Ukraine and EU sign Common Aviation Area Agreement

Ukraine

On 12 October 2021, the EU and Ukraine signed a long-awaited Common Aviation Area Agreement, which applies to EU member states and Ukraine.

The Agreement will come into force after its ratification by each EU member state and Ukraine and will align Ukrainian regulations with EU regulations. At the moment, the parties agree provisionally to apply the Agreement in accordance with their internal procedures and national legislation.

The list of the EU acts that establish the requirements and standards to be transposed into the Ukrainian legal system is specified in the annexes to the Agreement.

The ultimate goal of the Agreement is to create a Common Aviation Area between the parties, which will be based on free access to the air transportation market and equal conditions of competition for air carriers.

The Agreement replaces numerous bilateral agreements (unless more favourable) between Ukraine and the EU states, and sets down unified rules (as regulated in the EU) and procedures to be adhered to by the parties, which relate to:

  • aviation safety and security;

  • air traffic management;

  • environment and consumer protection;

  • industrial cooperation, etc.

The Agreement will be implemented over two transition periods. During the first period, air carriers will enjoy unlimited traffic rights between any point in the EU and any point in Ukraine (i.e. “third and fourth freedom traffic rights”). After the conditions set down in the Agreement are met (i.e. full implementation of the Agreement as to be confirmed by the Joint Committee), air carriers will also be able to exercise unlimited traffic rights (i.e. “fifth freedom traffic rights”) between the following points (in any order):

  • For EU carriers:
    • EU – Ukraine – any other country;
    • Ukraine – Ukraine.
  • For Ukrainian carriers:
    • EU – Ukraine – EU.

The Agreement also establishes the following rights for air carriers:

  • the right to fly over the other party’s territory without landing;

  • the right to make stops in its territory for any purpose other than taking on or discharging passengers, baggage, cargo or mail in air transport (i.e. non-traffic purposes);

  • while operating an agreed-upon service on a specified route, the right to make stops in this territory for the purpose of taking up and discharging international traffic in passengers, cargo or mail, separately or in combination.

In addition to traffic rights, the Agreement establishes the following benefits for air carriers: the right to open representative offices, access ground handling services, transparently allocate slots in airports, make blocked-space agreements or code-sharing arrangements, provide intermodal transportation or leasing, offer night stops in any of the parties’ airports, and liberalise FX rules.

To obtain operating authorisations or technical permissions from the EU or Ukraine, an air carrier must meet the requirements set out in the Agreement. The requirements for Ukrainian carriers include:

  • the principal place of business should be in Ukraine and the carrier should hold the necessary licence;

  • the effective regulatory control of the air carrier is to be exercised and maintained by Ukraine;

  • the air carrier should be owned directly or through majority ownership and is effectively controlled by Ukraine and/or its nationals (except if permitted by virtue of a prior decision of the Joint Committee),

The principal place of business, regulatory control and ownership must be similarly linked to EU member states for EU carriers.

The Agreement also establishes a Joint Committee that will be responsible for administering the Agreement, and will update the list of EU regulations to be complied with by Ukraine. The Committee will also develop a process of cooperation for doing business and for commercial opportunities, monitor progress in effectively addressing obstacles to commercial operators, and regularly review developments.

When implemented, the Common Aviation Area will provide more opportunities in the civil-aviation market for both EU and Ukrainian air carriers, and additional guarantees for consumers.

For more information on the Common Aviation Area for civil aviation, contact your regular CMS advisor or local CMS expert: Maria OrlykIhor OlekhovDiana Valyeyeva, Taras Chernikov and  Ivan Pshyk.