Aircraft Escrow in Europe: A Different Approach to Cross-Border Aircraft Closings

For the better part of two decades, aviation escrow has meant one thing: a provider in Oklahoma City, operating under Oklahoma or Delaware law, on US business hours, in US dollars. That is not an accident of the market. The FAA Civil Aircraft Registry sits in Oklahoma City, and the title and escrow infrastructure that grew up around it became the default for aircraft transactions globally, regardless of where the aircraft, the parties, or the registry actually were.

For a domestic US transaction, that infrastructure makes complete sense. For a transaction closing in London, Dublin or Luxembourg, it is worth asking whether it still does.

We think it doesn’t, and we built Altrium to offer the alternative.

The Aircraft Closing-Day Problem

Every aviation lawyer who has run a European closing knows this afternoon. The Aircraft Purchase Agreement is signed. Conditions precedent are satisfied. The registry, whether the Irish Aviation Authority, the UK CAA, or the DGAC, needs to act before close of business to complete deregistration, re-registration, or the release of the mortgage. And the escrow agent holding the funds is in Oklahoma, where the business day has not yet started.

That is not a hypothetical inconvenience. It is a structural feature of US-based aircraft escrow when applied to European transactions, and it routinely costs four to five hours of usable closing time on deals where the registry’s working day is the actual constraint.

Altrium operates on European hours, from European accounts. When your registry opens, we are already at our desk. Funds move at European market open, not US market open, which means the registry has the full business day to act and the closing has the best chance of completing the same day it was scheduled to.

Multi-Currency Aircraft Escrow Without Unnecessary FX Risk

Most aircraft escrow providers operate in USD as a default, regardless of the currency the transaction is actually denominated in. For a EUR or GBP purchase price, that means an unnecessary currency conversion at the most sensitive point in the transaction, with the FX cost and timing risk that comes with it.

Altrium holds segregated escrow accounts in EUR, GBP and USD. The currency of the deal is the currency of the escrow. No conversion, no unnecessary intermediary step, no FX exposure introduced by the escrow mechanism itself.

Interest on Escrow Funds: Who Should Benefit?

Here is something the market has quietly normalised: many escrow providers retain all interest earned on client deposits as their own. On a transaction where funds may sit in escrow for several weeks while conditions precedent are satisfied, that interest is not trivial. On a $10m deposit, even a conservative yield compounds into a meaningful sum, and under the current arrangement, the client never sees it.

The FCA has been direct about this practice, describing it as a form of double-dipping inconsistent with fair value to clients. We agree, and built Altrium around the opposite principle. Interest on deposit is shared with the client by default, at generally competitive rates across major currencies. The client’s money works for the client, for the entire duration of the escrow period.

Choosing the Governing Law for an Aircraft Escrow Agreement

Standard US aviation escrow agreements are typically governed by Oklahoma or Delaware law. That is sensible for a transaction with a genuine US nexus. It is less obviously sensible when the aircraft is registered in Ireland, the seller is incorporated in Luxembourg, the buyer’s financing is governed by English law, and the only US connection in the entire transaction is the escrow agreement itself.

This is not a theoretical point. If a dispute arises over the release of funds, litigation or arbitration under Oklahoma or Delaware law, for parties and counsel with no US presence, means instructing specialist US counsel, navigating an unfamiliar procedural framework, and bearing the cost and inconvenience of a forum with no real connection to the deal. For a European transaction, an English law escrow agreement, sitting alongside English law financing documents and aligned with the rest of the transaction’s legal architecture, is simply a more coherent foundation, and a meaningfully cheaper one if something goes wrong.

Altrium’s escrow agreements are governed by English law or local European laws.

The Escrow Agent as Part of the Aircraft Purchase Agreement

Many aircraft escrow arrangements are documented through standalone escrow agreements operating alongside the Aircraft Purchase Agreement. At Altrium, where the transaction requires it, we can instead join the Aircraft Purchase Agreement directly as a named party, integrating the escrow arrangements into the transaction itself.

This allows us to administer the agreed conditions precedent, coordinate the delivery of closing documents with counsel, and release funds only once the contractual release conditions have been satisfied. Rather than simply holding funds, we facilitate the execution of the closing alongside the parties and their advisers.

For European aircraft transactions, we believe this integrated approach provides a cleaner and more efficient closing process than a standalone escrow arrangement operating separately from the principal transaction documents.

Aircraft Registry Filings and Cape Town Registrations

European aviation closings rarely involve a single filing. Deregistration from the seller’s national registry, re-registration with the buyer’s, discharge or assignment of existing security interests, and, for qualifying aircraft objects, registration of the relevant interest with the International Registry under the Cape Town Convention, all typically need to happen within the same working day, often in a specific sequence.

The Cape Town priority rule is unambiguous: the first party to register an interest takes priority, even over a prior but unregistered interest, and even if the later filer had actual knowledge of it. For qualifying aircraft objects under the Cape Town Convention, getting that registration in promptly is not a formality. It is a genuine point of legal and operational risk.

The same is true, in substance, of the national filings sitting alongside it. A registry that has not received the right documents at the right time, in the right order, can hold up a closing regardless of how clean the underlying transaction is.

Coordinating that sequence cleanly requires an escrow agent that is in direct contact with local counsels throughout the closing day, not one working several hours behind it. An escrow agent operating on a different clock is, by construction, working at a structural disadvantage in managing filings that genuinely need to happen on the day.

KYC, AML and Segregated Escrow Accounts

Compliance is often treated as the trade-off against speed: thorough KYC slows a deal down, a fast closing means cutting corners somewhere. We built Altrium on the view that this trade-off is a false one.

Our KYC and AML process is built from the ground up to be both rigorous and fast, with a 48-hour turnaround as standard, so that onboarding supports the closing timetable rather than dictating it. Client funds are held in segregated escrow accounts, kept entirely separate from Altrium’s own balance sheet, with full audit trail on every transaction, from deposit to release.

European Aircraft Escrow Services

Escrow accounts in EUR, GBP and USD. Competitive interest rates on deposit. A team operating in your time zone, available when your deal is moving and when your registry needs an answer. Direct integration into the Aircraft Purchase Agreement as a named party where the transaction requires it. English law documentation, aligned with the rest of your transaction’s legal framework. Rigorous coordination of the Aircraft Purchase Agreement closing process, including administration of the conditions precedent and release mechanics, supported by a complete audit trail. 48-hour KYC turnaround.

Specialist US providers have built exceptional expertise in FAA title, registration and International Registry filings, particularly for N-registered aircraft. Our proposition is not that this expertise is unnecessary, but that European transactions with a predominantly European legal and operational nexus may benefit from an escrow agent operating in the same jurisdiction, time zone and legal framework as the wider transaction.

European counsel and brokers are increasingly asking whether the US default is still the right one for their deals. We think the answer, for a growing number of transactions, is no.

If you are working on a European aircraft transaction and would like to discuss how Altrium can support it, we would welcome the conversation.