This should make it all as clear as MUD-
AIRCRAFT MANAGEMENT
The law and public transport
The starting point is the definition of public transport. Article 157(3)(a) of the Air Navigation Order 2005 provides that a public transport flight is one on which valuable consideration is given or promised for the carriage of passengers in the aircraft on that flight. In applying that definition, one should ask in respect of a particular flight whether there is a passenger on board and if so whether any payment has been made for the purpose of carrying the passenger on that flight. This is a question of substance and not of form. It matters not how the payment is characterised (eg, as an access fee, facilitation fee, utilisation charge).
Contracting in expertise
A person may wish to have the benefit of an aircraft but have insufficient expertise or be unwilling to devote the time and effort to undertake all aspects of the operation himself. He may buy aircraft management services to support the operation.
Payments by an owner for aircraft management services
Where an owner pays for aircraft management services, the question which needs to be determined is how those payments should be characterised. In particular, in what circumstances will those payments amount to payment for the carriage of a passenger on the flight so that the flight would be public transport. Alternatively, in what circumstances might the payments be characterised as not being for the carriage of a passenger on a particular flight in which case the flight may be operated as either a private or an aerial work flight.
Where the owner is the operator
In the view of the CAA, where, notwithstanding services bought in from an aircraft management company, an owner operates his own aircraft, payments to the aircraft management company will not be for the carriage of passengers on a flight.
Identifying the operator
To determine who will be the operator one must look at the operation as a whole in order to determine who is managing it. Where virtually all aspects of an operation are contracted out, and in particular where they are largely contracted to one supplier, at some point the person would cease to be the operator in substance and thus in law. It would be the external supplier who becomes the operator.
The Air Navigation Order 2005
“Operator” is defined at Article 155(3) of the Air Navigation Order 2005 as in essence being the person who has the management of the aircraft at the relevant time. There is no further assistance in the legislation as to what amounts having the management of an aircraft. In practice, it means the person who is in substance (and not in form) managing the operation of the aircraft. CAA interprets it by reference to the case of CAA v Internationale Nederlanden Lease BV and JAR-OPS 1.175 (see below).
CAA v Internationale Nederlanden Lease BV
In the case of CAA v Internationale Nederlanden Lease BV, the Judge stated:
“It seems to me that the management of an aircraft typically includes two crucially important aspects: ensuring that the aircraft is at all times airworthy, and ensuring that it has a competent, qualified and certificated crew.”
Mere ownership of an aircraft is not in itself relevant to these considerations. It is possible to operate and aircraft one does not own and it is possible to own an aircraft which one does not operate.
JAR OPS 1.175
It is useful to consider the provisions in JAR-OPS setting out those matters which must take into account when granting an AOC. JAR OPS 1.175 provides that an applicant for an AOC must have a management organisation capable of exercising operational control and supervision over any flight operated by it and have an accountable manager who has corporate authority for ensuring that all operations and maintenance activities can be carried out to the standard required by the Authority.
Appendix 2 to JAR OPS 1.175 provides that an operator must have a sound and effective management structure in order to ensure the safe conduct of their operations.
IEM OPS 1.175 states that the responsibilities of management related to JAR-OPS Part 1 should include at least the following five main functions:
(a) determination of the operator’s flight safety policy;
(b) allocation of responsibilities and duties and issuing instructions to individuals, sufficient for the implementation of person policy and the maintenance of safety standards;
(c) monitoring of flight safety standards;
(d) recording and analysis of any deviations from person standards and ensuring corrective action;
(e) evaluating the safety record of the person in order to avoid the development of undesirable trends.
Where an owner is not the operator
Where an owner is not the operator whether payments made in connection with the operation are for the carriage of a passenger on a particular flight will depend on all the circumstances. The following factors may be relevant:
Ownership
Whether the person making the payments is the sole or a substantial owner and the registered owner.
Purpose of Payments
Whether the only payments made may properly be considered to be for the purpose of aircraft management services.
Whether payments are in respect of a flight
Whether the payments are part of a long-term aircraft management contract or are in respect of a particular flight or short period.
Use of Aircraft
Whether the aircraft is used solely or mainly by the owner.
Responsibility of owner
Whether the owner has selected the aircraft management company and placed his aircraft within it.
Conclusions
Where payments are made:
• under a long term management contract;
• to an aircraft management services company selected by the owner;
• by a sole owner;
• for the provision of operational services for the owner’s aircraft
• which aircraft is solely or mainly used by the owner for the carriage of himself and persons personally known to the owner;
• without any other payments being made in connection with their carriage:
the CAA is likely to conclude that the payments are not for the carriage of passengers on any particular flight and therefore the flights will not be public transport. ; The CAA would not therefore expect such flights to be conducted under an AOC.
However, as noted above the position will depend on all the circumstances, the legal test is open to interpretation and the CAA cannot certify that any particular arrangement will be lawful. It will be for the owner and the management company to satisfy themselves that their arrangements are safe and lawful both in terms of the requirements of the Air Navigation Order and any applicable insurance policies.
Civil Aviation Authority
December 2002
(Revised to ANO 2005 references)
TMAB