Chapter 4 - A Foreign Air Operator that Leases a Canadian Aircraft from a Canadian Air Operator

4.1  Regulatory Reference

The regulatory reference for a foreign air operator that leases a Canadian aircraft from a Canadian air operator that is operating under Part IV, VI or VII is paragraph 203.02(1)(b).

4.2  Leasing Authorization Required

A leasing authorization is required under this type of leasing operation.

4.3  Applicant Submissions

The applicant, i.e. the Canadian registered owner, shall submit a completed LF-2, the fee, a copy of the lease agreement, and other documentation that confirms compliance with Subpart 203 and Standard 223.03(2). A signed copy of the lease must be submitted to the Minister within seven days of the authorization being issued.

4.4  Evidential Requirements

The applicant for a leasing authorization must provide evidence about the leasing operation that may be:

  1. be specified within the lease;
  2. be supplied through other documentation; or
  3. be established through a TCCA review of the proposed leasing operation.

Refer to the checklist in Appendix C of this manual.

4.5  Application Review and Approval

The regional Aircraft Registration and Leasing division will distribute the LF-2 and all other relevant documentation to the following regional/TCC divisions for review and approval:

  1. Aircraft Maintenance and Manufacturing
  2. General Aviation
  3. Commercial and Business Aviation

The LF-2 has a signature coordination block on the bottom. Sign-off by the appropriate divisions is required prior to the issuance of the leasing authorization.

4.6  Issuance of Leasing Authorization

The Minister will issue a leasing authorization when the applicant has demonstrated that the requirements of Subpart 203 and Standard 223 are met. The leasing authorization shall be issued to the Canadian registered owner by regional Aircraft Registration and Leasing staff who hold Delegation of Authority C-9 (Civil Aviation Licensing Officers).

CARs reference: 203.03(2)

4.7  Conditions of Issue

The Minister will specify in the authorization those conditions governing the operation that are necessary to ensure aviation safety. Where TCCA subject matters experts have specified conditions, they will be added to the leasing authorization under the “conditions of issue” section. In addition, if TCCA and the applicable foreign civil aviation authority have agreed to any mutual obligations, commitments, special conditions or requirements to be fulfilled as part of the lease arrangement, they shall be included or referenced in the leasing authorization.

CARs reference: 203.03(2)

4.8  Leasing Authorization Fee

The fee to process an LF-2 is $1,200.00, in accordance with the requirements of Subpart 104. Cost recovery fees (see section 1.19 of this manual) may also be involved.

4.9  Fee Collection

The fee shall be submitted with the application. The fee applies whether or not the applicant is ultimately successful in obtaining a leasing authorization.

4.10  Document Copy/Distribution

Copies of the LF-2 and LF-6 shall be placed on the regional leasing and aircraft files. Copies must also be forwarded to the Chief, Aircraft Registration and Leasing (AARRC).

4.11  Maximum Number of Leased Aircraft/Limitations

A Canadian air operator is restricted to leasing no more than 25 percent of the aircraft registered in its name to a foreign air operator, rounded to the next higher whole number, as follows:

  • 1 to 4 registered aircraft = 1 aircraft that can be leased;
  • 5 to 8 registered aircraft = 2 aircraft that can be leased;
  • 9 to 12 registered aircraft = 3 aircraft that can be leased; and
  • 13 to 16 registered aircraft = 4 aircraft that can be leased, etc.

CARs reference: 203.07(2)

4.12  Time/Limitations

There are no limitations on the period of time that Canadian air operators may lease Canadian aircraft to foreign air operators, in this type of leasing operation, however a termination date must be specified on the leasing authorization (see section 1.8 of this manual).

4.13  Individual Aircraft/Limitations

There are no limitations on the number of leasing authorizations that may be consecutively issued to a Canadian aircraft.

4.14  Consent of Foreign Civil Aviation Authority

The consent of the applicable foreign Civil Aviation Authority is required before a leasing authorization can be issued. This consent should be in writing.

CARs reference: 203.04(1)

4.15  Airworthiness Eligibility Requirements

The following clarifies the requirements of the regulations and standards and is necessary to ensure the safe operation of a Canadian registered aircraft by a foreign air operator:

a.  where the aircraft is to be maintained by or under the authority of the foreign air operator, the organization that will perform and certify the work must have a valid maintenance approval or equivalent document, for the aircraft type that is the subject of the leasing operation, issued by the airworthiness authority of the country of the lessee. This approval will ensure that an evaluation of the maintenance organization has been carried out by the foreign civil aviation regulatory authority; and

b.  TCCA inspectors must assess the foreign air operator’s ability to maintain the aircraft to Canadian airworthiness standards by:

  1. inspecting the proposed maintenance facility, if required;
  2. reviewing the qualifications of personnel who are assigned maintenance supervision and certification responsibilities;
  3. ensuring that the operator is aware of and can comply with Canadian requirements in all respects; and
  4. reviewing foreign maintenance rules to determine that they are acceptable and do not conflict with Canadian maintenance rules.

4.16  Responsibility for Airworthiness Surveillance

Responsibility for airworthiness surveillance will remain with the regional branch where the aircraft is normally based. A surveillance schedule for the leasing operation will be developed based on a risk assessment of the safety of the operation.

4.17  Delegation of Airworthiness Responsibility

The responsibility for airworthiness may be delegated to the foreign airworthiness authority where there is an agreement in force between Canada and the foreign authority that provides for this delegation.

4.18  Long Term Airworthiness Requirements

Certain airworthiness requirements have long term implementation times that are subject to additional compliance action. These include, but are not limited to, Airworthiness Directives (ADs) that address corrosion prevention and control programs. Aircraft that are subject to these ADs must be inspected and maintenance records reviewed to determine compliance with the provisions of the ADs, paying particular attention to the following:

  1. corrosion and structural related service bulletins;
  2. structural modifications and repairs, including major and multiple site damage repairs and damage tolerant repair;
  3. application of Supplemental Structural Inspection Programs (SSIPs);
  4. fatigue quality of multiple repairs; and
  5. major repair documentation, such as drawings, procedures and related technical data.
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