In the context of political uncertainty in Peru, this article explains the remedies that the Civil Aviation Law provides to aircraft and engine owners and lessors to guarantee their property and creditors' rights. Since the enactment of the Security Interest Law in 2006, aircraft and engine detention is the only remedy offered by the Civil Aviation Law.
While recording aircraft leases in the public registry is in the best interests of both domestic operators and aircraft owners, the public registry does not constitute a title registry for foreign aircraft. Therefore, the rights of owners of foreign aircraft that operate in Peru may be seen as being insufficiently public under local laws. However, genuine registrations have been extended to cover the supporting documents which record title information, providing reassurance to owners of foreign aircraft that operate in Peru.
In 2018 the Security Interest Law was replaced by Legislative Decree 1400, which approved the security interest regime but is not yet in force. It is hoped that after Legislative Decree 1400 enters into force, it will become clear how parties can take the best advantage of the security interest on aviation-related assets (eg, aircraft, engines and rentals income), despite any delays that the new law may introduce.
The closure of Peru's borders and the restrictions placed on international flights to and from the country due to COVID-19 have had a highly negative effect on tourism and its related industries. While the ongoing health emergency should not be underestimated, the time to reassess the aviation restrictions has arrived. The aviation industry should at least expect the government to provide clarity with regard to when international operations for passengers will be resumed.
The situation faced by the aviation industry is serious and it is likely to be among the sectors which will take the longest to recover from the COVID-19 pandemic despite its importance to the development of a connected world. This article examines recent amendments to Article 274 of the Regulations of the Civil Aviation Law which aim to address the effects of the pandemic on the Peruvian aviation industry.