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Air carrier operations

Operating authorisation

What procedural and documentary requirements must air carriers meet in order to operate in your jurisdiction?

Under Article 778 of the Navigation Code, air carriers must:

  • be companies located in Italy whose effective control is owned directly or through majority ownership by member states or citizens of member states;
  • carry out as their main business the activity of air transport, either alone or combined with any other commercial activity in the sector of operation, repair or maintenance of aircraft;
  • own a valid certificate of airworthiness issued by the Civil Aviation Authority (ENAC);
  • own or lease (ie, under a dry lease) one or more aircraft, as provided by Article 4 of Circular EAL-16A, enacted by ENAC on December 23 2015;
  • ensure that the people in charge of such key functions as administration, finance and marketing meet certain professional requirements;
  • provide satisfactory evidence of meeting the administrative, financial and insurance requirements of EU Regulation 1008/2008 and EU Regulation 785/2004, as amended by Regulation 285/2010; and
  • ensure that the top management meet certain honourability requirements and have not been declared bankrupt.

Ownership and control

Do any nationality or other requirements or restrictions apply to ownership or control of air carriers operating in your jurisdiction?

In order to qualify for an EU licence, Article 4 of EU Regulation 1008/2008 requires airlines to:

  • have their principal place of business in an EU member state;
  • be principally engaged in air transport activities;
  • be at least 50% owned – directly or indirectly – and effectively controlled by an EU member state or nationals of an EU member state; and
  • be managed by persons of good reputation.

Pursuant to Article 8 of the regulation, airlines must be able to demonstrate to the competent licensing authority that they meet the above requirements for a licence at all times.

Financial requirements

What financial thresholds must air carriers meet to obtain operating authorisation?

According to ENAC Circular EAL-16A of December 23 2015, air carriers must be able to meet their current and potential obligations on the basis of realistic assumptions for 24 months after obtaining an operating authorisation. Air carriers must comply with certain reporting requirements towards ENAC, concerning issues that include:

  • extraordinary corporate transactions;
  • changes in the shareholder structure; and
  • material changes in their operational business plan (eg, changes in the type of aircraft used).

Following review of the information received, ENAC may decide to confirm, suspend or revoke the operating authorisation or to grant a provisional authorisation with a 12-month duration.

Insurance coverage

What is the required level of insurance coverage for air carrier operations?

Insurance for hull risk, hull war risk and liability for damage incurred by crew and passengers is mandatory (Articles 935 and 942 of the Navigation Code). Moreover, on December 21 2011 ENAC issued Circular EAL-17-A, implementing EU Regulation 785/2004 and EU Regulation 285/2010 on insurance requirements for air carriers and aircraft operators.

Under Circular EAL-17-A, air carriers must comply with the following minimum coverage requirements:

  • 250,000 special drawing rights per passenger;
  • 1,131 special drawing rights per passenger for baggage; and
  • 19 special drawing rights per kilogram for cargo.

Safety requirements

What safety requirements apply to air carrier operations, including with regard to professional and technical certifications?

ENAC applies international rules governing the maintenance of aircraft (eg, European Aviation Safety Agency Regulations Part 145 and EU Regulation 3922/91), as well as all EU regulations, including:

  • EU Regulation 748/2012, laying down implementation rules for the airworthiness and environmental certification of aircraft and related products, parts and appliances, as well as for the certification of design and production organisations; and
  • EU Regulation 1321/2014, on the continuing airworthiness of aircraft and aeronautical products, parts and appliances, and on the approval of organisations and personnel involved in these tasks.

Environmental obligations

What environmental obligations apply to air carrier operations?

The parties to the UN Framework Convention on Climate Change and the Kyoto Protocol have undertaken to control and reduce the emission of greenhouse gases. In order to meet its obligations under international law, the European Union enacted the EU emissions trading system (ETS) through the EU Emissions Trading Scheme Directive (2003/87/EC), which applied from January 1 2005.

The EU Aviation Emissions Trading Scheme Directive (2008/101/EC) extended the scope of the ETS to aviation activities. All flights arriving at or departing from airports situated in an EU member state are generally covered by the ETS. The aircraft operators are listed in EU Regulation 748/2009, as amended. The Aviation Emissions Trading Scheme Directive has been implemented into Italian law by Legislative Decree 257/2010. Under the directive, each aircraft operator must surrender a number of allowances equal to the total emissions produced, duly notified and certified during the preceding calendar year from its aviation activities by April 30 each year. Administrative penalties up to interdiction at EU level apply to air carriers that breach these obligations.

For each year of the current trading period (ie, 2013 to 2020), this quantity is reduced to the equivalent of 95% of historical aviation emissions. As a consequence of the reduction of the total quantity of allowances, the number of allowances to be allocated free of charge to aircraft operators will be equally reduced. In the current trading period this accounts for 82% of all allowances allocated, with 3% being held in a special reserve for fast-growing aircraft operators and new entrants in the market. The applicable reference parameter for the allocation of allowances free of charge for the period from January 1 2013 to December 31 2020 is 0.000642186914222035 allowances per ton-kilometre. The percentage of allowances auctioned in the current trading period is equal to 15% of all allowances allocated.

In order to tackle the structural supply-demand imbalances that are expected to continue, the Environment Commission of the European Parliament has approved the introduction of a market-stability reserve relating to all carbon markets, which should be established in 2018 and should be operational from January 1 2019.

Air traffic control

How are air traffic control services regulated in your jurisdiction?

ENAV is the Italian company in charge of controlling and supporting air traffic. ENAV’s remit is to:

  • allow aircraft to fly within the assigned airspace with constantly enhanced levels of safety, optimising the effectiveness of the service provided and the efficiency of the company;
  • handle the airspace safely and consistently, guaranteeing operational continuity and regularity;
  • manage air space and air traffic; and
  • provide air traffic services (ATS).

ATS are intended to:

  • prevent collisions between aircraft;
  • prevent collisions between aircraft in the manoeuvring area and obstructions in such area;
  • expedite and maintain an orderly flow of air traffic;
  • provide advice and information useful for the safe and efficient conduct of flights; and
  • notify appropriate organisations regarding aircraft in need of search and rescue aid, and assist such organisations when required.

Routes

Do any licensing requirements apply to specific routes?

Under Article 15 of EU Regulation 1008/2008, no permit or authorisation by an EU member state is required for the operation of intra-community air services by EU-licensed air carriers. The air carrier can therefore exercise traffic rights within the European Economic Area to any destination for both scheduled and chartered flights.

Are any public service obligations in place with respect to remote destinations?

According to Article 782 of the Navigation Code, as amended by Legislative Decree 96/2005 and Legislative Decree 151/2006, the government may impose public service obligations to guarantee the right of mobility provided by Article 16 of the Italian Constitution. Article 782 of the Navigation Code complies with EU Regulation 1008/2008 and EU Regulation 95/1993, as amended by EU Regulation 793/04.

The government may impose public service obligations in respect of domestic scheduled air services serving a peripheral or developing region or on a thin route to any regional airport, when such route is considered vital for the economic development of the region in which the airport is located. The Italian government imposes public service obligations to and from Sicily and Sardinia.

Charter services

Do any special provisions apply to charter services?

Non-EEA charter carriers must apply for entry permission if they wish to fly to Italy. ENAC is responsible for regulating the services of non-scheduled air transport under a regulation enacted on December 21 2015. The permit can be obtained for a single flight or for several flights. The permit is granted only if the home country of the charter carrier grants entry permissions to Italian charter carriers in the same way (ie, under the reciprocity principle). ENAC requires non-EU carriers to meet technical requirements and administrative provisions, including those relating to the prevention of attacks against civil aviation under Article 787 of the Navigation Code.

Taxes

What taxes apply to the provision of air carrier services?

Under Law 324/1976, air traffic is subject to the following taxes:

  • landing and take-off fees, based on the weight of the aircraft;
  • stopping fees, based on the weight of the aircraft and the ground time; and
  • passenger boarding fees, based on the number of passengers boarded. Passengers who transit because of a stopover are exempt. Children under two years old are exempt. Children from two to 12 years old are subject to a 50% fee reduction. This fee is subject to value added tax at the time of the recourse to the passenger.

The measure of airport fees may be revised every year based on the pricing policy of the sector and changes to costs.

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