Communication from the Commission to the European Parliament pursuant to the second subparagraph of Article 251(2) of the EC Treaty concerning the common position of the Council on the adoption of a Regulation of the European Parliament and of the Council on insurance requirements for air carriers and aircraft operators
Date: 2004-01-09
Institutions: European Commission
Subjects: air transport, insurance, liability, transport company, transport regulations

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 9.1.2004
COM(2004) 6 final

2002/0234 (COD)

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT

pursuant to the second subparagraph of Article 251(2) of the EC Treaty

concerning the

common position of the Council on the adoption of a Regulation of the European
Parliament and of the Council on insurance requirements for air carriers and aircraft
operators

EN

  EN

   
2002/0234 (COD)

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT

pursuant to the second subparagraph of Article 251(2) of the EC Treaty

concerning the

common position of the Council on the adoption of a Regulation of the European
Parliament and of the Council on insurance requirements for air carriers and aircraft
operators

1-

BACKGROUND

Date of transmission of the proposal to the EP and the Council
(document COM(2002)521 final – C5–0455/2002] - 2002/0234(COD)):

25 September 2002

Date of the opinion of the European Economic and Social Committee:

26-27 February 2003

Date of the opinion of the European Parliament, first reading:

Date of transmission of the amended proposal:

Date of adoption of the common position:

13 May 2003

28 July 2003

5 December 2003

2-

OBJECTIVE OF THE COMMISSION PROPOSAL

Following the  events of 11 September  2001, the Commission adopted a Communication  on
10 October 2001 concerning the repercussions of the terrorist attacks in the United States on
the air transport industry.1 With regard to the specific problem of  insurance, it undertook to
examine the revision of the amounts and conditions of insurance required for the granting of
operating  licences  in  order  to  ensure  a  harmonised  approach.  It  also  took  the  view  that
Member  States  should  verify  whether  third-country  air  carriers  produce  proof  of  minimum
risk  cover  in  accordance  with  internationally  agreed  recommendations  (ECAC  Resolution
25/1 of 12/2000) in the absence of Community rules.

The Commission also considered that, as they currently stand, Community rules in the field of
air  carrier  licensing2  merely  require  air  carriers  to  “be  insured  to  cover  liability  in  case  of
accidents,  in  particular  in  respect  of  passengers,  luggage,  cargo,  mail  and  third  parties”
without, however, setting any criteria, conditions or amounts to be observed by the licensing
authorities of the Member States.

To  fill  these  gaps,  the  Commission  adopted  a  proposal  on  24  September  2002  designed  to
establish a legal framework setting out the conditions of insurance and minimum amounts that
both  Community  and  third  country  air  carriers  and  aircraft  operators  have  to  observe  at  all

1 COM(2001)574 final of 10.10.2001
2 Council Regulation (EEC) No 2407/92 of 23 July 1992, OJ L 240, 24.8.1992, p. 1

2

 
                                                
times when they fly into, within, out of or over the Community. These insurance requirements
should cover their liability vis-à-vis passengers, baggage, cargo, mail and third parties.

This proposal should provide for legal certainty vis-à-vis Community and non-Community air
carriers  and  aircraft  operators  and  create  a  level  playing  field  by  ensuring  transparent,  non-
discriminatory  and  harmonised  application  of  the  minimum  insurance  requirements
throughout the Community.

3-

COMMENTS ON THE COMMON POSITION

The Council made a number of changes to  the Commission's initial and amended proposals
that are acceptable because they would ensure its aims were met. These changes concern the
following issues:

(1)

(2)

(3)

(4)

The  nature  of  the  proposal.  Although  the  Commission’s  initial  and  amended
proposals did not confuse liability regimes and insurance requirements, the Council
has sought to state that in even clearer terms (Article 4(2) of the common position).
Also, the recitals of the Regulation specify  that,  where  further  rules  are  required to
establish  adequate  insurance  for  matters  not  covered  by  the  Regulation,  such  rules
can be introduced by means of subsidiarity (Article 4(2)).

The  general  obligation  of  all  (EU  and  non-EU)  air  carriers  and  aircraft  operators
irrespective  of  any  leasing  arrangements  or  cooperation  (code-shares,  joint
operations)  to be insured at all times when  they  fly into,  within,  out  of  or  over  the
Community has been confirmed even though redrafted (Article 4(1)).

The general obligations of all air carriers to produce evidence of valid insurance, and
the obligation of Member States to ensure that no aircraft (whether operated by an air
carrier or an aircraft operator) takes off from an airport on their territory which is not
sufficiently  insured  according  to  the  requirements  set  out  in  the  Regulation
(Article 8) have been confirmed even though redrafted.

The  insurance  to  cover  liability  in  respect  of  passengers  and  baggage.  The
Commission's original and amended proposals stipulate that irrespective of the type
of  flight,  commercial  or  private,  persons  on  board  should  benefit  from  the  same
insurance  cover  in  case  of  injury  or  death  (including  the  destruction  or  loss  of
baggage).  The  Commission  proposed  250  000  SDRs  (approx.  €325  000)  per
passenger following a resolution of the European Civil Aviation Conference (ECAC)
of  2000.  The  Council  has  found  it  difficult  to  endorse  that  approach  for  economic
reasons relating particularly to aircraft operators using small aircraft of low tonnage.

The  text  of  the  common  position  (Article  6(1))  follows  the  Commission  approach
introducing  the  same  insurance  obligation  for  air  carriers  (commercial  flights)  and
aircraft operators (non-commercial flights) vis-à-vis passengers for all aircraft above
2.7  tonnes.  Aircraft  operators  using  aircraft  of  a  lighter  weight  can  benefit  from
national  measures  although 
these  may  not  be  below  100 000 SDRs.  This
differentiation  has  been  made  because  of  the  particular  economic  aspects  of  small
aircraft. The category of aircraft has been chosen to fit the needs of sports and leisure
aviation using rather small aircraft. As far as the carriage of cargo is concerned, the
common  position  adopts  the  approach  of  the  1999  Montreal  Convention  on  that
matter.

3

 
(5)

(6)

(7)

As the rationale of this particular approach is in line with the approach followed by
both  the  European  Parliament  and  the  Council  on  the  insurance  requirements  for
aircraft  operators  using  small  aircraft  (categories  of  aircraft  below  25  tonnes),  the
Commission has been able to accept this approach.

The possibility of amending the  minimum insurance  requirements to cover  liability
in respect of passengers, baggage, cargo and third parties by  means of  a  regulatory
comitology procedure as proposed by the Commission (Articles 6(5) and 7(2)).

The  comitology  procedure  is  also  used  in  exceptional  cases  of  insurance  market
failure,  where,  in  addition  to  its  powers  in  application  of  the  rules  of  the  Treaty
relating  to  State  aid,  the  Commission  can  also  decide  by  means  of  the  regulatory
comitology  procedure  on  the  appropriate  measures  regarding  compliance  by  air
carriers and aircraft operators with the requirements of the Regulation.

The  Council  has  deleted  certain  definitions  (Article  3):  “insurer”,  “insurance”,
“insurer’s principal place of business”, “incident”, “air service”, “scheduling period”.
The Commission has been able to accept the deletion of these definitions as the text
does  not  deviate  from  established  Community  law  in  the  field  of  the  provision  of
financial services, i.e. Council Directives 73/239/EEC and 79/267/EEC, and because
the redrafting of Articles 5 and 6 has made them superfluous. The Council has also
revised the definitions of “aircraft operator”, “flight” and “passenger” and has added
a new definition regarding “third parties”. The Commission has been able to accept
these changes as the new text further clarifies the proposed definitions.

In  total  the  European  Parliament  proposed  24  amendments  in  the  opinion  it  adopted  on
13 May 2003. The Commission was able to accept 18 of them as such, in part or in principle.
The  Council  was  able  to  incorporate  in  principle  or  with  redrafting  16  of  the  European
Parliament’s amendments. In particular, the Council was able to endorse the objective of most
of the amendments proposed by the European Parliament without necessarily using the same
wording.

4-

COMMISSION DETAILED COMMENTS

4.1          Amendments accepted by the Commission and incorporated in full or in part in the

common position

The references below are to recitals and articles of the common position.

Amendments  1  (recital  17)  and  10  (Article  8(4)).  The  amendments  concerning  the  validity
throughout the Community of the deposit by Community air carriers and aircraft operators of
evidence of insurance have been incorporated into the text of the common position. The scope
of the measure however, has been restricted to Community air carriers and aircraft operators
only, so as not to interfere with the obligations of Member States stemming from the Montreal
Convention (Article 50).

Amendments  2  (Article  2(1)  and  21  (Article  3-(g)).  The  amendments  concerning  which
persons  would  be  covered  by  the  Regulation  have  been  taken  on  board  in  the  common
position by widening the definition of “passenger” (Article 3(g)).

4

 
Amendments 3 and 4 (Article 2(1)). The amendments concerning the scope of the Regulation
have been fully incorporated into the text of the common position. Part of amendment 4 has
been addressed in the definition of “aircraft operator” (Article 3 (c)).

Amendment 5 (Article 2(2)(a). The amendment concerning the exclusion of state aircraft from
the  scope  of  the  Regulation  has  been  fully  incorporated  in  the  common  position  (explicit
exclusion under Article 2 and introduction of a (new) corresponding recital 12).

Amendment 6 (Article 2(1)). The amendment concerning the inclusion of local flights in the
scope of the Regulation has been fully incorporated in the text of the common position.

Amendment 7 (Article 3(f)). The amendment concerning the definition of maximum take-off
weight  (MTOW)  has  been  redrafted  to  fit  the  description  (acronym)  of  maximum  take-off
mass (MTOM), which is practically the same (and is the acronym used by the European Civil
Aviation Conference - ECAC).

Amendment  8  (Article  4(1)).  The  amendment  concerning  the  reference  to  air  carriers  and
aircraft operators falling within the scope of the Regulation has been fully incorporated in the
common  position  with  a  consistent  reference  through  the  Regulation  to  “air  carriers  and
aircraft operators referred to in Article 2”.

Amendment 14 (Article 7(2)). The  amendment  concerning  the categories of aircraft and the
minimum insurance requirements for damages to third parties has been followed in principle
in the common position. All aircraft that fall within the scope of the Regulation operated by
air  carriers  and/or  aircraft  operators  have  to  be  insured  for  damages  caused  to  third  parties,
including  risks  of  war  and  terrorism.  The  common  position  contains  more  categories  of
aircraft  (below  25  tonnes)  than  those  proposed  by  the  Commission  and  the  European
Parliament and different insurance requirements from those proposed by the Commission and
the European Parliament. The table below summarises the situation:

Category
of aircraft

MTOM (kg)

Minimum insurance
(million SDRs)

COM* COUNCIL

EP

COM* COUNCIL

EP

1

2

3

4

5

6

7

7a

8

8a

9

10

< 500

< 1 000

< 2 000

< 2 700

< 6 000

< 6 000

< 12 000

< 14 000

< 25 000

< 25 000

< 25 000

< 50 000

< 50 000

 < 50 000

< 100 000

< 200 000 < 200 000 < 200 000

> 200 000

> 200 000

80

270

400

600

< 500 000

(cid:1) 500 000

1,5

4,5

9

12

25

50

90

250

0,75

1,5

3

7

18

80

150

300

500

700

COM* = Commission's initial proposal – COM(2002)521 final of 24.9.2002

5

 
Amendment  16  (Article  7(2)).  The  amendment  concerning  the  commercial  practice  of
aggregates  currently  applicable  to  insurance  cover  for  risks  of  war  and  terrorism,  has  been
fully followed in the common position.

Amendment 19 (Article 8(6)). The amendment concerning sanctions against third-country air
carriers and  aircraft operators  has been  partially taken up in  the  common  position.  The  part
concerning overflights has not been followed.

Amendment  20  (Article  8(7)).  The  amendment  concerning  the  sanctions  against  aircraft
which  have  landed  without  adequate  insurance  has  been  followed  in  full  despite  the
provision's being redrafted.

Amendment 23 (Article 3(g)). The amendment concerning the definition of “flight” has been
adopted  in  principle.  The  Commission  has  been  able  to  accept  the  text  of  the  common
position  as  it  spells  out  what  is  covered  by  this  term  more  clearly  than  the  European
Parliament's proposal.

Amendment  31  (Article  8(5)).  The  amendment  concerning  the  withdrawal  of  the  operating
licence  of  Community  air  carriers  as  a  sanction  for  infringing  the  Regulation  has  been
followed in full in the common position.

4.2          Amendments  accepted  by  the  Commission  and  not  incorporated  in  the  common

position

Amendment  11  (Article  5(3)).  The  amendment  concerning  overflights  was  accepted  by  the
Commission  in  its  amended  proposal.  The  Council  however,  considered  the  practical
difficulties  linked  to  the  enforceability  of  controls  and  sanctions  against  air  carriers  and
aircraft operators  overflying  the  territory  of  a  Member  State  and  has  therefore  unanimously
supported the relevant text proposed in the Commission’s initial proposal. For this reason the
Commission has been able to support the common position.

Amendment 17 (Article 8(1)). The amendment concerning stricter general enforcement of the
insurance  requirements  provided  for  in  the  Regulation  through  additional  unannounced
inspections was accepted by the Commission in its amended proposal. The Council, however,
took  the  view  that  the  proposed  wording  by  the  European  Parliament  as  accepted  by  the
Commission  was  over-prescriptive.  Therefore,  it  agreed  a  text  which  leaves  it  to  Member
States  to  decide  how  they  enforce  the  Regulation.  Thus,  the  text  allows  Member  States  to
proceed  with  additional  and  announced  inspections  if  they  consider  it  appropriate.  For  this
reason the Commission has been able to accept the text of the common position.

Amendment 19 (Article 8(6)). The amendment concerning the refusal to allow third-country
air carriers and aircraft operators to overfly the territory of a Member State as a sanction for
infringement  of  the  Regulation  was  accepted  by  the  Commission  in  its  amended  proposal.
When considering the question of overflights, however,  the Council came to  the  conclusion
that enforcing this sanction would be very difficult in practice. For this reason the amendment
has not been retained as such.

Nevertheless, a new text has been proposed in the common position (Articles 5(3) and 8 (2)
and  (4))  whereby  Member  States  may  request  evidence  of  insurance  from  air  carriers  and
aircraft  operators  overflying  but  not  landing  in  the  Community.  Where  such  controls  show
evidence  of  an  infringement  of  the  Regulation,  sanctions  have  to  be  effective,  proportional
and  dissuasive.  Thus,  Member  States  also  have  the  possibility  of  imposing  appropriate

6

 
sanctions for infringement of the Regulation in the case of overflight. Given that this was the
objective  of  the  measure,  i.e.  to  ensure  that  the  Regulation  stipulates  that  the  insurance
requirements are adequately enforced, the Commission has been able to accept the text of the
common position.

4.3          Amendments  rejected  by  the  Commission  and  not  incorporated  in  the  common

position

Amendments  9  and  25  (Article  5(2)  –  text  deleted  in  the  common  position).  The  European
Parliament  had  proposed  that  the  measure  whereby  third-country  air  carriers  and  aircraft
operators  are  given  alternative  insurance  possibilities  should  be  made  optional.  It  had  also
proposed extending the measure to cover State guarantees. The Commission had not accepted
the  amendment  of  the  European  Parliament.  The  Council  was  unanimously  against  any
positive discrimination of third-country air carriers and aircraft operators. Thus, the provision
has been deleted from the proposal.

Amendment  12  (Article  5(5)  –  text  deleted  in  the  common  position).  The  European
Parliament  had  proposed  imposing  the  obligation  on  air  carriers  to  ensure  that  before
commencement  of  the  flight  their  insurance  cover  would  continue  to  be  in  force  until  after
safe landing. The Commission had not accepted this amendment because it was unreasonable
to  impose  an  obligation  on  air  carriers  and  aircraft  operators  that  they  cannot  control,  as
insurance  cover  for  risks  of  war  and  terrorism  (particularly  after  11.9.2001)  may  be
withdrawn  automatically  under  certain  conditions  beyond  the  control  of  air  carriers  and
aircraft  operators.  In  its  common  position  the  Council  has  unanimously  suppressed  the  text
initially  proposed  by  the  Commission  and  replaced  it  with  a  general  obligation  (new
Article 4(2))  for  air  carriers  and  aircraft  operators  to  ensure  that  insurance  cover  exists  for
each  and  every  flight.  In  that  context,  the  common  position  also  makes  it  clear  in  the
definition of the term “flight” that an aircraft is considered to be in “flight” until it has come
to a complete stop on the apron. Thus, even though the text of the proposal has been redrafted
the result is effectively the same as the Commission’s initial (and amended) proposal.

Amendments  13  and  15  (Articles  6(2)  and  7(4)  -  text  deleted  in  the  common  position).  In
these  two  amendments  the  European  Parliament  had  proposed  the  concept  of  short-term
leases. The Commission had  not  accepted these  amendments  as they  are sufficiently clearly
defined  in  Council  Regulation  (EEC)  No  2407/92  on  air  carrier  licensing.  In  the  common
position the Council has deleted the two provisions in the initial (and amended) Commission
proposal and has replaced them by a new Article 4(2) with effectively the same result as the
Commission’s initial (and amended) proposal.

Amendment  18  (Article  8(3)).  The  European  Parliament  had  proposed  specifying  the  cases
where Member States  may  request  additional evidence of  valid  insurance.  The  Commission
had  not  accepted  this  amendment  because  in  view  of  the  words  used  in  the  Commission
proposal (“where appropriate”) it considered it to be superfluous. The Council did not follow
the proposed amendment of the European Parliament and replaced the word “appropriate” by
the word “necessary”.  In  view  of  this situation  the Commission  has  been  able  to  accept  the
text of the common position.

7

 
5-

CONCLUSION

For  the  reasons  explained  above,  the  Commission  considers  that  the  common  position
adopted on 5 december 2003 by qualified majority does not alter the aims and approach of its
proposal and thus can support it.

8