Chapter 5 - A Canadian Air Operator that Leases an Aircraft Registered in a Foreign State

5.1  Regulatory Reference

The regulatory reference for a Canadian air operator that is operating under Part IV, VI or VIl and that leases an aircraft registered in a foreign state is paragraph 203.02(1)(c).

5.2  Leasing Authorization Required

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

5.3  Applicant Submissions

The applicant, i.e. the Canadian air operator who is leasing and operating the foreign registered aircraft shall submit a completed LF-3, the fee, a copy of the lease agreement, and other documentation that confirms compliance with Subpart 203 and Standard 223.03(3). A signed copy of the lease must be submitted to the Minister within seven days of the authorization being issued.

5.4  Evidential Requirements

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

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

Refer to the checklist in Appendix D of this manual.

5.5  Application Review and Approval

The regional Aircraft Registration and Leasing division will distribute the LF-3 and all other relevant documentation to the following regional/TCC divisions for review and approval:

  1. Aircraft Certification
  2. Aircraft Maintenance and Manufacturing
  3. Commercial and Business Aviation (for an air operator); or General Aviation (for a flight training unit operator)

OR: in the case of an Airline Inspection Division operator:

  1. Airline Inspection Division
  2. Aircraft Certification
  3. Aircraft Maintenance and Manufacturing

The LF-3 has a signature coordination block on the bottom. Sign-off by the appropriate divisions is required prior to the issuance of the leasing authorization.

5.6  Issuance of a 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 air operator lessee by regional Aircraft Registration and Leasing staff who hold Delegation of Authority C-9 (Civil Aviation Licensing Officers).

CARs reference: 203.03(2)

5.7  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 of issue, 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)

5.8  Leasing Authorization Fee

The fee to process an LF-3 is $995.00, in accordance with the requirements of Subpart 104. Cost recovery fees (section 1.19 of this manual) may also be involved.

5.9  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.

5.10  Document Copy/Distribution

Copies of the LF-3 and LF-6 shall be placed on the regional leasing file. Copies must also be forwarded to the Chief, Aircraft Registration and Leasing (AARRC).

5.11  Maximum Number of Leased Aircraft/Limitations

There is a limit to the number of foreign aircraft that a Canadian air operator may lease. The number of foreign aircraft leased by a Canadian air operator must not exceed more than 25 percent of the Canadian aircraft registered in its name, 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(1)

5.12  Time/Limitations

There is a limit of 24 months in any consecutive 30-month period that Canadian air operators may be issued with a leasing authorization. This means that in any 30-month period the air operator must go a minimum of 6 months without being issued any leasing authorizations for foreign aircraft.

CARs reference: 203.08(a)

5.13  Individual Aircraft/Limitations

The use of any particular foreign aircraft by Canadian air operators is limited to 24 months in any 30-month period. This means that once a foreign aircraft has been in use by a Canadian air operator for 24 months, it may not be the subject of another leasing authorization by any other Canadian air operator for a minimum of 6 months.

CARs reference: 203.08(b)

5.14  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)

5.15  Aircraft Certification Eligibility Requirements

To be eligible for certification, an aircraft must be listed by serial number on a Canadian type certificate or where applicable, on a United States, Federal Aviation Administration (FAA) type certificate accepted by the Minister, as referenced in Airworthiness Notice B038.

Note - Where a Canadian type certificate exists for the associated aircraft type, the FAA type certificate will not be considered in determining the eligibility of the leased aircraft.

5.16  Compliance With CARs Chapter 507/Foreign Aircraft

For a foreign registered aircraft to be leased by a Canadian air operator, the aircraft must comply with all the conditions for the issuance of a certificate of airworthiness in the standard or special (restricted) category and be eligible for inclusion on a Canadian operator certificate. The lessor does not need to hold an air operator certificate.

5.17  Maintenance Records Inspection

Prior to operation in Canada, the aircraft and its maintenance records must be inspected by TCCA inspectors to ensure that the aircraft has been maintained to a standard equivalent to that contained in CARs Chapter 571.

5.18  Foreign Inspection Program

If the inspection program to be used is one that is required by the foreign air operator’s regulatory authority, it must be evaluated and where necessary, supplemented by additional tasks to meet Canadian airworthiness requirements.

Note - Canadian air operators leasing aircraft registered in the United States should be aware of the requirements of Federal Aviation Regulations (FAR) Part 129. FAR Part 129.14 requires that any person leasing a U.S. registered aircraft used in common carriage (commercial service) receive approval of FAA Flight Standards district office having geographical responsibility for the air operator (see section 5.19 below).

5.19  FAA Facilitation

To facilitate the approval process for Canadian air operators wishing to lease a U.S. registered aircraft, two FAA offices have been designated:

  1. for air operators located east of longitude 100 degrees west, contact the FAA eastern regional office; Manager, Flight Standards division, at (718) 553-3200; and
  2. for air operators located west of longitude 100 degrees west, contact the FAA northwest mountain regional office; Manager, Flight Standards division, at (425) 227-2200.

5.20  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 that address corrosion prevention and control programs. Aircraft that are subject to these airworthiness directives must be inspected and maintenance records reviewed to determine compliance with the airworthiness directive provisions, 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.

5.21  Modifications and Repairs – Review and Acceptance

A TCCA Aircraft Certification Engineer will review the modifications and repairs on foreign aircraft in accordance with Aircraft Certification Policy Letter 50 (ACPL 50), Aircraft Certification Staff Instruction 23 (ACSI 23), and Airworthiness Notice B004.

Following a review of embodied modifications and repairs, the acceptance should be recorded by attaching the list of the accepted modifications and repairs (including all supporting documentation) to the leasing file.

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