News in brief from around the word… Marsh & McLennan has this week acquired UK insurer Jardine Lloyd Thompson in a US$5.6 billion deal that will boost its aviation presence. Elsewhere a UK trade group has redoubled its efforts to foster UK/EU aviation cooperation post-Brexit and the ICAO has called for more regulations on air passenger behaviour.
⇒ Lawyers from Wachtell Lipton Rosen & Katz have advised US professional services firm Marsh & McLennan (MMC) on its US$5.6 billion acquisition of UK insurer Jardine Lloyd Thompson; a deal which the companies say will improve their coverage of the aviation sector.
JLT, which was advised by Clifford Chance, will add “compelling value” to MMC’s aviation services offering CEO Dan Glasser said on a conference call on Tuesday. The UK company insures airlines and other aerospace and space companies against a range of risks, as well as providing coverage to other industries, including healthcare, shipping and energy.
The deal comes just over two weeks after JLT hired MMC managing director Bruce Fine as the head of its global aerospace manufacturers team. Fine previously led MMC’s Aircraft Finance Insurance Consortium (AFIC), an innovative programme developed with Boeing that offers exclusive aircraft non-payment insurance packages.
The acquisition, announced on 18 September, will be completed via a UK court-backed scheme of arrangement and is expected to close early next year.
⇒ The Federal Aviation Administration (FAA) has formally extended its US flight prohibitions in North Korea into federal law.
Under the rule, first issued 3 November 2017 and formally incorporated into the Code of Federal Regulations for two years on 18 September, US aircraft are forbidden from operating in the Pyongyang FIR “due to the hazardous situation created by North Korean military capabilities and activities”.
The FAA has described the action as “necessary”, due to “continued hazards to US civil aviation operations in the entire Pyongyang FIR”.
⇒ UK trade group ADS has sent a second letter to the European Commission calling for technical discussions between the UK Civil Aviation Authority and the European Aviation Safety Agency (EASA) to prepare for Brexit, after the EC rejected their initial request earlier in the year.
In the letter, dated 7 September 2018, ADS argues that any aviation-related contingency plan for a no-deal Brexit developed by EASA and the EC requires “close cooperation” with the CAA on the legal basis for certification recognition relationships between third countries and the EASA aviation system.
ADS – which represents companies in the UK aerospace, defence, security and space sectors – made its initial request in June alongside the General Aviation Manufacturers Association (GAMA). In response, the EC said it would need more “clarity and certainty” on the outcome of the negotiations before discussions with the CAA could commence.
The EC’s rejection of technical discussions is “inconsistent” with its previous calls for preparedness on 29 June and 19 July, ADS said. On those occasions, the Commission said “preparing for the UK becoming a third country is of paramount importance” and called for EU member states to step up preparations “at all levels and for all outcomes”.
⇒ The UK Civil Aviation Authority has hit back at what it called a “misleading” Sky News article – published on 11 September – claiming leaked documents show that thousands of pilot licences would no longer be recognised by the EU in the event of a no-deal Brexit.
Sky News said that the documents showed “thousands of aviation licences, ratings and certificates for pilots and aircraft issued by the European Aviation Safety Agency (EASA) would have to be reissued . . . which would cost millions”.
In a statement issued on the same day, CAA group director of safety and airspace regulation Mark Swan called the claims “misleading”, noting that the UK’s status as a signatory to the Chicago Convention meant that “[b]oth commercial and private UK pilot licences would remain valid for use on UK-registered aircraft”. He said the CAA would continue to issue and reissue licences as normal post-Brexit, making the “purely cosmetic change” of removing references to EASA.
Sky News also reported that a leaked internal CAA email had asked staff if they were prepared to train in "airworthiness design and certification", concluding that the CAA was “scrambling to make the necessary preparations for a no-deal Brexit and the UK dropping out of the aviation single market altogether”.
Swan said that the CAA “strongly refutes” the suggestion it was worried about its “ability to provide safety oversight” of the UK’s aviation industry in the event of a no-deal Brexit, adding that safety remains its “absolute priority”.
“Sky News has unfortunately confused EASA approval of new aircraft and component design with our existing national safety oversight obligations,” Swan added.
The International Civil Aviation Organisation’s (ICAO) legal committee has said that guidance material concerning offences committed by disruptive and unruly passengers on-board aircraft will be published as a manual for member states following a meeting in Montreal earlier in the month.
The committee also recommended that the ICAO establish “a repository of states’ criminal legislation” with regards to disruptive passengers and that the organisation conduct a survey on “administrative sanctions or comparable regimes” put in place by member states to deal with such incidents.
The recommendations come shortly after the UK Civil Aviation Authority called for an increase in prosecutions to “crack down” on violent and drunken behaviour by airline passengers, citing over 200 reports of disruptive passenger behaviour at UK airlines in 2018, prior to the summer season.