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Authorized Party in the New Regulation of IDERA

Authorized Party in the New Regulation of IDERA

CLIENT ALERT : AUGUST, 2018 Practice Group: Transportation

The Ministry of Transportation has recently issued Regulation No. 52 of 2018 Regarding Civil Aviation Safety Regulations Part 47 Regarding Aircraft Registration (“MOTR Regulation 52/2018”) revoking the Ministry of Transportation Regulation No. 49 of 2009 Regarding Civil Aviation Safety Regulations Part 47 Regarding Aircraft Registration (“MOTR Regulation 49/2009”). This brief article tries to discuss as to whether or not problematic in the implementation of Irrevocable Deregistration and Export Request Authorizations (“IDERA”) in Indonesia has sufficiently been addressed by adding further stipulation on the “authorized party” which was absent in the previous regulation.


Anggia Rukmasari

Menara Prima 18th Floor
Jl. DR. Ide Agung Anak Gde Agung Blok 6.2
Jakarta 12950, Indonesia
T: +62 21 5794 7880
F: +62 21 5794 7881


IDERA implementation in Indonesia has been a problem for parties involved in aircraft financing. One of the major problems is relating to who can be the authorized party in IDERA documents, since Law No. 1 of 2009 Regarding Aviation and MOTR Regulation 49/2009 do not specifically regulate it. Therefore, many people believes that IDERA can be given to any party appointed by the operator or registered owner as long as the party is “creditor” as defined in Convention on International Interests in Mobile Equipment and Protocol to the Convention on International Interest in Mobile Equipment on Matters Specific to Aircraft. 

However, based on the internal policy of the Directorate General of Civil Aviation (“DGCA”), they are only willing to issue IDERA to a direct lessor as the authorized party. This causes a problem especially in an international aircraft financing transaction which commonly uses two-tier lease structure in which the debtor, who is the owner of the aircraft, leases the aircraft to their affiliate or subsidiary company whose role serves as the head-lessee. Subsequently, the head-lessee further leases the aircraft to the operator (sub-lessee). In this case, the operator may only provide IDERA to the head-lessee who is an affiliate or a subsidiary of the owner, and not directly to the owner of the aircraft itself. Hence this condition is not ideal for the creditors.

Responding to this problem, MOTR Regulation 52/2018 regulates more specific the definition of a creditor as authorized party in IDERA in Subpart E number 47.95 point c, which consists of: (i) chargee on security agreement; (ii) conditional seller in title reservation agreement; or (iii) lessor in leasing agreement. In addition, Subpart E number 47.95 point i stated that the authorized party can appoint another party as the only party who is authorized to apply the deregistration of an aircraft. 

Even though the creditor has been defined in the MOTR Regulation 52/2018, there are still some remaining issues that need to be addressed, such as: (i) whether the lessor in the lease agreement includes the head lessor; and (ii) whether in case IDERA is granted for the benefit of an intermediate lessor (in a two-tier lease structure involving the head lessor), an intermediate lessor may provide certified designee letter for the benefit of the creditor from the head lessor. These issues are not covered in the MOTR Regulation 52/2018.

To sum up, MOTR Regulation 52/2018, in our view, is still not able to fully solve the problems concerning who can be the authorized party in IDERA documents. Ministry of Transportation needs to do a public socialization to further clarify these issues. Ministry of Transportation can also address these issues in operational technical guidelines and implementation guidelines in DGCA Regulation. In addition, other than defining the creditor in IDERA, Subpart E of IDERA in MOTR Regulation 52/2018 also regulates the issuance of IDERA, registration and cancellation of IDERA, registration and cancellation of the certified designee letter, cancellation of aircraft registration pursuant to IDERA, Export Certification of Airworthiness and endorsement of copy of IDERA Form and certified designee letter.


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