote:
LGAviation wrote:
The beauty of sovereignty in this case might be hampered by the fact that the Lugano convention and other agreements provide for that court rulings from Germany are generally enforceable in Iceland.

There are ways around the Lugano Convention, including invoking its public policy exception.

Cheers,

C.


The Lugano Convention already includes an exemption covering insolvency and bankruptcy. However, there is a separate EC/EU regulation on cross-border bankruptcy/insolvency - that without some expert in such law providing advice is indecipherable legalese to me.
 
robsaw
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 5:42 am

Not a lawyer - but found the following items on a law site discussing Icelandic bankruptcy law:
- The Lugano Convention has been ratified in Iceland and applies to " rules relating to debt recovery by foreign creditors," This is an issue regarding a domestic creditor.
- "Iceland has ratified the Nordic Bankruptcy Convention 1933. Under the convention, bankruptcies in Norway, Sweden, Finland and Denmark are recognised in Iceland.
Insolvency proceedings in other jurisdictions are not recognised in Iceland. Bankruptcy proceedings in another jurisdiction do not bar a creditor in Iceland from levying executions against assets situated in Iceland belonging to the foreign bankrupt entity"
 
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cougar15
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 9:49 am

Any news of what happened to the poor pax planned on the return sector? Guess they cant just rebook them on Icelandair....... ??
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hvusslax
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 10:02 am

cougar15 wrote:
Any news of what happened to the poor pax planned on the return sector? Guess they cant just rebook them on Icelandair....... ??


All but three of them chose to fly to Berlin with AB which departed later that night.
 
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SheikhDjibouti
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 10:26 am

TWA772LR wrote:
Slightly OT, if a flight declares an emergency does the airline have to pay the landing fees in that situation?

This might be where insurance comes to the rescue.
If the emergency is a medical emergency due to a passenger, it's probably a slam-dunk.
If the emergency is a technical failure, the carriers own insurance policy might cover such breakdowns.
In the case of some engines, they are maintained under contract with the OEM - maybe they cover it.
But I'm no expert in aviation law & operating practice, so it's just my two cents worth.
Nothing to see here; move along please.
 
aviationaware
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 10:56 am

Poor management on the part of Air Berlin, that's all this is.
 
csavel
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 12:23 pm

RJWNL wrote:
Good to see the Viking "pay due tribute or suffer the consequences" attitude is still alive in Iceland and that they hopefully did learn something from the financial crisis in stead of playing along with the dirty games again :-)



So is KEF in New Jersey now? That's how Tony Soprano would do it. "Nice A320 you got here. Shame if anything happened to it."
I may be ugly. I may be an American. But don't call me an ugly American.
 
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Revelation
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 12:36 pm

hvusslax wrote:
cougar15 wrote:
Any news of what happened to the poor pax planned on the return sector? Guess they cant just rebook them on Icelandair....... ??


All but three of them chose to fly to Berlin with AB which departed later that night.

Seems then the 2nd a/c was owned by a different lessor, or the lessor didn't file the paperwork in time.

aviationaware wrote:
Poor management on the part of Air Berlin, that's all this is.

True, but maybe they don't give a bleep any more since they are shutting down shortly.
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Kilopond
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 12:56 pm

I think the Iclandic authorities committed a mistake: they arrested a Singaporean plane that belongs to BOC Aviation. Airberlin couldn't care less, I'm afraid.
 
dtw2hyd
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 1:07 pm

Kilopond wrote:
I think the Iclandic authorities committed a mistake: they arrested a Singaporean plane that belongs to BOC Aviation. Airberlin couldn't care less, I'm afraid.


I am glad Iceland did that? In what world only one vendor(ie., lessor) gets all the privileges. What about other vendors? This moveable asset crap has gone too far..

Imagine aviation if no one services a leased plane without cash payment.
All posts are just opinions.
 
dochawk2
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 1:18 pm

dtw2hyd wrote:
I will say this aloud. Kudos to Iceland for standing up for other vendors and for not signing this crappy treaty. No one knows how these signatories signed, maybe they were drunk.


I applaud your comment.

The fact is that everyone of the ground personnel have been already paid for the work they preformed on that AB plane. All the use, wear and tare, on the equipment (albeit relatively minor) has been done and cannot be undone. I hope the airport repos the plane and sells it at auction to cover the debts. That would send a strong message.
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Finn350
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 1:20 pm

Kilopond wrote:
I think the Iclandic authorities committed a mistake: they arrested a Singaporean plane that belongs to BOC Aviation. Airberlin couldn't care less, I'm afraid.


On the contrary, there is now a party whose interest it is to have their plane back and who is not prohibited from paying for it by a German court.
 
vfw614
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 1:25 pm

robsaw wrote:

German law is relevant to the release of this specific aircraft ONLY IF Iceland is party to a treaty that allows for German insolvency law to be enforced in Iceland (you have not cited any clear evidence that such is the case, and I do not know the answer for certain either).

No it is not a German peculiarity and it is quite general, however, the matter of jurisdiction is paramount. In the absence of a treaty, German insolvency law is irrelevant in Iceland. Yes, you are quite right - creditors would and DO pull this sort of maneouvre (it isn't "extortion", it is lawful seizure to enforce payment of a debt). When an insolvent company does not either by virtue of treaty or by filing parallel creditor protection in multiple jurisdictions to protect against such seizure it is the insolvent company that has failed to protect its assets properly.

This is nothing to do with gambling and losing, it is purely a matter of debt and collection of such debt when the debtor is insolvent and doing so in accordance with the laws which can be enforced in any particular jurisdiction.

If you want to argue the law, then argue law, which means cited legislation, treaties and regulations - principles alone won't win in a court of law.


Please re-read what I wrote.

1) airberlin, not Iceland, is bound by German insolvency law. And that means that as many snowploughs Isavia parks in front of an aircraft (that actually is not owned by airbelrin, but only wears its livery), airberlin as the debtor cannot make any payment to creditors for debt accrued before the insolvency filing. Making any such payment by an insolvent debtor is forbidden by German law, whatever tantrum Isavia throws. If Isavia does not like that element of German law, they should not do business with German companies, operate on a cash-only, advance payment basis, demand a monetary bond, ask for collaterals, whatever. If they do not, they are not different from anyone doing business with a company that may become insolvent or not. Like, for example, the employees.

2) A wholly different question - and a question of Icelandic law - is whether Isavia can impound a third-party asset that is not onwed, but simply used by the debtor. That may or may not be the case, but is nothing that concerns airberlin as they are merely the possessor, but not the owner of the impunded aircraft. Now, generally speaking, if you lease a car form a car dealer and don't pay insurance, or if you rent an appartment and don't pay electricity, from a legal point of view it would be very unusual if the company that you owe money could not only seize said car or appartment that you only possess and do not own, but also sell/auction it off in order to settle the debt of the possessor at the detriment of the owner. If this is the case under Icelandic law, it would be a rather peculiar feature as property rights would not be effectively protected (which usually is one of the cornerstones of a legal system as it is a prerequisite to attract investment). What you can usually do is to seize property the debtor has possession of because there is a rebuttable legal assumption that property possessed is also owned. But if possession and ownership are not with the same person, the owner usually has a legal remedy to get possession of the seized asset from the creditor.

3) Now, on a totally different page - a more practical one - is of course if the owner is happy to go through the whole legal process to reclaim possession of the asset he owns by wasting time in courts, paying lawyers etc. He might take a more practical approach and pay off the third-party debt in order to lease out the aicraft again instead of having it sit idle on the ground for months with the doubtful prospect of being able to claim damages from the debtor or creditor. Hence my mentioning of "extortion" - Isavia is probably playing this card. Which does not mean that they can lawfully not only impound third.party assets, but also convert them into cash at their pleasure.

4) What I do not know but others may be able to add is whether Isavia has indeed legally seized the aircraft pursuant to Icelandic law - or whether they have simply blocked the aircraft from moving in the hope of airberlin coughing up some dough to settle the debt. If so, this will not work as far as airberlin is concerned, see above 1)
 
aviationaware
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 2:57 pm

vfw614 wrote:
2) A wholly different question - and a question of Icelandic law - is whether Isavia can impound a third-party asset that is not onwed, but simply used by the debtor.


Iceland is not a party of the Cape Town Treaty. It's entirely Air Berlin's fault for operating this asset into Icelandic jurisdiction, either for not knowing or understanding the legal consequences of doing so or for not caring. Any further discussion of this seizure is moot.
 
vfw614
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 3:48 pm

So you assume that with Iceland not being a signee of the Cape Town Treaty the general (Icelandic) law of sequestration does not apply to an aircraft, which, after all, is just a movable property with wings on it? What the treaty does is to modify general rules for security interests in a jurisdiction by replacing them with an international standard. So if the international standard does not apply, there are no rules at all in Iceland? That would be very surprising. It is one of the ineradicable myths on a.net that airlines, airports and other stakeholders in aviation (other than passengers) are above and beyond the general laws that apply to everybody else. What the relevant body of law on sequestration in Iceland says regarding sequestration of movable property in general and aircraft in particular nobody has explained here. I have just given an explanation how rules on sequestration generally look like as these rules try to balance the conflicting interests of creditor and non-debtor owner of property. Maybe they are different in Iceland, but if so, they would be somewhat unusual and certainly not help Iceland's position in international trade.
 
asdf
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 4:55 pm

well.

seams like KEF has the law ( of island) on its side

but is this a clever move?

if this goes through lessors will no longer accept that their customers, the airlines are flying their property to island

and they will stop any aircraft leasing to companies based in island

was it that worth?
 
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LTU330
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 5:22 pm

asdf wrote:
well.

seams like KEF has the law ( of island) on its side

but is this a clever move?

if this goes through lessors will no longer accept that their customers, the airlines are flying their property to island

and they will stop any aircraft leasing to companies based in island

was it that worth?


They might stop Airlines in insolvency from flying to Iceland with their Aircraft. Aside from that scenario I don’t see a problem.
 
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Finn350
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 5:47 pm

vfw614 wrote:
So you assume that with Iceland not being a signee of the Cape Town Treaty the general (Icelandic) law of sequestration does not apply to an aircraft, which, after all, is just a movable property with wings on it? What the treaty does is to modify general rules for security interests in a jurisdiction by replacing them with an international standard. So if the international standard does not apply, there are no rules at all in Iceland? That would be very surprising. It is one of the ineradicable myths on a.net that airlines, airports and other stakeholders in aviation (other than passengers) are above and beyond the general laws that apply to everybody else. What the relevant body of law on sequestration in Iceland says regarding sequestration of movable property in general and aircraft in particular nobody has explained here. I have just given an explanation how rules on sequestration generally look like as these rules try to balance the conflicting interests of creditor and non-debtor owner of property. Maybe they are different in Iceland, but if so, they would be somewhat unusual and certainly not help Iceland's position in international trade.


The relevant Icelandic law is explained here

https://www.isavia.is/english/news/isav ... arges/1658
 
asdf
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 5:50 pm

this part of the iceland law is not limited on insolvencies
it covers any debit, doesnt it?

as a lessor i have usually a general idea how the financial situation of my customers is
but i dont know how much they owe whom exactly ...
 
vfw614
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 7:51 pm

Finn350 wrote:
The relevant Icelandic law is explained here

https://www.isavia.is/english/news/isav ... arges/1658


Thank you. That exactly proves my point.

We are not talking about a legal sequestration which would ultimately allow the creditor to convert the seized asset into cash by auctioning it off or selling it. We are simply talking about the right to park a snowplough in front of the aircraft without being punishable for coercion. That is all that can be done as the debtor is not the owner of the asset. It merely allows Isavia to enter into a power game, but they have no legal position whatsoever to touch the asset itself, particularly no powers to expropriate the lessor of the aircraft.

As Art. 136 indeed seems to give powers to block the aircraft until not only the operator, but also the owner has paid the bills of the operator, it means that any lessor runs the risk that his property will be seized in Iceland due to unpaid bills by the lessee. That this is a far from normal legal situation can easily be derived from the fact that airports that are owed money by airberlin up and down Europe are not pulling similar stunts at the moment. I seem to remember cases where airlines that had disputes about unpaid bills in a country deliberately scheduled leased aircraft instead of owned aircraft to avoid the aircraft getting seized.

To me, it appears as if Isavia was trying to play the usual game that is being played when an airline has not paid bills - park a snowplough in front of the aircraft, make the captain produce a company credit card or have him the monies wired to the airport by the airline and after a short delay, the aircraft departs. They were probably not aware that under German law nobody at airberlin was in a legal position to pay the accrued debt off. If they really force the lessee to pay the debt to get hold of the aircraft again, this could really backfire as far as operations of leased aircraft in Iceland are concerned.
 
dtw2hyd
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 8:58 pm

vfw614 wrote:
... It is one of the ineradicable myths on a.net that airlines, airports and other stakeholders in aviation (other than passengers) are above and beyond the general laws that apply to everybody else.


It is about fairness. Without even giving a chance to collect dues for services rendered, Cape Town Treaty allows the lessor to repo. Go to the German court, get the payment released to the airport and fly away. The plane is not going to go anywhere, just bring the check.

Kingfisher owed close to $100Million to several airports. Lessors placed their planes with new customers and airports left holding bin bags because of Cape Town Treaty.

Like a member said up thread, just because the services and consumables are not assets, other vendors are not charities.
All posts are just opinions.
 
vfw614
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 9:19 pm

No business in the world is forced to render services without payment. Airports are not in a more difficult position than any other business. The problem only arises if a business does not demand cash or upfront payment or bank guarantees in exchange for servies rendered. It is a dilemma every business is faced with and there are hundreds of companies that offer nothing else than intelligence on how credit-worthy a potential or current business partner is. It is absolutely not the case as if Isavia could not have done anything to avoid the current situation they are now in. And I don't think it is fair that the lessor as the owner of the property now has to suffer from Isavia's inattentiveness. Isavia could have long pulled the plug and stopped servicing airberlin, thus forcing it to quit the routes to Iceland. They did not do that probably also because it is goverment owned and airberlin hauled hundreds of tourists to Iceland each week.
 
cerealspiller
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 9:20 pm

This is a classic example of why we have lawyers.
 
ei146
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 9:34 pm

vfw614 wrote:

As Art. 136 indeed seems to give powers to block the aircraft until not only the operator, but also the owner has paid the bills of the operator, it means that any lessor runs the risk that his property will be seized in Iceland due to unpaid bills by the lessee. That this is a far from normal legal situation can easily be derived from the fact that airports that are owed money by airberlin up and down Europe are not pulling similar stunts at the moment. I seem to remember cases where airlines that had disputes about unpaid bills in a country deliberately scheduled leased aircraft instead of owned aircraft to avoid the aircraft getting seized.


Probably it was the original purpose of this law to avoid this situation.


vfw614 wrote:
To me, it appears as if Isavia was trying to play the usual game that is being played when an airline has not paid bills - park a snowplough in front of the aircraft, make the captain produce a company credit card or have him the monies wired to the airport by the airline and after a short delay, the aircraft departs. They were probably not aware that under German law nobody at airberlin was in a legal position to pay the accrued debt off. If they really force the lessee to pay the debt to get hold of the aircraft again, this could really backfire as far as operations of leased aircraft in Iceland are concerned.


I agree. Just because the law allows you to do something, you don't have to do it. Isavia now created a terrible situation. This plane was arbitrarily picked. Air Berlin can not pay for old bills (and even Isavia should have found that out in the meantime). This means they indiscriminately selected one lessor as hostage for Air Berlin's debts. Why this lessor and not one of the others? I don't know if this is lawful in Iceland or not, I find it wrong anyway.

The should release the plane ASAP. And file their claim with the administrator like everybody else.
Last edited by ei146 on Sat Oct 21, 2017 9:38 pm, edited 1 time in total.
 
Kilopond
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 9:35 pm

dtw2hyd wrote:
[...]Like a member said up thread, just because the services and consumables are not assets, other vendors are not charities.


Yet, it will be interesting to watch how this particular, extremely crazy story ends. Scarcely will BOC find a new home for their 18-year-old veteran aeroplane within a few weeks. Will ISAVIA offer them a discount for the storage fees?
 
bourbon
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 10:07 pm

[twoid][/twoid]
TWA772LR wrote:
I didn't even know AB flew to KEF.

Slightly OT, if a flight declares an emergency does the airline have to pay the landing fees I. hat situation?


Bringing your question back to ON TOPIC - If this Air Berlin plane had done an emergency diversion into Keflavik instead of a revenue flight, would they have impounded the plane?
 
asdf
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 11:33 pm

bourbon wrote:
[twoid][/twoid]
TWA772LR wrote:
I didn't even know AB flew to KEF.

Slightly OT, if a flight declares an emergency does the airline have to pay the landing fees I. hat situation?


Bringing your question back to ON TOPIC - If this Air Berlin plane had done an emergency diversion into Keflavik instead of a revenue flight, would they have impounded the plane?


i suppose there is no difference WHY an asset is within icelands borders
the point is if the airline has open depts to an iceland company
 
ltbewr
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 11:54 pm

What is the country of the plane's registration ? Singapore or Germany ? If Germany then Iceland's agreements with the EC would apply. If Singapore then...I am not sure.
AB however knew there was a risk of impoundment of the aircraft for non-payment of fees to the authority that runs KEF was there and ignored it or assumed (perhaps wrongly) that EC rule would apply and the airplane couldn't be impounded. I would presume the German court supervising AB's Receivership/Insolvency will have to issue an order, serve via diplomatic agreements for recognizing legal orders of another jurisdiction (and the EC) upon the authority that runs KEF. That means more costs to the estate of AB in lawyers fees, no revenue from the aircraft to pay something to their bills. Of course as others have suggested the leaseholder or LH will make a deal and pay all of part of the fees due and from the impoundment, although the KEF authority will waive any new fees as wrong in their impoundment. Sounds like some lawyers will make some money no matter what.
 
hayzel777
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 12:53 am

dochawk2 wrote:
dtw2hyd wrote:
I will say this aloud. Kudos to Iceland for standing up for other vendors and for not signing this crappy treaty. No one knows how these signatories signed, maybe they were drunk.


I applaud your comment.

The fact is that everyone of the ground personnel have been already paid for the work they preformed on that AB plane. All the use, wear and tare, on the equipment (albeit relatively minor) has been done and cannot be undone. I hope the airport repos the plane and sells it at auction to cover the debts. That would send a strong message.

I'm sure BOC Aviation will have something to say if they do this. Terrible idea.
 
dtw2hyd
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 1:27 am

hayzel777 wrote:
....
I'm sure BOC Aviation will have something to say if they do this. Terrible idea.


They shouldn't. AB is probably paying 6 months in advance for this 18-year-old clunker. An airport vendor extending NET30 credit will get screwed.
All posts are just opinions.
 
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lightsaber
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 2:38 am

Bummer for the leasor. There will be a rule change. This is like Kingfisher in India which cost leasing companies far more. How many aircraft weren't airworthy at the end? This forced India to rewrite leasing rules for aircraft as leasing companies changed the rules.

This will result in airlines having to put a significant amount of money into a trust fund to liberate leased aircraft. How much will depend on law changes. But if the companies try to charge too much, airlines will have no choice but to grow slower and wait until they can buy their own aircraft. So the market will find a solution. Right now AirBerlin has 72 A320s per Wikipedia. One is impounded. I doubt any leasing company only leased one to them. So a profit/loss analysis will be performed.

There might be new rules for flying into KEF. That might impact Iceland airlines a lot, or not so much. I see a 60 day trust for expenses a likely outcome...

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prebennorholm
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 3:51 am

Kilopond wrote:
I think the Iclandic authorities committed a mistake: they arrested a Singaporean plane that belongs to BOC Aviation. Airberlin couldn't care less, I'm afraid.

I am convinced that BOC Aviation has made sure that they are paid the leasing fee - (from the €150M which AB got to continue). Otherwise they would have collected their planes long time ago. BOC Aviation is not a charity organization.

So the German insolvency administrator must approve AB payment of BOC leasing fee also while the plane is sitting at KEF.

If the plane is still sitting at KEF when AB closes for good, and all BOC owned planes are returned to BOC, then we have a new situation.

The AB bankruptcy is nothing new today. Isavia has taken their time to react. That would to me indicate that they have made substantial efforts to convince themselves that they do have Icelandic law and conventions on their side. Then this situation can be rather interesting.

Just forget about German laws. German law would apply if the plane was sitting in a German airport.

But who cares? A bunch of German tourists got a cheap holiday in Iceland. Too cheap to pay the bills. So someone else must pay the bills for them.

Either the German insolvency administrator finds out that it is cheaper to pay Isavia than paying BOC leasing fee for an idle plane, and ultimately the German tax payers will pay from their €150M allowance.

Or the Isavia revenue will suffer, and the shareholders (Icelandic state) will have that less ROI. Meaning that indirectly the Icelandic tax payers will pay the bills.
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PanHAM
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 5:20 am

cerealspiller wrote:
This is a classic example of why we have lawyers.


No, it is a classic example of how lawyers justify their existance.

Simple common sense tells us that you cannot hold back an item that belongs to a third party to enforce a payment which i not owed by that third Party.
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Finn350
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 6:00 am

prebennorholm wrote:
Either the German insolvency administrator finds out that it is cheaper to pay Isavia than paying BOC leasing fee for an idle plane, and ultimately the German tax payers will pay from their €150M allowance.


You make very good points. Actually this is a very likely outcome. And the lessor is probably only happy at the moment, as the AB estate has to continue to pay leasing fees as long as the plane is grounded in Iceland. The plane was probably to be returned to the lessor quite shortly otherwise.
 
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moo
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 6:27 am

PanHAM wrote:
cerealspiller wrote:
This is a classic example of why we have lawyers.


No, it is a classic example of how lawyers justify their existance.

Simple common sense tells us that you cannot hold back an item that belongs to a third party to enforce a payment which i not owed by that third Party.


If that were true, a leased car could never be towed or clamped.

Which pretty much puts paid to *that* argument.
 
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hvusslax
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 10:38 am

prebennorholm wrote:
The AB bankruptcy is nothing new today. Isavia has taken their time to react. That would to me indicate that they have made substantial efforts to convince themselves that they do have Icelandic law and conventions on their side. Then this situation can be rather interesting.


This is key. Isavia has taken several weeks to evaluate its options. They (or their lawyers rather) are perfectly aware of the finer points of German bankruptcy laws and still made this choice.
They will hold on to the aircraft until a) dues have been paid in full or b) an Icelandic court tells them to release it.
 
ei146
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 12:32 pm

hvusslax wrote:
This is key. Isavia has taken several weeks to evaluate its options. They (or their lawyers rather) are perfectly aware of the finer points of German bankruptcy laws and still made this choice.
They will hold on to the aircraft until a) dues have been paid in full or b) an Icelandic court tells them to release it.


They can hold it but not touch it? Fine. I hope the lessor writes it off and leaves it there, it blocks the space for some decades until it ends as a pile oft rubble and can be swept away.
 
dtw2hyd
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 2:27 pm

lightsaber wrote:
Bummer for the leasor. There will be a rule change.

There should be a change to Cape Town Treaty.(CTT).

This is like Kingfisher in India which cost leasing companies far more. How many aircraft weren't airworthy at the end?

None. All 54 leased planes are flying with other customers. Airport operators lost $100 Million.

This forced India to rewrite leasing rules for aircraft as leasing companies changed the rules.

India was a signatory of CTT, so they had no choice but to amend the laws. Iceland is not, the lessor can take a hike.

Leasing companies want to have cake and eat it too. They target airlines in financial troubles.
1) Lease barely airworthy aged frames.
2) Jackup LRF as risk mitigation.
3) Collect lease payments 3-6 months in advance
4) Repo as soon first payment is missed.
Combine all four, they are actually making more money by rotating these between financially troubled.
This practice won't change whether a country is CTT signatory or not. CTT makes #4 easy.

The same 3x12+-year-old ATRs were leased out to several Indian startups. A couple of months into the dry lease engine knocks out, the airline has no money to fix, repo and give it to next startup.

One-two week airport fees and ATF cost will be more than these aged clunker monthly lease payment.

Why should airport operators always take a financial hit? CTT need to be amended.
All posts are just opinions.
 
greenjet
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 4:09 pm

PanHAM wrote:
cerealspiller wrote:
This is a classic example of why we have lawyers.


No, it is a classic example of how lawyers justify their existance.

Simple common sense tells us that you cannot hold back an item that belongs to a third party to enforce a payment which i not owed by that third Party.


You should read about Global Knafaim Leasing and the issues they had with the CAA (acting on behalf of Eurocontrol and NATS) and BAA after one of their aircraft on lease to Zoom Airlines was impounded at GLA for unpaid charges and fees relating to the entire Zoom fleet. GKL had to pay up to $2m to get the aircraft released. They challenged this in the courts and lost.

Others in this thread have said these actions at KEF could affect the leasing of aircraft to airlines operating to/from Iceland in future. It will have zero impact. Lessors lease to airlines operating to the UK without any hesitation. It is recommended that outstanding Eurocontrol charges for such airlines be monitored though as that's a huge red flag.
 
greenjet
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 4:33 pm

dtw2hyd wrote:
Leasing companies want to have cake and eat it too. They target airlines in financial troubles.
1) Lease barely airworthy aged frames.
2) Jackup LRF as risk mitigation.
3) Collect lease payments 3-6 months in advance
4) Repo as soon first payment is missed.
Combine all four, they are actually making more money by rotating these between financially troubled.
This practice won't change whether a country is CTT signatory or not. CTT makes #4 easy.


I can assure you that lessors do not target airlines in financial troubles. It makes no sense to do so. Financially weaker lessees may end up taking aged airframes but this is due to the combination of (i) such airlines not being able to afford newer airframes; (ii) lessors being able to find better homes for newer aircraft; and (iii) financially stronger lessees offering much lower rental payments (and no cash maintenance reserves) for older aircraft.

I presume by collecting lease payments 3-6 months in advance you mean the security deposit? Very few airlines will pay more than 3 months (airberlin probably paid no more than 2 in most cases) for a security deposit. Do you know how quickly 3 months rent can evaporate in a repossession/default scenario. Even after netting off overdue rent and maintenance reserve invoices there are multiple other amounts incurred, e.g. aircraft modifications, maintenance, painting, ferry flights, crew, remarketing, storage, record scanning, legal fees (extremely expense - not to mention a lengthy process - particularly if the lessee does not cooperate), etc. Very few lessors will repo as soon as a payment is missed. They don't just magically take an ageing aircraft back from an airline and place it overnight with another lessee. It is often better to have an aircraft with a lessee with several weeks of arrears than repo and have the aircraft sitting AOG indefinitely.
 
dtw2hyd
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 5:16 pm

greenjet wrote:
dtw2hyd wrote:
Leasing companies want to have cake and eat it too. They target airlines in financial troubles.
1) Lease barely airworthy aged frames.
2) Jackup LRF as risk mitigation.
3) Collect lease payments 3-6 months in advance
4) Repo as soon first payment is missed.
Combine all four, they are actually making more money by rotating these between financially troubled.
This practice won't change whether a country is CTT signatory or not. CTT makes #4 easy.


I can assure you that lessors do not target airlines in financial troubles. It makes no sense to do so. Financially weaker lessees may end up taking aged airframes but this is due to the combination of (i) such airlines not being able to afford newer airframes; (ii) lessors being able to find better homes for newer aircraft; and (iii) financially stronger lessees offering much lower rental payments (and no cash maintenance reserves) for older aircraft.

I presume by collecting lease payments 3-6 months in advance you mean the security deposit? Very few airlines will pay more than 3 months (airberlin probably paid no more than 2 in most cases) for a security deposit. Do you know how quickly 3 months rent can evaporate in a repossession/default scenario. Even after netting off overdue rent and maintenance reserve invoices there are multiple other amounts incurred, e.g. aircraft modifications, maintenance, painting, ferry flights, crew, remarketing, storage, record scanning, legal fees (extremely expense - not to mention a lengthy process - particularly if the lessee does not cooperate), etc. Very few lessors will repo as soon as a payment is missed. They don't just magically take an ageing aircraft back from an airline and place it overnight with another lessee. It is often better to have an aircraft with a lessee with several weeks of arrears than repo and have the aircraft sitting AOG indefinitely.


Sounds just like this. 18 minutes worth watching
https://www.youtube.com/watch?v=4U2eDJnwz_s
All posts are just opinions.
 
vfw614
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 6:01 pm

moo wrote:
If that were true, a leased car could never be towed or clamped.

Which pretty much puts paid to *that* argument.


I really do not want to get into legal technicalities, but towing or clamping a car is a wholly different thing because the car is not towed/clamped by a third party because of debt of the owner, but because of traffic rule violations committed with the car. That is really apples and oranges.

What non-lawyers tend to misunderstand is that impounding / seizing / clamping is one thing and usually only requires possession of the asset by the debtor. Turning the impounded / seized / clamped asset into money, however, is another thing and requires not only possession, but ownership of the debtor. And debtors usually have possession of a lot more things than they have ownership of. Because creditors can, as far as moveable assets are concerned, only judge possession, but not ownership, they are by law allowed to impound / seize / clamp anything the debtor possesses (unless it is plain evident for the creditor that the asset is third-party owned). The owner then has a legal remedy to get his property released if he can prove his ownership. There may be slight variations of this principle, but that is the general standard. Why? Anything else would be expropriation, and under the rule of law, the right of property usually is constitutionally protected.

As I have repeatedly pointed out, nobody has forced Isavia to allow airberlin accrue debt. Like in any business, if your business partner is not credit-worthy, you either a) assume the risk (and eventually take a hit) or b) protect yourself against a potential loss by demanding advance payments, bank guarantess, collaterals etc. If you opt for alternative a) or have been too lazy to monitor the credit-worthiness of your business partner, why on earth should a third party make up your carelessness by loosing property or paying ransom money?
 
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SheikhDjibouti
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sun Oct 22, 2017 7:21 pm

vfw614 wrote:
I really do not want to get into legal technicalities, but towing or clamping a car is a wholly different thing because the car is not towed/clamped by a third party because of debt of the owner, but because of traffic rule violations committed with the car. That is really apples and oranges.

This presumably varies from country to country.
Here in the UK, the vast majority of vehicle clampings are by private companies on behalf of other private companies, and all to do with parking on private land. This would be because of a debt of the vehicle owner.
If you park on a busy highway and draw the attention of the police, they are more likely to tow your vehicle away; how else are they going to get the result they need, which is to clear the obstruction from the road to ease the flow of traffic.
Hence, in general terms towing is somewhat different from clamping. So we are indeed talking apples and oranges, but not quite in the way you intended. :lol:
Nothing to see here; move along please.
 
vfw614
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Mon Oct 23, 2017 10:52 am

According to Icelandic media, airberlin has canceled all flights to Keflavik since the grounding of its aircraft at KEF. Hence the press release by Isavia stating that its actions are limited to the aircraft in question - as apparently a fair number of Icelanders booked on those flights are now stuck in Germany and have difficulties getting back to Iceland, the media have picked up the story....
 
RJWNL
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Mon Oct 23, 2017 11:36 am

vfw614 wrote:
As I have repeatedly pointed out, nobody has forced Isavia to allow airberlin accrue debt. Like in any business, if your business partner is not credit-worthy, you either a) assume the risk (and eventually take a hit) or b) protect yourself against a potential loss by demanding advance payments, bank guarantess, collaterals etc. If you opt for alternative a) or have been too lazy to monitor the credit-worthiness of your business partner, why on earth should a third party make up your carelessness by loosing property or paying ransom money?


No one forced the lease company to provide AirBerlin with planes and the lease company knew a lot better what they were getting themselves into. Thus the lease company is more of a "second party" colluding with AirBerlin as pointed out by dtw2hyd above. The only innocent third party here is Isavia and they have every right to get what is owed to them. Your argument doesn't hold.
 
vfw614
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Mon Oct 23, 2017 12:02 pm

So, for example, the concept of collaterals is just a wet dream of lawyers because nobody has to respect a transfer of property by way of security? And everything somebody simply possesses is treated as his property regardless of actual ownership?

I hope you guys are just as relaxed when you borrow your car to someone and the creditor of your friend seizes your car because it is merely in the possession of your friend... Or your bank keeps its cool if your mortgaged house is seized by one your creditors just because you and not the bank happens to live in it...
 
dtw2hyd
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Mon Oct 23, 2017 12:27 pm

Why is the question of repo raises as soon as an airport operator blocks a leased aircraft?

Was AB past due on its lease payments? If so why is this frame still flying?
Did Germany de-register this frame so the lessor can repo?
All posts are just opinions.
 
B747forever
Posts: 13847
Joined: Mon May 21, 2007 9:50 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Mon Oct 23, 2017 12:33 pm

vfw614 wrote:
According to Icelandic media, airberlin has canceled all flights to Keflavik since the grounding of its aircraft at KEF. Hence the press release by Isavia stating that its actions are limited to the aircraft in question - as apparently a fair number of Icelanders booked on those flights are now stuck in Germany and have difficulties getting back to Iceland, the media have picked up the story....


I am sure a good amount of those booked their AB flights after bankruptcy was declared. It is beyond me why people still buy tickets with AB.
Work Hard, Fly Right
 
mjoelnir
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Re: Air Berlin plane grounded at KEF for unpaid airport charges

Mon Oct 23, 2017 12:59 pm

If we compare this to a ship. You run a ship and you do not pay your dues in a foreign harbor. Next time that ship calls into that harbor it can be sized, all the same if the owner has changed, the owner gone bankrupt e.t.c. And we are not talking only about harbor fees but also for example food that you bought from a vendor there. The ship is responsible for a dept incurred somewhere in the world. Otherwise it would be so easy, run up a big bill somewhere and than change the owner.

In this case in KEF, the money due to Isavia includes taxes collected through the ticket price. Here in Iceland it is a criminal act to withhold those taxes. That part of the ticket price was never owned by Air Berlin, but only collected by AB, to go to the government via Isavia.

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