Environmental, social and governance (ESG) initiatives have vastly affected recent commercial and investment activity, and aviation is no exception. In just the last year, we have seen unprecedented investment by major airlines and others in new sustainable aviation technology, including electric vertical take-off and landing aircraft (eVTOL), electric commercial aircraft, hydrogen propulsion engines, hybrid electric aircraft, new offerings of sustainable aviation fuel, and many others. Such investments—whether via purchase of equipment, debt or equity investments, or other commercial arrangements—present exciting and transformative opportunities for manufacturers, airlines and customers. But they also present unique, and in many cases, substantial risks for airlines. As such, conducting appropriate legal due diligence—and engaging an experienced legal team to do so—is critical.
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