On 23 December 2019 a 30% tax on services hired abroad by travel agencies located in Argentina was introduced. The fact that the new tax applied the day after its introduction created chaos for air companies as non-compliance can trigger fines with interest. The Argentine Tax Authority recently introduced a resolution to address the lack of clarity surrounding the collection of the new tax, but it will take time for carriers to implement the measures required to comply with the new regulations.
The Department of Transportation (DOT) has proposed significant changes to its disability regulations relating to the transportation of service animals by air. The DOT's current regulations require that airlines allow passengers to travel with a wide range of animals in cabin on the basis that they are service animals or emotional support animals. This article sets out the DOT's most significant proposed changes.
New limits of liability under the Montreal Convention 1999 recently came into force following the International Civil Aviation Organisation's review procedure under Article 24 of the convention. Airlines should update their general conditions on carriage, information for passengers and insurance policies, when needed, so that they reflect the revised limits of liability.
The Malaysian Aviation Commission (MAVCOM) recently announced that it had imposed RM2 million fines on AirAsia Berhad and its long-haul sister airline AirAsia X Berhad. MAVCOM further announced that it had imposed an RM856,875 penalty on Malaysia Airports (Sepang) Sdn Bhd, which is the operator of Kuala Lumpur International Airport. The fines come at a time of considerable uncertainty for MAVCOM and the Malaysian aviation industry.
In a recent Federal Administrative Court case – in which the German court referred questions to the European Court of Justice (ECJ) – Deutsche Lufthansa AG achieved its goal of defending itself effectively against higher airport charges and underlined the possibility of a judicial review to examine the appropriateness of airport charges. However, the ECJ decision clarifies that, for the time being, there is no scope for free pricing under the EU Airport Charges Directive and thus no contractual freedom for airport users.
The French Civil Aviation Authority's Registration Office recently moved from Paris to Athis-Mons. As a result, aircraft mortgage beneficiaries must elect domicile in the jurisdiction of the Evry Tribunal Judiciaire. This will not prove too difficult for French banks, which may elect domicile at a branch in the Court of Evry's territorial jurisdiction; however, foreign lenders and non-banking mortgagees will have to find someone (eg, a notary) who will accept such election of domicile on their behalf.
Letters of credit are often issued in aircraft leasing transactions as an alternative to the provision of a cash security deposit and, less frequently, the obligation to pay maintenance reserves in cash. In an airline bankruptcy scenario, it is important to understand the differences that exist between different forms of letter of credit and some of the challenges that may arise for an enforcing lessor or financier.
The Italian Civil Aviation Authority (ENAC) recently approved a new drone regulation which will ease the transition to the EU Basic Regulation. Although EU legislation has already outlined a clear picture of the rules that will be definitively operational in the next few years, ENAC's regulation aims to safeguard the prerogatives and rights acquired by operators in the period before the EU drone legislation enters into force.
The Federal Government recently issued an executive order with the potential to change the tax treatment of commercial aircraft leasing. Subject to that determination, the executive order sets new rules for commercial aircraft and engine leases. However, the executive order has created considerable confusion and doubts in the aviation sector.
A recent Erding Local Court judgment concerned a compensation claim after four passengers missed their flight due to a security alert at the airport. The court decided that there was no entitlement to compensation because there had been no refusal of carriage by the airline. Given the growth of passenger numbers and the resulting need for extra security staff, the decision sets a positive and correct precedent for the benefit of airlines operating in Germany.
The Supreme Court recently upheld an appeal against the conviction of an air traffic controller who had cleared two aircraft in quick succession to take off from two crossing runways at Zurich airport. The decision is welcome news and contrasts with recent convictions of air traffic controllers handed down in Switzerland for operational incidents that resulted in neither injury nor damage.
The International Air Transportation Association (IATA) recently published a report on the Italian air transport market, focusing on the developments that would occur if more efficient conditions were introduced. According to IATA, civil aviation is competitive in terms of air transport support, but airport and passenger ticket taxes make Italy the seventh most expensive country at the continental level. This is having an adverse effect on Italy's attractiveness as a location for both business and tourism.
The US Treasury Department's Office of Foreign Assets Control (OFAC) recently announced sanctions against Apollo Aviation Group LLC for violation of the then-effective Sudan Sanctions Regulations. The takeaway from the OFAC's Apollo decision is clear: aircraft lessors cannot rely on a boilerplate lease clause to protect them; rather, they must exercise pro-active vigilance over the products that they are leasing out, know their customers and in some cases know their customers' customers.
The Administrative Court of Lazio (TAR) recently upheld Wizz Air's challenge and cancelled fines that had been imposed by the Italian Competition Authority (AGCM) on the airline for its hand baggage policy. The policy provided that only a small piece of hand luggage to be stored under the seat was allowed on board flights free of charge, while a fee had to be paid for larger pieces of hand luggage.
The Immigration Authority (DNM) repeatedly imposes substantial fines on carriers. Despite the fact that in many cases these fines have been wrongly imposed, airlines must pay any outstanding fines in order to file a judicial complaint against the DNM, so the fines are widely viewed as another cost of operating in Argentina. That said, a number of airlines have recently challenged the DNM's fines and the courts have given a clear sign that, even with the above difficulties, it is worth challenging this legal loophole.
Malaysia's International Aviation Safety Assessment air safety rating was recently downgraded from Category 1 to Category 2 by the US Federal Aviation Administration (FAA). As a result, all Malaysian airlines are now restricted from adding new flights to the United States, although existing flights will be allowed to continue under heightened FAA surveillance and checks. The downgrade also means that reciprocal code-sharing arrangements between US and Malaysian airlines are no longer permitted.
The US Department of Transportation (DOT) has issued a notice of proposed rulemaking to amend its regulations governing situations in which an aircraft remains on the airport tarmac without an opportunity for passengers to deplane for an extended period. Specifically, it proposes to change the departure delay exemption, carrier reporting requirements and record retention requirements, among others. Comments on the notice of proposed rulemaking must be filed with the DOT by 24 December 2019.
In most cases, flights are operated by aircraft that arrive at an airport from a previous flight. As such, flights are sometimes delayed or cancelled due to a delay or cancellation of the previous flight. The Tel Aviv District Court recently denied a motion for leave to appeal filed by a passenger whose claim regarding the cancellation of his flight due to lightning damage to the aircraft which had occurred during the previous flight was denied by the Tel Aviv Small Claims Court.
The Malaysian Aviation Commission Protection Code 2016 was recently amended. The amendments, which considered feedback from consumers and consultations with industry players, aim to promote greater transparency and fairness in dealings between airlines and passengers, which should allow consumers to enjoy monetary savings and make more informed decisions.
If the Maldives ratifies the Cape Town Convention on International Interests in Mobile Equipment and the Aircraft Equipment Protocol 2001, it is likely to have a direct and positive effect on airlines, passengers and the Maldives economy as a whole. For example, if borrowing costs reduce, this would pave the way for the acquisition of new modern aircraft with less fuel consumption – ultimately enabling airlines to pass on the benefits to passengers in the form of reduced travel costs.