In 2019 a number of airlines challenged fines issued by the Immigration Authority (DNM) – in particular, fines relating to an entrance tax imposed on US, Canadian and Australian citizens. A number of recent court decisions revoked such fines and may lead the way towards a new conceptual approach by the Argentine courts regarding the fines that the DNM regularly, and often incorrectly, imposes on airlines.
The COVID-19 pandemic has resulted in the introduction of several new resolutions in Argentina. For example, on 12 March 2020, in a general agreement of ministers, the president decreed a state of public emergency for one year and on 19 March 2020 a number of social, preventive and mandatory isolation measures were established. This article examines the effects of COVID-19 on the Argentine aviation industry.
Federal Civil and Commercial Court 2 recently dismissed a damages claim against Aeromexico brought by two passengers for the rescheduling of their flights. The court found that the decision to reschedule the relevant flights had been approved by the Argentine Aviation Authority and that the plaintiffs had been informed of the rescheduled flights in a correct, clear and detailed way.
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 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.
The COVID-19 pandemic has turned the global aviation industry on its head with operations slowly grinding to a complete halt. At present, no international or domestic flights are permitted to operate to, from or within The Bahamas with the exception of those authorised by The Bahamas Civil Aviation Authority to conduct cargo or emergency relief flights.
There was much progress in The Bahamas' aviation sector in 2019; in particular, the completion of the runway rehabilitation project at the country's gateway airport and the aircraft registry project. Unfortunately, there were also a few setbacks. This article provides an overview of the main issues that affected the aviation sector in The Bahamas over the past 12 months.
In recent years, there has been significant growth in air traffic to and from The Bahamas. As a result, the government has taken proactive steps to support this growth – notably, with upgrades to several of the country's busiest airports. For example, the Nassau Airport Development Company recently commenced a major rehabilitation project at the Lynden Pindling International Airport. This project will, among other things, include an asphalt upgrade to increase the runway's lifespan.
The Bahamas' flight information region airspace comprises tens of thousands of miles and is subject to significant overflight activity. Moreover, it is one of the most important airspaces and is worth millions in revenue. To further enhance the civil aviation sector, the government is seeking to create a self-funded and sustainable management programme in order to collect overflight fees, while paying the US Federal Aviation Administration a fee for the management of its airspace.
The Bahamian government continues to make progress towards enhancing its aircraft registry and ratifying the Cape Town Convention. For example, the Aviation Steering Committee (ASC) recently presented draft legislation to implement the Cape Town Convention to the Attorney General's Office. The ASC expects this draft legislation to be approved and presented to the Cabinet before the next government budget communication in Summer 2019.
The Council of Ministers recently approved preliminary draft legislation amending the Passenger Data Processing Act. Among other things, the proposed changes concern the protection of individuals with regard to the processing of personal data, data exchanges and the cross-checking of passenger data following the identification of suspicious passengers. The changes aim to bring the act into line with the EU General Data Protection Regulation.
As a result of the Cape Town Convention on International Interests in Mobile Equipment coming into force in Bermuda, leasing companies, owners, lenders and other parties that deal with Bermudian entities participating in aircraft transactions and/or aircraft registered in Bermuda may opt to take the additional steps necessary to obtain the protections conferred by the convention. This article revisits key points concerning the implementation of the convention and declarations relating thereto.
The COVID-19 crisis has brusquely forced businesses and professionals to close offices and work from home. Luckily, the Brazilian government began implementing measures relating to electronic filings and electronic signatures approximately 20 years ago, all of which have made closing aircraft deals from home offices relatively easy. The Brazilian Aeronautical Registry has adjusted some of its requirements on an interim basis to serve the aviation community by facilitating compliance with necessary formalities and filings.
Brazil's airlines are now being subjected to a withholding tax that has not been charged on most leases for more than three decades. Airlines may be able to successfully challenge the legality of the withholding tax; however, this will require dedication of legal and administrative resources that might have been used elsewhere to fortify the airlines. In any event, under the final text of the law, the likelihood of lessors being liable for withholding tax has been reduced significantly.
A draft law providing emergency relief due to the COVID-19 pandemic has been submitted to the lower house of Congress. The impact of the draft law on the rights of aircraft lessors would be significant and would place into question Brazil's compliance with the Cape Town Convention on International Interests in Mobile Equipment and the Protocol to the Convention on Matters Specific to Aircraft Equipment.
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 number of recent aircraft repossession actions have demonstrated that a majority of judges have correctly recognised lessor rights to repossession in the face of apparent lease agreement defaults. However, these decisions have not clearly cited the Cape Town Convention as their basis. The Brazilian judiciary's failure to unify repossession actions against a bankrupt lessee in a single court has meant that some lessors are subject to minority view decisions that can be upheld on appeal.