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Clearances for Accidents, Incidents Replacing Nonincident Statements In Leases

IATA working group seeks to take NIS out of lease agreements once and for all.

Printed headline: For Lease

The long-standing custom of including nonincident statements (NIS) in lease agreements is on its way out. The contractual provision utilized by leasing companies to ascertain whether equipment has been involved in an incident while in the hands of the lessee suggests by its very name that a history of “incidents” has a determining effect on the aircraft’s airworthiness. Even worse, the varying definitions of “incident” and “accident” provided by the International Civil Aviation Organization (ICAO) and national aviation authorities create challenges for those saddled with executing the agreement.

The International Air Transport Association’s (IATA) Aicraft Leasing Advisory Group (ALAG), a collaboration between airlines and lessors represented by the Aviation Working Group (AWG), is finalizing the fourth edition of the group’s Guidance Material and Best Practices for Aircraft Leases, scheduled for release in the second quarter of 2017. In 2015, the publication dropped its use of the NIS in favor of the more pragmatic incident/accident clearance statement (ICS), which refocuses on the goal of airworthiness.

“Previous NIS language required confirmation that there had been no incident or accident, which, given broad definitions of the term, could require reporting of, for example, a crewmember injury,” explains IATA’s Safety and Flight Operations Operational Cost Management head Chris Markou, “while not saying much about the current condition of the equipment.”

Recognizing the challenge and seeing the need for standard language, the group created the ICS template, which states that even if an incident/accident occurred, the aircraft or the engine are cleared of any defects, as provided for in the maintenance manual. Through IATA and the AWG, airlines and lessors are promoting the ICS template as the preferred industry standard; over the past few years it has found widespread acceptance.

It begs a reminder that the ICS and NIS are commercial documents and not based on any regulatory requirement. Proper consideration should be made during lessee/lessor contract negotiations.

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Lease agreement on a legal contract or document and signature line with pen

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