Avocet

Services for Aircraft Owners

The introduction of aviation into the European Emissions Trading Scheme (EU ETS) for intra-EU flights will increase aircraft owner credit risk exposures to airlines within and outside of Europe. Any aircraft operator offering intra-EU flights that fails to register or comply with EU ETS regulations may face substantial financial penalties as well as a potential withdrawal of their aircraft operator’s certificate.

ETS presents aircraft financiers and lessors with an additional due diligence obligations that needs to be continually monitored and controlled.  This may require having to deal with a number of different entities including Government Departments, EU ETS accredited verifiers and carbon traders. 

Our services for airfinance providers are:

  • EU ETS advisory and risk mitigation: Avocet has developed specific expertise in managing EU ETS risk exposures and provides dedicated risk mitigation and advisory resources to banks, aircraft lessors and investors. Management of is a difficult task due to the complexities of the scheme including confidentiality undertakings and external political influences.
  • EU ETS credit risk management: Operators of intra-EU flights who fail to meet the EU ETS can face operational penalties as well as heavy fixed and daily local fines.  Non-compliance could also lead to aircraft detention and seizure resulting in lease termination by the aircraft owner.  Avocet provides mark-to-market credit risk analysis of airlines EU ETS liabilities and contingent exposures.