THE Aviation Sector Understanding (ASU) talks, hosted by OECD, have concluded with in principle approval for state financing to support the export of commercial aircraft. The OECD Release states that this would move fees closer to market rates and allow regular adjustments to reflect market developments.

A broad understanding was arrived at by the participating governments – Brazil, Canada, EU (including France, Germany, UK and Italy), Japan and the US. The Participants aim to have formal approval by January 20, 2011, with entry into force on February 1, 2011.

The objective of the agreement is to create and maintain a market- and risk-based fee system that produces a level playing field between manufacturers, airlines and governments.

The agreement, if formally approved, will unify the previous disparate financing terms and conditions between large and regional jets. It also contains mechanisms to smooth very sharp market movements.

There are no quantitative restrictions on export credit agency programmes.

The agreement includes a transition period for certain previously ordered aircraft which will be covered by existing financing terms.