Sergi Giménez Binder January 11 2023 Year in review: Spanish aviation industry 2022 Augusta Abogados | Aviation - Spain Sergi Giménez Binder Aviation LegislationCase lawIndustry2023 outlookThis article identifies some of the most significant developments that took place during 2022 in Spain from the perspective of aviation law.LegislationJudiciary system reformAn organisational reform of the Spanish judiciary system approved in July 2022 means that passenger claims in air transport disputes are now being heard by the courts of first instance. Previously, such matters were tried by the commercial courts.The change has various practical consequences. The know-how accumulated at the 64 commercial courts may now be lost at the more than 450 courts of first instance. Further, airlines can now potentially be sued anywhere in Spain – under the previous system, the number of places was limited to Spain's 52 provincial capitals.New ADR procedureThe most significant legislative change relates to the approval of a new alternative dispute resolution (ADR) procedure for claims under the EU Flight Compensation Regulation on 17 March 2022 by Ministerial Order TMA/201/2022. It was envisaged that the new procedure would be implemented before the start of Summer 2022. However, it has suffered some delays and it is now expected that the new procedure will be implemented during the first or second quarters of 2023. The key aspects of the system are as follows:The Spanish Aviation Safety Agency (AESA) has been appointed as the sole arbitration entity. The AESA is presently in the final stages of becoming a qualified arbitration authority.The ADR proceeding will apply to claims under the EU Flight Compensation Regulation (eg, cancellations, significant delays, boarding denials and schedule changes), but only in respect of flights departing from Spain and flights departing from outside the European Union and arriving in Spain, unless such flights are operated by an EU carrier and the non-EU country grants compensation and assistance rights. Claims based on EU Regulation 1107/2006, concerning the rights of disabled persons and persons with reduced mobility, can also be submitted to the arbitration authority. As a result, the following types of claims are excluded from the new ADR proceedings and must still be referred to the ordinary courts of justice in the event of disagreemenclaims under the Convention for the Unification of Certain Rules for International Carriage by Air for personal injuries and baggage disruption damages; andclaims based on breaches of the contract of carriage beyond the scope of the EU Flight Compensation Regulation (eg, compensation for moral damages, loss of profit or pre-paid expenses).The new ADR proceeding is voluntary for passengers, who can choose to bring their claims before the AESA or use the usual court proceedings. Furthermore, passengers are not bound by the AESA's decision and may resort to the courts if they disagree with the decision made in the ADR proceedings.The ADR proceeding is, however, mandatory for airlines: they have an obligation to raise a defence in an ADR proceeding if it is launched by the passenger. Although airlines can appeal AESA decisions before the courts, decisions made by the AESA are enforceable while the appeal takes place. Thus, where the AESA rules in favour of the passenger, airlines must pay the compensation ordered by the AESA within 30 days, even if the decision is subject to judicial review. Furthermore, airlines that do not process the payment on time may be fined between €4,500 and €70,000 under the Air Safety Act 2003.Before starting an ADR proceeding, the passenger must have filed a formal complaint with the airline. If the airline does not respond or if it rejects the claim, the passenger can lodge their claim before the AESA.Some concerns have been raised about the controversial legality of the ministerial order that created the new ADR proceeding (for further details, see "New ADR proceeding for air passenger claims: legality of new regulation"). These concerns relate primarily to the fact that the AESA has been appointed as an arbitration authority while also being the national enforcement body for matters concerning the EU Flight Compensation Regulation. This dual role puts into question the AESA's neutrality given its broad powers of inspection, supervision and sanction over the same subject matter and the same facts (ie, the same flights) that will be subject to a resolution through the new ADR.Secondly, certain aspects of the new procedure also seem questionable: the different treatment of passengers and airlines in terms of the voluntary and compulsory nature of the ADR procedure and the legal effects of the ADR decision for each of them is highly controversial. It is certainly unusual that the procedure is voluntary for passengers and compulsory for airlines (but not for airport operators) and that the decision is binding on one of the parties and not on the other, depending on the outcome of the procedure. If the operator loses, the result is binding and it must pay; if the operator wins and the passenger claim is therefore proved to be unfounded, the result is no longer binding and the passenger is not obliged to pay anything, not even the procedural costs or expenses.Further, if the airline challenges an AESA decision in court, the passenger is exempted from the burden of appearing in the judicial proceedings. This seriously affects the company's right to effective judicial protection. This different treatment may give rise to a possible challenge on the ground of violation of the principle of equality enshrined in article 14 of the Constitution if it is considered that the discrimination between the two parties to the procedure lacks due justification.Airspace and flight procedure regimeIn May 2022, new regulations were approved through Royal Decree 310/2022 to approve the legal regime applicable to changes to the Spanish airspace and flight procedures. In doing so, Spain partially developed the provisions of the EU Commission Implementing Regulation, laying down common requirements for providers of air traffic management and air navigation services and other air traffic management network functions and their oversight.Ultralight aircraft legislationIn October 2022, Royal Decree 765/2022 approved a new regulation concerning ultralight aircraft, derogating the previous legislation, which dated back to 1982 (for further details, see "New ultralight aircraft regulation in Spain: what operators need to know"). This regulation now captures the design, production, maintenance and operation activities in respect of certain categories of aircraft with a maximum take-off mass (MTOM) of between 600 kilograms and 650 kilograms, depending on whether they are intended to be operated on water.The Spanish government has thus decided to issue domestic legislation relating to ultralight aircraft, including third-generation ultralight motorised (ULM) aircraft. The following are not considered to be ULM and continue, with some exceptions, being governed by the existing rules:sailplanes;paragliders;aeroplanes that require a physical effort from the occupant for take-off or landing;wingsuits; andaircraft with an MTOM of less than 70 kilograms.Case lawIt is not easy to summarise the large number of court decisions published in any given year. In 2022, two types of cases merit specific attention.Knock-on effectA first category of cases deals with the question of the so-called "knock-on effect" (for further details, see "Extraordinary circumstances and knock-on effect in Spain"). Air carriers are often disturbed by the knock-on effect that certain disruptions have on future operations planned for the same aircraft. The EU Flight Compensation Regulation does not expressly contemplate the possibility for the operating air carrier to rely on an "extraordinary circumstance" in situations where that circumstance affected a previous flight operated with the same aircraft, for the purpose of avoiding payment of compensation to passengers.In 2022, in line with two 2019 European Court of Justice judgments, various Spanish courts began to apply the "extraordinary circumstance" exemption to situations caused in previous rotations of the same aircraft. Pursuant to these judgments, it would be unreasonable to expect that airlines have spare aircraft for use upon an initial disruption. On this basis, further rotations of the disrupted aircraft would also warrant the legal treatment of "extraordinary circumstances", therefore releasing the airline from the obligation to pay compensation under the EU Flight Compensation Regulation.Emergency landing and illegal entry into SpainA case that obtained widespread media coverage and has the potential for a landmark decision relates to an incident that occurred in November 2021. A commercial aircraft had to conduct an emergency landing at the airport of Palma de Mallorca due to a passenger's alleged sudden illness. Once on ground, while the medical team was entering to treat the passenger, 23 passengers escaped from the aircraft using force against some crew members, jumped onto the tarmac and illegally entered the country.The Criminal Court of Palma de Mallorca opened criminal proceedings against more than 20 people in April 2022, accusing them of sedition, coercion and illegal immigration. An almost identical situation happened at the beginning of December 2022, this time in Barcelona – on this occasion, 27 persons illegally abandoned the aircraft.Industry2022 has been characterised by a significant number of disruptions caused by several strikes of personnel at various important airlines, including Ryanair, Easyjet, Vueling, Iberia Express and Lufthansa. The long queues of passengers and related problems seen at many European airports were also found in Spain, but on a smaller scale.Airlines including Iberia, Air Europa and Volotea received emergency funds from the Spanish government under legislation relating to the covid-19 pandemic, which helped them to overcome the crisis the pandemic caused. However, in general terms, all Spanish airlines are in the process of overcoming the most critical consequences of the crisis and are expanding their operations. In November 2022, Spanish airports had recuperated about 96% of the pre-pandemic number of passengers.The announced acquisition of Air Europa by the IAG Group was cancelled during the covid-19 pandemic crisis, but IAG retained a right to resume negotiations until the end of 2023 on an exclusive basis. It has recently been stated in the media that the parties are in talks again, so some movement might be seen in this area during 2023.2023 outlookFrom a legal perspective, it can be expected that the ADR procedure for passenger claims will be implemented during 2023. Certain teething problems are to be expected, but the Spanish authorities expect that this new system will alleviate the workload of the courts of justice.An amendment of the regulations relating to the aircraft registry is also presently under discussion. The main aim is to clarify certain doubts that have arisen in connection with the cancellation of Spanish registration marks due to the interplay of the current regulatory body and the irrevocable de-registration and export request authorisation contemplated by the Cape Town Convention 2001.For further information on this topic please contact Sergi Giménez Binder at Augusta Abogados by telephone (+34 933 621 620) or email ([email protected]). The Augusta Abogados website can be accessed at www.augustaabogados.com.