Civil Aviation (Air Transport Licensing) Regulations, 2004

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 17,541, 17 ta’ Frar, 2004

L.N. 78 of 2004

CIVIL AVIATION ACT

(CAP. 232)

Civil Aviation (Air Transport Licensing) Regulations, 2004

IN exercise of the powers conferred by article 3 of the Civil

Aviation Act, the Minister responsible for Transport and

Communications has made the following regulations:-

(1) The title of these regulations is the Civil Aviation Citation and

commencement.

(Air Transport Licensing) Regulations, 2004.

(2) These regulations shall come into force on such date or

dates as the Minister responsible for Transport and Communications

may, by notice in the Gazette, appoint.

(Regulations 3, 4 and 5)

Information for use in association with regulations 3, 4 and 5

on financial fitness of air carriers.

A. Information to be provided by a first-time applicant from a financial

fitness point of view.

1. The most recent internal management accounts and, if available, audited

accounts for the previous financial year.

2. A projected balance sheet, including profit and loss account, for the

following two years.

3. The basis for projected expenditure and income figures on such items as

fuel, fares and rates, salaries, maintenance, depreciation, exchange rate

fluctuations, airport charges, insurance, etc. Traffic/revenue forecasts.

4. Details of the start-up costs incurred in the period from submission of

application to commencement of operations and an explanation of how it is

proposed to finance these costs.

5. Details of existing and projected sources of finance.

6. Details of shareholders, including nationality and type of shares to be

held, and the Articles of Association. If part of a group of undertakings,

information on the relationship between them.

7. Projected cash flow statements and liquidity plans for the first two years

of operation.

8. Details of the financing of aircraft purchase/leasing including, in the

case of leasing, the terms and conditions of contract.

B. Information to be provided for assessment of the continuing financial

fitness of existing licence holders planning a change in their structures or in their

activities with a significant bearing on their finances.

1. If necessary, the most recent internal management balance sheet and

audited accounts for the previous financial year.

2. Precise details of all proposed changes, eg., change of type of service,

proposed take-over or merger, modifications in share capital, changes in

shareholders, etc.

3. A projected balance sheet, with a profit and loss account, for the current

B

financial year, including all proposed changes in structure or activities with a

significant bearing on finances.

4. Past and projected expenditure and income figures on such items as

fuel, fares an rates, salaries, maintenance, depreciation, exchange rate fluctuations,

airport charges, insurance, etc. Traffic/revenue forecasts.

5. Cash flow statements and liquidity plans for the following year,

including all proposed changes in structure or activities with a significant bearing

on finances.

6. Details of the financing of aircraft purchase/leasing including, in the

case of leasing, the terms and conditions of contract.

C. Information to be provided for assessment of the continuing financial

fitness of existing licence holders.

1. Audited accounts not later than six months after the end of the relevant

period and, if necessary, the most recent internal management balance sheet.

2. A projected balance sheet, including profit and loss account, for the

forthcoming year.

3. Past and projected expenditure and income figures on such items as

fuel, fares and rates, salaries, maintenance, depreciation, exchange rate

fluctuations, airport charges, insurance, etc. Traffic/revenue forecasts.

4. Cash-flow statements and liquidity plans for the following year.

In these regulations, unless the context otherwise requires - Interpretation.

"Agreement" means an agreement between groups of States to

which Malta is a party, reciprocally granting to citizens of such States

or their dependants the right to enter, remain and reside in and leave

the country of such States, to move freely within such States for such

period as may be established in the agreement and to work or

establish, provide or receive services therein; and "Agreement State"

shall be construed accordingly;

"air transport undertaking" means a person whose business

includes the carriage by air of passengers or cargo for hire or reward;

"business plan" means a detailed description of the air transport

undertaking’s intended commercial activities for the period in

question, in particular in relation to the market development and

investment to be carried out, including the financial and economic

implications of these activities;

"Council Regulation EEC 2407/92" means the Regulation

promulgated by the Council of the European Communities on 23 July

1992;

"Director" means the Director of Civil Aviation and, to the

extent of the authority given, any person so authorised in that behalf

by the Director;

"management account" means a detailed statement of income

and costs for the period in question including a breakdown between

air-transport related and other activities as well as between pecuniary

and non-pecuniary elements.

(1) An applicant air transport undertaking to which an

air service licence is to be granted for the first time must be able to

demonstrate to the reasonable satisfaction of the Director that

(a) it can meet at any time its actual and potential

obligations, established under realistic assumptions, for a period

of twenty-four months from the start of operations; and

(b) it can meet its fixed and operational costs incurred

for operations according to its business plan and established

under realistic assumptions, for a period of three months from

the start of operations, without taking into account any income

from its operations.

(2) For the purpose of subregulation (1), an applicant shall

submit a business plan for, at least, the first two years of operation.

The business plan shall also detail the applicant’s financial links with

any other commercial activities in which the applicant is engaged

either directly or through related undertakings. The applicant shall

also provide all relevant information, in particular the data in Part A

of the Schedule to these regulations.

(1) An air transport undertaking shall notify the

Director in advance of its plans for operating a new scheduled service

or non-scheduled service, to a continental or world region not

previously served, changes in the type or number of aircraft used or a

substantial change in the scale of its activities. It shall also notify in

advance any international mergers or acquisitions and shall notify the

Director within fourteen days of any change in ownership of any

single shareholding which represents 10% or more of the total

shareholding of the air transport undertaking or of its parent or

ultimate holding company. The submission of a twelve-month

business plan two months in advance of the period to which it refers

shall constitute sufficient notice under this subregulation for the

purposes of change to current operations and, or circumstances which

are included in that business plan.

(2) If the Director deems the changes notified under

subregulation (1) to have a significant bearing on the finances of the

air transport undertaking, he shall require the submission of a revised

business plan incorporating the changes in question and covering at

least, a period of twelve months from its date of implementation, as

well as all the relevant information, including the data referred to in

Part B of the Schedule to these regulations, to assess whether the air

transport undertaking can meet its existing and potential obligations

during that period of twelve months. The Director shall take a

decision on the revised business plan not later than three months after

all the necessary information has been submitted to him.

(3) The Director may, at any time and in any event whenever

there are clear indications that financial problems exist with an air

transport undertaking licensed by him, assess its financial

performance and may suspend or revoke the licence if he is no longer

satisfied that the air transport undertaking can meet its actual and

potential obligations for a twelve-month period. The Director may

also grant a temporary licence pending financial reorganisation of the

air transport undertaking, provided safety is not at risk.

An air transport undertaking shall provide to the Director Provision of

annually without undue delay the audited accounts relating to the audited

accounts.

previous financial year. At any time upon request of the Director an

air transport undertaking shall provide the information relevant for

the purposes of regulation 4(3), and, in particular, the data referred to

in Part C of the Schedule to these regulations.

The provisions of regulations 3, 4(1) and (2), and 5 shall Licensing of

not apply to air transport undertakings exclusively engaged in certain aircraft.

operations with aircraft of less than 10 tonnes mtow (maximum take-

off weight) and, or less than 20 seats. Such air transport undertakings

shall at all times be able to demonstrate that their net capital is as

specified in Council Regualtion EEC 2407/92 or to provide, when

required by the Director, the information relevant for the purposes of

regulation 4(3). The Director may nevertheless apply regulations 3,

4(1) and (2), and 5 to air transport undertakings licensed by him that

operate scheduled services or whose annual turnover exceeds the

amount established by Council Regulation EEC 2407/92.

An air transport undertaking shall be insured to cover Insurance cover.

liability in case of accidents, in particular in respect of passengers,

luggage, cargo, mail and third parties.

(1) The Director shall not refuse an application for the Ownership,

grant of an air service license by reason of the applicant not holding lease

registration of

ownership of aircraft provided however that he has one or more aircraft.

aircraft at his disposal through ownership or any form of lease

agreement.

(2) An aircraft used by an air transport undertaking to which

an air service licence is granted shall be registered at the option of the

Director, either in Malta or in an Agreement State, except when the

aircraft is the subject of a short-term lease agreement to meet

temporary needs or otherwise in exceptional circumstances.

The Director may require that the air transport undertaking

re-submits its air service licence for approval when -

(a) an air transport undertaking has ceased operations

for six months or has not started operations for six months after

the grant of an air service licence;

(b) a change in one or more elements affecting the legal

situation of the undertaking and, in particular, in case of

mergers or take-over

Provided that the air transport undertaking may, in

such case as is referred to in this paragraph (b), continue its

operation unless the Director considers that it should cease

operation because safety is at risk, notifying the air transport

undertaking with his reasons for doing so.