CIVIL AVIATION (AIR TRANSPORT LICENSING) REGULATIONS (airtransportlicensing)

SUBSIDIARY LEGISLATION 499.28

CIVIL AVIATION (AIR TRANSPORT LICENSING)

REGULATIONS

1st May, 2004

LEGAL NOTICE 78 of 2004, as amended by Act VIII of 2010.

The title of these regulations is the Civil Aviation (Air

Transport Licensing) Regulations.

(Regulations 3, 4 and 5)

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

on financial fitness of air carriers.

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.

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,

p r o p o s e d t a k e - o v er o r m e rg e r, m o d i f i c a t i o n s i n s h a r e c a p i t a l , c h a n g e s i n

shareholders, etc.

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

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.

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

CIVIL AVIATION (AIR TRANSPORT LICENSING)

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 -

"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

operator 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 fina ncial

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

annually without undue delay the audited accounts relating to the

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

not apply to air transport undertakings exclusively engaged in

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

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

grant of an operator licence by reason of the applicant not holding

ownership of aircraft provided however that he has one or more

aircraft at his disposal through ownership or any form of lease

agreement.

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

operator 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 operator 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 operator 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.