Dentons HPRP assists PT SMFL Leasing Indonesia in securing the first-ever IDERA issued in Indonesia for a domestic aircraft financing transaction

Dentons HPRP has successfully assisted PT SMFL Leasing Indonesia, a domestic financing company, in obtaining an Irrevocable Deregistration and Export Request Authorisation (IDERA) in connection with a domestic aircraft finance lease transaction involving PT Whitesky Aviation Indonesia.

This transaction represents the first-ever IDERA issued in Indonesia in favor of a domestic financing company in a domestic aircraft financing transaction, marking a significant milestone in the development of Indonesia’s aviation finance sector.

The transaction involved novel regulatory considerations regarding the availability of IDERA protections to domestic financiers, as well as the application of the international interest framework under the Cape Town Convention and the Aircraft Protocol within the Indonesian legal and regulatory landscape. Dentons HPRP assisted the client through extensive legal analysis of the relevant aviation and financing regulations and engaged in ongoing discussions and correspondence with the Directorate General of Civil Aviation (DGCA) concerning the interpretation and implementation of the applicable rules. These efforts ultimately contributed to the introduction of an explicit regulatory provision under the DGCA framework recognizing the availability of IDERA in support of domestic aircraft financing arrangements, thereby providing greater legal certainty for domestic financiers participating in the aviation sector.

The successful issuance of the IDERA is a landmark achievement for Indonesia’s aviation finance market. As the first IDERA ever issued in Indonesia in respect of a domestic aircraft financing transaction involving a domestic financier, it establishes an important precedent for future transactions and confirms that the protections afforded by the Cape Town Convention framework are available not only in cross-border financing structures but also in qualifying domestic financing arrangements. The achievement is expected to support broader participation by domestic financial institutions in aircraft financing and leasing transactions and further strengthen Indonesia’s aviation finance ecosystem.

The Dentons HPRP team advising on this matter was led by Hendra Ong (Partner), with support from Ken Atyk Nastiti (Senior Associate) and Hilwa Az Zahra Adwani (Associate).

For further information or assistance with similar aviation finance, aircraft leasing, and aviation regulatory matters, please contact one of the Partners listed under Key Contacts.