Recent developments and trends

Recent developments

Are there any notable recent developments or trends in the aviation sector in your jurisdiction?

Although the United Kingdom ratified the Convention on International Interests in Mobile Equipment and the associated Aircraft Equipment Protocol (known together as the Cape Town Convention) in November 2015, it can extend the Cape Town Convention to Bermuda only as of January 1 2018.  Bermuda made its own declarations under the Cape Town Convention, including the adoption of Alternative A, which is one of the conditions required to comply with the Organisation for Economic Cooperation and Development’s Aircraft Sector Understanding in order to obtain a discount on export credit financing.

Regulatory framework

Domestic law

What is the primary domestic legislation governing the aviation industry in your jurisdiction?

As Bermuda is an overseas territory of the United Kingdom, registration of aircraft in Bermuda is governed by a UK statute, the Air Navigation (Overseas Territories) Order 2013. Air Safety Support International, a wholly owned subsidiary company of the UK Civil Aviation Authority, acts as the oversight regulatory body for the United Kingdom’s overseas territories in relation to aviation matters.

International law

What international aviation agreements has your jurisdiction concluded?

Bermuda is a signatory to and has ratified the Chicago Convention through the United Kingdom.

Regulatory authorities

Which government bodies regulate the aviation industry and what is the extent of their powers?

Most matters relating to aviation are dealt with by the Bermuda Civil Aviation Authority (BCAA), which is a government quango with a statutorily appointed board of directors responsible for the performance of the BCAA in accordance with applicable law. The functions of the BCAA include all matters relating to:

  • the licensing, certification and regulation of aircraft, flight crew and aerodromes;
  • air navigation services, aviation security, management of the Bermuda Air Terminal, participation in the operation of the Bermuda International Airport; and
  • the economic regulation of air transport and the development of air services.

The BCAA is ranked as a Category 1 Aviation Regulatory Authority by the US Federal Aviation Administration (FAA).

The BCAA is subject to the Overseas Territories Aviation Requirements, which are similar to those of the European Aviation Safety Agency, the FAA and Transport Canada, and based on International Civil Aviation Organisation standards.

Air carrier operations

Operating authorisation

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

Aircraft can be registered in Bermuda in the commercial category only where the aircraft is to be operated in a jurisdiction with which Bermuda has an agreement under Article 83bis of the Convention on International Civil Aviation (Chicago 1944), to which the United Kingdom (representing Bermuda) is party. Under Article 83bis agreements, certain functions and duties normally carried out by a state registry are transferred to an operator’s state. The BCAA retains airworthiness oversight. This is an attractive position for lessors and owners, as they receive the asset on return with a complete maintenance history, in English, to a high standard.

Ownership and control

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

N/A.

Financial requirements

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

N/A.

Insurance coverage

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

N/A.

Safety requirements

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

The relevant European Aviation Safety Agency (EASA) approvals and Overseas Territories Aviation Requirements (OTARs) under the UK Air Navigation (Overseas Territories) Order 2013 apply.

Environmental obligations

What environmental obligations apply to air carrier operations?

The relevant EASA approvals and OTARs under the UK Air Navigation (Overseas Territories) Order 2013 apply.

Air traffic control

How are air traffic control services regulated in your jurisdiction?

The relevant OTARs under the UK Air Navigation (Overseas Territories) Order 2013 apply.

Routes

Do any licensing requirements apply to specific routes?

N/A.

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

N/A.

Charter services

Do any special provisions apply to charter services?

No – these are not permitted unless the aircraft is registered in the commercial category.

Taxes

What taxes apply to the provision of air carrier services?

N/A.

Consumer protection and liability

Airfares

Are airfares regulated in your jurisdiction?

N/A.

Passenger protection

What rules and liabilities are air carriers subject to in respect of:

(a) Flight delays and cancellations?

N/A.

(b) Oversold flights?

N/A.

(c) Denied boarding?

N/A.

(d) Access for disabled passengers?

N/A.

(e) Lost, damaged or destroyed luggage?

N/A.

(f) Retention and protection of passenger data?

N/A.

Cargo

What rules and liabilities apply to the air carriage of cargo?

N/A.

Marketing and advertising

Do any special rules apply to the marketing and advertising of aviation services?

N/A.

Complaints handling

Do any special rules apply to consumer complaints handling in the aviation industry?

N/A.

Aircraft

Aircraft register

What are the requirements for entry in the domestic aircraft register?

Aircraft can be registered in Bermuda in either the private or the commercial transport category. Requirements for registration of aircraft are fully set out in the UK Air Navigation (Overseas Territories) Order 2013. This includes who is considered to be a qualified person for registration. Such qualified persons are:

  • the crown in right of her majesty’s government in the United Kingdom or in right of the  Bermuda government;
  • UK nationals;
  • commonwealth citizens;
  • nationals of any European Economic Area (EEA) state;
  • bodies incorporated in any part of the commonwealth and which have their registered office or principal place of business in any part of the commonwealth; or
  • undertakings formed in accordance with the law of an EEA state and which have their registered office, central administration or principal place of business within the EEA.

It should be noted that aircraft registered on the Bermuda register will be subject to various technical directives concerning their maintenance and operation. Such requirements are fully detailed in separate notices available on the Bermuda Civil Aviation Authority (BCAA) website. The only requirements external to the BCAA are those relating to the Class 6 aircraft radio licence which, under statute, is administered by the Bermuda Regulatory Authority.

Mortgages and encumbrances

Is there a domestic register for aircraft mortgages, encumbrances and other interests? If so, what are the requirements and legal effects of registration?

Aircraft mortgages and aircraft engine mortgages can be registered under the Mortgaging of Aircraft and Aircraft Engines Act 1999 and related regulations. The relevant registers are maintained by the BCAA. Registration is not required for perfection or enforceability purposes, but does ensure priority over any non-registered mortgages or subsequently registered mortgages.

It is also possible for the priority of a mortgage to be fixed by filing a priority notice with the BCAA pursuant to which the priority of a yet to be executed mortgage can be a fixed for a 14-day renewable period. Once an entry has been made and the mortgage is registered (within 14 days excluding public holidays), the mortgage will be deemed to have priority from the date of registration of the priority notice.

All information on the Mortgage Register is deemed to be in the public domain. As such, all parties are deemed to have express notice of the information contained within the register.

Detention

What rules and procedures govern the detention of aircraft?

Under Bermuda law, persons are granted a right to detain and, in some cases, sell (or cause to be forfeited) aircraft under certain circumstances, such as:

  • non-payment of airport charges;
  • contravention of certain licensing and the air navigation provisions of the UK Air Navigation (Overseas Territories) Order 2013;
  • forfeiture under Bermuda customs law – forfeiture of an aircraft may occur if an aircraft has been adapted and used for the purpose of smuggling or concealing goods;
  • crimes including: 
    • terrorism – under the Aviation Security and Piracy (Overseas Territories) Order 2000, certain sections of the UK Aviation Security Act 1982 were extended to Bermuda. Under the Anti-terrorism (Financial and Other Measures) Act 2004, the Bermuda courts may make forfeiture orders with respect to any property of a person convicted of financing terrorism which is intended to be, or is suspected of being, used for the purposes of terrorism. This would include aircraft; and
    • drug trafficking – if an aircraft is used for drug trafficking purposes or purchased from the proceeds of crime, a court can order the aircraft to be forfeited; and
  • war or national emergency – when a state of war or national emergency exists, the governor of Bermuda has broad powers to make regulations pursuant to the Emergency Powers Act 1963, which includes, among other things, the power to make regulations which authorise the taking of possession or control of any property.

Safety and maintenance

What rules and procedures govern aircraft safety and maintenance?

The relevant European Aviation Safety Agency (EASA) approvals and Overseas Territories Aviation Requirements (OTARs) under the UK Air Navigation (Overseas Territories) Order 2013 apply.

 Drones

What is the state of regulation on unmanned aerial vehicles (drones) in your jurisdiction?

The relevant EASA approvals and OTARs under the UK Air Navigation (Overseas Territories) Order 2013 apply.

Accidents

Investigation

How are air accidents investigated in your jurisdiction?

The relevant European Aviation Safety Agency (EASA) approvals and Overseas Territories Aviation Requirements (OTARs) under the UK Air Navigation (Overseas Territories) Order 2013 apply.

 Liability

What liability regime governs death, injury and loss arising from air accidents?

The relevant EASA approvals and OTARs under the UK Air Navigation (Overseas Territories) Order 2013 apply.

Regulatory notification

What are the reporting requirements for air accidents?

The relevant EASA approvals and OTARs under the UK Air Navigation (Overseas Territories) Order 2013 apply.

Airports

Ownership

What rules govern the ownership of airports (both public and private)?

There is only one airport in Bermuda, the LF Wade International Airport, which is owned by the Bermuda government but subject to a lease in favour of the Canadian Commercial Corporation, which is developing a new airport on the same site.

Operation

What is the authorisation procedure for the operation of airports?

The operation of the Bermuda airport is overseen by the Bermuda Airport Authority, established under the Bermuda Airport Authority Act 2017.

What ongoing operating requirements apply (including obligations relating to safety, security and facilities maintenance)?

These will be subject to such regulations promulgated under the Civil Airports Act 1949 and the Bermuda Airport Authority Act 2017 from time to time.

Airport charges

What airport charges apply and how are they regulated?

Fees are set by the Bermuda Airport Authority in accordance with Section 30 of the Bermuda Airport Authority Act 2017 and the agreement (as defined in such act) between the Bermuda Airport Authority and Bermuda Skyport Corporation Limited as developer of the new Bermuda airport.

Access

What regulations govern access to airports?

The Bermuda Airport Regulations 1959 apply.

Slot allocation

What regime governs the allocation of airport slots (including slot transfer, revocation and disputes)?

N/A.

Ground handling

How are ground handling services regulated?

These will be subject to such regulations promulgated under the Civil Airports Act 1949 and the Bermuda Airport Authority Act 2017 from time to time.

Competition issues

Governing regime

Do any sector-specific competition regulatory/legal provisions apply to the aviation industry in your jurisdiction?

N/A.

Code sharing and joint ventures

What (if any) competition concerns arise in relation to code sharing and air carrier joint ventures?

N/A.

State aid

What rules govern state aid in the aviation industry? Do any exemptions apply?

N/A.

Notable cases

Have there been any notable recent cases or rulings involving competition in the aviation industry?

No.

Dispute resolution

Disputes

What aviation-related disputes typically arise in your jurisdiction and how are they usually resolved?

N/A.