Lithuania Joins Cape Town Convention to Improve Aviation Business Conditions
Today, the Government endorsed the proposal of the Ministry of Transport and Communications to ratify the Cape Town Convention, which will facilitate business conditions for Lithuanian aviation and increase the competitiveness of Lithuanian aviation companies in the global market, as well as attract aircraft management and aircraft leasing companies.
“Accession to the Cape Town Convention is particularly important in order to broaden the scope for activities related to the purchase, sale, leasing and mortgaging of aircraft, and to enhance the competitiveness of our country’s aviation in the global aviation market. It is also a coherent and targeted step towards achieving the objectives of the Lithuanian Aviation Development Guidelines 2030,” says Marius Skuodis, Minister of Transport and Communications.
The Lithuanian aviation companies have been calling for the ratification of the Cape Town Convention for more than a decade. The fact that Lithuania had not ratified the Convention earlier was an obstacle to the choice of our country for aviation transactions. The aim is to grow the sector from the current 3% of GDP to 5%, with as few obstacles as possible to its development.
The ratification of the Cape Town Convention will make the process of registering aircraft in the Lithuanian Aircraft Register safer and more approachable for companies financing and managing their acquisition. It is expected that the country’s aviation business will be able to access loans more easily and companies will be able to purchase, sell, mortgage or lease aircraft on better terms, as well as to attract more investors and reduce transaction costs.
In addition, the Convention establishes international guarantees allowing creditors to recover aircraft from non-compliant airlines and otherwise enforce their rights, and to join the International Registry.
The Government will request the President to submit the Cape Town Convention to the Seimas for ratification.
The Cape Town Convention is the Convention on International Interests in Mobile Equipment, signed in Cape Town in 2001.
Last updated: 13-01-2023
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