Ques: Can you tell us a bit about Arnecke Siebold's Aviation practise?
Ans: Our aviation practice comprises six attorneys within our Transportation, Aviation and Logistics (TAL) group and offers a one stop-shop for industry participants. Within our full service law firm we are one of the few German firms that has a strong focus on the airline (cargo and passenger business) and aviation industry as well as on logistics, shipping and airport related issues. We litigate heavily and render services as regards regulatory matters and a large variety of contracts. Our TAL group is rounded up by our aircraft finance practice which assists clients with their registration/ de-registration of aircraft and mortgages for example but also in terms of repossession of engines and aircraft as well as all tax and customs related questions.
Ques: Where do you see the global aviation industry five years from now and what are the various avenues within the sector where you anticipate growth?
Ans: Consolidation must and will continue. I do not see a short-term solution to the ownership and control-restraints which is holding the industry hostage for so many decades now. One catalyst for growth is the Gulf Cooperation Council (GCC) carriers which enjoy a political and legislative environment that EU community carriers can only dream of. I anticipate that more and more GCC carriers will try to get their hands on struggling EU carriers by accepting a minority share of up to 49 per cent and then restructure and integrate them. Joining an alliance seems less attractive these days or only an additional strategy to have an easier access to additional markets.
Ques: Can you tell us your opinion on the European Union's unilateral decision to impose clean air tax on all airlines taking off and landing within the EU?
Ans: The EU’s one-sided approach to include the aviation industry into the EU Emissions Trading Scheme (EU ETS) is in my view a violation of international public and customary law as well as the Chicago Convention. But there seems to be a silver lining on the horizon: On 4 September 2013 the Council of ICAO adopted a text which aims at a compromise. It allows to cover flights within EU airspace and also those flights to non-European third countries, even though only the part of the journey within EU airspace. At this stage nothing is written in stone but we look only at a proposal which will be discussed during the next ICAO assembly of all Member States later this month. I think one can conclude that this is a positive development in light of the standstill period of the previous years.
Ques: What is your take from the competition law aspect on the proposed American Airlines and US Airways merger which is currently facing anti trust related regulatory hurdles?
Ans: Now that the merger hearing had been scheduled earlier than the DoJ desired we will know rather sooner than later what the outcome will be. From a European perspective I can imagine than many European legacy carriers could be terrified when looking at the sheer size of the fleet of the merged companies. The EU Commission already approved the merger under the condition of the release of slots at London Heathrow. It will be interesting to hear how the carriers will address the DoJ’s argument that the creation of the world’s largest airline would lessen competition when it will control for instance almost 70% of all slots at Washington Reagan Airport. In general, consolidation is inevitable and can only be delayed but not eliminated.
Ques: What according to you are the biggest legal hurdles being faced in the aviation sector today?
Ans: Many airlines in the EU and in particular in Germany are facing a very consumer friendly and at the same time airline adverse atmosphere when passengers take air carriers to court for denied boarding compensation or compensation for long delays and cancellation. This is a development frequently described as ‘consumerism’, or a beast nobody seems to be able to control anymore. Regulation (EC) No. 261/2004 will and should be revised in the not too distant future. But when looking at the available draft documents now, I do not get the impression that this will make the industry entirely happy.Despite of all credit crunches, the financial crisis and recessions in many markets aviation will remain a success story and the number of passengers flying worldwide will increase significantly over the next years and decades to come. This will mean regulatory hurdles in respect of noise, emission and the streamlining of Air Traffic Control which bears a great potential for the reduction of fuel consumption and to leverage airline profitability.
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