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Georgia Joins Cape Town Convention to Streamline Aircraft Leasing

Georgia Joins Cape Town Convention to Streamline Aircraft Leasing
Georgia has taken a pivotal step toward simplifying aircraft leasing by ratifying the Cape Town Convention, an international treaty aimed at protecting the rights of aircraft lessors and operators. This decision, recently approved by the Georgian Parliament, is anticipated to enhance the country’s attractiveness to global leasing companies and bolster its standing in the competitive aviation sector.
Implementation and Industry Impact
The Civil Aviation Agency of Georgia is currently finalizing the internal procedures necessary to fully implement the convention. Once enacted, the new legal framework will govern all Georgian-registered airlines engaged in international leasing agreements with foreign lessors. This development coincides with a period of robust growth in the global aircraft leasing market, underscored by substantial orders from major lessors such as AviLease, alongside improving international trade conditions, including the UK aerospace industry’s recent relief from U.S. tariffs.
Industry leaders have welcomed Georgia’s accession to the convention as a critical move toward aligning the nation’s aviation sector with international standards. Shalva Kiknadze, President of Geo Sky, one of Georgia’s foremost cargo carriers, highlighted the practical benefits for both domestic operators and international partners. He explained that prior to this ratification, foreign leasing companies required extensive guarantees to ensure aircraft could be repossessed if an airline defaulted. Despite guarantees issued by the Civil Aviation Agency, lessors often demanded additional international assurances, resulting in delays and increased financial burdens.
Kiknadze emphasized that the Cape Town Convention will substantially reduce the perceived risk for lessors. Previously, lessors required extended guarantee periods—sometimes four to five months—compared to the standard two months, due to the absence of streamlined legal protections. The convention now secures the rights of all parties involved, enabling aircraft owners to swiftly reclaim and deregister their assets through internationally recognized legal channels in the event of a default.
Strategic Significance and Regional Considerations
Georgia’s accession to the Cape Town Convention is expected to attract heightened interest from international leasing firms, leveraging the country’s strategic position at the crossroads of Europe and Asia. Nonetheless, experts caution that Georgia may encounter challenges in harmonizing its aviation laws with international standards, which could initially slow leasing processes. Additionally, neighboring countries may respond by enhancing their regulatory frameworks or introducing incentives to maintain competitiveness in attracting aircraft leasing business.
As the global aviation industry continues to evolve, Georgia’s adoption of the Cape Town Convention positions it to capitalize on expanding leasing activity and a more favorable international trade environment. This development also underscores the ongoing necessity for legal and regulatory alignment with global best practices.

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