The U.S. Department of Transportation (DOT) has finalized its rule requiring U.S. and foreign air carriers to refund costs associated with tickets and ancillary service fees under certain circumstances related to airline delays and cancellations. This rule stems from and responds to President Biden’s Executive Order on Promoting Competition in the American Economy, issued on

As we begin the new year, the aviation industry is closely following certain Department of Transportation (DOT) Notices of Proposed Rulemakings (NPRM) published in 2022. These proposed rulemakings relate to consumer protections, including ancillary fees and airline ticket refunds.
Continue Reading Department of Transportation (DOT) consumer protections – rules to watch

Aviation infrastructure opportunities are rising due to Advanced Air Mobility (AAM) market growth. In September 2023, the FAA conditionally approved the first US public-use vertiport. Dubai’s leaders endorsed a vertiport design in February, aiming for a city-wide vertiport network by 2026. Yet, AAM infrastructure lags behind aircraft manufacturing due to development constraints, offering room for growth.
Continue Reading Aviation infrastructure for new technologies

Recent news headlines relating to air travel have demonstrated the aviation industry’s refocus on passenger experience and consumer protection issues.  Airlines are working hard to address scenarios that may affect the passenger experience during air travel today, including remediating weather delays and personnel-related issues. The Biden Administration has made consumer protections in the aviation industry

According to the Centers for Disease Control and Prevention (CDC), those who are fully vaccinated with an FDA-authorized vaccine or a vaccine authorized for emergency use by the World Health Organization can now travel safely within the U.S.  Face coverings, however, must still be worn at the airport and during flight.
Continue Reading FAA and Homeland Security issue warnings as unruly passenger incidents increase

It is now a unanimous conclusion that the COVID-19 pandemic has resulted in the worst ever crisis in the history of the aviation industry. In 2020, we saw major airlines such as Avianca, LATAM, Thai Airways, Virgin Atlantic and Virgin Australia enter into formal insolvency or restructuring proceedings, with the majority of other airlines being kept afloat by a combination of government aid, cost-cutting measures and concessions from shareholders, employees, bondholders, lessors and other creditors. As we enter the spring of 2021, the inevitable question is: what will happen next? Which airline may fail and which will be well-positioned to benefit from an eventual recovery in international air travel?
Continue Reading Hoping for the best but preparing for the worst

After considering whether to implement a COVID-19 testing requirement for domestic travel, including air travel, the United States Centers for Disease Control and Prevention (“CDC”) recently stated that it is not recommending point of departure COVID-19 testing for U.S. domestic travel. Federal officials had indicated that the CDC was considering a rule that would require all U.S. domestic flyers to test negative for COVID-19 prior to boarding a domestic flight. However, following industry opposition, including opposition from U.S. based air carriers, the CDC stated that it was not recommending point of departure COVID-19 testing prior to domestic travel. The statement by the CDC follows its January 29, 2021 Order which requires the wearing of masks by travelers.
Continue Reading Masks but no tests: U.S. CDC requires masks but will not require COVID-19 testing for domestic travel

On January 13, 2021, the Department of Transportation (DOT) issued a new final rule amending its rules regarding oversales and compensation due to passengers who are denied boarding involuntarily — a practice known as “bumping”. The final rule was issued in accordance with the Transparency Improvements and Compensation to Keep Every Ticketholder Safe Act of 2018 (“TICKETS Act”)[1] which required the DOT complete a rulemaking to clarify that:

  1. there is no maximum level of compensation an air carrier or foreign air carrier may pay to a passenger who is involuntarily denied boarding as the result of an oversold flight, and
  2. the denied boarding compensation levels set forth in DOT regulations are the minimum levels of compensation an air carrier or foreign air carrier must pay to a passenger who is involuntarily denied boarding as the result of an oversold flight.

The final rule prohibits airlines from involuntarily denying boarding to a revenue passenger after the revenue passenger has checked-in for the flight and the passenger’s boarding pass has been collected or scanned and the passenger has been “accepted by the gate agent”, subject to safety and security exceptions that may require removal of the passenger. In addition, the final rule states that the passenger can be removed if the passenger is engaging in behavior that is “obscene, disruptive, or otherwise unlawful.” The final rule also makes clear that it does not limit the authority of the pilot of the aircraft provided for in 14 CFR 121.533.
Continue Reading U.S. DOT issues new final rule on bumping

On December 2, 2020, the U.S. Department of Transportation (“DOT”) announced its final rule revising its Air Carrier Access Act (“ACAA”) regulation on the transportation of service animals by air.[1] The final rule constitutes significant changes to the ACAA regulations regarding the transportation of service animals. Significantly, the final rule restricts the types of service animals allowed on U.S. flights to dogs and frees airlines from having to accommodate a variety of emotional support animals. However, the rule does not bar emotional support animals from traveling in passenger cabins.

Prior to the issuance of the final rule, the DOT published an Advance Notice of Proposed Rulemaking titled “Traveling by Air with Service Animals” on May 23, 2018. On February 5, 2020, the DOT issued a Notice of a Proposed Rulemaking providing notice of a proposed rule amending its ACAA regulation on the transportation of service animals by air.[2] The DOT then received more than 15,000 comments on the proposed rule before announcing the final rule on December 2, 2020.
Continue Reading DOT issues new rule addressing emotional support animals on flights

Well, sort of.

There are parallels to be drawn – I know, but indulge me for a moment. With Avengers: Endgame released this week, it’s the end of an era.

Much like the Avengers, we in aviation have lost a few of our heroes recently, and there are likely to be more losses to come. As the cover of the latest issue of Airline Economics (pictured) demonstrates, we are seeing very high airline casualty rates at the moment, with forecasts of further collapses in the short and medium term. While it has been sad to see some greats fall (although the disappearances are attributed variously to flawed business models, rising fuel prices, Brexit uncertainty and lack of funding rather than a super-villain snapping his gauntleted fingers…), and we are undeniably looking at challenges as the industry cycle begins to turn, we are also seeing this provoke some self-reflection and perhaps re-direction in the industry.

Some of this reflection relates to Earth Day, which also happened in the last week, and while the commentary on the environmental impact of aviation is more or less constant, there are moments of hope peeping through the fog. We have written before about the need to develop some sort of Tony Stark-style arc reactor to innovate out a lot of the fuel-related environmental side effects, but (if we could turn for a moment from Iron Man to Thor and his lightning bolts…) there are also increasingly viable options emerging in electric technology, which are particularly suited for countries like Australia where there are high volumes of short-haul travel, and few cost-effective options for accessing remote areas. It is predicted that we could see electric 150-seat aircraft with a 500 km range in operation before 2030, which could significantly reduce both the environmental costs of air travel and the operating costs incurred by airlines running these routes, who would gradually become less reliant on expensive and polluting aviation fuel. Innovation in this vein would be a meaningful step forward for our industry.
Continue Reading Aviation: Endgame (… not really)

Our aviation finance team has made it to the end of its first complete year since its relaunch in summer 2017 – and it has been a big one! We have worked on transactions involving over 100 aircraft and 19 different jurisdictions, we have met with clients and friends in Dublin, New York, Hong Kong and London, and we have seen our renewed team go from strength to strength as we welcomed new members in Paris and the United States.
Continue Reading So long, farewell … and happy new year! 2018 trends and 2019 opportunities

The heatwave may be over but the wave of August out-of-office responses is still building, so rather than post about controversial redelivery conditions or the fascinating behaviour of interest rates, and prompted by the striking intersection of aviation and literature recently, we thought it seemed high time to offer Legal Flight Deck: The Summer Reading Edition. You’re welcome.
Continue Reading Flypasts, Flybraries, Hurricanes and Paper Planes: The Summer Reading Edition

The Reed Smith Aviation team were out in force for FIA 2018. It’s always nice to be able to catch up with clients and old industry friends from across the globe on our own doorstep – and even better when it’s in the middle of a heatwave!

New orders

Boeing’s executives are likely to be flying back to Seattle feeling very pleased with the week’s work, having secured/announced $79 billion in orders during the show. Vietjet signed an MoU for an additional 100 Boeing 737 Max aircraft and Hawaiian Airlines also confirmed its order for 10 787-9s, while also confirming purchase rights for an additional 10 aircraft. Overall Airbus announced 93 firm orders and commitments for 338 aircraft, including a commitment from JetBlue for 120 of its new A220 aircraft and a confirmation from AirAsia X for 34 A330neos. Embraer had a much more successful show than last year, securing/announcing 265 orders for variants of its EJets.

There was plenty of lessor activity to note across the week with Goshawk Aviation (20 Boeing 737 Max 8 aircraft) making its first direct order from Boeing and Jackson Square Aviation (30 Max-family aircraft) making its first direct purchase from any OEM. Macquarie AirFinance ordered 20 A320neos and ACG ordered a further 20 Boeing 737 Max, taking its current order to 100.
Continue Reading Farnborough International Airshow 2018: Notes from the runway

Summary

In last week’s case of Triple 7 MSN 27251 Ltd v. Azman Air Services Ltd,[1] Azman Air Services argued that two aircraft lease agreements were void under the English law doctrine of common mistake.

The High Court considered this question and found that common mistake is only sufficient to void a lease agreement (or any other contract) where:

  1. the mistaken assumption on which the parties acted was fundamental to the contract; and
  2. the mistake was such that the “contract or its performance would be essentially and radically different from what the parties believed to be the case at the time of the conclusion of the contract”.

Continue Reading When will a lease agreement be void for common mistake?