The Process of Aircraft Revocation, Deregistration, and Exportation Under IDERA by the Nigerian Civil Aviation Authority (NCAA)

Aircraft leasing is essential in the aviation industry, enabling airlines to operate modern fleets without the full financial burden of ownership. However, when an airline defaults on its financial obligations, lessors and financiers need mechanisms to protect their assets. The Irrevocable Deregistration and Export Request Authorization (IDERA), established under the Cape Town Convention and its Aircraft Protocol, provides such a mechanism. It allows the swift repossession, deregistration, and export of aircraft by the financier or lessor in case of default by the lessee (airline). This article will explore Aircraft Leasing and the Role of IDERA in Nigeria’s Airline Industry.

---

The IDERA Mechanism (Role of IDERA)

IDERA is a legal instrument that allows creditors—such as banks, leasing companies, and financiers—to secure their interest in an aircraft by having the right to request the deregistration and export of the aircraft directly from the national aviation authority (in this case, the NCAA) without interference from the airline.

Under IDERA, the airline grants the creditor the authority to:

• Deregister the aircraft from the NCAA’s civil aircraft registry.
• Export the plane from Nigeria if the lessee defaults on financial obligations.

IDERA streamlines the repossession process by ensuring creditors can quickly recover and export their assets, minimizing financial risks in case of default.

---

The Typical Process of Revoking, Deregistering, and Exporting an Aircraft and the Role of IDERA (Role of IDERA):

Issuance of IDERA

• When an aircraft is leased or financed, the lessee (airline) signs an IDERA in favor of the creditor (lessor or financier).
• This document grants the creditor the legal right to request the deregistration and export of the aircraft directly from the NCAA if the airline defaults on its financial obligations.

Triggering Default

• The process begins when the lessee (airline) fails to meet its financial obligations as per the lease or loan agreement, typically failing to make lease payments or breaching other contractual terms.
• The creditor issues a formal notice of default to the airline, requesting rectification within a stipulated timeframe.

Notice to the NCAA

• If the airline does not remedy the default within the specified period, the creditor can submit the IDERA to the NCAA along with a formal request for the deregistration and export of the aircraft.
• The IDERA serves as proof of the creditor’s legal authority to act on the aircraft’s deregistration and export without further consent from the airline.

Verification and Deregistration by NCAA

• Upon receiving the creditor’s request, the NCAA verifies the validity of the IDERA and the claim of default. If all documents are in order, the NCAA begins the deregistration process.
• The NCAA will issue a deregistration certificate, officially removing the aircraft from Nigeria’s civil aviation registry.

Coordination of Export

• Following deregistration, the creditor works with the NCAA and relevant customs authorities to obtain the necessary export documentation.
• The aircraft can then be moved out of Nigeria to a location chosen by the creditor, either for return to the lessor or for sale or release to another airline.

Return of the Aircraft to Creditor

• Once the aircraft is deregistered and all formalities are completed, the aircraft is either flown or transported to its next destination, as determined by the creditor or lessor.

• How Nigerian Banks Can Leverage IDERA to Revitalize the Airline Industry
• Aircraft Leasing and the Role of IDERA in Nigeria’s Airline Industry
• Managing Stress and Fatigue: A Shared Responsibility
• Aviation Industry: A Call for Integrity and Intentional Change
• Nigeria Lost the USA FAA Category One Rating: #Implications

---

Key Takeaways (Role of IDERA):

Streamlined Process for Creditors

• IDERA provides a clear, legal mechanism for financiers to recover their assets in case of default.
• It reduces the time and legal complexity involved in repossession, deregistration, and exportation.

Protection for Financiers

• IDERA ensures that creditors’ interests are protected, making Nigeria an attractive market for leasing companies and financiers.
• This protection encourages more favorable financing terms for Nigerian airlines, as the risk of asset loss is reduced.

Impact on Airlines

• Airlines must maintain strict financial discipline to avoid triggering IDERA processes.
• Defaulting can lead to an immediate reduction in fleet size, impacting routes, operations, and overall competitiveness.

---

Recommendations for Airlines to Avoid IDERA Triggers:

Maintain Financial Discipline (Role of IDERA)

• Airlines should prioritize timely payments on lease agreements and maintain good financial standing with creditors.

Regular Communication with Creditors

• Establish open lines of communication with leasing companies and financiers. If financial difficulties arise, airlines should proactively negotiate new terms rather than risk triggering the IDERA process.

Diversify Funding Sources (Role of IDERA)

• Airlines should seek diversified sources of financing to avoid over-reliance on a single creditor, reducing the likelihood of default.

Fleet Management (Role of IDERA)

• Optimize fleet operations by regularly assessing the financial viability of each aircraft in the fleet. Maintaining operational efficiency can prevent financial distress that leads to default.

---

Conclusion

The Irrevocable Deregistration and Export Request Authorization (IDERA) is a powerful tool that protects the interests of aircraft financiers and lessors in Nigeria. For airlines, understanding the process and implications of IDERA is crucial to maintaining healthy relationships with creditors and avoiding the risks of deregistration and export. While IDERA provides a safety net for financiers, it places the onus on airlines to ensure financial stability and proper fleet management to prevent the loss of assets.