ARNECKE SIEBOLD_Avaition Law_Germany_2015

The International Comparative Legal Guide to:

A practical cross-border insight into aviation law

Published by Global Legal Group, with contributions from:

Alexander Holburn Beaudin + Lang LLPAli Budiardjo, Nugroho, ReksodiputroArnecke Siebold Rechtsanwälte PartnerschaftsgesellschaftArte Law FirmBahas, Gramatidis & PartnersCabinet BOPS – SCP Bouckaert Ormen PassemardChacón & Rodríguez, S.C.Christodoulou & Mavrikis Inc.Condon & Forsyth LLPDDSA – De Luca, Derenusson, Schuttoff e Azevedo AdvogadosDingli & Dingli Law FirmKaye Scholer LLPKromann ReumertKubes Passeyrer Attorneys at Law

Locke Lord Edwards LLPMaciel, Norman & AsociadosMcAfee & TaftMMMLegal - Legal CounselsNDR – Neville de Rougemont & AssociatesOzturk & PartnersRojs, Peljhan, Prelesnik & PartnersSalazar & AsociadosStudio PieralliniTaylor English Duma LLPVentura Garcés & López-Ibor AbogadosVISCHER AGWorldwide Airports Lawyers Association (WALA)

3rd Edition

Aviation Law 2015

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DisclaimerThis publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice.Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication.This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations.

General Chapters:

Country Question and Answer Chapters:

6 Argentina Maciel, Norman & Asociados: Rogelio N. Maciel & Maria Laura Maciel 19

7 Austria Kubes Passeyrer Attorneys at Law: Dr. David Kubes 26

8 Bolivia Salazar & Asociados: Sergio Salazar-Machicado & Ignacio Salazar-Machicado 32

9 Brazil DDSA – De Luca, Derenusson, Schuttoff e Azevedo Advogados: Ana Luisa Castro Cunha Derenusson 38

10 Canada Alexander Holburn Beaudin + Lang LLP: Darryl G. Pankratz & Michael Dery 45

11 Denmark Kromann Reumert: Jakob Bernhoft & Julie Bak-Larsen 52

12 France Cabinet BOPS – SCP Bouckaert Ormen Passemard: Aurélia Cadain 59

13 Germany Arnecke Siebold Rechtsanwälte Partnerschaftsgesellschaft: Holger Bürskens & Ulrich Steppler 65

14 Greece Bahas, Gramatidis & Partners: Betty Smyrniou 73

15 Indonesia Ali Budiardjo, Nugroho, Reksodiputro: Theodoor Bakker & Emir Nurmansyah 80

16 Italy Studio Pierallini: Laura Pierallini & Francesco Grassetti 87

17 Kyrgyzstan Arte Law Firm: Aisulu Chubarova & Liliia Kim 95

18 Malta Dingli & Dingli Law Firm: Dr. Tonio Grech 101

19 Mexico Chacón & Rodríguez, S.C.: Samuel Chacón & Kaynicté Pérez De Gante 107

20 Poland MMMLegal - Legal Counsels: Krystyna Marut & Anna Burchacińska-Mańko 114

21 Portugal NDR – Neville de Rougemont & Associates: Geoffrey Graham & Vicky Rodrigues 121

22 Slovenia Rojs, Peljhan, Prelesnik & Partners: Alexander Uroš Košenina & Sonja Radošević 127

23 South Africa Christodoulou & Mavrikis Inc.: Chris Christodoulou 135

24 Spain Ventura Garcés & López-Ibor Abogados: Alfonso López-Ibor Aliño & Pablo Stöger Pérez 148

25 Switzerland VISCHER AG: Urs Haegi & Dr. Thomas Weibel 156

26 Turkey Ozturk & Partners: Yasar Ozturk 163

27 United Kingdom Locke Lord Edwards LLP: Alan Meneghetti & Kaye Scholer LLP: Philip Perrotta 169

28 USA Condon & Forsyth LLP: Bartholomew J. Banino & Nicole M. Smith 180

1 The Use of Personal Data by the Commercial Aviation Industry – Alan Meneghetti, Locke Lord Edwards LLP 1

2 The Aviation Industry – Constant Change Leading to Tales of the Unexpected – Philip Perrotta, Kaye Scholer LLP 4

3 Recent Developments in U.S. Aviation Law – 2015 – Unmanned Aircraft Systems – Donald R. Andersen, Taylor English Duma LLP 8

4 The Cape Town Convention: An Evolving Process (with Side Notes on Selected Issues) – Erin M. Van Laanen & Maria E. Gonzalez, McAfee & Taft 11

5 The Need to Extend WALA’s Presence in the Airport Industry – Alan Meneghetti & Michael Siebold, Worldwide Airports Lawyers Association (WALA) 16

Contributing EditorsAlan Meneghetti, Locke Lord Edwards LLP and Philip Perrotta, Kaye Scholer LLP

Head of Business DevelopmentDror Levy

Sales DirectorFlorjan Osmani

Commercial DirectorAntony Dine

Account DirectorsOliver Smith, Rory Smith

Senior Account ManagerMaria Lopez

Sales Support ManagerToni Hayward

Senior EditorSuzie Levy

Sub EditorNicholas Catlin

Group Consulting EditorAlan Falach

Group PublisherRichard Firth

Published byGlobal Legal Group Ltd.59 Tanner StreetLondon SE1 3PL, UKTel: +44 20 7367 0720Fax: +44 20 7407 5255Email: [email protected]: www.glgroup.co.uk

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ISBN 978-1-910083-32-1ISSN 2050-9839

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The International Comparative Legal Guide to: Aviation Law 2015

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Arnecke Siebold Rechtsanwälte Partnerschaftsgesellschaft

Chapter 13

Germany

Ulrich Steppler

Holger Bürskens

1 General

1.1 Please list and briefly describe the principal legislation and regulatory bodies which apply to and/or regulate aviation in Germany.

Aviation legislation in Germany is, to a high degree, characterised by international treaties and by European law. On a national level, aviation law is primarily based on the German Air Traffic Act (Luftverkehrsgesetz) of 1922, the Air Traffic Order (Luftverkehrs-Ordnung) of 1963 and the Aviation Security Act (Luftsicherheitsgesetz) of 2005.The Federal Aviation Office (Luftfahrt-Bundesamt or “LBA”) was established in 1954 in Braunschweig as the supreme authority in civil aviation and, as such, is directly subordinated to the Federal Ministry of Transport, Building and Urban Development (Bundesministerium für Verkehr, Bau und Stadtentwicklung). Amongst other tasks, the LBA is responsible for the supervision of the aviation industry and for the German Aircraft Register (Luftfahrzeugrolle).

1.2 What are the steps which air carriers need to take in order to obtain an operating licence?

The provisions of Regulation (EC) No. 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community (“Regulation (EC) No. 1008/2008”), which were transposed into German law by sec. 20 para. 4 German Air Traffic Act (see question 1.1), set out the conditions for granting an operating licence. The Regulation consolidates and updates the set of liberalisation measures known as the ‘Third Package’, adopted by the European Commission in 1992. According to Art. 3 para. 1 Regulation (EC) No. 1008/2008, no undertaking established in the Community shall be permitted to carry air passengers, mail and/or cargo for remuneration and/or hire unless it has been granted the appropriate operating licence.An undertaking shall be granted an operating licence by the Federal Aviation Office (Luftfahrt-Bundesamt or “LBA”) provided that:■ its principal place of business is located in Germany;■ it holds a valid Air Operator Certificate;■ it has one or more aircraft at its disposal through ownership

or a dry lease agreement;■ its main occupation is to operate air services in isolation or

combined with any other commercial operation of aircraft or the repair and maintenance of aircraft;

■ its company structure allows for the implementation of the provisions outlined in this chapter;

■ Member States and/or nationals of Member States own more than 50% of the undertaking and effectively control it, whether directly or indirectly through one or more intermediate undertakings, except as provided for in an agreement with a third country to which the Community is a party;

■ it meets the financial conditions specified in Art. 5 of Regulation (EC) No. 1008/2008;

■ it complies with the insurance requirements specified in Art. 11 of Regulation (EC) No. 1008/2008; and

■ it complies with the provisions on good repute as specified in Art. 7 of Regulation (EC) No. 1008/2008.

Additional relevant information:The LBA is entitled to revoke or suspend an operating licence at any time if the above-mentioned requirements are not (all) met.Air carriers from Member States of the European Economic Area (“EEA”) are allowed to operate intra-Community scheduled air services in the EEA. A separate application or notification is no longer necessary. Air carriers from EEA Member States must, however, apply for entry permissions with regard to commercial flights for other purposes (e.g. aerial work, flights with balloons or local flights).Air carriers from non-EEA Member States shall apply for an operating permission prior to commencing scheduled air services to and from Germany. Prior to commencing charter flights to and from Germany, air carriers from non-EEA Member States, as well as air carriers from EEA Member States wanting to conduct flights to third countries, have to apply for an entry permit. Companies from non-EEA Member States shall apply for entry permits with regard to commercial flights for other purposes (e.g. aerial work, flights with balloons or local flights).

1.3 What are the principal pieces of legislation in Germany which govern air safety, and who administers air safety?

With the adoption of Regulation (EC) No. 1592/2002 of the European Parliament and of the Council of 15 July 2002 on common rules in the field of civil aviation, the establishment of a European Aviation Safety Agency (“Regulation (EC) No. 1592/2002”) and the subsequent establishment of the European Aviation Safety Agency (“EASA”), a European Agency and Europe-wide regulatory authority was created. In this regard EASA absorbed most tasks from the Joint Aviation Authorities (“JAA”), as well as acquiring new responsibilities. Initially, EASA was responsible for: safety

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passenger seats. An operating licence is also not necessary for flights that are exclusively carried out to drop parachutists or with aerial sport devices.

1.5 Are air charters regulated separately to commercial, cargo and private carriers?

In commercial air traffic, which does not qualify as scheduled transport operations (Gelegenheitsverkehr or “non-scheduled services”), the licensing authority can determine conditions and requirements or prohibit transportation, if such air traffic has a negative impact on the public interest. For special requirements relating to licensing of non-scheduled services, refer to question 1.2.

1.6 As regards international air carriers operating in Germany, are there any particular limitations to be aware of, in particular when compared with ‘domestic’ or local operators? By way of example only, restrictions and taxes which apply to international but not domestic carriers.

Yes. Concerning the German Air Travel Tax (Luftverkehrsteuer) for instance, carriers with a registered office outside Germany have to nominate a so-called licensed tax or fiscal representative, which can be considered discriminative at least under the European aviation law regimes if not also under the Chicago Convention.Pursuant to sec. 3 of the German Air Traffic Act (Luftverkehrsgesetz), aircraft can, inter alia, only be registered in the German Aircraft Register (Luftfahrzeugrolle) if they are exclusively owned by German nationals or nationals of an EU Member State.An undertaking shall only be granted an operating licence by the German Federal Aviation Office (Luftfahrt-Bundesamt) according to Art. 4 lit. f of Regulation (EC) No. 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community, if Member States and/or nationals of Member States own more than 50% of the undertaking and effectively control it, whether directly or indirectly through one or more intermediate undertakings, except as provided for in an agreement with a third country to which the Community is a party. See also question 1.2.

1.7 Are airports state or privately owned?

German airports are mainly state-owned through operating companies organised under private law, i.e. there are no airport authorities, in the sense of a government agency, that operate an airport. Shareholders are mostly the Federal Republic of Germany (“FRG”) and the federal state and/or city/county in which the airport is situated. Some operating companies also include private shareholders.Out of the licensed German airports, of which there are currently 39, the five biggest (by passengers per year) are owned as follows: FRA – state of Hesse, Deutsche Lufthansa AG and two other private investors as well as free float; MUC – FRG, state of Bavaria, city of Munich; DUS – city of Dusseldorf, private investor; TXL – FRG, states of Berlin and Brandenburg; HAM – city of Hamburg, private investor; and CGN – FRG, cities of Cologne and Bonn, state of North Rhine-Westphalia, two counties.

1.8 Do the airports impose requirements on carriers flying to and from the airports in Germany?

Yes. The most notable requirement is the payment of airport charges as laid down in the Airport Charges Regulation (Entgeltordnung)

and environmental type certification of all aeronautical products; approval of organisations involved in the design of aeronautical products, as well as foreign production, maintenance and training organisations; and coordination of the European Union programme, Safety Assessment of Foreign Aircraft (“SAFA”).Regulation (EC) No. 216/2008 of the European Parliament and of the Council of 20 February 2008 on common rules in the field of civil aviation, establishing a European Aviation Safety Agency, and repealing Council Directive 91/670/EEC, Regulation (EC) No. 1592/2002 and Directive 2004/36/EC (“Regulation (EC) No. 216/2008” or the so-called “Basic Regulation”), entered into force on 8 April 2008 and extended the competencies of EASA to air operations, pilot licensing and authorisation of third-country operators (first extension). On 7 September 2009, the Council further extended EASA’s competencies in order to cover the safety of aerodromes, air traffic management and air navigation services (second extension).EASA works closely with the Federal Aviation Office (Luftfahrt-Bundesamt or “LBA”), but has taken over many of the LBA’s functions in the interest of aviation standardisation across the European Union (“EU”).By performing ramp inspections on third-country aircraft landing at Community airports, the EU tries to meet the need for an effective enforcement of international safety standards. In this regard, Directive 2004/36/EC of the European Parliament and of the Council of 21 April 2004 on the safety of third-country aircraft using Community airports (the so-called “SAFA Directive”), which came into effect on 30 April 2004, provides a legal obligation for EU Member States to perform ramp inspections upon third-country aircraft landing at their airports.On 6 May 2014, Commission Regulation (EU) No. 452/2014 laying down technical requirements and administrative procedures related to air operations of third country operators pursuant to Regulation (EC) No. 216/2008 of the European Parliament and of the Council was published in the Official Journal of the European Union. As from 26 May 2014, EASA will issue safety authorisations to commercial air carriers from outside the EU upon earlier request, if all authorisation requirements are met. Third country operators (TCO) flying to any of the 28 EU Member States and/or to the EFTA States (Iceland, Norway, Liechtenstein, Switzerland) must apply to EASA for a so-called TCO authorisation.Furthermore, air carriers may be refused landing within the EU for safety reasons on the basis of Regulation (EC) No. 2111/2005 of the Parliament and of the Council of 14 December 2005 on the establishment of a Community list of air carriers subject to an operating ban within the Community and on informing air transport passengers of the identity of the operating air carrier, and repealing Article 9 of Directive 2004/36/EC. The lists, which distinguish between an operational ban and operation restrictions, are prepared by EASA and updated every four months.The German Air Traffic Control (Deutsche Flugsicherung GmbH) is responsible for air traffic control in Germany. It is a company organised under private law and 100% owned by the Federal Republic of Germany. Under certain circumstances, flights might remain under the control of EUROCONTROL.

1.4 Is air safety regulated separately for commercial, cargo and private carriers?

Not entirely. An operating licence is required for non-commercial air transport operations of passengers, mail or cargo if those operations are conducted for remuneration, pursuant to sec. 20 para. 1 German Air Traffic Act (Luftverkehrsgesetz). An exception is made whenever an operation is conducted with an aircraft with no more than four


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1.10 Have there been any recent cases of note in Germany involving air operators and/or airports?

Please find below a non-exhaustive list of recent court decisions in Germany involving air operators and/or airports which are of interest to the aviation industry:■ In a December 10 2013 decision (X ZR 24/13), the Federal

Court of Justice deemed two clauses in the terms and conditions of a tour operator regarding flight time changes to be invalid. This decision will necessitate the amendment of tour operators’ terms and conditions and will also affect the contractual relationship of tour operators with airlines and travel agencies, as tour operators will want to shift liability for claims by passengers relating to changes in flight times or for a reduction in the travel price arising from the travel contract.

■ The German Federal Court of Justice decided with a judgment handed down on 12 June 2014 (X ZR 121/13) that in cases where extraordinary circumstances (here: strike of the air traffic controllers) have a detrimental effect of the flight plan of the air carrier, it is irrelevant for the determination of the question whether a cancellation or a delay of the flight in question resulted from this or whether the circumstances occurred on the same day in relation to the previous flight of the cancelled or delayed flight. This decision has improved the airlines’ position, as it emphasises that extraordinary circumstances which occur in relation to a previous flight can still lead to a successful application of the extraordinary circumstances defence in relation to subsequent flights.

■ On 25 September 2014 the Hamburg Local Court dismissed a claim by passengers pursuant to EU Regulation No. 261/2004 (8b C 115/14) where the passengers had missed a connecting flight outside the European Union because the feeder flight from Germany to the airline’s hub outside the European Union was delayed. This was a positive decision for airlines seeing that in light of the European Court of Justice’s decision in Folkerts (26 February 2013, C-11/11) and the decision of the German Federal Court of Justice (7 May 2013, X ZR 127/11), German courts have repeatedly decided this type of case against non-EU carriers. The case is currently pending on appeal level.

■ In November 2014, the German Federal Constitutional Court rejected an attempt by the federal state of Rhineland Palatinate to challenge the legality the air traffic tax, which was introduced in Germany in 2011. The Court held that the tax is constitutional and does not contravene passengers’ or companies’ rights.

2 Aircraft Trading, Finance and Leasing

2.1 Does registration of ownership in the aircraft register constitute proof of ownership?

No. The registration in the Aircraft Register (Luftfahrzeugrolle) is only a declaratory one. It does not have any constitutive effect on the ownership of the aircraft under German law. Ownership can be proven by an effective transfer of ownership according to sec. 929 et seqq. of the German Civil Code (Bürgerliches Gesetzbuch) through mutual consent and delivery to the buyer on the basis of an effective contractual agreement under the law of obligations, e.g. a purchase and sale agreement. The good faith (bona fide) regarding the ownership of the registered party is not protected. This is a consequence of the fact that the German Aircraft Register mainly aims at securing registered data for purposes under public law, i.e.

drawn up by each airport and subject to prior authorisation by the supervising authority (sec. 19 lit. b German Air Traffic Act (Luftverkehrsgesetz or “LuftVG”)), i.e. the Ministry of Transport of the federal state where the airport is located. Operational limitations for carriers result e.g. from varying charges for aircraft in categories like noise and pollutant emissions, as well as maximum take-off weight (MTOW) or time of operation. Sec. 19 lit. b LuftVG contains a non-discrimination clause, therefore in general there is no distinction e.g. between domestic and foreign carriers whereas the law expressly states that differentiations by noise categories or other material reasons are justified.Technical requirements such as specific approach or take-off procedures or specifications of aircraft allowed to use the airport are frequently not imposed on carriers and other users by the airport itself; instead the competent authorities such as the Ministries of Transport or the Federal Aviation Agency act in these matters. Further requirements may also stem from the licence under which the airport in question operates, e.g. curfew hours, etc.

1.9 What legislative and/or regulatory regime applies to air accidents? For example, are there any particular rules, regulations, systems and procedures in place which need to be adhered to?

The German Federal Bureau of Aircraft Accident Investigation (Bundesstelle für Flugunfalluntersuchung or “BFU”) is subordinated to the Federal Ministry of Transport and is responsible for the investigation of civil aircraft accidents and serious incidents in Germany. The purpose of the BFU is to improve aviation safety by determining the causes of accidents and serious incidents and making safety recommendations in order to prevent recurrence. The BFU is not, however, responsible for determining liability.Regulation (EC) No. 996/2010 of the European Parliament and the Council of 20 October 2010 on the investigation and prevention of accidents and incidents in civil aviation and repealing Directive 94/56/EC (“Regulation (EC) No. 996/2010”) came into force on 2 December 2010. According to this regulation, each Member State has to set up a national safety investigation authority and information on safety investigation should be exchanged between Member States. Regulation (EC) No. 996/2010 supplements the provisions contained in Annex 13 to the Convention on International Civil Aviation (“ICAO Convention”) dated 7 December 1944.Germany ratified the ICAO Convention in 1956. Annex 13 of the ICAO Convention contains information regarding the process of investigation and analysis of aviation accidents and incidents regarding civil aviation and stipulates the rights and responsibilities of signatory states in relation to the collaboration. Pursuant to Art. 37 and 38 of the ICAO Convention, signatory states are obligated to implement the rules and regulations and processes provided by the International Civil Aviation Organisation (ICAO), preferably unmodified.On a national level, there is also the Law Relating to the Investigation into Accidents and Incidents Associated with the Operation of Civil Aircraft (Gesetz über die Untersuchung von Unfällen und Störungen bei dem Betrieb ziviler Luftfahrzeuge), which is in line with Regulation (EC) No. 996/2010 and the ICAO Convention, and which came into force on 1 September 1998. This law replaced existing general administrative regulations regarding the specialist investigation of aviation accidents in relation to the operation of aircraft. In the course of the new regulation, sec. 5 of the German Air Traffic Regulations (Luftverkehrsordnung) regarding the notification of aviation accidents and incidents was also adapted.


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2.4 Is Germany a signatory to the main international Conventions (Montreal, Geneva and Cape Town)?

Germany is a signatory to the International Conventions of Montreal 1999 (effective date 28 June 2004), Warsaw 1929 (effective date 29 December 1933), the Hague Protocol for the amendment of the Warsaw Convention 1955 (effective date 1 August 1963), the Chicago Convention (effective date 8 June 1956) as well as to the Geneva Convention on the International Recognition of Rights in Aircraft (effective date 5 October 1959). The Cape Town Convention has not been ratified by Germany.

2.5 How are the Conventions applied in Germany?

The ratification process renders the International Conventions into directly applicable national and EU Law. The application is performed by the relevant German courts.

3 Litigation and Dispute Resolution

3.1 What rights of detention are available in relation to aircraft and unpaid debts?

If a creditor has a claim regarding an outstanding debt against the owner of an aircraft, and if this creditor does not have a registered mortgage in relation to the relevant outstanding debt, then the creditor has to obtain an enforceable title (as recognised under German law) for the outstanding debt against the owner of the aircraft (e.g. by way of an enforceable court judgment or enforcement order) from the German civil courts. The enforceable title also needs to be issued with an enforcement clause by the competent German civil court and must be duly served on the debtor.If the aircraft in question is registered in the German Aircraft Register, then the creditor needs to apply to the Local Court in Braunschweig (where the Register of Mortgages on Aircraft is kept) for the entry of a registered mortgage on the aircraft.The enforcement of the mortgage is carried out by way of enforcement proceedings. In order to enforce the mortgage, the creditor has to apply to the relevant German civil court for compulsory auction of the aircraft.If the outstanding debt is already secured by way of a registered mortgage and if the debtor has agreed to be subjected to immediate enforcement proceedings (which is common), then the creditor can (if all the necessary requirements are fulfilled) apply for compulsory auction of the aircraft with the relevant German civil court straight away.Aircraft of foreign origin are not registered in the German Aircraft Register and no registered mortgage can be entered against such aircraft. Once the creditor has received an enforceable title with the relevant enforcement clause and has served this title on the debtor, the creditor will need to apply to the relevant bailiff to enforce title by way of seizure.An aircraft can be released from a registered mortgage by cancellation of the registered mortgage by way of a transaction between the owner of the aircraft and the owner of the registered mortgage. Further, if the outstanding debt ceases to exist (e.g. by way of settlement) then the registered mortgage ceases to exist. Similarly, the registered mortgage ceases to exist if outstanding debt is settled as a result of enforcement proceedings.

airworthiness and identification of the owner, nationality of the same, etc. Regardless of the public law nature and character of the Register, it is common practice to make use of the Aircraft Register for transactions under civil law.

2.2 Is there a register of aircraft mortgages and charges? Broadly speaking, what are the rules around the operation of this register?

Yes. Aircraft mortgages can be registered in the separate Register of Mortgages on Aircraft (Pfandrechtsregister für Luftfahrzeuge) in accordance with the 1948 Geneva Convention on the International Recognition of Rights in Aircraft. The conditions are set out in the German Aircraft Mortgage Act (Gesetz über Rechte an Luftfahrzeugen). The public register is maintained by the Local Court in Braunschweig. Upon request, a certified excerpt from the register may be issued.A key precondition for the registration in the Register of Mortgages on Aircraft is that the aircraft is registered in the Aircraft Register. An effective mortgage requires the mutual consent between the owner and the creditor and needs to be recorded in the Register of Mortgages on Aircraft. The declarations of the parties have to be certified before a notary public or the Register Court. As a consequence, recordings in the Register of Mortgages on Aircraft are not only declaratory but constitutive for the creation of the mortgage.Upon its registration (Eintragung), the mortgage is a valid, enforceable and perfected security interest in the form of a first ranking aircraft mortgage over the aircraft. The German aircraft mortgage generally covers the engines, provided such engines are installed at the airframe, title to the engines is and remains with the mortgagor as owner of the aircraft and they do not qualify as third-party accessories (Zubehör) of the airframe. Due to the flexible use of aircraft engines, it was in dispute in jurisprudence and amongst legal scholars in Germany in the past whether the ownership right of the aircraft owner and the rights of a mortgagee over the aircraft extend to the respective engine(s). It can now be considered a prevailing view for the time being under German law that aircraft engines do not form an integral part (wesentlicher Bestandteil) of an aircraft, and engines are therefore capable of being subject to independent rights. It is still controversial whether engines do qualify as accessories (Zubehör). Consequently, extra liens separate from the aircraft could rest on the engines without being registered in the Register of Mortgages on Aircraft. In Germany a separate register of mortgages on aircraft engines does not exist. However, so far the German Federal Court (Bundesgerichtshof) has not ruled on this qualification and therefore the questions have not been clarified yet.

2.3 Are there any particular regulatory requirements which a lessor or a financier needs to be aware of as regards aircraft operation?

The lessor/financier needs to be aware that the tax debtor in relation to the German Air Travel Tax (Luftverkehrsteuer or “ATT”) is generally the carrier or the so-called licensed or fiscal representative, which carriers with a registered office outside Germany have to nominate. However, if an international carrier does not nominate a licensed or fiscal representative, then the owner (lessor) or keeper (operator) of the aircraft will be liable for ATT.Regarding the restrictions of the lessor/financier on their right to retake possession of the aircraft, see question 3.2.


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Administrative proceedings regarding aviation disputes have to the brought before the relevant German administrative courts.Criminal proceedings in relation to aviation disputes have to be brought before the relevant German criminal courts.

3.4 What type of remedies are available from the courts or arbitral tribunals in Germany, both on an i) interim and a ii) final basis?

Entering into legal proceedings before a court of law is the standard remedy to be taken in Germany in order to enforce one’s rights. Summary proceedings are available for monetary claims and can be initiated by filing a standard form with the local court. Lawsuits require the filing of a detailed statement of claim, in particular including proper documentation of all facts presented to the court. Depending on the content and volume of the claim, the case will be heard on different levels of the German court system, typically comprising first instance, appellate level and – under certain conditions – a further appeal on questions of law at the federal level and/or the European level. The likely time involved to obtain a court order is between two to three months (summary proceedings), six to 18 months (judgment at first instance) and several years (appeal up to federal level). Obviously, exceptions may apply. Injunctive relief offers interim rulings in urgent matters to be obtained within days if not hours. Appeals are possible. Injunctive proceedings are often followed by regular court proceedings in which the subject matter of the injunctive proceedings will be reviewed in greater detail.The parties are free to submit to arbitration proceedings rather than regular court proceedings. Arbitration proceedings can be rather time-consuming but are decided in one instance, usually without the right to appeal. Only in rare cases is an appeal to the public courts of law possible. Arbitration proceedings take between several months and several years, depending on the complexity of the subject matter, the experience of the arbitrators, etc. Depending on the arbitration rules established between the parties, the arbitral tribunal may also render injunctions for an interim solution.

3.5 Are there any rights of appeal to the courts from the decision of a court or arbitral tribunal, and, if so, in what circumstances do these rights arise?

In court cases an appeal to the respective higher instance is possible if either party faces negative effects with a value of more than EUR 600.00. A further appeal on a question of law requires an explicit admission, to be granted inter alia if the case involves legal questions of fundamental importance.An appeal against an arbitration award is only possible in case of a grave violation of procedural principles. In order to be enforceable, arbitration rulings have to be declared enforceable by a court of law. Germany is a signatory to the New York Convention on the enforcement of arbitral awards.

4 Commercial and Regulatory

4.1 How does Germany approach and regulate joint ventures between airline competitors?

Joint ventures on the basis of a joint venture company are subject to German merger control if the turnover thresholds are met. Joint ventures based solely on a cooperation agreement may be subject to the rules on the prohibition of cartels, which are similar to EU antitrust law.

If a foreign aircraft is seized, seizure can be released by way of a transaction between the owner of the aircraft and the creditor. Further, seizure can be released by way of settlement of the outstanding debt or return of the aircraft to the owner.In order to secure the enforcement proceedings, the creditor can apply for an arrest of the aircraft with the relevant German civil court. The enforcement of the arrest regarding an aircraft, which is registered in the German Aircraft Register or the German Register of Mortgages on Aircraft, is executed by the bailiff entering a registered mortgage against the aircraft and (if permissible) taking the aircraft into safe custody. In relation to aircraft of foreign origin, the bailiff will seize the aircraft instead of entering a registered mortgage.

3.2 Is there a regime of self-help available to a lessor or a financier of aircraft if it needs to reacquire possession of the aircraft or enforce any of its rights under the lease/finance agreement?

No, the lessor/financier has to proceed in accordance with the German laws of enforcement and debt recovery in order to repossess the aircraft or enforce its rights under the lease/finance agreement.If the lessor/financier has a claim for the return of the aircraft against the debtor which is not fulfilled, then the lessor/financier has to obtain an enforceable title (recognised under German law) for this claim from the relevant German civil court. The title has to contain the necessary enforcement clause and needs to be duly served on the debtor. The creditor can then apply for the enforcement of the enforceable title with a bailiff, who will procure the creditor possession of the aircraft. This process can be rather lengthy.The parties can, however, agree in the lease/credit agreement/surety agreement that the lessee/borrower submits to subjecting the aircraft to immediate enforcement proceedings. In such cases the lessor/financier does not need to go through the first step of obtaining an enforceable title from the German civil courts. Instead, the creditor can (if all the requirements are fulfilled) apply for the enforcement of the enforceable title with a bailiff directly, who will procure the creditor possession of the aircraft.If ownership of the aircraft has not been transferred to the financier as a security and the financier only has a registered mortgage, then the financier cannot claim the return of the aircraft, but has to apply for the compulsory auction of the aircraft according to the relevant rules (see question 3.1).In order to secure the enforcement proceedings of the claim for the return of the aircraft, the owner can apply for an injunction with the relevant German civil court. The enforcement of an injunction in relation to an aircraft which is registered in the German Aircraft Register or the German Register of Mortgages on Aircraft, is executed by the bailiff entering a registered mortgage for the claim and (if permissible) taking the aircraft into safe custody. In relation to foreign aircraft, the bailiff will enforce the injunction by way of seizure of the aircraft instead of entering a registered mortgage.

3.3 Which courts are appropriate for aviation disputes? Does this depend on the value of the dispute? For example, is there a distinction in Germany regarding the courts in which civil and criminal cases are brought?

There are no special courts (of any type) for aviation disputes.Civil claims in relation to aviation disputes have to be brought before the German civil courts. For a more detailed description of the civil court system and the remedies available, see questions 3.4 and 3.5.


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in the Community (“Regulation (EC) No. 1008/2008”). The individual criteria are determined in the corresponding public tender procedure (cf. Art. 16 para. 10 and 17 Regulation (EC) No. 1008/2008).

4.8 What are the main regulatory instruments governing the acquisition, retention and use of passenger data, and what rights do passengers have in respect of their data which is held by airlines?

The main regulatory instrument in Germany governing the acquisition, retention and use of passenger data is the Federal Data Protection Act (Bundesdatenschutzgesetz or “BDSG”), in which Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data, was incorporated. According to the BDSG, the acquisition, retention and use of personal data is only lawful if permitted by the BDSG or other law or if the passenger has provided consent.According to the BDSG, passengers have a right of information on recorded data relating to them, the recipients or categories of recipients to which the data are transferred and the purpose of the data recording. If data is collected without the passenger’s knowledge, the passenger has to be notified of such collection. Furthermore, passengers have the right to request rectification of recorded personal data relating to them if such personal data is inaccurate. In addition, passengers may claim damages in case of unlawful acquisition, retention or use of personal data relating to them.

4.9 In the event of a data loss by a carrier, what obligations are there on the airline which has lost the data and are there any applicable sanctions?

If an airline determines that:■ special categories of personal data (any information on racial

or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, health or sex life);

■ personal data subject to professional secrecy;■ personal data referring to criminal or administrative offences;

or■ personal data concerning bank or credit card accounts,which it has recorded have been unlawfully transferred or otherwise unlawfully disclosed to third parties, threatening serious harm to the rights and legitimate interests of passengers, the airline has to inform the supervisory authority and the passengers, without undue delay, describing the nature of unlawful disclosure, and recommend measures to minimise possible harm. The notification to the supervisory authority shall, in addition, describe possible harmful consequences and measures taken by the airline as a result.Any breach of this obligation is deemed to be an administrative offence and may be punished by a fine up to EUR 300,000.00, or more if the benefit derived from such offence is higher.

4.10 What are the mechanisms available for the protection of intellectual property (e.g. trademarks) and other assets and data of a proprietary nature?

In the Federal Republic of Germany (“FRG”), intellectual property is protected by industrial property rights (“IPR”), which prevent the IPR from being copied or imitated. IPR include patents (protection of technical inventions), utility models (protection of technical innovations), designs (protection of designs and models) and trademarks. These IPR must be registered to obtain respective protection. The administrative body dealing with industrial property

4.2 How do the competition authorities in Germany determine the “relevant market” for the purposes of mergers and acquisitions?

The essential authority with regard to mergers and acquisitions is the Federal Cartel Office (Bundeskartellamt). Its decision can be appealed against before the Dusseldorf Higher Regional Court. As regards the determination of the relevant market, the specific type of aviation sector has to be considered. While in the context of passenger flights further distinction is made between the direct destinations served by the airlines at hand, cargo flights require a broader market definition.

4.3 Does Germany have a notification system whereby parties to an agreement can obtain regulatory clearance/anti-trust immunity from regulatory agencies?

Yes, parties can obtain a regulatory clearance for mergers by the Federal Cartel Office (Bundeskartellamt) under the terms of sec. 35 et seqq. of the Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen). There is no system of clearances for cartels.

4.4 How does Germany approach mergers, acquisition mergers and full function joint ventures?

According to sec. 37 of the Act against Restraints in Competition (Gesetz gegen Wettbewerbsbeschränkungen), mergers are defined as a) acquisition of assets, b) acquisition of joint or sole control, c) acquisition of shares (at least 25%), or d) exercise of competitively significant influence (also in case of shares below 20%). However, no distinction is made between various forms of joint ventures.

4.5 Please give an outline of the procedure, including time frames for clearance and details of any costs of notifications.

A notification procedure before the Federal Cartel Office (Bundeskartellamt) begins with Phase I investigations which take up to four weeks (no reaction = clearance). If the case at hand is rather complicated, Phase II investigations will be initiated (only few cases). Their duration is limited to another three months. Normally, costs for Phase I proceedings range between EUR 2,000.00 and 8,000.00, while Phase II proceedings are much more expensive.

4.6 Are there any sector-specific rules which govern the aviation sector in relation to financial support for air operators and airports, including (without limitation) state aid?

There are no sector-specific rules, but there are various forms of support (tax relief regarding kerosene and VAT, state aid for airlines, flight control and infrastructure).

4.7 Are state subsidies available in respect of particular routes? What criteria apply to obtaining these subsidies?

Yes, state subsidies may be granted in the context of so-called “public service obligations” according to Art. 16 et seqq. of the Regulation (EC) No. 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services


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it will initiate administrative fine proceedings. The air carrier has the right to be heard and can submit a written statement regarding the accusations directed at it.As a second step, the LBA may end the proceedings based on the air carrier’s statement or may issue an administrative order imposing a fine. In this respect, the LBA can impose fines up to EUR 25,000.00. The air carrier can file objections against this administrative order.Finally, the LBA may end the proceedings or may dismiss the objection to the administrative order. In the latter case, the air carrier may file an application for a decision by a court of law, which then has to decide on the matter.The LBA procedure is a purely administrative procedure. The LBA is not in a position to enforce possible civil claims for passengers legally. Passengers can only assert their claims according to the procedures provided for in German civil law.

4.13 Are the airport authorities governed by particular legislation? If so, what obligations, broadly speaking, are imposed on the airport authorities?

Airport operators (see question 1.7) are subject to German and EU legislation, as well as international agreements to which Germany is a signatory. Specific rules on the construction and operation of airports are contained in sec. 6 et seqq. German Air Traffic Act (Luftverkehrsgesetz) and sec. 38 et seqq. German Air Traffic Licensing Regulation (Luftverkehrszulassungsordnung), stipulating a general licensing requirement and compliance, e.g., with zoning, construction and environmental compatibility laws. Also relevant are the German Aviation Security Act (Luftsicherheitsgesetz), imposing various obligations e.g. to secure and control the airport premises, and the German Ground Handling Services Regulation (Bodenabfertigungsdienstverordnung), the latter implementing Council Directive 96/67/EC of 15 October 1996 on access to the ground handling market at Community airports. Furthermore, all relevant EU legislation, such as Regulation (EC) No. 300/2008 of the European parliament and of the Council of 11 March 2008 on common rules in the field of civil aviation security and repealing Regulation (EC) No. 2320/2002, applies, as well as related Regulations (EC) No. 272/2009, No. 18/2010 and No. 185/2010 and specific international treaty law such as Annex 14 (airports) of the Chicago Convention.

4.14 To what extent does general consumer protection legislation apply to the relationship between the airport operator and the passenger?

German consumer protection law is characterised by a rather high standard, but there is no specific and consolidated codified law in Germany. Instead, respective norms are placed in a number of codes. Based on these norms, prior to a purchase or the signing of a contract, consumers in Germany must be able to recognise the benefits and consequences of their decision. Transparency and information are important for the German market, including with regard to the airline industry. The Federal Office of Consumer Protection and Food Safety (BVL) and other authorities are responsible for the enforcement of consumer protection in Germany.According to sec. 13 German Civil Code and related norms, German consumers are better protected than non-consumers. The general German consumer protection legislation consists of norms in the German Civil Code and, inter alia, insolvency law, unfair competition law, law against unfair terms and conditions and many norms related to protection of consumer health. There have also been activities in German legislation against telephone marketing and other means of distribution practice.

rights is the German Patent and Trademark Office (Deutsches Patent- und Markenamt).With regard to patents and utility models, the Employee Invention Act (Gesetz über Arbeitnehmererfindungen or “ArbNErfG”) needs to be considered. The employee is entitled to any invention made in course of an employment if the employee makes use of the invention in accordance with the specifications of German law. The employee shall receive the statutory compensation. The ArbNErfG sets out how employee inventions and proposals for technical improvement should be dealt with.As regards copyrights, in the FRG, the copyright protection comes into force when a work is created; official registration is not necessary. The German Copyright Act (Urheberrechtsgesetz) applies to works of literature, art and signs.In relation to patents, utility models and trademarks, like in other European countries, protection at a European level with effect also in the FRG can be sought at the European Patent Office and/or the Office of Harmonization of the Internal Market. New designs are even protected without registration. The term of copyright expires, however, after three years.An infringement of an IPR can be pursued in court proceedings or via interim injunctions, the latter of which may be obtained within hours. There are specialised civil divisions at the various German regional courts that deal with such cases.The basic claims connected with any IPR proceeding are the cease and desist claim, the information claim, the damage claim, as well as the right to have the infringing products destroyed.

4.11 Is there any legislation governing the denial of boarding rights?

Regulation (EC) No. 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No. 295/91, grants passengers a right to fixed-rate compensation, a right to reimbursement or re-routing, as well as a right to care in case of denied boarding and cancellation. Passengers may also have contractual claims for damages under the contract of carriage pursuant to sec. 631 et seqq. of the German Civil Code (Bürgerliches Gesetzbuch or “BGB”). Passengers travelling on a package holiday may have claims for damages against the tour operator under sec. 651a et seqq. BGB. Furthermore, a conciliation body for air passenger rights was established in Germany as of 1 November 2013.

4.12 What powers do the relevant authorities have in relation to the late arrival and departure of flights?

According to Regulation (EC) No. 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No. 295/91 (“Regulation (EC) No. 261/2004”), Member States should ensure and supervise general compliance by their air carriers with this Regulation and designate an appropriate body to carry out such enforcement tasks.In Germany, the Federal Aviation Office (Luftfahrt-Bundesamt or “LBA”) is the National Enforcement Body (NEB) and, as such, is the competent authority for the implementation of Regulation (EC) No. 261/2004.As a first step, the LBA investigates passenger complaints. If the LBA finds potential infringements based on a passenger’s complaint,


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Regulation (EC) No. 80/2009 of the European Parliament and of the Council of 14 January 2009 on a Code of Conduct for computerised reservation systems and repealing Council Regulation (EEC) No. 2299/89 (“Regulation (EC) No. 80/2009”), shall publicly disclose, unless this is otherwise made public, the existence and extent of a direct or indirect capital holding of an air carrier or rail-transport operator in a system vendor, or of a system vendor in an air carrier or rail transport operator. A system vendor within the meaning of Regulation (EC) No. 80/2009 means any entity and its affiliates which is or are responsible for the operation or marketing of a computerised reservation system.

4.17 Is vertical integration permitted between air operators and airports (and, if so, under what conditions)?

Yes. Although the shares in – especially the major – airports in Germany are usually not owned by private investors (see question 1.7), there is no general prohibition on air operators acquiring such shares, as illustrated by the fact that Deutsche Lufthansa AG owns 8.46% of Frankfurt airport operator Fraport AG (as of January 2015). Potential restrictions may arise under applicable national and/or EU competition law but would, as the case may be, not exist with the aim to prevent vertical integration.

However, there is typically no contractual relationship between passengers and airport operators, because passengers enter into air carriage agreements with airlines or travel companies whereas airlines enter into agreements with airport operators in order to provide services for passengers. Thus many norms regarding contracts with consumers are not directly applicable concerning the relationship between the airport operator and the passenger. Airport charges to be paid by passengers are a special scenario and transparency is important in this regard, because of general consumer protection law. Also, many general public law regulations relating to safety and security exist in Germany in order to protect consumers in airports. Furthermore, Regulation (EC) No. 1107/2006 is a specific consumer protection law which provides that passengers with a handicap must be properly assisted by airport operators.

4.15 What global distribution suppliers (GDS) operate in Germany?

The key players are Amadeus, Sabre, Galileo and Worldspan (Travelport).

4.16 Are there any ownership requirements pertaining to GDSs operating in Germany?

No. However, it should be noted that a system vendor, pursuant to

ARNECKE SIEBOLD is one of the market leaders in Transport and Aviation Law. The firm’s highly specialised Transport, Aviation and Logistics practice group is widely renowned in the market for its expertise and attracts an impressive clientele ranging from major domestic and foreign commercial airlines, cargo airfreight companies, forwarding agents, logistics companies, manufacturers and insurance companies to lenders, banks and financiers of aircraft. ARNECKE SIEBOLD provides legal support on all aspects of business in the airline and aviation industry, including advice in relation to corporate, employment, competition and property law, regulatory matters, litigation and arbitration, aircraft leasing, financing and registration, and accident investigation or claims handling. The firm has repeatedly received numerous awards and recommendations in publications such as The Legal 500 (Top Tier Law Firm 2015), Legal Experts, Who’s Who Legal, Focus and JUVE.

Ulrich Steppler, LL.M. is the joint head of the Transportation, Aviation and Logistics (TAL) group at ARNECKE SIEBOLD. He specialises in aviation matters, focusing in particular on passenger air transportation. Ulrich Steppler has published numerous articles, case notes and reviews, as well as a book on IATA interlining and a collection of regulations on the inclusion of aviation into the EU Emissions Trading Scheme (EU ETS). He is also the winner of the ILO Client Choice Award 2010, 2011, 2014 and 2015 for the category “Aviation Law Expert Germany”, as well as other awards, and has been recognised as a leading individual by various institutions (e.g. The Legal 500, Who’s Who Legal and Legal Experts). Ulrich represents numerous international airlines, industry participants, banks, financiers and organisations in all relevant areas. He has significant experience in the German Courts as well as expertise in regulatory and aircraft finance matters. Ulrich is also admitted to represent clients before the Austrian Courts and institutions.

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Holger Buerskens, LL.M. (McGill) heads the Transportation, Aviation and Logistics (TAL) group at ARNECKE SIEBOLD. He has practised in the field of transportation, aviation and logistics for more than 20 years and is the author of numerous articles and books on German transportation and international business law, as well as being a regular speaker at industry events. Holger represents international airlines, forwarding agents and logistics providers. He has been awarded the title of Specialist Attorney for Transportation and Forwarding Law, and over the past years has been recommended frequently by publications such as The Legal 500, European Legal Experts, Nomos Handbook on Law Firms in Germany and the JUVE Handbook on German Commercial Law Firms.

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Tel: +49 69 9798 85 220Fax: +49 69 9798 85 82Email: [email protected]: www.ArneckeSiebold.de

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