ikea monster
22nd Oct 2005, 00:54
Comments please chaps - Cause I bet this would not happen in the good old USA.
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APPLICATION BY BRITISH AIRWAYS TO LEASE A FOREIGN-REGISTERED AIRCRAFT
Thank you for your letter of 9 September. Our advice is as follows:
Applicant: British Airways plc Lessor: Atlas Air
Aircraft: Boeing 747-200F N528MC or substitute* Type of lease: Wet
* substitute may be a Boeing 747-400F
Length of proposed lease: 1 October 2005 until 31 March 2006
Temporary needs or exceptional circumstances that give rise to the application:
Exceptional circumstances. BA had a temporary waiver to wet lease one Boeing 747-200F from 2 September 2004 until 30 September 2005. It has now applied to extend this lease for a further six months until 31 March 2006. This takes the period of the lease to 19 months in all. The minute statement of Regulation 2407/92 states that for the purposes of Article 8.3 short-term leases would normally cover periods of up to a traffic season. BA therefore needs to demonstrate that there are exceptional circumstances in order to satisfy the criteria in Article 8.3.
Objections/representations:
The application was published in the Official Record on 13 September 2005 and has drawn objections from BALPA and from two individuals. BALPA objects to the further extension of this lease and says that it no longer complies with the wet lease specification of exceptional or temporary needs. It states that the lease has now run continuously for over a traffic season and that it understands there are now UK-based Boeing 747 aircraft, crewed by UK/EU nationals, available through Global Supply Systems (GSS) to meet the contractual needs of BA.
The two individuals object to a US-registered aircraft and crew flying out of the UK for a UK company, saying this should be done by a UK aircraft and crew. One objection goes further and says that this practice has been going on for a number of years and is stopping UK pilots’ jobs, and says that they will raise the issue with their MP if this application is approved, because under no circumstances would a US operator allow a UK-registered aircraft to operate in the USA and take US jobs.
BA comments in support of the application and in response to the objections:
BA says that it requires this extension as there are no suitable aircraft on the UK register and an aircraft is required in support of BA’s cargo programme to Hong Kong, India and Chicago. It says that the circumstances faced by the airline are exceptional in that there are no aircraft on the market compatible with the existing GSS operation at a time when it needs to support its existing programme. GSS, BA’s supplier, is currently in negotiation to secure Boeing 747-200F and -400F aircraft to replace the US-registered aircraft currently being operated by BA. However, although it is taking longer than expected to complete this task, GSS is optimistic that it would be able to crew the new UK-registered aircraft and make it available to BA by April 2006. BA has supplied further commercially sensitive information regarding the efforts to source additional aircraft, which we are attaching in a confidential annex. BA points out that other European authorities continue to approve similar wet lease arrangements.
In response to the objection from BALPA, BA says that while it agrees that GSS has Boeing 747s that are operated by UK and EU nationals, all three aircraft are already under wet lease to BA. As and when GSS is able to add another aircraft to the UK register, BA intends that this will replace the leased aircraft.
As for the comments from individuals, BA says that providing it makes economic and safety sense, it has always done its utmost to use British aircraft. As there are no other UK-registered aircraft currently suitable to its commercial needs it has no real choice but to seek foreign-registered aircraft. BA has every sympathy with the concerns voiced regarding the inability of UK airlines to operate within the USA. It understands that the topic is part of the current round of UK/US talks aimed at establishing a transAtlantic common aviation area. However, at this time BA has no other option than to request an extension to the wet lease of this US-registered aircraft thus providing capacity for its customers and protecting jobs at BA.
Advice:
The CAA's Statement of Policies says that airlines should be free to choose the aircraft they employ and, subject to Article 8.3 of Council Regulation (EEC) 2407/92, that the CAA will advocate a liberal policy when advising the Department on these applications. However, BA needs to demonstrate that there are exceptional circumstances in order to satisfy the criteria in Article 8.3.
GSS is the only UK operator of 747 freighters, with three -400F on the UK register. (There is one 747-200F on the UK register, although this is currently in storage without a current Certificate of Airworthiness.) BA says that the further lease extension is required in exceptional circumstances because despite energetic efforts by BA and GSS, they are still unable to source a suitable aircraft to transfer to the UK register in a very tight market. This extension seemed to be a possibility when we advised on BA's previous applications. BA had anticipated that a limited number of 747 freighters would become available in 2005, but no firm dates were ever given. We noted at that time that press reports suggested that demand for such aircraft was increasing, with two Boeing 747-400 passenger-to-freighter conversion programmes launched last year. BA does now seem to be more confident that an aircraft can be sourced, crewed and placed on the UK register by April 2006.
The objections mention the lack of wet-leasing reciprocity with the US. As we have said previously, we consider any lack of leasing reciprocity with another country to be a matter for the Department in the formulation of its negotiating strategy with the government concerned, rather than something to be challenged in the context of a specific application.
Our conclusion is that BA's difficulties in sourcing a suitable aircraft are consistent with our understanding that there is strong demand in the market for 747 freighters. BA seems quite aware of the restrictions in Article 8.3 and appears to be committed to be placing an aircraft on the UK register via GSS. While the process has become quite protracted there does seem to be a greater prospect of a firm conclusion date within the period of the proposed extension. Meanwhile the airline has commercial commitments that it cannot fulfil with its current fleet. On balance our belief is that the criteria in Article 8.3 have been met and the airline has demonstrated a genuine commercial need for the aircraft within its own operations. BA would not be overly dependent on aircraft registered outside the EEA.
Recommendation: We recommend that you issue an Article 8.3 waiver.
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APPLICATION BY BRITISH AIRWAYS TO LEASE A FOREIGN-REGISTERED AIRCRAFT
Thank you for your letter of 9 September. Our advice is as follows:
Applicant: British Airways plc Lessor: Atlas Air
Aircraft: Boeing 747-200F N528MC or substitute* Type of lease: Wet
* substitute may be a Boeing 747-400F
Length of proposed lease: 1 October 2005 until 31 March 2006
Temporary needs or exceptional circumstances that give rise to the application:
Exceptional circumstances. BA had a temporary waiver to wet lease one Boeing 747-200F from 2 September 2004 until 30 September 2005. It has now applied to extend this lease for a further six months until 31 March 2006. This takes the period of the lease to 19 months in all. The minute statement of Regulation 2407/92 states that for the purposes of Article 8.3 short-term leases would normally cover periods of up to a traffic season. BA therefore needs to demonstrate that there are exceptional circumstances in order to satisfy the criteria in Article 8.3.
Objections/representations:
The application was published in the Official Record on 13 September 2005 and has drawn objections from BALPA and from two individuals. BALPA objects to the further extension of this lease and says that it no longer complies with the wet lease specification of exceptional or temporary needs. It states that the lease has now run continuously for over a traffic season and that it understands there are now UK-based Boeing 747 aircraft, crewed by UK/EU nationals, available through Global Supply Systems (GSS) to meet the contractual needs of BA.
The two individuals object to a US-registered aircraft and crew flying out of the UK for a UK company, saying this should be done by a UK aircraft and crew. One objection goes further and says that this practice has been going on for a number of years and is stopping UK pilots’ jobs, and says that they will raise the issue with their MP if this application is approved, because under no circumstances would a US operator allow a UK-registered aircraft to operate in the USA and take US jobs.
BA comments in support of the application and in response to the objections:
BA says that it requires this extension as there are no suitable aircraft on the UK register and an aircraft is required in support of BA’s cargo programme to Hong Kong, India and Chicago. It says that the circumstances faced by the airline are exceptional in that there are no aircraft on the market compatible with the existing GSS operation at a time when it needs to support its existing programme. GSS, BA’s supplier, is currently in negotiation to secure Boeing 747-200F and -400F aircraft to replace the US-registered aircraft currently being operated by BA. However, although it is taking longer than expected to complete this task, GSS is optimistic that it would be able to crew the new UK-registered aircraft and make it available to BA by April 2006. BA has supplied further commercially sensitive information regarding the efforts to source additional aircraft, which we are attaching in a confidential annex. BA points out that other European authorities continue to approve similar wet lease arrangements.
In response to the objection from BALPA, BA says that while it agrees that GSS has Boeing 747s that are operated by UK and EU nationals, all three aircraft are already under wet lease to BA. As and when GSS is able to add another aircraft to the UK register, BA intends that this will replace the leased aircraft.
As for the comments from individuals, BA says that providing it makes economic and safety sense, it has always done its utmost to use British aircraft. As there are no other UK-registered aircraft currently suitable to its commercial needs it has no real choice but to seek foreign-registered aircraft. BA has every sympathy with the concerns voiced regarding the inability of UK airlines to operate within the USA. It understands that the topic is part of the current round of UK/US talks aimed at establishing a transAtlantic common aviation area. However, at this time BA has no other option than to request an extension to the wet lease of this US-registered aircraft thus providing capacity for its customers and protecting jobs at BA.
Advice:
The CAA's Statement of Policies says that airlines should be free to choose the aircraft they employ and, subject to Article 8.3 of Council Regulation (EEC) 2407/92, that the CAA will advocate a liberal policy when advising the Department on these applications. However, BA needs to demonstrate that there are exceptional circumstances in order to satisfy the criteria in Article 8.3.
GSS is the only UK operator of 747 freighters, with three -400F on the UK register. (There is one 747-200F on the UK register, although this is currently in storage without a current Certificate of Airworthiness.) BA says that the further lease extension is required in exceptional circumstances because despite energetic efforts by BA and GSS, they are still unable to source a suitable aircraft to transfer to the UK register in a very tight market. This extension seemed to be a possibility when we advised on BA's previous applications. BA had anticipated that a limited number of 747 freighters would become available in 2005, but no firm dates were ever given. We noted at that time that press reports suggested that demand for such aircraft was increasing, with two Boeing 747-400 passenger-to-freighter conversion programmes launched last year. BA does now seem to be more confident that an aircraft can be sourced, crewed and placed on the UK register by April 2006.
The objections mention the lack of wet-leasing reciprocity with the US. As we have said previously, we consider any lack of leasing reciprocity with another country to be a matter for the Department in the formulation of its negotiating strategy with the government concerned, rather than something to be challenged in the context of a specific application.
Our conclusion is that BA's difficulties in sourcing a suitable aircraft are consistent with our understanding that there is strong demand in the market for 747 freighters. BA seems quite aware of the restrictions in Article 8.3 and appears to be committed to be placing an aircraft on the UK register via GSS. While the process has become quite protracted there does seem to be a greater prospect of a firm conclusion date within the period of the proposed extension. Meanwhile the airline has commercial commitments that it cannot fulfil with its current fleet. On balance our belief is that the criteria in Article 8.3 have been met and the airline has demonstrated a genuine commercial need for the aircraft within its own operations. BA would not be overly dependent on aircraft registered outside the EEA.
Recommendation: We recommend that you issue an Article 8.3 waiver.