Estonian national procedure for the allocation of limited air traffic rights
Date: 2008-12-11
Institutions: European Commission
Subjects: Estonia, air law, air traffic, air transport, airline, third country

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Official Journal of the European Union

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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.

Tallinn, 31 October 2008, No 97

Ministerial Regulation

Procedure for the distribution of traffic rights

adopted pursuant

This Regulation is
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.

to Article 5 of Regulation (EC) No 847/2004 of

§ 1. Scope

This procedure for

1.
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.

the distribution of

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.

This procedure shall apply in cases where at least one of the following is provided for in a bilateral

3.
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

The following information shall be published on the website of the Ministry of Economic Affairs and

1.
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;

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5. all applications for traffic rights received and related correspondence, subject to commercial confidenti-

ality 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 Communica-
tions 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

Applications submitted by air carriers applying for existing traffic rights must be written in Estonian

1.
or English and submitted by the deadline set by the Ministry of Economic Affairs and Communications.

An air carrier's application for the allocation of existing traffic rights must contain at least the

2.
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 arrange-
ments 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).

In addition to the provisions of Section 4(2), the applicant may also submit other information it

3.
considers necessary and which may be relevant within the meaning of Section 5.

If an air carrier fails to submit all the information listed in Section 4(2), the Ministry of Economic

4.
Affairs and Communications shall set the applicant a deadline to submit the missing information.

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§ 5. Assessment of applications

The Ministry of Economic Affairs and Communications shall assess all applications submitted by air
1.
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 expan-

sion 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.

The Ministry of Economic Affairs and Communications may make use of experts when assessing appli-

3.
cations.

§ 6. Decision-making process

1.
Once all the received applications have been reviewed, the Ministry of Economic Affairs and Commu-
nications shall compile an assessment report and adopt a draft decision on the basis thereof. This draft deci-
sion 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.

Applicants may comment on the draft decision and submit additional documents and arguments they

2.
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.

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§ 7. Duration and transfer of allocated traffic rights

Limited traffic rights may be allocated for a maximum of three years in accordance with the decision

1.
to launch the procedure for the distribution of traffic rights.

Traffic rights thus allocated may not be transferred without the permission of

2.
Economic Affairs and Communications.

the Ministry of

§ 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 applica-
tion 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 allo-
cated, 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 condi-

tions 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 partici-
pating 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.

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.

§ 10. Existing traffic rights

Juhan PARTS

Minister

Marika PRISKE

Secretary-General