EN Official Journal of the European Union C 316/13

Estonian national procedure for the allocation of limited air traffic rights

(2008/C 316/05)

In accordance with Article 6 of Regulation (EC) No 847/2004 on the negotiation and implementation of air service agreements between Member States and third countries, the European Commission publishes the following national procedure for the distribution among eligible Community carriers of air traffic rights where they are limited under air service agreements with third countries.

Ministerial Regulation

Tallinn, 31 October 2008, No 97

Procedure for the distribution of traffic rights

This Regulation is adopted pursuant to Article 5 of Regulation (EC) No 847/2004 of the European Parliament and of the Council of 29 April 2004 on the negotiation and implementation of air service agreements between Member States and third countries (OJ L 157, 30.4.2004, p. 193-196) and Section 63(1) of the Government of the Republic Act.

§ 1. Scope

1. This procedure for the distribution of traffic rights implements Article 5 of Regulation (EC) No 847/2004 of the European Parliament and of the Council of 29 April 2004 on the negotiation and implementation of air service agreements between Member States and third countries.

2. A traffic right is the right of an air carrier to access a market consisting of agreed physical or geographical conditions regarding who may perform air transport operations on a specific route or part thereof and what may be carried.

3. This procedure shall apply in cases where at least one of the following is provided for in a bilateral agreement concluded between Estonia and a third country: 1. a limited number of traffic rights for scheduled or non-scheduled air services, which are insufficient to meet the requests of all interested air carriers; 2. a limited number of air carriers that may be designated to provide scheduled or non-scheduled air services, where this number is lower than the number of air carriers interested in providing these air services.

4. This procedure shall apply to Community air carriers who hold an operating licence in accordance with Council Regulation (EEC) No 2407/92 of 23 July 1992 on licensing of air carriers (OJ L 240, 24.8.1992, pp. 1-7).

§ 2. Information and expression of interest

1. The following information shall be published on the website of the Ministry of Economic Affairs and Communications (www.mkm.ee): 1. the text of this procedure for the distribution of traffic rights and information regarding the period for which traffic rights are to be allocated; 2. an overview of the traffic rights for scheduled and charter flights on routes between the Republic of Estonia and third countries; 3. information on planned air service negotiations between the Republic of Estonia and third countries; 4. information on the launch of the procedure for the distribution of traffic rights and the deadline for the submission of applications; 5. all applications for traffic rights received and related correspondence, subject to commercial confidentiality in specific and justified cases; 6. draft decisions on the distribution of traffic rights; 7. decisions on the distribution of traffic rights; 8. decisions regarding complaints lodged following decisions on the distribution of traffic rights.

2. Community air carriers interested in providing air services on routes with limited traffic rights or on routes between the Republic of Estonia and third countries with which the Republic of Estonia has not concluded air service agreements may at any time notify the Ministry of Economic Affairs and Communications of their plans and requests. The Ministry of Economic Affairs and Communications shall take these notifications into account when preparing negotiations with third countries on the provision of air services.

§ 3. Launch of the procedure for the distribution of traffic rights

1. The procedure for the distribution of traffic rights shall be launched by an Order of the Minister for Economic Affairs and Communications. The procedure may also be initiated at the request of a Community air carrier.

2. The launch of the procedure for the distribution of traffic rights shall be published on the website of the Ministry of Economic Affairs and Communications and notification shall also be sent to all Community air carriers who have expressed an interest in providing air services on the routes in question and to all Community air carriers established in the Republic of Estonia.

§ 4. Submission of applications and the requirements therefor

1. Applications submitted by air carriers applying for existing traffic rights must be written in Estonian or English and submitted by the deadline set by the Ministry of Economic Affairs and Communications.

2. An air carrier's application for the allocation of existing traffic rights must contain at least the following information: 1. a copy of the air carrier's operating licence; 2. the air carrier's business plan for serving the route(s) with regard to which traffic rights are being applied for; the business plan must contain information regarding the services to be offered on the routes, the planned days and operating schedules for the flights and the type, configuration and registration numbers of the aircraft to be used; 3. information regarding the intended pricing policy for the route in question together with ticket prices broken down both by season and by the different ticket price categories (e.g. economy and business class), a traffic volume forecast, estimated operating costs and revenue and possible marketing arrangements with other air carriers; 4. data on the accessibility of services to consumers and the existence of consumer support (e.g. description of the ticket sales network and online services); 5. information and documents on the technical and financial capacity to ensure that the services planned by the air carrier are provided and will continue to be offered (e.g. certificates of airworthiness, reports from the last three financial years; carriers which have been in operation for less than three years must submit all available annual reports and also attach their business plan).

3. In addition to the provisions of Section 4(2), the applicant may also submit other information it considers necessary and which may be relevant within the meaning of Section 5.

4. If an air carrier fails to submit all the information listed in Section 4(2), the Ministry of Economic Affairs and Communications shall set the applicant a deadline to submit the missing information.

§ 5. Assessment of applications

1. The Ministry of Economic Affairs and Communications shall assess all applications submitted by air carriers for the distribution of existing traffic rights. The assessment of the applications shall take account mainly of the following factors: 1. indicators demonstrating the quality of the service provided when operating the route, such as the type and configuration of the aircraft used, scheduled or non-scheduled service, passenger or cargo transport, the use of the carrier's own or wet-leased aircraft or code-sharing, direct or transit traffic, the period and contiunuity of the service offered, and a description of any alliances or other forms of cooperation with air carriers, where applicable; 2. the value for money of the service offered to consumers; 3. the accessibility of the service to consumers and the existence and quality of consumer support (ticket sales network, online services, etc.); 4. the technical and financial capacity to ensure that services are provided and will continue to be offered; 5. economic data relating to the application, a demand forecast, existing agreements, etc.; 6. the proposed starting date and duration of the services to be provided; 7. any improvement in regional connections.

2. When making the selection preference will be given to applications which: 1. will be of most benefit to consumers; 2. satisfy public demand or promote market development through the opening of new routes or the expansion of existing routes; 3. offer the lowest pricing levels reasonably possible in relation to the level of service provided; 4. are cost-effective, making optimum use of the traffic rights; 5. promote competition between air carriers; 6. guarantee flight safety and the level of security required by law; 7. promote environmental protection; 8. promote the overall development of Community air transport, trade and tourism; 9. promote regional development.

3. The Ministry of Economic Affairs and Communications may make use of experts when assessing applications.

§ 6. Decision-making process

1. Once all the received applications have been reviewed, the Ministry of Economic Affairs and Communications shall compile an assessment report and adopt a draft decision on the basis thereof. This draft decision must include the information set out in Subsection 3. The draft decision shall be published on the website of the Ministry of Economic Affairs and Communications.

2. Applicants may comment on the draft decision and submit additional documents and arguments they consider relevant within 20 working days of the date of publication of the draft decision.

3. The Ministry of Economic Affairs and Communications shall take its decision on the distribution of traffic rights within three months of the date on which the procedure was launched, and the decision shall be sent to all applicants. The decision must include factual information, a consumer benefit analysis and an assessment of the impact on market structure and competition, the legal basis and reasons for the decision and a reference to the possibilities, place, deadline and procedure for appealing against the decision.

§ 7. Duration and transfer of allocated traffic rights

1. Limited traffic rights may be allocated for a maximum of three years in accordance with the decision to launch the procedure for the distribution of traffic rights.

2. Traffic rights thus allocated may not be transferred without the permission of the Ministry of Economic Affairs and Communications.

§ 8. Monitoring

The Ministry of Economic Affairs and Communications shall monitor whether the allocated traffic rights are used in full and in accordance with the terms of the licence granted, the conditions laid down in the application submitted by the air carrier and other relevant requirements laid down in this Regulation.

§ 9. Reallocation of traffic rights

1. After hearing the opinion of the air carrier to which the traffic rights have been allocated, the Ministry of Economic Affairs and Communications shall launch the procedure for the redistribution of traffic rights if: 1. the air carrier to which the limited traffic rights were allocated has not begun providing air services by the end of the scheduling period following the scheduling period in which the traffic rights were allocated, unless the delay is caused by exceptional circumstances beyond the air carrier's control; 2. the limited traffic rights have not been used or have not been used in full for six months, unless the air carrier proves that the interruption was caused by exceptional circumstances beyond its control; 3. the air carrier to which the traffic rights were allocated does not operate in accordance with the conditions laid down in the licence; 4. the obligations laid down in the applicable rules, in the relevant bilateral air services agreements or arrangements or in other international rules are not fulfilled when providing the air services; 5. the air carrier fails to meet conditions described in its application for the allocation of the traffic rights, and the Ministry of Economic Affairs and Communications finds that failure to meet those conditions would have meant that the rights would have been allocated to another Community air carrier participating in the procedure; 6. the air carrier notifies the Ministry of Economic Affairs and Communications that it does not intend to continue providing the air service; 7. the air carrier's operating licence loses its validity; or 8. another Community air carrier contests the allocated traffic rights, which in its opinion have not been used efficiently one year after their allocation, and the initial assessment of the Ministry of Economic Affairs and Communications is that this other Community air carrier would be able to offer services that are clearly superior to the existing services.

§ 10. Existing traffic rights

Limited traffic rights allocated before the entry into force of this procedure shall continue to be valid for three years after the entry into force of this procedure.