Aviation, United Kingdom updates

Court of Appeal rules on termination of aircraft purchase agreement
  • United Kingdom
  • 02 November 2011

A recent case underscores the importance for a potential aircraft purchaser of carefully scrutinising the terms of a purchase agreement into which it may seek to enter, as well as the need to focus on the purchaser's right to terminate the agreement if the manufacturer is late in tendering the aircraft for final inspection.

Assessing the Civil Aviation Act
  • United Kingdom
  • 26 October 2011

The Department for Transport has published a memorandum to the Transport Select Committee entitled "Post-Legislative Assessment of the Civil Aviation Act 2006". It provides a preliminary evaluation of the effects of the Civil Aviation Act, as part of the government's commitment to scrutinise the effects of legislation.

Advocate general opines on EU Emissions Trading Scheme
  • United Kingdom
  • 12 October 2011

Advocate General Kokott has opined that EU plans to extend the EU Emissions Trading Scheme to the aviation sector are legal and do not contravene principles of international law. The opinion was published in the context of proceedings brought before the English High Court by a group of airlines and airline associations which sought to challenge the legality of UK and EU rules extending the scheme to the aviation sector.

Passenger is denied compensation for cancelled flights
  • United Kingdom
  • 24 August 2011

The recent Hendy v Iberian Lineas De Espana SA case concerned a passenger's compensation claim against an airline for expenses incurred because of a cancelled flight. Although the defendant airline was in breach of its obligation to provide meals and refreshments under Article 9(1)(a) of the EU Denied Boarding Regulation, breach of that obligation did not give rise to a civil right to claim damages.

Government consults on future of ATOL
  • United Kingdom
  • 27 July 2011

The goverment has been developing a policy on the reform of Air Transport Organisers' Licensing in order to provide up-to-date consumer protection and put the scheme's finances on a self-sustaining footing, allowing the government guarantee to be withdrawn. A consultation seeks stakeholders' views on amendments through secondary legislation and broader, long-term changes.

Government consults on sustainable development
  • United Kingdom
  • 18 May 2011

The Department for Transport has published a consultation document that raises a series of strategic questions about the future direction of aviation policy. The document also provides a useful summary of the government's plans on various aspects of policy, a view of the contribution that aviation makes to the UK economy and a summary of the EU Emissions Trading Scheme.

Legislative changes affecting airports and aircraft
  • United Kingdom
  • 11 May 2011

A number of changes to aviation legislation have taken place recently. Among other things, they relate to the technical instructions which must be followed when dangerous goods are carried onboard an aircraft, and the power to detain and sell aircraft in certain circumstances where airport charges have not been paid.

New regulations on aviation emissions trading
  • United Kingdom
  • 13 April 2011

The Aviation Greenhouse Gas Emissions Trading Scheme (Amendment) Regulations 2011 are now in force. The EU Emissions Trading Scheme Directive requires the European Commission to publish and regularly to update a list of aircraft operators. Among other things, the 2011 regulations allow non-UK designated aircraft operators to apply to the secretary of state to be considered as a UK aircraft operator.

Government consults on extending air passenger duty to business jets
  • United Kingdom
  • 06 April 2011

The Budget included a statement that the government will consult on whether to extend the United Kingdom's air passenger duty to passengers travelling on business jets. The government estimates that a per-passenger tax on business jets could apply to passengers aboard an estimated 80,000 to 90,000 flights a year.

VAT changes to zero-rating of aircraft
  • United Kingdom
  • 26 January 2011

A recent change to UK value-added tax affects the ability permanently to import aircraft into the United Kingdom at a 0% rate. Owners and operators of corporate aircraft should examine whether they are affected by the changes and should consider other options where permanent importation is impossible.

Incorporation of maintenance organisation's standard terms by reference
  • United Kingdom
  • 08 December 2010

A recent court case concerning a summary judgment application considered whether an aircraft maintenance organisation's terms and conditions were imported by reference by words contained in a work order. The case highlights the need to draft carefully any documents that seek to incorporate terms by reference.

Court rejects purchaser's claim on termination of aircraft purchase agreement
  • United Kingdom
  • 01 December 2010

A recent case confirms that if an aircraft purchaser wishes to have a clear and final cut-off date for the manufacturer to tender the aircraft for final inspection or make final delivery of the aircraft after the rectification of defects, clear terms should be negotiated and included in the purchase agreement.

Damages claim for loss of sale following late redelivery of aircraft
  • United Kingdom
  • 17 November 2010

A recent case before the High Court concerned a claim by aircraft lessors against the lessee for damages in respect of the loss of the sale of the aircraft as a result of late redelivery. Among other issues, the court addressed the question of whether one of the lessors had a claim for compensation or damages under one of the contractual indemnities in the operating lease or at common law.

New regulations continue countdown to emissions trading
  • United Kingdom
  • 20 October 2010

The latest UK aviation emissions trading regulations are in force, although the 2009 regulations still allow UK operators to apply for a free allocation of allowances for their participation in the scheme before the end of 2010. From 2013 operators must surrender one allowance for each tonne of carbon dioxide that they emit during the preceding calendar year.

Standby duty for aircrew: new rules on calculating annual working time limit
  • United Kingdom
  • 21 July 2010

The Civil Aviation (Working Time) Regulations 2004 established an annual working time limit of 2,000 hours for aircrew. However, amending regulations provide that although standby duty normally counts fully against the annual working time limit, time spent on standby will be counted as half in certain limited circumstances.

Changes on flying testing and training
  • United Kingdom
  • 14 July 2010

The Air Navigation Order 2009 has been amended so that flying training and testing for the grant of a pilot's licence or the addition of an aircraft rating, a night rating or a night qualification in a licence need not be conducted from a licensed aerodrome. An exemption from the low-flying prohibition applies to certain aeroplanes and rotorcraft for the purposes of such training and testing.

High Court rejects lessor's claim that fleet lien is unlawful
  • United Kingdom
  • 07 July 2010

A recent case concerned an application in the High Court that the detention of an aircraft for a fleet lien was contrary to the European Convention on Human Rights and was anti-competitive. The aircraft was detained in respect of airport and en route charges incurred not only by the aircraft leased by the claimants, but also by other aircraft operated by the lessee in which the claimants had no interest.

Budget updates plans for VAT change to zero-rating of aircraft
  • United Kingdom
  • 23 June 2010

The coalition government's first budget stated that the scope of the value added tax zero rate for aircraft will be amended - the rate will apply to aircraft bought by airlines operating for reward chiefly on international routes. Her Majesty's Revenue and Customs is being asked to consider allowing zero-rating for aircraft for which a purchase contract is signed before the change becomes law.

Court rules on aircraft lessor's liability for unairworthy aircraft
  • United Kingdom
  • 16 June 2010

A recent case concerned an application for summary judgment for the payment of rent under an aircraft lease agreement. The aircraft was seriously defective and the defendant resisted the claim on the grounds of the total failure of consideration. Although the facts were extreme, the case is significant for the aviation industry and aviation finance lawyers, and is generating interest in the aircraft leasing industry.

VAT change to zero-rating of aircraft
  • United Kingdom
  • 31 March 2010

The 2010 Budget proposed a significant change in the value-added tax treatment of aircraft, changing the definition of aircraft that can be supplied at the 0% rate from the existing one, based on weight and usage, to one based on the customer's status. However, the real effects of the change will depend on how the key terms in the phrase 'an airline operating for reward chiefly on international routes' are drafted.

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