Partner Sydney
"Lessors of mid-life and older aircraft should ensure that the Thai lessee’s obligations in relation to maintenance and inspection reflect these new requirements."
Currently Thai operators of scheduled and non-scheduled commercial aviation can operate aircraft with the following age restrictions:
- up to 16 years from the date of manufacture for fixed-wing passenger and cargo aircraft;
- up to 22 years as from the date of manufacture in case of fixed-wing aircraft solely used for cargo flights; and
- over five years from the date of manufacture for helicopters for non-scheduled commercial air services.
A key objective of the existing regulations was to encourage Thai operators to purchase or lease new or relatively new aircraft and ensure that older aircraft did not remain in service in Thailand beyond these limits. However, these restrictions were only enforced at the time of applying for the civil aviation operating license (“AOL”). For example, where a passenger aircraft was manufactured 14 years before the date of a Thai operator’s application for their air operator’s licence, it could be leased and/or operated for a longer than two years. This resulted in a number of Thai-registered aircraft continuing to operate after their age exceeded these restrictions.
The proposed new requirements
Key contacts
"The removal of aircraft age restrictions is partly intended to allow Thai airlines to acquire or lease mid-life aircraft given the challenges and delays in acquiring or leasing newer and younger aircraft."
The CAAT has approved removal of these aircraft age limits and replacing them with reliance on the airworthiness of aircraft. This is consistent with the approach of aviation regulators in other jurisdictions and would bring Thailand into line with broadly accepted international standards. The airworthiness will be assessed as part of the airworthiness assessment process and the operator’s ongoing obligations under the Air Navigation Act to ensure that aircraft remain airworthy. An increase in the number of mid-life or older aircraft may result in a corresponding increase in inspection requirements and frequency and this may result in further and more regular inspections of Thai-registered aircraft by CAAT. Lessors of mid-life and older aircraft should ensure that the Thai lessee’s obligations in relation to maintenance and inspection reflect these new requirements.
As Thai airlines emerge from COVID-19 and rehabilitation, their focus has been on renewing and expanding their fleets. Thai airlines are not unique in having their fleet renewal and expansion plans affected by the current imbalance between the demand for and supply of new aircraft. The removal of aircraft age restrictions is partly intended to allow Thai airlines to acquire or lease mid-life aircraft given the challenges and delays in acquiring or leasing newer and younger aircraft.
What does this mean for lessors and Thai lessees?
Thai operators may be more interested in and willing to acquire or lease mid-life aircraft. Lessors who focus on mid-life aircraft may have greater opportunities to lease aircraft to Thai operators. These opportunities are and will continue to be constrained by reduced trading of mid-life aircraft as existing operators respond to delays in deliveries of newer aircraft by retaining these mid-life aircraft in their fleets beyond their intended period of service.
"Notwithstanding the challenges and delays in leasing newer aircraft, Thai operators may not see mid-life aircraft as a key solution to the delays in delivery of newer aircraft."
Operators of mid-life aircraft are likely to have a greater need for MRO facilities given the additional maintenance requirements and the greater need for ‘C’ and ‘D’ checks.
Given the focus of Thai’s key airlines on newer and more fuel-efficient aircraft, the impact of these changes may be limited and leasing of mid-life aircraft may not be attractive. In October, the Board of Thai Airways deferred a decision on a proposal to lease A330-200 and 787-8 aircraft. It appears that this may have been prompted in part by the age of these aircraft and the maintenance requirements and was notwithstanding the challenges facing the airline in leasing newer wide- and narrowbody aircraft. This may suggest that, notwithstanding the challenges and delays in leasing newer aircraft, Thai operators may not see mid-life aircraft as a key solution to the delays in delivery of newer aircraft.
Next steps
The Civil Aviation Board has approved these changes and once approved by the Transport Minister, they will come into force. This could be as early as Q1 of this year.
Key contacts
Partner Sydney
Senior Associate Bangkok
Associate Bangkok
