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06 July 2011
ENAC, the Italian civil aviation authority, recently issued significant measures in the field of ground-handling services. It issued a regulation on the subject in March 2011, replacing a January 2011 regulation which had previously superseded the 2008 regulation. A draft circular is under discussion and has not yet entered into force; it will ultimately replace Circular APT-02A of January 25 2007. The key changes relate to subcontracting and self-handling (ie, arrangements whereby airlines provide handling services to their own flights and passengers).
The March 2011 regulation contains significant changes from the January 2011 version. Unfortunately, one such change makes the new version less clear. Article 1(1)(c) states that the regulation applies to air carriers when they self-handle "and/or conclude contracts, of any description, with a third party in order to provide one or more categories of ground-handling services" under Article 2(f) of Legislative Decree 18/1999. The term 'and/or' has caused uncertainty, but this appears to be resolved by a reading of Circular 2007. According to Article 6 of the circular, 'self-handling' refers to a situation in which an undertaking (ie, an air carrier, according to the draft circular) directly provides itself with one or more categories of ground-handling service and does not conclude contracts with a third party for the provision of such services. Only in these circumstances can an undertaking be described as undertaking self-handling.
The draft circular contains a provision which is absent from the 2007 circular. Article 13(3) provides that self-handling relates to activities performed by an air carrier that:
Article 5 of the 2007 circular provides that ground-handling services that are supplied on the basis of commercial agreements between air carriers (eg, code-sharing, franchising and lease agreements) may be regarded as falling within the definition of 'self-handling', whereas Article 6(6) of the new draft circular states the opposite. The latter rule is already contained in Article 13(2) of both versions of the 2011 regulation.
The two circulars also set out opposing rules with regard to the exercise of self-handling activities. The draft circular states that the exercise of such activities by an air carrier that holds an operating licence is not conditional on the carrier having obtained supplier ground-handling approval (except where specifically indicated), whereas the 2007 circular imposes this requirement.
The content of Article 7 of the new draft circular is consistent with the corresponding provision of the 2007 circular (ie, Article 6). According to the new draft provision, approval may be issued only to an undertaking which takes responsibility for carrying out services for entire categories - dividing the performance of services is not allowed (as specified in Article 1(3) of both versions of the 2011 regulation). This restriction is intended to prevent inefficiency, especially in terms of airside operational safety. Moreover, the division of categories of handling is also prohibited, except under Article 9(b) of the regulation. This limitation is set out in Article 1(3) of both versions of the 2011 regulation, whereas it is not envisaged in the 2007 circular or the 2008 regulation.
Stricter rules will be imposed on handlers that wish to provide their services at airports which are used by at least 5 million passengers a year. In such situations, and subject to liberalisation principles, ENAC will issue a certificate (or renew existing certification) subject to an assessment of the handler's activity over the preceding three years.
Article 13(3) of the March 2011 regulation empowers ENAC to assess the documentation provided by self-handling air carriers in order to ensure compliance with Article 9(2).
Article 7(1) of the 2008 regulation and Article 7(1) of the 2007 circular provide that the option of subcontracting is open to both the certified supplier and the managing body. However, Article 9(1) of the 2011 regulations and Article 10(1) of the draft circular confer this right exclusively on the certified supplier.
The March 2011 regulation and the draft circular amend the documents that they replace. Article 9(2)(b) of the regulation and Article 7(2) of the draft circular provide that in addition to Categories 1, 2, 5.4, 6.1, 6.3 and 10 under Annex A of Legislative Decree 18/1999, subcontracting is allowed for Categories 5.7, 6, 6.2, and 10.2 (excluding the transportation of dangerous cargoes).
Maximum value of subcontracting activities
Another change affects the terms on which subcontracting is allowed, especially those contained in Article 9(1)(a) of the 2011 regulations. The January version states that subcontracted activities may not exceed 30% (by value) of the turnover realised by the certified supplier in a single airport, whereas the March version refers to the same percentage of the annual global revenue that accrues to the certified supplier in relation to a single airport.
Certification of subcontractor
A certified supplier may subcontract, provided that ENAC authorises it to do so. In order to obtain such authorisation, the supplier must provide the airport management with a registration certificate (from the chamber of commerce) relating to the subcontractor. The certificate must be dated within the preceding six months and must include an attestation pertaining to compliance with anti-corruption rules, plus other documents as set out in Article 10(1)(3) of the circular. In contrast, the 2007 circular does not require the supplier to provide a registration certificate; rather, it is required merely to provide the airport management with documentary evidence that the requirements listed in Article 7 of the circular have been met - to this end, Article 7 requires a report to be filed to confirm compliance. The draft circular deals with both documentary evidence and the certificate of registration in Article 10(1)(3); the reporting requirement is set out in Article 10(1)(5).
Authorisation and refusal
Another difference between the draft and the 2007 circular is found in Article 10(1)(4) of the draft. It provides that ENAC may not authorise a subcontractor which has previously been denied certification for failing to meet requirements, or which has had its certification suspended or withdrawn, unless it is satisfied that the issues which led to the refusal, suspension or withdrawal have been resolved. This restriction is imposed directly by law; in such cases ENAC may not grant certification. However, the circular allows ENAC to identify a possible solution to the impediment to certification or the grounds for suspension or withdrawal; in the event of a positive finding, ENAC can issue the authorisation.
Article 7(1) of the 2008 regulation and Article 7(1) of the 2007 circular provide that a certified supplier may enter into a subcontract having verified that the operator applies safety and quality standards that are equivalent to its own (subject to certain regulatory conditions). Article 9(4) of the 2011 regulations and Article 10(1)(7) of the draft circular make the certified supplier responsible for ensuring that the subcontractor meets the requirements and applies the appropriate safety, qualitative and environmental standards (determined by the authorisation to subcontract). On the basis of a general preliminary commitment, the supplier is made responsible for permanent ongoing monitoring - using the verification mechanisms that it has developed to ensure that the subcontractor maintains the requirements, pursuant to Article 10(1)(5) and Article 16(1) of the circular. In the event of failure to comply, approval may be suspended for up to six months. ENAC may impose the penalty as a justified measure according to Article 17(1)(l) of the two 2011 regulations and Article 17(1) of the draft circular.
For further information on this topic please contact Laura Pierallini or Gianluigi Ascenzi at Studio Legale Pierallini e Associati by telephone (+39 06 88 41 713), fax (+39 06 88 40 249) or email (firstname.lastname@example.org or email@example.com).
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