legal factors affecting airline industry

This last aspect or the ongoing global economic slowdown has meant that the already struggling airlines now have to contend with declining passenger traffic, competition from low cost carriers, high aviation fuel prices, labor demands, and soaring maintenance and operating costs. Oil prices hit a 13-year high in March 2022, although they has fallen back since then. There is no prohibition of vertical integration between air operators and airports. EU regulators (and therefore in all likelihood the UK competition authorities at the present time) consider that the degree of competitive constraint imposed by one-stop services varies according to the route and assesses the precise impact of competing one-stop flights on the parties joint venture on a route-by-route basis. Some types of aviation contracts, such as operating leases and aircraft charter agreements, are more likely to contain force majeure clauses. Civil Aviation (Provision of Information to Passengers) Regulations 2006 Statutory Instrument No 3303 2006. Here are 7 professional tips that can, Our General Mills SWOT Analysis examines internal and external factors that impact the company's operations, What is root cause analysis, the goal, and why is it important? This escalated quickly, with sanctions and bans on Russian airlines, of course having an effect on aviation. New airline Breeze Airways has had to increase pay by over 10% and expand recruitment to Australia to secure new pilots for its fleet (as reported by, As a final thought for 2022, we are likely to see a continued increase in air rage and related safety incidents. During the first half of 2021, there were 3,000 such incidents in the US (according to the. ) It can help them to offer a safe and comfortable service. These clauses have to be read extremely closely in order to determine whether they enable a party to suspend their obligations. Proper strategies and plans can be very fruitful in this case. This is a major obstacle as airlines will start losing customers in areas that have high-security threats. The user can get an idea of the external conditions that can hinder their growth or be catalytic in their growth. any rights and interests existing prior to ratification of the CTC will retain their priority without the need for registration. Below is a list of selected treatises on this topic that are available from the collections of the Harvard Library. The principal legislation relating to investigation of air accidents includes: The AAIB has the power to require the detention and preservation of evidence, and has powers of enquiry. The delay therefore occurred wholly outside the UK. Si vous souhaitez personnaliser vos choix, cliquez sur Grer les paramtres de confidentialit. Looking slightly ahead, several other new aircraft are coming onto the market. Aviation remains a high-profile terrorism target. including the passing on of savings through lower prices); (c) the agreement should not impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives. Similar to economic or political factors, legal factors also hold special importance for analyzing the external environment of the airline industry. Pratap, A., 2021. This is a quick guide designed to help you use resources from the Harvard Law School Library to research legal issues surrounding the regulation of the airline industry. Applicants for registration of a mortgage must complete and provide to the CAA a Form CA1577 (see www.caa.co.uk), together with a complete copy of the related aircraft mortgage deed (provided it has been certified as a true copy by the applicant). Learn how to, Our Mayo Clinic SWOT Analysis examines the Strengths, Weaknesses, Opportunities and Threats of one of, Technology is now taking over, and almost all fields are turning most tasks into digital., Copyright 2020 Weberience LLC. The shortage post-COVID has already been seen in the recovering US market. This Regulation establishes the rules on compensation and assistance to passengers in the event of denied boarding, long delay of flights, and cancellation. Note: This book is not available in the Harvard Library collections. If a company can secure a tie-up with the government, that can be highly beneficial for them. In practice, this is not a commonly used doctrine as there is a very high threshold to prove it. They need to upgrade continuously and incorporate the green flight ideas as much as possible. In relation to b), there are no documentary taxes (e.g. Commercial claims (see below) should be pursued in the Commercial Court of the Queens Bench Division of the High Court, or in the County Court. John F. O'Connell; George Williams (Editor), Attention All Passengers: The Airlines' Dangerous Descent -- and How to Reclaim Our Skies, Clipped Wings: Corporate Social Responsibility and the Airline Industry, From Lowlands to High Skies: a Multilevel Jurisdictional Approach Towards Air Law, Full Upright and Locked Position: Not-So-Comfortable Truths About Air Travel Today, Peter Belobaba (Editor); Cynthia Barnhart (Editor); Amedeo Odoni (Editor), International Air Carrier Liability: Safety and Security, Andrew J. Harakas; American Bar Association, Tort Trial and Insurance Practice Section Staff (Contribution by), Managing the Skies: Public Policy, Organization, and Financing of Air Traffic Management, The Principles and Practice of International Aviation Law, Progressive Commercialization of Airline Governance Culture, The Routledge Companion to Air Transport Management, Nigel Halpern (Editor); Anne Graham (Editor), https://guides.library.harvard.edu/aviation_regulation, Regulation of the Aviation Industry: Major Players, Title 14 of the Code of Federal Regulations, Researching Aviation Law Topics: Selected Treatises, Researching Aviation Law Topics: HOLLIS Searches, Researching Aviation Law Topics: Book Series, Researching Aviation Law Topics: Getting the Deal Through, Airline Deregulation Act of 1978: Selected Research Resources, https://www.transportation.gov/airconsumer, https://www.gpo.gov/fdsys/pkg/CFR-2004-title14-vol1/content-detail.html, https://www.loc.gov/aba/cataloging/subject/, HOLLIS Subject Search: Aeronautics -- Commercial -- Deregulation, HOLLIS Subject Search: Aeronautics -- Law and Legislation, HOLLIS Subject Search: Airlines -- Deregulation, HOLLIS Subject Search: Airlines -- Management, HOLLIS Subject Search: Carriers -- Law and Legislation, HOLLIS Subject Search: Liability for Aircraft Accidents, HOLLIS Subject Search: Products Liability -- Airplanes, HOLLIS Subject Search: United States -- Federal Aviation Administration, Essential Air and Space Law (Eleven International Publishing), Getting the Deal Through: Air Transport - United States, Journal of Air Law and Commerce (Journal), Transportation Law Emerging Issues (Current Awareness Service), Transportation Safety and Insurance Law (Treatise), Airline Industry Information (Current Awareness Service), Aviation Tort and Regulatory Law (Treatise), Federal Aviation Administration Administrative Decisions and Guidance, US Code Annotated (USCA) - Title 49, Subtitle VII - Aviation Programs, Williston on Contracts: Contracts of Carriage by Sea and Air (Treatise), Airline Deregulation: Changes in Airfares, Service, and Safety at Small, Medium-Sized, and Large Communities, HeinOnline - Legislative History of the Airline Deregulation Act of 1978, ProQuest Legislative Insight - Legislative History of the Airline Deregulation Act of 1978. This is a consideration in light of the pandemic, as it is unknown how long the impact to the aviation industry will continue, and it may become clearer over time whether parties are able to rely on this. ')6K- t>{wJW[ ^72sSg.F:ykSF|B|}x{=RlIL ^zmHYTvA~&"a 3j{r64d\&aL[1*)rsin?lA6fofnWsv?QSDx"CG6uQ5vo(-ve$w(q1M7VII%="?B*38Ut"p#P9A , Sf/p{9KJYvF]U>rag4 The different services appeal to different passenger groups with varying travel needs and price sensitivities. The importance of technological factors can be understood from the heavy use of technology in the global airline industry. Employment law employment law, also known as labo(u)r law, dictates how companies employees should be treated. trading) of aircraft in England and Wales. The fees payable are, since August 2012: A merger fee is not payable if the merger involves the acquisition of an interest that is less than a controlling interest and the CMA has investigated the acquisition on its own initiative. In the case of companies running international flights, the impact can be deeper and more long-lasting. It does allow the exercise of extant (or existing) rights to repossess chattels such as aircraft and aviation assets without the need for a court order, however there are conditions to that and a person seeking to exercise rights on this basis can only do so peaceably and lawfully. A fee is payable to the CMA in respect of relevant merger situations. Looking wider, the impact is being felt, Since the retirement of Concorde, the area of commercial supersonic flight has remained quiet. The CAA maintains the United Kingdom Aircraft Mortgage Register (pursuant to the Mortgaging of Aircraft Order 1972). In addition, as much of the aviation law in the UK stems from the EU, it will be important to keep a close eye on the development of plans post-Brexit. However, air quality policy and regulation is devolved, with individual strategies for England, Scotland, Wales and Northern Ireland. For this purpose, cross-sectional data analysis was applied, and the test was performed on Turkey. It constitutes notice of the relevant mortgage being given to all relevant third parties, and all persons are thereby deemed to have express notice of all of the details appearing in the United Kingdom Aircraft Mortgage Register. RadcliffesLeBrasseur LLP, Philip Perrotta Use EdrawMax Online to create a PESTEL analysis diagram, or create any other diagram with ease! As a general rule, an arbitrator has the same powers as any court, and an arbitral tribunals decision is binding. Since the end of the 1980s many reforms have affected the industry, transforming it from the rigid government mandated duopoly of the 80s into the relatively open market that exists today. When the Brexit transition period ended on 31 December 2020, European trademark-holders were automatically granted cloned UK registrations. much more than normal. Failure to install, maintain and use the proper equipment to enable aircraft to take off and land safely will attract liability, and there may be liability to passengers of aircraft which crash if there is a failure to have or to use adequate rescue equipment. Many felt they were not well treated and have moved to look for work in other growing areas. As the aviation business can be profitable in the long term, the government may want to invest. Civil disputes concerning personal injury or property damage may be pursued in the Queens Bench Division of the High Court or in the County Court in accordance with the criteria summarised below. In June 2014, the Court of Appeal held that a technical problem is not considered to be an extraordinary circumstance under Regulation 261 and accordingly cannot be used as a basis for an airline to escape from its obligation to compensate passengers for long delays, cancellations, rerouting and/or denied boarding (Jet2.com v Huzar [2014] EWCA Civ 791). 2.1 Does registration of ownership in the aircraft register constitute proof of ownership? First and Business Class ticket passengers are less price-sensitive than Economy ticket users. Pursuant to Part 1 Article 5(1), only the following persons are qualified to hold a legal or beneficial interest by way of ownership in an aircraft registered in the United Kingdom or a share in such an aircraft: (a) the Crown in right of HM Government in the United Kingdom and the Crown in right of the Scottish Administration; (e) bodies incorporated in some part of the Commonwealth and having their principal place of business in any part of the Commonwealth; (f) undertakings formed in accordance with the law of an EEA State which have their registered office, central administration or principal place of business within the EEA; or. Some of the principal pieces of domestic UK legislation are: Her Majestys (HM) Government, from time to time, appoints commissions to investigate certain aspects of the aviation industry, the most recent and highly publicised being the Airports Commission into the expansion of Londons airport capacity, which was chaired by Sir Howard Davies and issued its final report in July 2015. The risk of cyber terrorism or data attacks is a real threat these days. To summarise, in order to fly a drone in the UK: 4.14 To what extent does general consumer protection legislation apply to the relationship between the airport operator and the passenger? This combines a number of different techniques PESTLE analysis being one of them to identify and evaluate the various external factors that affect a business. In October 2018, London Gatwick, the UKs second-busiest airport, published proposals to move its standby runway to use it for short-haul flights by the mid-2020s. The Package Travel and Linked Travel Arrangements Regulations 2018 implemented the Package Travel Directive in the UK on 1 July 2018. This is broadly the position also in relation to VAT applicable to the importation of aircraft into the United Kingdom, except where the aircraft has been imported previously into a Member State of the EU and is classified to be in free circulation for customs purposes. The passenger airline industry is affected by the following factors. (3) Drones weighing more than 20kg must comply with all rules within the ANO as if they are a manned aircraft, subject to any exemptions from the CAA. Though the number of passengers has increased over the years, most airline companies failed to see a surge in their revenue. In October 2016, HM Government approved a third runway at Heathrow to expand the UKs airport capacity. This was an issue before the pandemic and, especially in some regions, will be worse after. The Civil Aviation (Chargeable Air Services) (Records) Regulations 2001 govern the format and content of the aircraft movement log, which must be kept at any airport pursuant to section 88 of the Civil Aviation Act 1982. In 2020, the majority of passenger . . A Harvard study suggests that more than 57% of today's youth will be obese at age 35. Liens are not registrable. 5335, paragraph 441; and Lufthansa/Swiss, Case COMP/M. Despite its efforts to lower its impact, the industry, of course, is well exposed to the effects of climate change. costs savings through joint operations or improved services); (b) consumers should receive a fair share of those benefits (e.g. 1.10 Have there been any recent cases of note or other notable developments in your jurisdiction involving air operators and/or airports? Airline Industry: Short-term recovery, long-term challenges. No, there are no ownership requirements specific to GDSs operating in the UK, beyond the general UK company law applicable to all companies. 1.6 As regards international air carriers operating in your jurisdiction, are there any particular limitations to be aware of, in particular when compared with domestic or local operators? Many workers who would usually take up employment in the sector have been unable to. These are the macroeconomic factors that can affect a company's performance. Internal emergency, war, or political instability can hinder the business of any airline company. They are currently as follows (and are subject to revision annually): For aircraft mortgages which attach to a number of aircraft, the CAA registration fee is levied on the heaviest aircraft by MTOW, plus 184 for each additional aircraft attached. An appeal to the Supreme Court followed, and the judgment to that appeal was delivered on 15 January 2021. Those Acts do not however apply to a registered mortgage of an aircraft (or aviation asset). However, an airline's criteria cannot subject a passenger to any unjust or unreasonable prejudice or disadvantage, such as using a passenger's race, ethnicity, or any other constitutionally. Around the world, the number of people flying increased by 6.6% in 2017. Sitemap, British Airways operates more than 280 aircraft, Political Factors Affecting British Airways, British Airways PESTLE Analysis: Final Thoughts, the pound experienced historic depreciation, s a direct effect on the airline industry, decided to reduce the legroom of its planes, the first airline that used sustainable fuel, What is PESTLE Analysis? The UK is a party to the Chicago Convention 1944, which provides for availability, so far as practicable, of aerodromes in its territory (Article 28) and equality of conditions for use of aerodromes for international and domestic aircraft (Article 15). It is also not clear how long parties must wait before being able to rely on frustration does a few months delay in being able to perform a duty render the contract impossible or must they wait longer? PESTLE analysis is the perfect tool to analyze the impact of the macroeconomic variables mentioned above on a company. Booking.com awaits Supreme Court ruling as the USPTO appeals previous decisions finding BOOKING.COM, though a combination of generic terms, can be protected through trademark registration. Consumer protection legislation requiring airlines to limit tarmac time during weather delays increases the flight cancellation rate, decreasing revenue. , , . . Overweight and obesity will challenge airports and airlines in the future. There are many regulations which require airlines to offer safe travel along with high-quality services. in respect of maintenance or repair of the aircraft or in respect of an unpaid purchase price for the aircraft) has been satisfied. The government has set up some strict rules and guidelines for the operation of an airline which can ensure the utmost security of the passengers. They did note that if the passenger had displayed this behaviour before or during boarding, it should not be classified as an extraordinary circumstance, as the pilot has authority to refuse a passenger from boarding or to ask them to disembark. Users of airports are subject to airport charges, which are regulated by the CAA under the Civil Aviation Act 2012 and the Airport Charges Regulation 2011. There is also a discretion for the CAA to register an aircraft which is owned by a person not qualified under Part 1 Article 5(1) where the owner resides or has a place of business in the United Kingdom, but such aircraft must not be used for commercial air transport, public transport or aerial work (Part 1 Articles 5(2) and (3)). It can add to the clear image of any aviation company. 4.4 How does your jurisdiction approach mergers, acquisition mergers and full-function joint ventures? The Civil Aviation Act 1982 and the Air Navigation Order 2009 stipulate that where an aerodrome is open for public use, the aerodrome must be available to all, on equal terms, whether they are foreign or domestic carriers. an injunction order to prevent the other party from doing something until final judgment is reached; and. It represents airports' interests with governments and international bodies such as the International Civil Aviation Organization (ICAO), develops standards, policies and recommended practices for airports, and provides information and training opportunities to raise standards around the world. 4.11 Is there any legislation governing the denial of boarding rights and/or cancelled flights? This includes new launches from Boeing and Airbus (most notably the 777X and the A321XLR), as well as new developments from new Russian and Chinese manufacturers. Added to this, sector wages remain low and the cost of living is increasing. Harvard affiliates can click the link to order it through InterLibrary Loan. (https://www.gpo.gov/fdsys/pkg/CFR-2004-title14-vol1/content-detail.html). In terms of the Civil Aviation Act 2012, an airport operator that has, or is likely to acquire, substantial market power requires a licence from the CAA. The airline industry remains a big and growing industry such that today, air travel has become commonplace as it is becoming more and more affordable to . Certified copies of the entries on the Mortgage Register are available at 31 per aircraft. Yes. Civil proceedings which include a claim for damages in respect of personal injuries must not be started in the High Court unless the value of the claim is 50,000 or more. 'A PESTLE analysis of the aviation industry', notesmatic, [online]. As regards favourable tax treatment on the disposal of aircraft, no particular tax rules or regulations apply at present, although the effects of such taxation can be optimised by thoughtful tax planning strategies. In the wake of recent drone incidents at airports, the UK Government has published amendments to the UK Air Navigation Order 2016 (ANO) so that: (1) Any drone weighing over 250g must be registered with the CAA and labelled with an operator ID. ______ factors result from the processes and actions of government bodies that influence the decisions and behavior of firms. Making a PESTLE analysis will help in determining the weak areas and how much efforts are required to invest so as to get back to the right way. The limited case law in English law, which applies as precedent to the matter of the priority of aircraft liens and statutory detention rights, suggests strongly that an aircraft lien or statutory detention right will take priority over a registered aircraft mortgage. Like any other business, the airline industry is impacted by changes in its external environment. In a connected world, conflicts can have more far-reaching effects too. 10. gain, the company offered to acquire a stake in the China Eastern Airlines against 7.3 billion Hong Kong Dollars that . The workforce in Canada is very diverse and represents different walks of life. Fiscal policies such as excise taxes on airline tickets increase consumer prices, and that affects demand. In general terms, there are both (for historical reasons) legal and equitable remedies, and the following may be available: 3.6 Are there any rights of appeal to the courts from the decision of a court or arbitral tribunal and, if so, in what circumstances do these rights arise? 1.9 What legislative and/or regulatory regime applies to air accidents? The ICO has the power to fine data controllers up to 17.5 million or 4% of annual worldwide turnover (whichever is higher) for breaches of the UK GDPR and DPA 2018. Whilst socio-cultural factors can affect the performance of an individual working alone (e.g. There has been pressure on the government to change immigration rules for the sector, but this seems unlikely. Shortages of ground staff, including security, baggage handling, and ramp agents, have led to significant delays in processing passengers and in handling flights. Political environment. Contributor, P., 2021. The companies need to invest in technology and bring in continuous changes to ensure the security and safety of the passengers. Everything in desktop + Templates Community, Join 2023 Edraw Special Sales. Led by the CMA and the courts, the UK will need to develop its own regime in due course with the ability to decide to diverge from those areas where similarities continue to be in place, in particular as regards EU competition law developments and case law. less. These have defined the relevant market in decisions regarding the aviation sectors as follows: Origin and Destination (O&D) City Pairs. covers common issues in aviation laws and regulations - including aircraft trading, finance and leasing, litigation and dispute resolution. The reason for this is because the airline industry has a major role to play . For airlines and operators, there are changes to ownership and operation, with companies becoming much more restructured to their own regions. The Transport Act 2000 requires airport operators to keep records of aircraft movements in order to facilitate the assessment and calculation of charges.