Aircraft mortgages | Traficom
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Transport and Communications Agency

Aircraft mortgages

A mortgaged aircraft can be used as collateral for a debt. The mortgage may be applied for by the owner of the aircraft or a creditor. If the mortgage application is submitted by the creditor, mortgaging the aircraft requires the written consent of its owner. Mortgage decisions are subject to a fee.

A confirmed aircraft mortgage remains valid for ten years from the date of confirmation unless it is separately discharged. A valid aircraft mortgage can also be renewed, with the mortgage remaining valid for ten years from the date of renewal. The debt instruments used for aircraft mortgages are most commonly bearer bonds.

Traficom will record a certification of the confirmation, renewal or cancellation/discharge of an aircraft mortgage in both the debt instrument and the Transport Register.

Confirmation of an aircraft mortgage must be applied for in writing using the relevant form. The mortgage may be applied for by the owner of the aircraft or a creditor with claims against the owner. If the mortgage application is submitted by the creditor, mortgaging the aircraft requires the written consent of its owner.

The mortgage application must uniquely identify the mortgage object and the monetary receivable(s) for the collateral of which the mortgage is to be confirmed. The application must include the capital, interest and any renewal and recovery fees.

Where applicable, the following must be attached to the application:

  • Original bearer bond(s) (bearer bond template)

    The bond must indicate the capital, interest and recovery/renewal fees, the mortgage object and the debtor. The bond must be signed by the debtor in accordance with the debtor’s rights of representation marked in the trade register or register of associations. In addition, two persons must witness the bond with their signatures and names in block letters.

    If the debtor is not the owner of the aircraft, the bond must also include the aircraft owner’s consent to the mortgage. If the party signing the bond does not own the aircraft to be mortgaged, or if the bond is only being issued by some of the owners registered for the aircraft, consent must be obtained from the owner or other owners of the aircraft. The consent statement may be entered under the ‘Owner’s consent’ heading in the bond document or, alternatively, in a separate document.

 

  • Decision on applying for mortgage (internal decision by a legal person)

    If the applicant is a company, association or a foundation, the application must include a copy of the decision by a competent body (e.g. minutes of a board meeting) authorising the application for an aircraft mortgage and recognition of the bearer bond. The decision to apply for the mortgage and recognise the bearer bond must specify the type, capital, annual interest rate and any recovery and renewal costs of the bond. It must also uniquely identify the aircraft being mortgaged (the registration of the aircraft and/or other sufficient identifying information).

 

  • Any power of attorney or other document that indicates the signatory’s power to sign the document (e.g. an extract from the trade register for foreign companies or associations).

The renewal or cancellation/discharge of an aircraft mortgage must be applied for in writing using the relevant form. When an aircraft mortgage is being renewed or cancelled/discharged, the original bonds belonging to the mortgage must be attached to the application. Mortgage renewal or cancellation/discharge may be applied for by the party who has the original bond(s) in its possession.

If the original bearer bond is lost, the mortgage may be cancelled once the bearer bond has been annulled at a District Court. In that case, the original decision of the District Court annulling the bearer bond or a certified copy of the decision must be attached to the application.

Mortgage decision EUR 115
– confirmation, renewal or cancellation/discharge of mortgage
– change of the order of priority of a mortgage

Certificate of mortgages and encumbrances or an extract of the EUR 75

Provisions on aircraft mortgages are laid down in the Act on aircraft mortgages (211/1928) and the Vessel mortgage act (211/1927). For instructions on applying for the confirmation, renewal or cancellation/discharge of an aircraft mortgage, please see above.

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