AIRPORT ECONOMIC REGULATIONS

SUBSIDIARY LEGISLATION 499.19

AIRPORT ECONOMIC REGULATIONS

1st October, 2002

LEGAL NOTICE 299 of 2001, as amended by Legal Notices 448 of 2004,

194 and 411 of 2007, and 132 of 2011 and Act XL of 2023.

The title of these regulations is the Airport Economic

Regulations.

In these regulations, unless the context otherwise requires

"aerodrome" shall have the same meaning as that assigned to it

by article 2 of the Air Navigation Act;

"air carrier" shall have the same meaning assigned to it in the

Allocation of Slots at Airport Regulations;

"airport" means any land area specifically adapted for the

landing, taking-off and manoeuvring of aircraft, including the

ancillary installations which these operations may involve for the

requirements of aircraft traffic and services, i ncludi ng th e

installations needed to assist commercial air services;

"airport charge" means a levy collected for the benefit of the

airport managing body and paid by the airport users for the use of

facilities and services, which are exclusively provided by the

airport managing body and which are related to landing, take-off,

lighting and parking of aircraft, and processing of passengers and

freight;

"airport facility charges" means all those charges, not being

airport charges;

"airport managing body" means a body that has as its objective

the administration and management of the airport infrastructure,

and the co-ordination and control of the activities of the different

operations present in the airport;

"Airport operator" means the airport managing body;

"airport user" means any natural or legal person responsible for

the carriage of passengers, mail and, or freight by air to or from the

airport concerned;

"AUC" means the Airport Users Committee which is set up at the

airport representing airport users;

"the Authority" means the Authority for Transport in Malta

established by article 5 of the Authority for Transport in Malta Act;

"the Directive" means Directive 2009/12/EC of the European

Parliament and of the Council of 11 March 2009 on airport charges;

"Minister" means the Minister responsible for Civil Aviation.

AIRPORT ECONOMIC

(1) The determination, review and regulation of airport

charges as well as the quality of service provided shall be the

responsibility of the board established by this regulation.

(2)

(a) There shall be established a board, to be known as the

Airport Charges Regulatory Board, hereinafter referred

to as "the Board", which shall meet once a year, unless

agreed otherwise in the latest meeting of the Board.

(b) The Board shall be chaired by a person of recognised

standing and experience in economics, who shall be

appointed by the Minister.

(c) The Chairman shall hold office for a period not

exceeding three years, which may be renewed for a

further period or periods of three years each.

(d) The Board shall, apart from the Chairman, be

composed also of the following members

(i)

one representative from the Civil Aviation

Directorate within the Authority for Transport in

Malta;

(ii) one representative of the AUC;

(iii) one representative of the Airport operator.

(e) The members and the Chairman of the Board shall

each have one vote. The Chairman shall have a casting

vote in the case of an equality of votes.

(3) The quorum for meetings of the Board shall be of two

members and the Chairman.

(4)

(a) The Airport operator shall be entitled to propose an

a d j u s t m e n t i n t h e l e v e l o f a i r p o r t c h a rg e s , o r a

modification of the system or structure of airport

charges in accordance with this sub-regulation.

(b) The Airport operator shall communicate its proposal,

together with the reasons for the proposed changes, to

the AUC, for consultation, at least four months before

the proposals are expected to enter into force, unless

there are exceptional circumstances which need to be

justified to airport users.

(c) Prior to each consultation with the AUC, the Airport

operator shall provide the AUC with information on

the components serving as a basis for determining the

system or the level of all airport charges, which

information shall include

(i)

a list of the various services and infrastructure

provided in return for the airport charge levied;

(ii) the methodology used for setting airport

charges;

(iii) the overall cost structure with regard to the

facilities and services which airport charges

relate to;

(iv) the revenue of the different charges and the total

cost of the services covered by them;

(v)

any financing from public authorities of the

facilities and services which airport charges

relate to;

(vi)

forecasts of the situation at the airport as regards

the charges, traffic growth and proposed

investments;

(vii)

the actual use of airport infrastructure and

equipment over a given period;

(viii) the predicted outcome of any major proposed

investments in terms of their effects on airport

capacity; and

(ix) plans for new infrastructure projects before

these plans are finalised.

(d) Prior to each consultation with the Airport operator,

the AUC shall provide to the Airport operator the

following information in respect of each airport user

(i) forecasts as regards traffic;

(ii) forecasts as to the composition and envisaged

use of their fleet;

(iii each airport user’s development projects at the

airport concerned;

(iv) each airport user’s requirements at the airport

concerned.

(e) The information provided in terms of this sub-

regulation shall be considered as confidential and

economically sensitive and shall be handled

accordingly. Any applicable stock exchange

legislation shall be complied with.

(5) After communicating its proposals to the AUC, the Airport

operator shall submit its proposals to the Board, taking into

account, insofar as is reasonably possible, any views put forward

by the AUC.

(6)

(a) As part of the consultation process, the Airport

operator and the AUC may enter into negotiations with

a view to concluding a service level agreement.

(b) Any such service level agreement shall determine the

level of the service to be provided by the Airport

operator which takes into account the actual system or

the level of airport charges and the level of service to

which airport users are entitled in return for airport

charges.

(7) In determining, reviewing, regulating or investigating an

increase in the level of airport charges or the modification of the

system or structure of airport charges, in terms of sub-regulation

(5), the Board shall have access to necessary information from the

Airport operator, the AUC and any other parties concerned.

(8) The Board shall issue its decision not later than three

months of the proposal being submitted to it by the Airport

operator.

AIRPORT ECONOMIC

(9) In addition to airport charges, the Airport operator shall be

entitled to recover from airport users, whether through increases in

airport charges or otherwise, the increase in costs or loss of revenue

resulting from exceptional or unforeseeable events including, but

not limited to, discriminatory changes in taxation or similar levies,

Government measures which impose additional costs in respect of

aviation security or the protection of the environment.

(1) The Board shall, in the execution of its functions, seek

to promote the following

(a) the interests of airport users, and the Maltese

economy; and

(b) the efficient, economic and profitable operation of the

airport and the aerodrome.

(2) In considering the interests of users and of the Maltese

economy, the Board shall seek to balance the application of the

following principles

(a) charges shall be reasonably related to costs, including

depreciation and a return on capital employed;

(b) the Airport operator is to be encouraged to invest in

airport facilities to meet demand;

(c) charges should be comparable to those levied at other

airports which serve areas competing with Malta as a

tourist destination;

(d) the achievement of service standards applicable

internationally in the industry.

(3) In considering the need to promote the efficient and

profitable operation of the airport, the Board shall seek to balance

the application of the following principles

(a) allow the Airport operator to benefit from any increase

in aviation and non-aviation revenues and

improvements in efficiency by permitting the Airport

operator to enjoy above-average returns on capital

employed by reference to the industry;

(b) allow the Airport operator experience below-average

returns on capital employed that may result in the

course of normal commercial operations of an airport

while ensuring that the Airport operator has the

minimum financial means to provide users with a safe

and reliable service

For the purpose of this paragraph, the Board shall

normally permit levels of return on capital, taking into

account aviation and non-aviation revenues earned and

the value of related assets located at the airport and

aerodrome, within a range of one-half to one and a half

times of the risk adjusted return on capital for the

industry;

(c) any activities not existing on the entry into force of

these regulations, including but not limited to, retail

outlets, shall not be included in the calculations

reckoned pursuant to those stipulated in paragraph (b).

The Airport operator’s revenues, costs and assets

associated with such activities will not be included in

the calculations of the Airport operator’s return on

capital employed.

The Airport operator and the Board shall agree the detailed

process for conducting each review, including a timetable for

completion of the review, which will -

(a) enable careful consideration of the criteria specified in

regulation 4;

(b) permit users and the Airport operator to prepare for the

effects of the conclusions of any review; and

(c) limit the impact on the resources of the Airport

operator.

In conducting its review, the Board will be permitted to

charge the Airport operator its reasonable costs, including the costs

of retaining appropriate consultants and experts necessary to carry

out its functions in a proper manner.

Airport facility charges shall be determined by the Airport

operator.

(1) Upon receiving a complaint, or if the Minister has

reasonable grounds for suspecting that the Board is failing to

comply, or has failed to comply, with these regulations, the

Minister may, within one month from the receipt of the complaint

or from the date on which the airport charges have been

determined, conduct an investigation in terms of subregulations (2)

and (3).

(2) The investigation shall be conducted in an independent and

transparent fashion with the assistance of individuals of recognized

standing in the economic regulation of airports.

(3) The investigation shall be concluded by a reasoned written

report.

(4) The recommendations contained in the above-mentioned

report shall be accepted or rejected by the Minister who will then

determine the appropriate course of action.

The Authority shall ensure the correct application of the

measures taken to comply with the Directive and that the

procedure, conditions and criteria applied by it shall be relevant,

objective, non-discriminatory and transparent.

In the event of disagreement between the members of the

Board over a decision on airport charges, every member may seek

the intervention of the Authority which shall examine the

justifications for the modification of the system or the level of

airport charges.

(1) A modification of the system or the level of airport

charges decided upon by the Board shall not, if brought before the

Authority, take effect until the Authority has examined the matter.

(2) The Authority shall, within four weeks of the matter being

brought before it, take an interim decision on the entry into force of

the modification of airport charges, unless the final decision can be

taken within the same deadline.

(3) Without prejudice to sub-regulation (2), the Authority shall

issue a final decision as soon as possible, and in any case within

four months of the matter being brought before it. This period may

be extended by two months in exceptional and duly justified cases.

(4) The decisions of the Authority shall, subject to review in

accordance with the provisions of article 469A of the Code of

Organization and Civil Procedure, be binding on the Airport

operator and airport users.

(5) The Authority shall publish an annual report concerning its

activities.

When determining or regulating airport charges or

undertaking any review or investigation into the justification for

any increase in the level of airport charges or the modification of

the system or structure of airport charges, the Board or the

Authority shall be permitted to levy a charge on the Airport

operator and the AUC to cover its reasonable costs, including the

costs of engaging appropriate consultants and experts as may be

necessary to carry out its functions in a proper manner.

(1) Any person who fails to provide the Airport Charges

Regulatory Board or the Authority with the relevant information

requested within a reasonable time specified in a written notice

shall be guilty of an offence.

(2) Any person who knowingly provides false information to

the Board or the Authority shall be guilty of an offence.

(1) A person who commits an offence under regulation

13(1) shall be liable, on conviction, to a fine (multa) not exceeding

two thousand five hundred euro (€2,500), and in case of a second or

subsequent conviction, to a fine (multa) not exceeding five

thousand euro (€5,000).

(2) A person who commits an offence under regulation 13(2)

shall be liable, on conviction, to a fine (multa) not exceeding ten

thousand euro (€10,000) or to imprisonment for a term not

exceeding six months, or to both such fine and imprisonment.