Australia's aviation industry has received a major boost with the Australian Government completing the formal accession to the Cape Town Convention.

Deputy Prime Minister and Minister for Infrastructure and Regional Development Warren Truss said acceptance of the Convention will help Australian airlines gain access to lower cost finance for aircraft purchases.

“The Cape Town Convention is an internationally recognised legal framework for registering and enforcing security interests in aircraft,” Mr Truss said. “It is intended to reduce risk for creditors, meaning lower borrowing costs for the purchase of aircraft assets. “Importantly, the Cape Town Convention also applies to aircraft carrying as little as eight passengers or 2,750kg of goods—meaning that our regional airlines and general aviation sector can also benefit from lower aircraft purchase costs.

“It is estimated that Australian airlines could save up to $5.6 million on the purchase of a new Airbus A380 and up to $330,000 on the purchase of a new ATR72 aircraft. “These changes will better equip Australia's aviation industry for future challenges by enabling them to accelerate fleet upgrades and enhance their international competitiveness.”

The Instrument of Accession and a series of declarations have been deposited with the International Institute for the Unification of Private Law, completing the formal accession process to the Cape Town Convention.

The Cape Town Convention will enter into force in Australia on 1 September 2015