legal factors affecting airline industry

An appeal from factual findings is usually difficult to pursue. There have been certain extents where some of the operators in the . Political analysis. 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. Looking wider, the impact is being felt, Since the retirement of Concorde, the area of commercial supersonic flight has remained quiet. On July 9, 2021, the DOT announced a Notice of Proposed Rulemaking that would require airlines to refund fees for checked bags that are significantly delayed and for ancillary services, such as advance seat selection and Wi-Fi, when consumers pay for them but they are not provided. Political environment. Recruiting staff into the industry quickly has been difficult. ')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 These forms of combined travel are protected as a package under the Directive; in particular, where the travel services are booked at the same time and as part of the same booking process or where they are offered for an inclusive price. 4.16 Are there any ownership requirements pertaining to GDSs operating in your jurisdiction? For airlines and operators, there are changes to ownership and operation, with companies becoming much more restructured to their own regions. There are several factors that can positively affect the aviation industry and boost its growth such as the rise in purchasing power with the middle class and rapidly growing youth population, favorable demographics, economy flights/ Low Cost Carriers (LCC), growing tourism industry of India and a rise in passengers traveling by air within and South African Airways (B) case study PESTEL analysis includes macro environment factors that impact the overall business environment - Political, Economic, Social, Technological, Environmental, and Legal factors. Terrorism likewise remains a threat, and the risk increases with more political instability. The Department for Transport (in exercising the authority of the Secretary of State for Transport) is the governmental body responsible for civil aviation. For the sake of completeness, it should be noted that the Bills of Sale Acts 1878 and 1882 allow seizure of an aircraft (or aviation asset) on the occurrence of certain events of default (as specified in the Acts) relating to a security bill of sale. At many airports, there have been delays for passengers of many hours leading to missed flights and further problems for airlines. 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 Federal Aviation Administration) much more than normal. If the clause does not explicitly address costs being recoverable in the occurrence of a triggering event, the general common law position is that costs are not recoverable. There are massive PESTEL templates and symbols to choose from, and creating a PESTEL analysis diagram could be really simple. The current EU case law is limited. The Enterprise Act 2002 is also applicable to aviation: it gives the CMA powers of enforcement in relation to consumer legislation. The DPA 2018s jurisdictional scope includes persons who: (b) have an office, branch or agency in the UK; or. While demand has increased, so have profits for major airlines, predicted to sit around $33.8B in 2018. It can help them to stay away from crashes or technical faults. The General Data Protection Regulation (Regulation 2016/679) (the GDPR), the UK GDPR (as incorporated into UK law via the European Union (Withdrawal) Act of 2018) and the UK Data Protection Act 2018 (DPA 2018) govern the collection and use of personal data in the UK. Airline Industry Legal Issues. Automation is yet another factor affecting the airline industry as people make use of Skype features or hold a conference call instead of travelling. Read those pages for additional information regarding the legal solutions our industry teams provide. There are three factors that cause financial problem for airline industry: fuel price, interest rate, currency rate. Much of this is related to mask-wearing, but other continuing restrictions are causing upset to passengers. Consumer rights legislation will continue to strengthen in the UK as a result of the Consumer Rights Act 2015 and the ever-present bolstering of Regulation 261, primarily by the CJEUs interpretation of the Regulation, as now clarified to an extent by the 2016 Interpretative Guidelines, but also in relation to a revision to the Regulation (which remains to be agreed). K&L Gates LLP, The International Comparative Legal Guides and the International Business Reports are published by: Global Legal Group, Working with GLG has been a smooth and efficient co-operation from beginning to end. Moving away from COVID, there are, of course, other factors to consider. South African Airways (B) case study (referred as "Case.an Airways" for purpose of this article) is a Harvard Business School . In the UK, Brexit has caused increased problems. There is no right of appeal to the courts on a question of fact. For international flights, the regulations are strict, and this situation may lead an airline to push for more amenities to keep up with the competitors. Since September 11, 2001, several air carriers have sought to reorganize under Chapter 11 of the U.S. Bankruptcy Code, including United Airlines, the second-largest U.S. air carrier, US Airways, the seventh-largest U.S. air carrier, and several smaller competitors. A fee is payable to the CMA in respect of relevant merger situations. The airline industry has been hit particularly hard, as the number of people flying in the Trademarks, patents and designs are registrable with the IPO. 2.5 What (if any) are the tax implications in your jurisdiction for aircraft trading as regards a) value-added tax (VAT) and/or goods and services tax (GST), and b) documentary taxes such as stamp duty; and (to the extent applicable) do exemptions exist as regards non-domestic purchasers and sellers of aircraft and/or particular aircraft types or operations? the outcome of the claim is of importance to the public in general. The Ukraine/Russian situation is not the only threat either. . As well as the immediate safety risks of such incidents, they also present a reputational risk for airlines. When the Brexit transition period ended on 31 December 2020, European trademark-holders were automatically granted cloned UK registrations. The CAA is the competent licensing authority in the UK in almost all matters relating to the granting of operating licences. Available at: https://www.managementstudyguide.com/pestle-analysis-of-global-aviation-industry.html (Accessed 16 June 2021). UAE's labor law deals with all the employees' contracts, wages, salaries, and vacations. The . Londons Stansted had previously been required to hold a licence but since April 2014 the CAA has held that it no longer meets the market power requirements and is no longer required to hold a licence. Much of the domestic legislation originates from European legislation, and there is no aviation-specific policy (presumably on the basis that there are a number of contributors to poor air quality). The Factors That Influnce Airline Industry volatility the international financial crisis and other factors especially the oil price that is the most major factor of the airline cost and still increasing made the airline industry's production decline shaply. It should be noted, however, that this priority position of an aircraft mortgage is nevertheless subject to certain other in rem rights (liens) of third parties to retain or detain the relevant aircraft until a claim for payment (e.g. Civil Aviation (Access to Air Travel for Disabled Persons and Persons of Reduced Mobility) Regulations 2007 Statutory Instrument No 1895 2007. But they also will make it harder for airlines to show profits as the squeeze is expected to push up labor costs at a time when carriers face significantly higher fuel prices. Proper strategies and plans can be very fruitful in this case. The passenger airline industry is affected by the following factors. Fuel price: In general, fuel price always plays an important role in the world economy. In relation to a), the supply, charter or hire of qualifying aircraft are zero-rated for VAT purposes. Firstly, the aviation industry has rebounded post-COVID much faster than many anticipated. Air Canada takes it as a strength. 2.6 Is your jurisdiction a signatory to the main international Conventions (Montreal, Geneva and Cape Town)? All the major GDSs operate in the UK, e.g. The initiative, which was launched in 2004, seeks to improve the European air traffic management system in order to reform the European airspace, from a perspective of capacity, efficiency and environmental impact. There are several reasons for this. In these circumstances, the mortgagee or the lessor (as the case may be) will be required to provide a cross-indemnity for any third-party claims arising from a sudden detention of the aircraft (not, however, in favour of the relevant mortgagor, lessee or operator of the relevant aircraft, on the basis that it is assumed that an appropriate indemnity from such party has already been given in respect of, among other things, losses arising from the repossession of the relevant aircraft following a default). Security concerns and airspace restrictions can affect airlines far from the conflict zone. At this time, EU Regulation 1008/2008 applies, which sets out at Article 4 (Conditions for granting an operating licence) that an undertaking shall be granted an operating licence by the competent licensing authority of a Member State provided that Member States and/or nationals of Member States own more than 50% of the undertaking and effectively control it, whether directly or indirectly through one or more intermediate undertakings, except as provided for in an agreement with a third country to which the community is a party. However, at the same time, the number of passengers is declining, which can show a negative result in the long run. A party requires permission to appeal from a County Court or High Court decision. This Regulation establishes the rules on compensation and assistance to passengers in the event of denied boarding, long delay of flights, and cancellation. However, UAE is the safest country in the region and it has the . 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). Those Acts do not however apply to a registered mortgage of an aircraft (or aviation asset). Added to this is a rigorous enforcement of safety standards. 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. 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. In October 2016, HM Government approved a third runway at Heathrow to expand the UKs airport capacity. The priority notice remains valid for 14 working days from and including the date of entry, and during this period either the relevant aircraft mortgage must be registered or a further priority notice entered. Around the world, the number of people flying increased by 6.6% in 2017. You can find the complete PESTLE analysis of Anthropologie here on our site. It inspects the guidance of government. Nevertheless, limited case law on the subject is exclusively related to real estate (that is, immovable assets) and there is perceived to be little or no risk as a matter of English law to loss of or prejudice to title when aircraft engines are installed on a different airframe. Does this depend on the value of the dispute? The shortage post-COVID has already been seen in the recovering US market. 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. In this chapter, I am going to analyses the TWO main factors that may affect the Singapore Airline strategy for next five years. The airport operator is responsible for ensuring that the landing ground and runway remain clear of unmarked and unlit obstructions pursuant to the Air Navigation (Consolidation) Order 1923. Political and legal factors that impact the airline industry The airline industry is widely impacted by regulations and restrictions related to international trade, tax policy, and. The relevant aircraft mortgage, once registered with the CAA, will then take its priority from the date of registration of the original priority notice. 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. ) They need to upgrade continuously and incorporate the green flight ideas as much as possible. This avoids additional administrative hurdles resulting from the ratification of the CTC, but at the same time means that it is not possible to register such pre-existing interests. A search of the United Kingdom Aircraft Mortgage Register for entries registered against relevant aircraft can be made by submitting a CAA Form CA350 (obtained from www.caa.co.uk) to the CAA. 2.1 Does registration of ownership in the aircraft register constitute proof of ownership? Pirates of the Caribbean Series The AAIB reports to the CAA and other civil aviation authorities having responsibility for oversight of any aspect of the accident. UK legislation is contained in the Civil Aviation Act 1982 and the Air Navigation Order 2009 (as amended). In this case, a non-EU carrier was operating services from the UK to the USA via Canada, where the passenger was to make a connection. The change was outside the parties control. Despite its efforts to lower its impact, the industry, of course, is well exposed to the effects of climate change. This is affecting airlines, airports, and other companies globally but the situation is particularly acute in Europe and the UK so far. The CAA maintains the United Kingdom Aircraft Mortgage Register (pursuant to the Mortgaging of Aircraft Order 1972). The airline companies must be well aware of them and abide by those rules to avoid legal proceedings. The CAA acts in the regulation of aviation without detailed supervision by the Government. 'A PESTLE analysis of the aviation industry', notesmatic, [online]. It was formerly known as the Air Transport Association of America (ATA). Of less frequent application, a creditor may obtain a freezing injunction, restraining an aircraft pending judgment and execution of the judgment debt. If you are an affiliate of Harvard Law School, you are welcome to contact us at research@law.harvard.edu for additional help. No. Recession and unstable economic conditions can severely affect the airline industry. Most of the countries have multiple operating airline companies, which makes it a highly competitive market. For example, if there are cases of employee harassment or passenger mistreatment, those events can create a deep impact on their business. In such a case, however, competition rules particularly prohibiting abuse of a dominant position (section 18 CA 1998 and/or Article 102 TFEU) will prohibit any discriminatory charges for access to airport infrastructure, or denial of access where this affects trade and is not objectively justified. The creditor will have to demonstrate, inter alia, that there is a real risk of dissipation of the debtors assets other than in the usual course of the debtors business, and that the value of the debt is commensurate with that of the aircraft. an injunction order to prevent the other party from doing something until final judgment is reached; and. Legal factors that impact on the aviation (airline) industry The aviation industry is widely impacted by a number of rules and regulations. To register aircraft on the United Kingdom Register of Civil Aircraft, a Form CA1 (see www.caa.co.uk) is submitted either by the owner or by the so-called charterer by demise (by virtue of a relevant loan, lease, hire or hire purchase) eligible to register in accordance with the Air Navigation Order 2009 [see Endnote 1]. There are no collateral rights of enforcement as a matter of law without a court order, and accordingly the exercise of such rights on a self-help basis usually requires the person in possession or control of the aircraft (or aviation asset) to cooperate with that exercise. as a self-help remedy. AirlinesAutomotiveBlockchain TechnologyConsumer ProductsCosmeticsCryptocurrencyCybersecurityDigital ArtsDigital MarketingEcommerceEnergyFashionLuxury BrandsHealth TechnologyProfessional ServicesReal Estate DevelopersRestaurantsRetailSoftwareSporting GoodsTechnologyTelecommunications. The airline industry has mounted publicity campaigns and engaged in lobbying in order to try to influence a reduction in APD rates, which the industry views as being too high. Airline companies face similar legal issues as businesses in the Automotive, Technology, and Retail industries. This has an impact on carriers, as it has a scope which extends beyond the traditional holiday package booked through a tour operator, and covers many other forms of combined travel (for example, fly-drive holidays and flight-hotel bookings). There are narrow exceptions to this general rule. A relevant merger situation under the UK merger rules arises where: With the exception of special cases of mergers involving newspapers, broadcasters or water companies, there is no obligation to notify proposed or completed mergers. The concept of force majeure is closely linked to the concept of frustration. This is not a short-term problem and nor is it limited to London Heathrow. The supreme court of European union has imposed compensation on emirates airlines amounting to million of pounds. trademarks) and other assets and data of a proprietary nature? There are many laws devised for air traffic and the safety and security of passengers. In the UK and Europe, Brexit is a leading one. For instance, Canada has considerable restrictions on foreign ownership of Canadian airlines which makes it a difficult place to start an airline. The labor problems threaten to limit revenue growth if carriers are forced to cancel routes or reduce frequency. As a general rule, an arbitrator has the same powers as any court, and an arbitral tribunals decision is binding. For example, the continued effects of coronavirus may not be seen as unforeseeable for new contracts made after the initial pandemic outbreak, therefore if the events defined in a force majeure clause must be unforeseeable, it could be argued that any coronavirus-related issues do not suspend obligations. They are licensed and regulated by the CAA. Minimum wage laws can limit the various different employment possibilities a company can offer, child labour laws can affect the way tight-knit home businesses in third world countries operate, and dismissal laws can make firing employees (for whatever reason, perhaps unproductivity) that bit harder. Shortages of ground staff, including security, baggage handling, and ramp agents, have led to significant delays in processing passengers and in handling flights. in 2016 it was 73% Almost all countries can record tremendous growth in the number of overweight and obese people. The CAA is an independent body responsible for economic, safety and consumer protection regulation, and airspace policy. Type B operating licences are for operators of aircraft with 19 or fewer seats; Type A operating licences are for operators of aircraft with 20 or more seats. This will depend entirely on the CTC and its requirements in the case of an aircraft, debtor location or aircraft registration in a CTC country (and compliance with the formalities set out in Article 7 of the CTC), and an aircraft mortgagee may be able to rely on the rights and remedies available under the CTC for such international interest in the relevant aircraft. Even in the case of a conditional sale where rental payments are effectively instalment payments of the purchase price, it is well understood in law that a seller is protected if the lessee defaults and that a seller maintains ownership of the asset and can claim repossession and all the other benefits of ownership notwithstanding many months or even years of possession and payment by the lessee beforehand. The Court analysed the position under English law and overruled the defendants submission that Lipton v BA City Flyer was wrongly decided insofar as claims decided after the end of the transition period should be decided on the basis of Regulation 261 as amended by the 2019 Amendment Regulations. Also, you can find substantial PESTEL templates in our template community to have a quick start. Where an individual has suffered material or non-material damage due to a data controllers breach of the UK GDPR, that individual is entitled to claim compensation from the data controller or processor. For example, is there a distinction in your jurisdiction regarding the courts in which civil and criminal cases are brought? The general competition rules (principally those contained in the CA 1998 and closely modelled on Articles 101 and 102 TFEU) apply fully to aviation as they do to other sectors. This means that they have to be very careful with where they take future designs from. The data controller remains legally responsible for the processing of personal data by the data processor. the drone must not be flown within 150m of any large group of people such as a concert or sporting event. In fact, the world's 20 busiest airports, alone, saw roughly 1.5 billion . Moreover, airlines also struggled with increasing labour demands from the part of employees. It can help them to offer a safe and comfortable service. In light of the coronavirus pandemic, many people and businesses have been forced to rely on these clauses in order to suspend their contractual obligations. The airline industry is not an exception. 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. According to the US Bureau of Transportation Statistics, airline travel in the US has increased 15% from 2007 to 2017, while flight prices are seeing all-time lows. The Package Travel and Linked Travel Arrangements Regulations 2018 implemented the Package Travel Directive in the UK on 1 July 2018. This is affecting airlines, airports, and other companies globally - but the situation is particularly acute in Europe and the UK so far. The impact of aviation on the environment has also continued to be discussed more widely this year, and has featured in cases such as the proposed Heathrow expansion. On the other hand, consumer law in itself makes a business for some private watchdog companies. 2021. 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? Ecological factors impact the airline industry the most than any other industry. In 2020, the majority of passenger . English law as a rule recognises the concept of accession, which is similar to the nature of an annexation of title, for example by the owner of an aircraft to which an engine owned by another party is affixed. These regulations cover all aspects of the airline industry, including the airlines themselves (carriers), as well as their equipment (aircraft) and pilots (airmen). The ICO issued the first UK enforcement notice under the GDPR in July 2018 on a Canadian data company. (2) The runway protection zone (in which no drones may be flown) has been extended around aerodromes to within 5km of runway ends, and up to a height of 2,000ft. The Air Passenger Rights and Air Travel Organisers Licencing (Amendment) (EU Exit) Regulations 2019 will directly transpose Regulation 261 into English law. The Secretary of State has statutory powers relating to aviation security (see, for example, the Aviation and Maritime Security Act 1990). The DPA 2018 further sets out derogations and exemptions to the GDPR that will apply in the UK.

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