The freighter and passenger-to-freighter market has expanded significantly in recent years, and that upward trajectory is expected to continue. Some aviation intelligence providers are forecasting a 41% increase in the global freighter fleet between 2024 and 2044.
Against that backdrop, cases of airline insolvency and aircraft repossession remain relatively uncommon, but they are far from irrelevant. Aviation, and airfreight in particular, remains highly exposed to geopolitical shocks and volatile fuel prices.
Recent no-fly zones across large parts of the Middle East provide a clear example. Longer routings mean more fuel burn, less available capacity and rising costs across the logistics chain, all of which can increase pressure on operators and their financial stability.
For freighter lessors and operators, the message is clear: preparation matters. If repossession becomes necessary, the ability to act quickly can make all the difference.
Repossession of a freighter aircraft often brings more operational complexity than taking back a passenger aircraft. The available rights and remedies will typically be governed by the lease and, in many jurisdictions, by the Convention on International Interests in Mobile Equipment.
Because cargo airlines can be especially vulnerable to macroeconomic and geopolitical events, lessors should monitor operators closely and make full use of inspection rights covering both aircraft condition and financial records. That visibility can provide early warning signs of distress.
If concerns begin to emerge, a repossession strategy should be developed immediately. This becomes especially important when aircraft are operating to remote airports, flying irregular charter schedules or working overnight routes, all of which can complicate recovery.
Those practical details matter because they affect where and when an aircraft can most effectively be repossessed. Freighter lessors often need to be more strategic and organised than they would be with passenger aircraft, precisely because cargo operations can be more varied and less predictable.
Technical support must also be lined up in advance at the proposed repossession location, and specialised legal advice should be taken early. That legal review should determine whether the chosen jurisdiction offers remedies under the Cape Town Convention, what those remedies are, and what domestic law may also provide.
This analysis is essential because recovery rights can vary significantly from one jurisdiction to another, and procedural requirements under local law or the CTC can affect both speed and outcome.
At the same time, lessors need a current picture of the aircraft’s maintenance status and, crucially, control over the aircraft’s records. In the case of converted freighters, technical records relating to passenger-to-freighter modification work are particularly important. Incomplete records can hinder deregistration, reduce aircraft value, delay export and make re-leasing much more difficult.
Repossession timelines are always fact-specific, but the need for speed is common. Situations often deteriorate quickly, especially when multiple creditors or owners begin to act at once. Lessors therefore need to stay close to both the market and the operator’s situation and be ready to shift plans rapidly if circumstances change.
Ideally, the lease should be terminated and the aircraft repossessed before insolvency proceedings begin. That reduces the risk of the aircraft becoming part of the airline’s bankruptcy estate and potentially subject to local moratorium rules or CTC-related delay.
Even where insolvency starts first, lessors may still be able to rely on contractual rights and CTC remedies, if applicable. In CTC contracting states, it is important to determine which insolvency provisions have been adopted. Many states apply Alternative A, often with a waiting period of around 60 days.
Under that framework, an insolvent airline must either cure all defaults and commit to future performance or return the aircraft by the earlier of the end of the waiting period or the date on which the creditor would otherwise be entitled to possession under national law.
If the airline fails to comply, the lessor may be able to exercise an IDERA to deregister and export the aircraft. If that route is blocked, court action may still be required to compel redelivery.
Provided the lessor’s international interest has been properly registered before insolvency begins, it should retain priority under the CTC and not rank alongside unsecured creditors.
Even then, another important issue remains: liens. Any outstanding liens affecting the aircraft or its parts under domestic law or the CTC must generally be satisfied before the aircraft can be removed from the jurisdiction.
Repossession of a freighter aircraft is therefore rarely straightforward. It requires legal preparation, technical readiness, detailed planning and the flexibility to respond quickly to changing events. For lessors operating in today’s volatile market, waiting until the last moment is rarely a wise option.
