Wet lease-out to non-Community air carrier
The first attempt to establish an EU-wide regime for aircraft wet-leases was part of the EU Licensing of Air Carriers Regulation (2407/92). However, the regulation proved imprecise, leaving a broad scope of interpretation and powers to national civil aviation authorities. In order to remedy this situation, the European Union adopted two new sets of harmonised measures: EU Regulation 1008/2008 and EU-Ops.(1) The combination of these measures was intended to create a new, comprehensive, harmonised regime. They superseded the previous national regulations (which, in the meantime, were complemented to varying degrees by the non-binding Joint Aviation Requirements (JAR-Ops) initially enacted by the Joint Aviation Authorities).
In 1996 the Belgian Civil Aviation Authority (BCAA) enacted the Circular on the Leasing of Aircraft for Commercial Air Transport (CIR/OPS-05), which is based on EU Regulations 2407/92 and 3922/91 and certain JAR-Ops principles.
EU Regulation 1008/2008 defines a 'wet lease' as "an agreement between air carriers pursuant to which the aircraft is operated under the air operator certificate of the lessor".(2) One of the main principles introduced by the regulation is that a Community air carrier may freely lease aircraft unless this would endanger safety. Unfortunately, the text of the Belgian circular has not been amended further to the 2008 reforms. As a consequence, lease-in or lease-out arrangements involving Belgium face certain difficulties.
EU Regulation 2407/92 established a relatively strict regime regarding wet lease operations, stipulating as follows:
- For the purposes of ensuring safety and liability standards, an air carrier that uses an aircraft from another undertaking or provides it to another undertaking must obtain prior approval for the operation from the appropriate licensing authority. The conditions of approval must be part of the lease agreement between the parties.
- An EU member state may not approve agreements that lease an aircraft with crew to an air carrier to which it has granted an operating licence unless safety standards equivalent to those imposed under Article 9 are met.
Thus, the regulation sets out the principle that such operations may not be authorised unless the conditions in Article 9 are met.
Regulation 1008/2008 sets out a liberalised principle whereby:
"[Community air carriers] can freely lease aircraft, except where this would lead to endangering safety. The Commission shall ensure that the implementation of such provision is reasonable and proportionate and based on safety considerations."
Thus, no limitations other than those imposed by the regulation can be applied to lease agreements to which a Community air carrier is a party.
Prior authorisation by national authorities must be granted on a proportionate and reasonable basis. A wet lease agreement can be refused only on the grounds of safety.
However, the BCAA does not comply with these principles, as the circular still provides as follows:
- The relevant principle is contained in EU Regulation 2407/92 - that is, wet lease-in operations are subject to the condition of "safety and liability standards equivalent to those imposed by the BCAA";
- The lessee must provide evidence that the proposed lease agreement remains reasonably proportionate to the capacity offered by the aircraft, as specified in its licence and air operator certificate; and
- The lessee must provide the results of a recent technical and operational audit of the lessor's safety and liability standards, as performed by the Belgian operator according to the national civil aviation authority's requirements.
Wet lease-out to non-Community air carrier
Pursuant to EU Regulation 1008/2008, wet lease-out operations between a Belgian lessor and a lessee that is not a Community air carrier do not require prior approval from the national authority. This is consistent with EU-Ops. Notwithstanding these provisions, which are directly applicable under Belgian law, the Belgian circular:
- stipulates the prior approval of wet lease-out operations by the BCAA; and
- states that "the wet lease-out period should not normally exceed 45 days", which limits such arrangements.
These provisions clearly do not comply with the terms of EU Regulation 1008/2008 and EU-Ops, and restrict the operations of Belgian carriers.
For further information on this topic please contact Pierre Frühling at Holman Fenwick Willan LLP by telephone (+32 2 643 3400), fax (+32 2 643 3488) or email ([email protected]).
(1) Then EU Regulation 8/2008; now EU Regulation 859/2008, amending EU Regulation 3922/91.