The current EU regulatory regime
The EU aviation acquis establishes the rules which the UK has signed up to as a member of the EU internal aviation market. EU aviation rules govern three key areasand detail on these is set out below:
– General internal market measures and external relations;
– Safety – European Aviation Safety Agency (EASA); and
– Air Traffic Management – Single European Sky.
There is further EU legislation which governs:
– Ground handling – Regulation 96/67;
– Airport charges Directive – Directive 2009/12;
– Allocation of take-off and landing slots at busy airports – Regulation 95/93;
– Passenger rights – Regulation 261/04 (cancellation/delay compensation) Regulation 1107/06 (disabled passengers), Directive 2015/2302 (Package Travel);
– Noise management – Regulation 598/2014; and
– Security – The common basic standards are set out in Regulation 300/2008with more detailed requirements in Regulation 2015/1998.
General Internal Market Measures
The internal aviation market has liberalised access for community airlines flying between points within the EU provided that they have a licence that meets EU conditions. The primary economic framework for air transport in the EU is contained in Regulation 1008/2008, which harmonises rules on operating licences, market access, aircraft registration and leasing, public service obligations, traffic distribution and pricing.
The Civil Aviation Authority (CAA) is the UK’s independent aviation regulator. It levies a charge on the aviation industry to fund its regulatory activity. Safety (and some environmental) regulation is set by the European Aviation Safety Agency (EASA).
The Warsaw and Montreal Conventions govern international carriage by air and provide for air carrier liability in the event of death or personal injury, destruction or loss or damage to baggage or cargo, and damage arising from delay.
EASA was created in 2003 and reached full competency in 2008 through the introduction of Regulation 216/2008 which sets out common safety rules and objectives for civil aviation in Europe. EASA has competence (either full or shared) over:
– Initial, additional and continuing airworthiness certificates of aircraft and products;
– Air crew and flight limits;
– Air operations;
– Third Country Operator Authorisations that certify compliance with safety requirements for foreign aircraft;
– Prohibiting unsafe airlines;
– Safety oversight in Air Traffic Management and Air Navigation Services;
– Air Traffic Controller licences and certificates;
– Airspace and airborne collision avoidance; and
– Administrative procedures related to aerodromes.
EASA prepares draft rules for consideration and adoption by the European Commission. Member States’ National Aviation Authorities (NAAs) then implement the adopted rules with monitoring from the Agency. The UK’s NAA is the CAA. EASA also has a number of executive tasks, for example the initial airworthiness certification of new and modified products (e.g. specific models of aircraft and engines) and the certification of organisations based in third countries. The Department for Transport and UK stakeholders are currently involved in more than rulemaking activities within EASA and the UK is one of the NAAs that contributes the most technical expertise to these working groups.
The system is underpinned by the set of common safety rules which are designed for uniform application across the EU. Those rules apply both to the air transport industry, individuals, organisations and products and to the NAAs themselves.
All regulations that derive from the EASA Basic Regulation (EU 216/2008) are currently subject to a vote by the EASA Committee as part of the comitology process.As a member of the EU, the UK is represented at the EASA Committee, which is the EU comitology committee on aviation safety, and has a seat on the EASA Management Board, which is the Agency’s management body. While third countries are able to propose regulations and shape their development at EASA, they do not have a vote at this stage. However, they do have observer status in the EASA Committee. In practice, regulations proposed by EASA as the technical advisory body are rarely voted against by Member States on safety policy grounds, as they prepared on a consensus-based approach.
Norway and Switzerland participate in the EU’s safety systems through their agreements with the EU. Norway and Switzerland are both associate members of EASA and both make a financial contribution to the running of the organisation.
Air Traffic Management (ATM)
ATM is a broad term that describes the technical communication, navigation and surveillance systems and operational procedures that ensure the safe separation and expeditious flow of air traffic through controlled airspace. States are obligated to provide an ATM system and arrangements for air navigation in a way that facilitates the international nature of air travel.
NATS is the UK’s en-route air navigation service provider (ANSP) providing air traffic control services handling 2.4 million flights and 250 million passengers in UK airspace each year. It is regulated by the CAA under a license covering en-route services and services provided in a portion of the North Atlantic. Many elements of its economic and safety regulation are governed currently by EU regulations set under the Single European Sky legislative framework.
Single European Sky (SES) Legislative Framework
The key objectives of the SES legislative framework are:
• To restructure European airspace as a function of air traffic flows;
• To create additional airspace capacity; and
• To increase the overall efficiency of the ATM system.
The SES consists of four Basic Regulations (numbers 549/2004, 550/2004, 551/2004 and 552/2004 – SES I package) that cover the provision of air navigation services, the organisation and use of airspace, and the interoperability of the European Air Traffic Management Network. The SES I package was revised in 2009 by a further package of legislation, SES II, which included economic and performance regulation and a framework for developing and deploying new concepts for air traffic management developed as part of Single European Sky ATM Research (SESAR)programme.
SES legislation requires that all Member States work together to make improvements to the organisation of airspace and delivery of air navigation services with a focus on air traffic flows rather than being limited by national borders, for example by forming Functional Airspace Blocks (FABs). All EU States were obligated to form FABs by December 2012. EU legislation encourages third country participation in FABs so some countries which border EU Member States, for example Norway and Switzerland, are part of FABs with EU Member States. There are nine FABs and the UK is a member of the FAB with Ireland. Work is collaboratively undertaken between the UK and Irish civil aviation authorities and air navigation service providers to optimise airspace, articulate performance plans and deliver performance targets at the FAB level.
EUROCONTROL, the European organisation for the safety of air navigation, is an inter-governmental organisation set up by its Member States to facilitate collaboration and ensure safe and seamless ATM across Europe. It currently has 41 member states, including non-EU States such as Turkey and the Ukraine.54 EUROCONTROL provides the operational co-ordination of the European air traffic system, technical expertise and legislative assistance to the Commission, industry and EUROCONTROL member states. Operationally, EUROCONTROL ensures that air traffic is planned daily against available airspace capacity. It works to minimise delays in the event of crisis situations or strikes. The UK is a signatory to the EUROCONTROL convention in its own right, independent of its membership of the EU.
Although it is not an EU agency, the EU has designated EUROCONTROL to carry out certain functions under the SES legislative framework, for example: administering regulations; assisting the Commission’s work in the Performance Review Body; and the Network Manager, which centralises responsibility for tasks including airspace design and flow management with a view to improving the network.
Devolution, Overseas Territories And Crown Dependencies
Aviation is primarily a reserved matter, although certain aspects of economic regulation of the sector, for example Air Passenger Duty, are devolved. The Crown Dependencies are the Bailiwick of Jersey, the Bailiwick of Guernsey and the Isle of Man. Crown Dependencies have their own directly elected legislative assemblies, administrative, fiscal and legal systems and their own courts of law.Principal legislation made by the Islands’ legislatures requires Royal Assent or sanction. The Ministry of Justice examines such legislation to ensure that there is no conflict with international obligations (including European Convention on Human Rights compliance) or any fundamental constitutional principles. UK legislation rarely extends to the Crown Dependencies
Due to the nature of the Crown Dependencies’ legislative arrangements there is freedom to choose the regulatory frameworks that are implemented. For example, Jersey has chosen to participate in the EASA system as a third country but follows UK rules on other aviation matters such as security. Each of the Crown Dependencies has an airport.
Unlike other Overseas Territories, Gibraltar is part of the EU. The Government of Gibraltar is responsible for implementing the relevant applicable EU legislation. The UK Government is working closely with the Government of Gibraltar to ensure the best possible agreement for the UK and Gibraltar.
51. Crown Dependencies and Overseas Territories have their own aviation safety regimes. For the purposes of Air Service Agreements (ASAs), the Crown Dependencies and Overseas Territories are considered part of UK territory. For Crown Dependencies, Overseas Territories and Devolved Administrations, connectivity to global, domestic and European destinations will continue to be important.
Existing frameworks for how trade is facilitated between countries in this sector
The arrangements described in this section are examples of existing arrangements between countries. They should not be taken to represent the options being considered by the Government for the future economic relationship between the UK and the EU. The Government has been clear that it is seeking pragmatic and innovative solutions to issues related to the future deep and special partnership that we want with the EU.
The Prime Minister has set out that the UK is seeking an ambitious arrangement with the EU which builds on our unique position of regulatory alignment. We should seek a set of arrangements which is in the best interests of citizens and businesses – both in the UK and across the EU.
International air services are not covered by WTO rules but governed by ASAs between individual countries (or regional blocs) which determine levels of marketaccess.56 ASAs are part of the international framework of air transport that has developed from the 1944 Chicago Convention. ASAs will set out the access between two states, and might also stipulate the number of carriers, provisions for freight traffic and a range of other aviation related business.
The UK has bilateral ASAs with 111 countries (including, for instance, Brazil, Russia, India and China). Our access to EU Member States, and some third countries, such the US and Canada, is currently derived from our membership of the EU. In total, this accounts for access to 44 markets which include some of our major trading partners and together they account for around 85 per cent of international passenger movements to and from UK airports
Since the privatisation of the commercial aviation industry in the UK, and following the removal of commercial restrictions within the EU internal aviation market during the 1990s, the UK has actively sought to liberalise and deregulate its ASAs, aiming,on a reciprocal basis, to allow carriers to operate competitively, on a level playing field, and within an appropriate regulatory framework.
The 1944 Chicago Convention also established the International Civil Aviation Organisation (ICAO), a UN special agency that develops international aviation guidelines and standards. ICAO has 191 state members. The UK is a permanent representative on ICAO’s Council – ICAO’s main executive body – independent of its membership of the EU. The EU is an ad-hoc observer in many ICAO bodies and at ICAO Council the EU is represented based on an ad-hoc invitation.58 ICAO has no ability to set regulation or enforce its rules, compliance is drawn from members’ domestic legislation. The UK and the EU have developed their aviation regulatoryframework on the basis of ICAO’s global standards.
Summarised below are examples of frameworks which facilitate aviation between the EU and non-EU countries.
European Common Aviation Area Agreement
The UK is currently part of the European Common Aviation Area (ECAA) by virtue of its membership of the EU.59 The ECAA agreement sets out the framework for an integrated aviation market, and aims to extend the EU’s internal aviation market to several non-EU countries.60 The level of market access granted is linked to the degree to which countries adopt the aviation acquis. For example, Norway is part of the ECAA through its membership of the European Economic Area (EEA). It has adopted the full aviation acquis, and has full and open access to the European single aviation market. The Former Yugoslav Republic of Macedonia has not completely aligned its aviation regulations and has more limited market access.
The EU-Switzerland Air Transport Agreement is a bespoke bilateral agreement which predates the ECAA. It is one of seven bilateral agreements between the EU and Switzerland which stand or fall as a package. Switzerland agreed in 2002 to adopt and implement the aviation acquis in full. Switzerland has been granted liberalised access to the internal market, though its traffic rights do not extend to the ability to fly between two destinations within a Member State.
EU Multilateral Agreements With Third Countries
US Open Skies Agreement
The EU has concluded liberal agreements with third countries. The EU-US Air Transport Agreement is an example of this. It offers liberal market access for the EU and US, with air carriers being able to fly an unlimited number of frequencies on any route between the US and EU Member States. Prior to this agreement, transatlantic routes were restricted in the points that could be served, the carriers that could operate them and at what frequency. The agreement encourages principles of competition and regulatory cooperation.
Neighbouring Countries Multilaterals (Inc. Israel, Morocco, Moldova, And Jordan)
Several countries neighbouring the EU have concluded agreements with the EU. The terms of these agreements differ from the other but none of these countries have been granted the right to operate flights within the EU. They are distinct from the US agreement in that they extend to regulatory alignment, meaning that the respective third countries have agreed to adopt and implement some, most of or all of the EU acquis as it applies to aviation. There is a close correlation in these relationships between the level of liberalisation in the agreement and the extent to which the third country agrees to implement the acquis.
EU Canada Air Transport Agreement
EU and Canada Transport Agreement was signed in 200961. The agreement aims to promote competition within the aviation marketplace with minimum government interference and regulation. The EU-Canada agreement gants EU and Canadian carriers the right to fly between any point in Canada and any point in the EU, as well as points beyond, on services originating in the EU or Canada.
The agreement emphasises the need for parties to work collaboratively. This is particularly emphasised on areas such as security and safety. Parties areencouraged to exercise mutual recognition of security arrangements and reciprocal acceptance of safety certificates and licences. Where there are reasonable grounds, and/or a contracting party departs from the agreement, parties can act to suspend, limit or revoke the arrangements.