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29 July 2020
COVID-19 has been the focus of most forms of media in 2020 and aviation industry-related publications have been no exception. However, the overwhelming flood of information has been inversely proportional to the development of legal initiatives designed to manage the dramatic situation that the aviation sector is currently experiencing.
When the aviation industry is at risk, a myriad of agents suffer the consequences – namely:
The pandemic's effects are not only broad, but particularly deep, and it is natural to expect government measures to be put in place to try to overcome the current situation.
Notwithstanding concern from local regulatory bodies regarding the impact of the COVID-19 crisis, before 18 July 2020 no recovery proposals – which may have been asking too much – or proposals to mitigate the effects of COVID-19 in the aviation industry had been issued. However, on 18 July 2020 the Ministry of Transport and Communications issued a draft amendment to Article 274 of the Regulations of the Civil Aviation Law for discussion and suggestions. The proposed change to the existing article is the addition of the following clause:
In the case of flight cancellation due to force majeure that involves the legal suspension of the air transport service, passengers have the right to airfare reimbursement that can be performed by the air carrier on services provided up to one year from the lifting of the suspension.
The main objection to this proposal is that the amended article contravenes Article 125.1 of the Civil Aviation Law. According to said article, passengers have the right to the immediate reimbursement of their total airfare. While the existing Article 274 does not strictly follow the aforesaid legal mandate, it arguably does not contravene said decree as it provides an alternative choice to passengers by stating as follows:
In the case of flight cancellation, the passenger can choose to make the trip on the next flight made by the same carrier on the same or similar route. In this case, the passenger is entitled to payment of the ordinary costs of accommodation, food, communications and commuting that are necessary.
On the contrary, the draft proposal, which is worded confusingly, leaves it to carriers to reimburse passengers' airfares within one year of the resumption of activities where their flight has been cancelled due to a force majeure event resulting in the air transport service's legal suspension.
In this particular case, although the measure may bring necessary financial relief to airlines, the aforesaid legal technicalities could render it ineffective as regulations cannot contravene the corresponding law. The Regulations of the Civil Aviation Law limit the rights afforded to passengers under the Civil Aviation Law, which opens the door to challenges and defeats the purpose of the regulations. Likewise, it is surprising that it took the authorities so long to propose this amendment. Undoubtedly, passengers whose flights were cancelled prior to the issuance of the statute may argue that this provision does not apply to them. Notably, most flight cancellations in Peru took place in the second quarter of 2020, as airlines have resumed domestic operations in the third quarter.
Finally, the draft proposal is a great opportunity to adjust other provisions in the Regulations of the Civil Aviation Law. For instance, Article 275 sets out that carriers are not liable if they deny coverage to passengers who fail to present the necessary documents for migratory purposes at their destination point. Amid the current pandemic, which looks set to last for some time, it would be beneficial for airlines and passengers' wellbeing if a specific provision was created to exclude liability when airlines use their discretion to deny embarkation to passengers who, in the airlines' reasonable opinion, show symptoms of COVID-19.
The situation faced by the aviation industry is serious and it is likely to be among the sectors which take the longest to recover despite its importance to the development of a connected world. Drastic situations require drastic measures from different angles and entities (eg, the government, Congress and regulatory bodies), and it is hoped that, at least from a regulatory perspective, the measures adopted will assist airlines to resist. Hopefully, the revision of Article 274 of the Regulations of the Civil Aviation Law will be such a departure point for the Peruvian aviation industry.
For further information on this topic please contact Fernando Hurtado de Mendoza at Kennedys Law LLP by telephone (+51 1562 5150) or email (email@example.com). The Kennedys Law LLP website can be accessed at www.kennedyslaw.com.
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