Italy: New National Rules On Traffic Rights For Extra-EU Routes

In August 2014, the Italian Civil Aviation Authority (ENAC) issued a draft new version of Circular EAL 14A, which lays down provisions to grant air traffic rights to air carriers to operate extra-UE scheduled flights to and from Italy. According to ENAC itself, the revision of the previous version of the Circular became necessary in order to update the legal framework on the matter and to simplify ENAC's administrative activity, as well as to tackle the challenges of the air transport industry and favour new business opportunities.

The new Circular, which will become Circular EAL 14B once it comes into effect, was accompanied by a new draft model agreement for the attribution of extra-EU scheduled services, to be signed by ENAC and the air carrier. Both documents were subject to a stakeholder consultation process, which ended on 24 September 2014. It is therefore expected that the final version of Circular EAL 14B will be published soon.

As indicated above, the Circular applies to scheduled air transport services between Italy and non-EU States which are regulated by air transport agreements. In the new version, it is further specified that it may also be applied to chartered flights, whenever those are limited by the applicable air transport agreements.

In a nutshell, the new Circular indicates guidelines for the negotiation of air transport agreements with non-EU countries and defines the procedures for the appointment of air carriers and granting traffic rights. The main developments, some of which have already been applied in practice for some time now, concern:

  • the enhanced participation of ENAC in the negotiation and conclusion process;
  • eligibility criteria for the assignment of traffic rights;
  • publicity and information on agreements and traffic rights.

Due regard is paid to the bilateral agreements in force between ENAC and the appointed air carriers, as well as to the international, European and national rules on the matter.

Firstly, ENAC's role in the negotiation and conclusion of air transport agreements with extra-UE countries is enhanced. It is indeed, provided that ENAC collaborates with the Department of Infrastructure and Transport in the negotiation and conclusion process. In this regard, ENAC will assess data related to the air transport market, e.g. air traffic statistics, the needs of the sector operators, developmental trends in the sector, or use of assigned traffic rights. It will also take into account views of international institutions and EU bodies. On that basis, it shall represent the interests of the air transport industry in negotiations with foreign aviation authorities, side by side with the ministerial department.

Secondly, the eligibility criteria that allow national or European airlines to operate extra-EU routes to and from Italy have been clarified. Air carriers seeking authorization must hold a valid air operator certificate and operating license in accordance with EU Regulation 1008/2008 and the national provisions laid down by ENAC in the implementation thereof. Authorization may be granted to national airlines and EU airlines established in Italy, pursuant to the so-called "standard clause" in air transport agreements. When air transport agreements are of a global nature, both national and EU carriers may be assigned traffic rights.

In order to be considered as established in Italy, the Circular points out that EU airlines need to have a stable organization in Italy, as well as a branch and at least one operational base. Moreover, they are required to register with the national Companies Register and to submit a security program, as well as to appoint a safety supervisor. Furthermore, these carriers need to comply with Italian law, especially regarding air transport, taxes and social security, in order to keep their traffic rights.

In addition to that, publicity given to air transport agreements is improved. In fact, ENAC will be informed about the conclusion of any new agreement and provide a list of the existing agreements on its website. Within 20 days from conclusion, ENAC must notify airlines that are entitled to the assignment of traffic rights, handling companies and the trade unions, which had previously so requested.

The main goals of the selection procedure for the granting of traffic rights are:

  • to maximize benefits for consumers and increase commercial trade and tourism;
  • to develop the general civil aviation system, especially the air transport industry and the airport network;
  • to enhance fair competition.

While insufficient traffic rights – meaning that they are not sufficient to satisfy companies' interests - are granted through a public selection procedure, the rest of the routes are assigned following the order of arrival of the requests to ENAC's offices.

As is the case with all traffic rights granted by ENAC, the "use it or lose it" principle applies. In fact, according to the new Circular, if the appointed carriers do not activate the route, or do not properly comply with the transport terms, or interrupt the relevant flight operations, ENAC will withdraw their traffic rights. Moreover, in the event of lack of activation, suspension or interruption of scheduled flights, carriers will be required to re-protect the affected passengers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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