New Licensing Conditions for Conducting Business Operations in Air Transportation

On 23 March 2017, Resolution No. 134 of the Cabinet of Ministers of Ukraine dated 10 March 2017 approving new Licensing Conditions for Conducting Business Operations in the Sphere of Passenger, Hazardous Cargo and Hazardous Waste Carriage by Air Transport (the "Licensing Conditions") became effective.

The Licensing Conditions are aimed at liberalization of the Ukrainian aviation market and apply to all legal entities of any type of organizational and legal form, as well as to private entrepreneurs (the "Airline(s)"), conducting business activities in the sphere of passenger, hazardous cargo and hazardous waste carriage by air transport (the "Air Transportation").

The Licensing Conditions provide for an exhaustive list of documents and information to be submitted together with the application for the license (the "Application") to conduct Air Transportation business (the "License"). This list, inter alia, includes (i) information on the air operator certificate, (ii) documents evidencing the ownership by Ukraine and/or its residents of more than 50 percent of the Airline's authorized capital (equity stake), and (iii) information on the absence of control over the license applicant's activity by residents of any state perpetrating military aggression against Ukraine (e.g., residents of the Russian Federation), as well as some other documents/information.

Once the License is obtained, the Airline will ensure that its Air Transportation operations are in compliance with the regulatory requirements stipulated in the Licensing Conditions. An exhaustive list of such requirements is contained in Section 9 of the Licensing Conditions and includes the following:




the Airline has a valid air operator certificate and own or lease at least one aircraft (except for a wet lease);




main activity of the Airline is conducting the Air Transportation exclusively or in addition to any other type of commercial aircraft operation and technical maintenance of aircrafts;




types of flights, place of business, and material and technical facilities set forth in the Airline's operational specifications comply with the declared type of business operations in the sphere of the Air Transportation;




more than 50 percent of the Airline's authorized capital (equity stake) is owned by Ukraine and/or its residents, unless otherwise established in the international treaties of Ukraine;




aircraft personnel of the Airline comply with the qualification requirements and have duly executed certificates; and




employment relations with the Airline's employees are formalized under the Labor Code of Ukraine.

The Licensing Conditions lay special emphasis on the specific obligations of established Airlines to be complied with in the course of their business operations in the sphere of Air Transportation. For instance, such obligations include, inter alia, the obligation to arrange for the presence of the Airline's chief executive officer, his/her deputy or other authorized person in the course of inspecting the compliance with the Licensing Conditions by the licensing authority, and the obligation to inform the licensing authority about any changes in the data specified in the Airline's documents submitted together with the Application, which must be done no later than one month after the date of such changes.

For further information please contact Asters' partner Vadym Samoilenko,
and associate Maryana Sayenko.

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