Applications to lease foreign registered aircraft

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Procedures for processing applications to the Department for Transport by UK airlines [1] wishing to lease foreign registered aircraft

1. With effect from 15 November 2006, the procedures set out below apply.

2. In all cases where a UK airline wishes to lease a foreign registered aircraft, the following rules apply:

(a) If the airline holds an EC operating licence [2] , it requires:

i. a waiver from the Department under Article 8.3 of Council Regulation 2407/92 ("the Licensing Regulation");

ii. a permit from the Department under Article 138 of The Air Navigation Order 2005 ("the ANO") for operations between points in the UK and points outside the EU, the European Economic Area (EEA), and Switzerland; and

iii. an approval from the Civil Aviation Authority (CAA) Safety Regulation Group under Article 10 of the Licensing Regulation.

(b) If the airline does not hold an EC operating licence, it requires a permit from the Department under Article 138 of the ANO for all operations. In considering such an application, the Department will seek advice from the CAA on safety aspects.

3. All applications to the Department for Article 8.3 waivers and/or Article 138 permits should specify under which of the following categories the application is being made:

(a) the "exempted" category (see paragraphs 6-9 below);

(b)(i) the "expedited" procedure (see paragraphs 14-15 below).

(b)(ii) the "standard" procedure (see paragraphs 16-17 below);

4. The Secretary of State for Transport has to determine whether the Article 8.3 criteria are met, i.e. that the lease is short-term [3] and is required to meet temporary needs, or that exceptional circumstances apply. He will also be concerned to ensure that there is a genuine commercial requirement for the aircraft within the applicant's own operations and that there is no excessive dependency on non-EU, EEA and Switzerland registered aircraft.

5. Airlines are reminded that a valid Article 8.3 waiver, Article 10 approval and/or Article 138 permit as appropriate are required for all leases, including all substitutions, before any flight takes place. The Secretary of State will not grant an Article 8.3 waiver unless the CAA is content to issue an Article 10 approval.

A. The exempted category

6. The only types of lease arrangements which are exempted from the expedited and standard procedures are " substitutions". These are defined as replacements for aircraft needing unplanned maintenance, or becoming unavailable owing to ATC problems, strikes or other unavoidable delays in planned schedules. For substitutions applicants are invited to use the appropriate form available at Annex F. This category does not include short-term leases to provide extra capacity or any other type of lease not mentioned above.

7. A notice of the grant by the Secretary of State of applications under this category will not be published in the CAA's Official Record (OR), nor will a copy of the decision be made available. Instead, any queries should be directed to the Departmental contact (see Annex A).

8. Applications which are exempted from the procedures are not, however, exempted from the need to obtain Article 8.3 waivers, Article 10 approvals and/or Article 138 permits, which must be obtained before a flight takes place. (NB: in certain circumstances, the CAA has given "blanket approval" under Article 10 - see paragraph 9 below.) Applications for an Article 8.3 waiver and/or Article 138 permit should be submitted by the lessee airline to the appropriate Departmental contact and should contain the following information:

(a) the name of the applicant;

(b) the date, route and flight number for which a substitute aircraft is needed;

(c) the need or circumstance giving rise to the proposed use of a foreign registered aircraft;

(d) the name of the lessor airline;

(e) the type of aircraft, the registration number and the country of registry.

NB: applications for emergency substitutions between 1730hrs and 0830hrs, during weekends, Public and Bank Holidays should be made to the Department's Duty Officer - see Annex A.

9. Where applicants make use of the CAA's effective "blanket approval" under Article 10 of the Licensing Regulation (Official Record Series 4 (ORS4), No. 588, dated 28 March 2006, copy attached at Annex B) they must report details of leases, as set out in paragraph 8 above, to the Safety Regulation Group of the CAA either by facsimile on 01293 573991 or, preferably, by email to aircraft.leasing@srg.caa.co.uk after the event. The purpose of this requirement is to enable the CAA and the Department to monitor the use of substitutions and to ensure that any abuses of the exemption facility are detected. Airlines should note in particular the restriction on the use of aircraft registered in a non-Joint Aviation Authorities (JAA) State if use is made of the "blanket approval" provisions - see paragraph 2(c)(ii) of ORS4, No 588.

B. Application of the procedures

10. For all other applications, one of two forms of the procedures will apply. The first exists for applications which are likely to be non-controversial. This is the "expedited" procedure - see paragraphs 14-15 below - whereby interested parties will have an opportunity to learn of the decision after the event but will not be able to make objections or representations before a decision is taken. The second form of procedure provides an opportunity for interested parties to make representations to the Secretary of State before a decision is made on the application: this is the "standard" procedure - see paragraph 16-17 below.

11. All applications under either the expedited or standard procedure should be made to the Secretary of State. These should be submitted to the appropriate Departmental contact (see Annex A) and should:

(a) indicate whether the application is being made under the standard procedure or the expedited procedure, together with the reasons;

(b) provide the following information:

i. the name of the applicant, the date of the application, the proposed start date and the duration of the lease;

ii. the need or circumstance giving rise to the proposed use of a foreign registered aircraft;

iii. the number and type(s) of aircraft, the registration number(s) and the country of registry;

iv. the number of foreign registered aircraft the applicant operates or has operated in the last 12 months;

v. copies of documentation specified at Annex C; and

(c) be copied by the applicant to Ms Angela Matthews (Safety Regulation Group) and to Mr Trevor Metson (Economic Regulation Group) at the CAA. Economic Regulation Group will publish notice of the application, including the details specified at (b)(i)-(iv) above, in the OR. Where the application is to lease a non-Community aircraft the details shall include (b)(iv) above. The timing of publication will depend on which procedures are being applied.

12. The process differs according to whether the application falls to be considered under the standard or expedited procedure. On receiving a request the Secretary of State will determine whether or not the correct procedure has been selected by the applicant.

13. Commercially sensitive information remains protected under section 23 of the Civil Aviation Act 1982 ("the Act") and will not be made available to other interested parties unless one of the exceptions in section 23 applies. Nor will the CAA advice concerning safety in the case of Article 138 permit applications be disclosed.

(i) The expedited procedure

14. The expedited procedure is intended for use in cases where an application is likely to be non-controversial. It will apply:

i. where the period requested is for no more than one month; or

ii. where the application is limited to aircraft registered in another EU Member State, or in the EEA or Switzerland, and:

a. the period of the lease does not exceed seven months - the equivalent of a traffic season (either in itself or if considered together with any consecutive lease); and

b. if the aircraft is to be used on services outside the EU, EEA or Switzerland, the lessor carrier is established in the UK [4] ; or

iii. where the aircraft is in the process of transfer to the UK register.

15. On receiving an application to which the expedited procedure applies:

(a) The Secretary of State will make a decision on the application once the CAA is content to issue an Article 10 approval (NB: in certain circumstances, the CAA has given "blanket approval" under Article 10 - see paragraph 9 above and note that the restrictions apply to the use of aircraft registered in a non-JAA state).

(b) A description of the application and a short statement of whether or not it has been granted will be published in the OR.

(ii) The standard procedure

16. The standard procedure will apply in the case of:

i. any application for a lease which exceeds a traffic season, either alone or as an extension of a previous lease;

ii. any application to lease an aircraft registered outside of the EU, the EEA or Switzerland if the period requested is for more than one month;

iii. any application to lease an aircraft from a Community airline not established in the UK if the period requested is for more than one month and the aircraft is to be used on services outside the EU, EEA and Switzerland.

17. On receiving an application to which the standard procedure applies:

a) The Secretary of State will formally request advice from the CAA Economic Regulation Group. This request will usually follow the format at Annex D and be made within seven working days [5] of receipt of the application.

b) The CAA will publish notice of the application in the OR.

c) Interested parties will make their objections or representations to the CAA within 10 working days of the publication of the application in the OR. These will be objections or representations which those parties wish the CAA to take into account when formulating its advice to the Department. "Interested parties" comprises all parties, including, for example, air transport users or their representatives, minded to make such objections or representations.

d) The CAA will provide advice to the Secretary of State under section 16 of the Act and in accordance with its duty under section 4. The CAA's advice will:

i. where possible, be provided to the Department within 21 working days of the date of publication of the application in the OR;

ii. be provided in the format indicated in the Department's letter of request for advice (see Annex D). In particular, it will set out the CAA's findings of fact, its conclusions as to whether the criteria in Article 8.3 of the Licensing Regulation have been met and the reasons for those conclusions;

iii. include a recommendation to the Secretary of State as to whether the application should be granted; and

iv. be copied to the applicant and to all interested parties.

e) Interested parties may make objections or representations to the Secretary of State via the appropriate Departmental contact (to whom the CAA's advice letter will be addressed) within seven working days of the date of the CAA's letter. These will be objections or representations about the application or about the CAA's advice which those parties wish the Secretary of State to take into account before reaching a decision on the application. The Secretary of State may ask for further advice from the CAA in the light of such objections or representations. "Interested parties" in this context comprises the applicant and those parties which have submitted a timely objection or representation to the CAA.

f) The Secretary of State will make a decision on the application once the CAA is content to issue an Article 10 approval (NB: in certain circumstances, the CAA has given "blanket approval" under Article 10 - see paragraph 9 above and note that the restrictions apply to the use of aircraft registered in a non-JAA state). Where possible, the decision will normally be made within 14 working days of the date of the CAA's advice. If the Secretary of State considers that his decision is likely to be materially influenced by information which was not previously available to the CAA, the applicant or to other interested parties, as the case may be, he will give all the parties an opportunity to make further objections or representations before he reaches his decision.

g) when the Secretary of State has made his decision, a short statement of whether or not the application has been granted will be published in the OR. In cases where the Secretary of State decides to depart from the CAA's recommendation, the decision letter will give the Secretary of State's reasons for reaching his decision. A copy of the decision letter will be available on request to interested parties from the Departmental contact. Those parties who have submitted objections or representations to the Department will be automatically sent a copy of the decision letter.

h) if, through no fault of an applicant, the application needs to be determined more quickly than the "standard" procedure would allow, the Department will be prepared to grant a temporary waiver for a period of one month pending, and without prejudice to, the consideration of the lease under the above procedure. In such cases, an interim decision letter will be sent to the applicant. The OR notice of the application will set out the reason(s) cited by the applicant for late submission of the application.

NB: airlines should be aware that while the Department and the CAA will aim to deal with all applications as expeditiously as possible, the standard procedure outlined above could take up to 50 working days to complete, and possibly longer, depending on the circumstances.

International Aviation and Safety Division

Aviation Directorate

Department for Transport

2006

[1] For the purposes of these procedures, “UK airlines” includes airlines based in the Channel Islands or the Isle of Man.

[2] Obtained in accordance with Regulation (EEC) 2407/92.

[3] The following statement was entered into the Council minutes when the Regulation was adopted: "The Council and the Commission state that, for the purposes of Article 8.3, short-term leases would normally cover periods up to a traffic season and that no air carrier will become excessively dependent on aircraft registered in a third country."

[4] The UK accepts the definition of “establishment” set out in Recital 10 to Regulation (EC) 847/2004 on the negotiation and implementation of air service agreements between Member States and third countries, as clarified by a Council statement for inclusion in the minutes of the Council meeting adopting a Common Position on the Regulation. The relevant extracts are attached at Annex E.

[5] “Working days” as defined in Regulation 3(4) of The Civil Aviation Authority Regulations 1991 (SI 1991 No. 1672)