2.

The public service obligations are as follows: Capacity and continuity of service On each route, the overall capacity of scheduled air passenger and cargo transport offered by all carriers combined must be at least equivalent to the capacity specified in Annex I. The services must be guaranteed throughout 2005 and, except in the cases mentioned below, may be suspended only with six months' notice. Reductions in capacity are subject to prior authorisation by the Portuguese Civil Aviation Institute, and may not be applied for six months if the overall capacity offered thereby falls below the threshold specified in the first paragraph of this section; the Portuguese Civil Aviation Institute must reply to the operator within thirty days following the notification. Except in cases of force majeure, the number of flights cancelled for reasons directly attributable to the carrier must not exceed 2 % of the number of flights scheduled for that season; ‘cancellation’ means that a flight scheduled to take place and on which at least one seat was booked fails to take place. In the event of temporary interruption of air services due to unforeseen circumstances, to cases of force majeure or for other reasons, the programmed capacity must be increased by at least 60 % from the moment when services can be resumed until the entire traffic backlog built up during the interruption in services has been cleared. Punctuality Except in cases of force majeure, delays of more than 15 minutes directly attributable to the carrier may not affect more than 15 % of flights. Type of aircraft used and operating conditions Services must be operated using duly certified jet-propelled aircraft with a seating capacity of at least 90; for services to and from Horta and Pico airports carriers must observe the conditions published in Aeronautical Information of Portugal (AIP). Minimum frequency — On the Lisbon/Ponta Delgada/Lisbon route, at least one round trip a day, between 8.00 and 21.00, throughout the year; one trip a week may be combined with the Lisbon/Santa Maria/Lisbon route, — on the Lisbon/Terceira/Lisbon route, at least four round trips a week, on different days, between 8.00 and 21.00, throughout the year; one trip a week may be combined with the Lisbon/Pico/Lisbon route, — on the Lisbon/Horta/Lisbon route, at least three round trips a week, between 8.00 and 21.00, throughout the year, on non-consecutive days, — on the Funchal/Ponta Delgada/Funchal route, at least one round trip a week, throughout the year, — on the Oporto/Ponta Delgada/Oporto route, at least two round trips a week, throughout the year; one of these trips may be combined with Lisbon, from October to June inclusive, — on the Lisbon/Santa Maria/Lisbon route, at least one round trip a week, which may be combined with the Lisbon/Ponta Delgada/Lisbon route, — on the Lisbon/Pico/Lisbon route, at least one round trip a week, throughout the year, which may be combined with the Lisbon/Terceira/Lisbon route. If the flight schedules submitted by the carrier(s) provide for more than one service a day, flights must be operated between 6.30 local time at the place of departure and 00.30 local time at the destination; there must be at least one service a day between 8.00 and 21.00 and, at least three days a week, one of the services must be operated before 14.00. On the Funchal/Ponta Delgada/Funchal, Lisbon/Santa Maria/Lisbon and Lisbon/Pico/Lisbon routes, if the schedules submitted by the carrier(s) provide for more than one service a week, these must be operated on different days. On the Lisbon/Terceira/Lisbon, Lisbon/Horta/Lisbon and Oporto/Ponta Delgada/Oporto routes services must be spread evenly throughout the week. If the total number of services offered per week on any given route by all operators combined is more than 6 (six), there must be at least one service a day. Fares 1. The fare structure must include: (a) a fully flexible economy fare, a range of fares with levels and conditions tailored to different demand segments (tourist, business, general cargo and specific products, etc.); (b) a return PEX fare of EUR 215 on flights between the Azores and mainland Portugal, and a return PEX fare of EUR 158 on flights between the Azores and Funchal; (c) persons who have been resident for at least six months in the Autonomous Region of the Azores on islands with a direct service to mainland Portugal or to Funchal and residents of the Autonomous Region of Madeira will be entitled to a reduction of 33 % off the fully flexible economy class public fare; (d) students aged 26 or under whose home or educational establishment is located in the Autonomous Region of the Azores and who, respectively, attend educational establishments or live elsewhere on national territory will be entitled to a reduction of 40 % off the fully flexible economy class public fare; (e) on days when there is no direct service between Funchal/Ponta Delgada/Funchal, students aged 26 or under travelling to or from the Autonomous Region of the Azores may travel via Lisbon provided they use the same carrier on all sections of the journey. The flight schedule chosen must not allow a stopover in Lisbon; (f) the maximum cargo tariffs are set out in Annex II. Each carrier must have the same fare structure for all the routes specified in section 1, whether the place of departure or destination is Lisbon or Oporto, and apply it without discrimination; however, promotions may be offered from time to time for point-to-point flights. The fares must be displayed to the public, both at the points of sale and at the check-in counters. 2. Residents and students will pay the following net amounts, after deduction of the discounts specified in point 1(c) and (d) above: (a) EUR 179: for residents of the Autonomous Region of the Azores, for round trips to mainland Portugal, (b) EUR 156: for residents of the Autonomous Region of the Azores and the Autonomous Region of Madeira, for round trips between the Azores and Funchal, (c) EUR 139: for students, for round trips between the Azores and mainland Portugal; EUR 98: for students, for round trips between the Azores and Funchal. The fares and tariffs specified in point 1(b) and (f) and in point 2(a), (b) and (c) will be revised on 1 April 2005 on the basis of the inflation rate for the previous year published in the Grandes Opções do Plano [Major Planning Options] and notified, by 28 February 2005, by the Portuguese Civil Aviation Institute to the carriers operating the routes in question. 3. The State will, under terms to be established by law, subsidise the journeys of residents and students, provided the criteria and fares specified in points 1 and 2 are applied. In 2005 the subsidy will be EUR 87 per round trip. Passenger fares and cargo tariffs to or from any airport in the Autonomous Region of the Azores without a scheduled direct link to mainland Portugal or Funchal must be the same as those specified above. Passengers travelling between mainland Portugal and the Autonomous Region of the Azores and between the Autonomous Regions will be entitled to two flight coupons, one for each direction, and passengers travelling within the Autonomous Region of the Azores will be entitled to: — two flight coupons (non-residents), — three flight coupons (residents and students), — for Corvo, one additional flight coupon will be allowed on days when there is no service. On days when an island has no direct service to mainland Portugal or to Funchal, residents and students may be routed via another gateway. For passengers travelling to or from islands with no direct service to mainland Portugal or Funchal, the State will pay the cost of transport, as specified in Annexes A and B to Notice on the Imposition of Public Service Obligations No 2002/C 115/02, published in the Official Journal of the European Union C 115 of 16 May 2002. A no-show penalty may be set, not exceeding 10 % of the relevant economy class reference fare. These public service obligations will apply without prejudice to the conclusion of interline agreements with other carriers on fares for services from or to places other than Lisbon, Oporto and Funchal. Carriers may combine air services and use the same flight numbers, provided this has been authorised by the Portuguese Civil Aviation Institute. Flight marketing Flights must be marketed using at least one computerised reservation system. Transfer conditions If the routes in question are operated by different carriers, the latter must make agreements between themselves to allow residents and students travelling to or from any airport in the Autonomous Region of the Azores to use different carriers for different sections of their journey. Cargo and postal service This must enable at least two tonnes of cargo, including mail, to be carried on each flight; the capacity offered by the carrier must be spread evenly throughout the week, with the following minimum requirements: — 30 tonnes per day on the Lisbon/Ponta Delgada/Lisbon route, — 25 tonnes on days when the minimum service required is operated on the Lisbon/Terceira/Lisbon route, — The cargo and mail capacity on each flight will be detemined by applying the following formula: C = W – (0,75 x S x 97) where C is the cargo and mail capacity, in kg, offered on a flight; W is the total weight, in kg, of passengers, baggage, cargo and mail that can be transported in an aircraft in a given sector (allowed traffic load), obtained by subtracting the operating weight (aircraft, crew, fuel, catering and other operating items) from the maximum certified take-off weight; S is the number of seats on the aircraft; 0,75 is the coefficient adopted for a load factor of 75 % 97 is the standard passenger and baggage weight of an adult passenger and his/her baggage (84 kg +13 kg) as specified in JAR-OPS 1 620 (Translator's note: the equation in Portuguese is C = P – (0,75 x S x 97). C is ‘capacidade de carga e correio’ and P is ‘peso total’.)