ABSTRACT
This chapter examines some of the legal implications of outsourcing in the airline industry. A significant consequence of the recession during the early 1990s has been a growing reliance by airlines on outsourcing their business requirements. One of the key areas in which airlines have sought outsourcing is aircraft leasing. In 1996, there were 34 major leasing companies which owned 1,760 jet aircraft. The first major consideration in outsourcing is the leasing of aircraft by an airline. The registration of the airline is the paramount legal consideration when an airline uses leased aircraft, since the basic postulate of law which applies to the legal identity of aircraft lies in Article 17 of the Chicago Convention, which states that aircraft have the nationality of the State in which they are registered. One of the key objectives of the virtual airline is to achieve the much coveted ‘lean and mean’ status as a business venture.
