Australia: Why the introduction of an aircraft exception to the Personal Property Securities Act is beneficial to the Australian aviation industry

The Personal Property Securities Act 2009 (Cth) (PPSA) has a wide reach in relation to personal property and extends its operation to aircraft and aircraft engines.

However aircraft are ambulatory by nature and often attract complex jurisdictional and cross-border issues. On 16 November 2001 the Cape Town Convention on International Interests in Mobile Equipment 2001 (Convention) was signed by several member states to set out a legal framework for the acquisition and use of high end mobile equipment. On March 2006 the Protocol on Matters Specific to Aircraft Equipment (Protocol) came into effect by extending the application of the Convention to include contracts of sale of aircraft equipment (together the Treaty). Australia was not one of the signatories to the Convention nor did it later ratify the Treaty.

The Department of Infrastructure and Transport has recognised the expanding growth of the aviation industry in Australia with the 16 December 2009 release of its White Paper on Aviation and recently sought submissions from stakeholders as to the approach the Australian government should take to avoid duplication of legislation in light of the Treaty and the PPSA.

PPSA or the Treaty?

We take the view that the Treaty should prevail. Our approach is based on the following considerations:

  • the PPSA will govern security interests in all aircraft falling within the Treaty definition1 and will include smaller aircraft if they have nationality and registration marks assigned to them under the Chicago Convention.2 The Treaty on the other hand covers aircraft over a certain weight and aircraft engines with a minimum thrust (together aircraft equipment).

    Accession to the Treaty and amending the PPSA for the purpose of allowing the Treaty to prevail to the extent of any inconsistencies would have the advantage of:
  • covering the field in aircraft regulation; the Treaty would apply to larger aircraft equipment and the PPSA would regulate aircraft objects outside its scope. (Financiers, both domestic and international, would find comfort in the protection of their interests and reduction of risk), and
  • aircraft operators having access to fee discounts from export credit agencies through Australia's participation in the Sector Understanding on Export Credits for Civil Aircraft (ASU) for Treaty aircraft objects. (Ratification of the Treaty would also extend the access to fee discounts to smaller aircraft not caught within the Treaty. This would have a flow on effect of reducing financing costs to all debtors in the industry.)

Allowing the PPSA to regulate the law in relation to aircraft would require a substantial rewrite of the PPSA. It would of course be possible to amend the PPSA and include extensive remedies to enable financiers to recover assets and facilitate repossessions. However any rewrite must recognise that, as the PPSA has far reaching application in relation to personal property, a substantial amount of work has already been undertaken by industry and significant costs incurred to install policies and procedures, set up computer systems, rewrite documentation and provide training based on its present drafting or present form and its implementation in October 2011. Further changes are already mooted for May 2011 and this must be a cause of concern to industry participants.

New Zealand recently acceded to the Treaty. Ten years ago it introduced its own Personal Property Securities Act 1999 (NZPPSA) (on which the PPSA is, to a large extent, based) but Parliament took the step of creating an exception to the NZPPSA for aircraft by passing the Civil Aviation (Cape Town Convention and Other Matters) Amendment Act 2010 (the Act). From 1 November 2010 the Treaty prevails over any other New Zealand law, including the NZPPSA.

In New Zealand's case, by introducing the Act, minimal amendment was required to the NZPPSA.

  • possible harmonisation of the Australian and New Zealand PPS regimes. The Ministry of Economic Development in New Zealand is currently consulting interested parties to establish a single trans Tasman register by the end of 2014. As New Zealand has acceded to the Treaty it seems incumbent on the Australian government to take the same approach to enable harmonisation to take place.

Where to next?

The Department of Infrastructure and Transport has received all submissions from interested parties and will be shortly submitting its own recommendations to the government. As the implementation of the PPSA has now been deferred to October 2011 we expect the government to consider its options over the ensuing months and release its position before the PPSA implementation date.

1 The definition of 'aircraft' under the Personal Property Securities Regulations 2010 adopts the concept of 'aircraft equipment' under the Protocol.
2 Convention on International Civil Aviation, Chicago, 7 December 1994 as amended by applicable Protocols

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.