The civil aviation industry emerged in the 1920s, but the real growth began after World War II. In the 1950s, the civil aviation industry began to be used much more for leisure travel as well as for business uses. By the expansion of the domestic and global air transport system, aviation has made the domestic and global economies and cultures cross-fertilise and caused markets to proliferate in number and to grow in size and wealth. Today, the civil aviation industry is an integral part of the infrastructure of the world economy and is too critical to the world economy to be allowed to fail. In order to develop the civil aviation industry, a considerable amount of capital was required to support the growth of airlines' fleet size. Traditionally, airlines acquired their aircraft through straight purchase transactions. Following the traffic growth and demands to replace used aircraft, airlines were forced to find other sources of finance for their aircraft acquisitions. Therefore, various types of lease financing became attractive and financially advantageous to airlines. Aircraft financing emerged rapidly and developed all over the world.
However, Aircraft financing is a complicated process which involves not only the final users of the aircraft but also the manufacturers, banks or other private investors, trustees, lessons, institutional lenders and so on. Moreover, aircraft are moveable and expensive. Even if the capital is available, risk may still be one of the key factors that affect the result of an aircraft acquiring transaction. Since the transaction process is complicated, a number of instruments have been introduced to secure aircraft financing. It is even more difficult in cases of international aircraft financing where parties from different jurisdictions are involved and with complicated conflicts of law. In international aircraft financing, difficulties may arise because every right or interest in aircraft is based on a national legal system which often has conflicts with foreign legal systems where the rights or interests may have to be experienced. Many efforts have been made to introduce globally accepted principles and regulations in aircraft financing. Although the process of formulating international conventions or treaties is full of thorns, some conventions and treaties respecting international aircraft financing have been adopted during the past decades.
As one of the largest aircraft importing countries, UK is becoming more and more important in civil aviation industry. UK's unique legal environment gives it a special nature. Following the implementation of the Reform and Open-up policy, the current legal system was gradually established in the last 30 years to regulate numerous new problems that arose from UK's rapid economic growth. The basic legal framework of aircraft financing has evolved to meet the needs of the fast development of UK's aircraft financing. Aircraft financing has developed for over 50 ...