Aviation Regulation Comparative Guide – Transport

1 Legal framework

1.1 Which legislative and regulatory provisions govern the aviation sector in your jurisdiction?

Legislative provisions: The legal framework for air transport in Cyprus is governed by:

• international conventions and agreements on air transport;
• EU legislation on air transport; and
• the Cyprus Civil Aviation Law (213(I)/2002), as amended.

The Department of Civil Aviation is responsible for implementing the framework.

Regulatory bodies: Cyprus is a member of:

• the International Civil Aviation Organization (ICAO);
• the European Civil Aviation Conference;
• the European Organization for the Safety of Air Navigation
• the European Aviation Safety Agency (EASA);
• the Directorate General for Mobility and Transport of the European Commission; and
• Eurocontrol.

Aviation is regulated by the Ministry of Transport, Communications and Works and the Cyprus Department of Civil Aviation (DCAC), which oversees the air transport industry in Cyprus. In addition, as a member of the European Union, Cyprus is regulated by EASA.

With regard to air navigation services, the National Supervisory Authority (NSA) is responsible for monitoring the performance of such services and the oversight of safety. The NSA engages in certification and oversight of air navigation services provided in the Nicosia Flight Information Region in accordance with the applicable national, international and EU Single European Sky legislation.

The NSA also cooperates with other NSAs at a European level, as well as with the Blue Med Functional Airspace Block (FAB), to continuously improve its oversight capabilities. The Blue Med FAB, established through the signing of a state-level agreement in Cyprus on 12 October 2012, is a FAB over the Mediterranean area in compliance with the Single European Sky II EU regulatory framework.

1.2 Which bilateral and multilateral instruments on aviation have effect in your jurisdiction?

On 7 November 2008 the Decree (Statutory Instrument 406/2008) of the Minister of Communications and Works under Article 260 of the Civil Aviation Law was published in the Official Gazette of the Republic (No 4082) for the purposes of implementing Articles 5 and 6 of Regulation (EC) 847/2004. The decision (Statutory Instrument Acts 406/2008), which was published in the Official Journal of the EU (10 March 2009 C56/37), aims to determine the procedure and criteria for granting access to community air carriers established in Cyprus to perform services, under the relevant bilateral air services agreements, between Cypriot airports and airports of third countries.

Cyprus initially signed bilateral agreements with 51 countries which regulated the framework of scheduled flights to and from the island. However, after joining the European Union on 1 May 2004, 22 of the agreements with EU member states became inactive as a result of the liberalisation of air services within the European Union.

1.3 Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?

The Civil Aviation Law established DCAC as the competent regulatory authority for all aviation matters in Cyprus and the authority for safety oversight. Among other things, it supervises:

• arrangements for the collection of airport fees;
• the issue of airworthiness and air operator certificates; and
• the licensing of personnel.

The law also establishes the enforcement mechanisms to be applied in case of breach of the applicable provisions.

1.4 What is the regulators’ general approach in regulating the aviation sector?

DCAC is extremely supportive of players in the aviation sector. The government’s policy is to promote the development of the aviation sector by performing its regulatory functions and facilitating the expansion of airlines and maintenance organisations in Cyprus.

2 Licensing and market access

2.1 What licences are required to provide aviation services in your jurisdiction? Does this vary depending on route?

The licensing of air carriers falls under the responsibility of the Air Transport Licensing Authority (ATLA), chaired by the permanent secretary of the Ministry of Transport, Communications and Works (Judicial Instrument 620/2002). An air carrier is licensed after securing an air operator certificate (AOC) from the Cyprus Department of Civil Aviation (DCAC). The airworthiness certification is governed by the Cyprus Civil Aviation Act and by European Aviation Safety Agency (EASA) Regulations 1702/2003, repealed by Regulation 748/2012; and 2042/2003, repealed by Regulation 1321/2014.

Air operators must obtain an AOC issued by DCAC and a commercial operating licence issued by ATLA. Operators with an AOC with a deliberately limited scope, allowing them to conduct flights that depart from and arrive at the same aerodrome, do not need an operating licence.

Individuals, organisations or companies wishing to operate an aircraft for the purpose of commercial air transport must first obtain an AOC from DCAC. The AOC is issued for:

• jet airliners operating on a transcontinental scheduled service;
• helicopters flying passengers to oil and gas exploitation platforms in the Cyprus exclusive economic zone; and
• pleasure flights that fly passengers and/or cargo for a fee.

The AOC application will vary depending on:

• the types of aircraft to be operated;
• the area and routes; and
• whether the operation will be an all-weather operation.

Operators that hold operating licences can operate on most routes within the European Economic Area (EEA) without the need to hold further licences. For operations beyond the EEA, the licence holder will normally need to hold an additional route licence, which is also granted by DCAC. Route licences can only be granted to holders of operating licences.

2.2 What nationality requirements must be satisfied to obtain a licence?

An applicant for a Cyprus AOC must have its principal place of business in Cyprus and operate 5B-registered aircraft, with certain exceptions. The AOC must be owned by a legal entity. The holder of an operating licence must be majority owned and effectively controlled by an EEA state or the nationals of EEA states. A natural person of Cypriot nationality or any European citizen with at least 50% ownership may apply for a licence in Cyprus.

2.3 What financial requirements must be satisfied to obtain a licence?

The financial conditions for obtaining a commercial operating licence as set out in Article 5 of EU Regulation 1008/20008 on common rules for the operation of air services in the Community must be met. Among other things, without taking into account any income from its operations, the operator must be able to meet, at any time:

• its actual and potential obligations established under realistic assumptions, for a period of 24 months from the start of operations; and
• its fixed and operational costs according to its business plan and established under realistic assumptions, for a period of three months from the start of operations.

2.4 What other requirements must be satisfied to obtain a licence? Do specific requirements or restrictions apply to foreign operators?

All requirements as set out in EU Regulation 1008/20008, repealed by Regulation 2018/1139, and the Cyprus Civil Aviation Law, as amended (213(I)/2002) must be met. In order to qualify for an operating licence, the operator must meet a number of requirements, including in relation to its safety and insurance arrangements and its nationality of control, and other requirements for operators of larger aircraft with 20 or more seats.

ATLA grants commercial rights to foreign airlines to perform flights to and from Cyprus. In the case of third countries which have accepted the right of other community air carriers to operate routes from Cyprus, an evaluation committee makes a recommendation to the minister of transport, communication and works on whether to grant permission to access such commercial rights.

2.5 What is the procedure for obtaining a licence?

• A pre-application statement must be submitted to DCAC. A pre-application meeting will be organised at DCAC’s office and a flight operations inspector and an airworthiness inspector will be assigned.
• A review meeting with DCAC will be held to discuss the procedure involved.
• 
  A formal application and documents must then be submitted. If the pre-application meeting was satisfactory and both parties agree that the application may proceed, a formal application must be made. This includes:

• • the AOC application form;
  • a draft schedule of events in the application certification process;
  • the operations manual checklist;
  • an AOC approvals document template;
  • the aircraft equipment checklist template;
  • template DCAC Form 4, to be completed by the accountable manager, the nominated persons for flight operations, crew training and ground operations, as well as the person responsible for compliance monitoring and the safety manager; and
  • template European Aviation Safety Agency Form 4, to be completed by the nominated person for continuing airworthiness.

• Documents will be reviewed by DCAC specialists.
• Pre-AOC audits and flight checks will be conducted.
• The AOC will be issued.

3 Safety and maintenance

3.1 What key safety requirements apply to operators in your jurisdiction?

At national level, the primary legislative acts on aviation safety are:

• the Law Ratifying the International Civil Aviation Convention of 1944 and its Thirteen Protocols 1947 to 1984 and Related Issues Law of 1988 (213/1988); and
• the Civil Aviation Law.

Subsidiary legislation stems from the Civil Aviation Law. Article 259 Authority of the Council of Ministers and Article 260 Authority of the Minister authorise the Council of Ministers and the minister of transport, communication and works, respectively, to issue secondary legislation applicable to individuals and organisations to ensure the application of applicable primary laws. In addition, Article 260 authorises the minister of transport, communication and works to delegate this power to the Cyprus Department of Civil Aviation (DCAC).

According to the provisions of the Law Ratifying the Chicago Convention (213/1988), the Standards and Recommended Practices issued by the International Civil Aviation Organization (ICAO) are adopted and applied as regulatory requirements; while the Civil Aviation Law establishes the ways and means by which EU law and ICAO standards are implemented.

At EU level, the main legislative act on aviation safety is the European Aviation Safety Agency (EASA) Basic Regulation, which establishes the safety requirements on competent authorities and aviation organisations in the field of air traffic management, flight operations, airworthiness, personnel licensing and aerodrome operations. Other legislative acts include the Single European Sky package of EU regulations and implementing rules.

3.2 What key maintenance requirements apply to operators in your jurisdiction?

The EASA Basic Regulation (Part I45) contains the standards for the certification and operation of an aircraft maintenance organisation.

3.3 Do these requirements differ depending on whether the operator is providing commercial, cargo or private services?

The EASA provisions for commercial, cargo and private services are followed.

3.4 What are the potential consequences of breach of the safety and maintenance requirements?

DCAC initiates enforcement actions in accordance with the EASA regulatory framework as well as, where necessary, under Articles 243 to 258 of the Civil Aviation Law, which provide sanctions and enforcement policy and procedures. In addition, enforcement procedures are laid down in the Civil Aviation (Measures for oversight and Compliance of Organisations with certain Regulations and the imposition of Sanctions) Regulations of 2011 (PI 72/2011) and the Civil Aviation (Designation of the Competent Body and determination of Sanctions for the Implementation of EASA Basic Regulation and of the implementing acts issued by virtue thereof Regulations of 2017 (PI 42/2017).

Enforcement measures will be applied when DCAC considers that other means of maintaining compliance with regulations and the required safety performance have not been effective. According to national law, enforcement measures are imposed by the minister of transport, communication and works, following a reasoned proposal to this effect by the competent authority. Enforcement actions are directed towards aviation organisations and may include financial penalties, operating restrictions and the revocation or suspension of the certificates or licences issued to aviation entities or persons.

3.5 What best practices in relation to safety and maintenance should operators consider adopting in your jurisdiction?

DCAC periodically produces industry guidance, disseminated mainly in the form of aeronautical information circulars. In addition, official guidance materials from recognised international organisations such as ICAO and EASA are extensively used. Operators consider the best practices of the International Air Transport Association (IATA) Operational Safety Audit, the International Standard for Business Aircraft Operations and the IATA Safety Audit for Ground Operations.

4 Consumer protection

4.1 What rights do passengers enjoy in your jurisdiction in relation to: (a) Flight delays or cancellations? (b) Overbooking? (c) Denied boarding for other reasons? (d) Baggage delay, damage or loss? and (e) Disabled access?

(a) Flight delays or cancellations?

If a flight is cancelled or delayed for three hours or more, passengers are entitled to compensation, care and assistance, as well as reimbursement or rerouting, in accordance with the EU Air Passenger Rights Regulation (261/2004). The regulation, which became effective from February 2005, provides for fixed compensation of between €250 and €600 per passenger, depending on the distance of the flight, in the event of flight delays of three hours or more, flight cancellations or denied boarding. Care and assistance in the form of meals and refreshments, hotel accommodation and transport between the airport and the place of accommodation, and two telephone calls, telex or fax messages or emails, must also be provided.

In accordance with the regulation, carriers are obliged to provide passengers with compensation and care, unless they are exempted from doing so by proving that the delay, cancellation or denied boarding resulted from an extraordinary circumstance – that is, something which could not have been avoided even if all reasonable measures had been taken. There is no exhaustive list of what would constitute unreasonable circumstances and the Court of Justice of the European Union considers this on a case-by-case basis.

In addition, Article 19 of the Montreal Convention 1999 will apply. A carrier will thus be liable for damage caused as a result of a delay in the carriage by air of passengers, baggage or cargo, unless the carrier proves that it and its servants and agents took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures.

(b) Overbooking?

If a flight has been overbooked, passengers are entitled to compensation, care and assistance, as well as reimbursement or rerouting, in accordance with the EU Air Passenger Rights Regulation. The regulation, which became effective from February 2005, provides for fixed compensation of between €250 and €600 per passenger, depending on the distance of the flight, in the event of flight delays of three hours or more, flight cancellations or denied boarding. Care and assistance in the form of meals and refreshments, hotel accommodation and transport between the airport and place of accommodation, and two telephone calls, telex or fax messages or emails, must also be provided.

(c) Denied boarding for other reasons?

In accordance with the EU Air Passenger Rights Regulation, an airline can refuse to carry a passenger if there are there are reasonable grounds to do so, such as health, safety or security concerns, or where the passenger does not have the necessary travel documents. If a passenger is denied boarding for another reason, he or she will be entitled to care and assistance and compensation of between €250 and €600 as outlined above, as well as to rerouting and/or reimbursement.

(d) Baggage delay, damage or loss?

In accordance with Article 22 of the Montreal Convention, a carrier will be liable for any damage sustained in case of destruction or loss of, or of damage to, checked baggage up to 1,288 special drawing rights – the revised limit of liability that came into effect on 28 December 2019. The Montreal Convention requires airlines to treat a bag as lost after 21 days.

(e) Disabled access?

Disabled persons and persons with reduced mobility enjoy the rights and assistance set out in EU Regulation 1107/2006

4.2 Are airfares regulated in your jurisdiction? What other requirements apply to the pricing and sale of flights?

As it is a liberalised market, airfares are not regulated in Cyprus.

4.3 What other marketing and advertising requirements apply to operators in your jurisdiction?

No specific requirements apply other than the general advertising and marketing principles.

4.4 What requirements apply in relation to the retention and protection of passenger data in your jurisdiction?

Passenger data is protected in accordance with EU Directive 2016/681 on the use of passenger name record (PNR) data for the prevention, detection, investigation and prosecution of terrorist offences and serious crime, which came into force in May 2016 and was adopted into national law.

Stricter rules on controlling and processing personal data and greater protection of personal data were provided by the General Data Protection Regulation (GDPR), Regulation (EU) 2016/679, which repealed Directive 95/46/EC and became applicable from 25 May 2018. The regulation requires compliance across all organisations and geographies, and therefore applies to all airports and airlines – even those outside the European Union – that process the personal data of EU citizens. Hefty fines are imposed for non-compliance. The GDPR affords greater protection to PNR data. This may be used only in the fight against terrorism and cannot include information about a passenger’s race, ethnicity or political or religious beliefs. The data must be depersonalised by removing, among other things, names, addresses and contact information after six months, and must be deleted after five years

In Cyprus, the capture, storage and dissemination of passenger data is governed in accordance with the above by Law 125(I)/2018, which repealed the Processing of Personal Data (Protection of Individuals) Law of 2001 (138(I)/2001). The law provides for the imposition of fines and/or imprisonment in case of non-compliance. Oversight of the processing of PNR data requires an independent national supervisory authority, which in Cyprus is the commissioner of personal data protection. The commissioner must have the same qualifications as a Supreme Court judge and is appointed by the Council of Ministers for a period of six years, renewable for one further equivalent term.

4.5 What other general consumer protection requirements are of relevance for operators in your jurisdiction?

Operators should be aware that consumers have the right to select from products and services of sufficient quality at competitive prices. This is ensured through the institutional framework of the Consumer Protection Service (CPS). The CPS – which falls under the Ministry of Energy, Commerce and Industry – protects consumers’ safety and economic interests, and fair competition. The economic interests of consumers are protected under various national laws in accordance with EU directives, which deal with issues including:

• unfair commercial practices;
• misleading and comparative advertising;
• alternative dispute resolution for consumer disputes;
• unfair contractual terms;
• consumer rights;
• package travel;
• timeshares and
• long-term holiday contracts.

4.6 How are consumer complaints in relation to aviation services handled in your jurisdiction?

A consumer in Cyprus who has a complaint against an airline must first submit the complaint to the airline. If the matter is not resolved, the consumer may submit his or her complaint to the Cyprus Consumers Association and also seek guidance. If the passenger believes that the airline has breached the law by not meeting its legal obligations, he or she may then contact the Cyprus Department of Civil Aviation and seek damages, if any, in the local courts. If the dispute remains unresolved or if the passenger is dissatisfied with the airline’s response, the matter may be referred to the European Consumer Centre (ECC) for mediation. Cyprus is part of the ECC Network, which provides consumers with advice on their EU consumer rights and helps them with disputes in other EU countries. It is an advisory body only; therefore, if its advice does not lead to the resolution of the dispute, further action may be taken through the Alternative Dispute Resolution Scheme, if applicable, or through the European Small Claims Procedure.

5 Accidents and liability

5.1 What is the applicable aviation liability regime in your jurisdiction?

Airline liability for death or injury to passengers and cases of delay, damage or loss of baggage and cargo is governed by Chapter 28 of the Cyprus Civil Aviation Law of 2002, as amended, and the Montreal Convention 1999. The Montreal Convention creates a two-tier liability regime for damages in cases of injury or death. Strict liability of the air carrier up to 100,000 special drawing rights (SDR) is imposed, irrespective of the carrier’s fault. To avoid paying damages in excess of 100,000 SDR, the carrier must prove that:

• the damage was not due to the negligence or other wrongful act or omission of the carrier or its servants or agents; or
• the damage was solely due to the negligence or other wrongful act or omission of a third party.

The revised limits as of 28 December 2019 are 128,821 SDRs per passenger.

5.2 What insurance requirements apply to operators in your jurisdiction?

According to Regulation (EC) 785/2004 of the European Parliament and of the Council of 21 April 2004 on insurance requirements for air carriers and aircraft operators an air carrier should be insured to cover liability in case of accidents with respect to passengers, cargo and third parties. An operator must also comply with the insurance requirements specified in Article 11 of Regulation 1008/2008, replaced by Regulation 2018/1139.

In accordance with Cyprus Aeronautical Information Circular (AIC) C004/10, an insurance certificate against third-party and passenger liability covering loss, injury and damage to persons and property in accordance with European Regulation (EC) 785/2004 and Cyprus AICs C13/2005 and A03/2005 must be submitted prior to an aircraft being registered.

5.3 What body is responsible for investigating accidents in your jurisdiction and what procedure will it follow in doing so?

Aircraft accidents and incidents are investigated by the Cyprus Air Accident and Incident Investigation Body (AAIIB), an independent accident investigation body established on 1 October 2003 in accordance with the provisions of the Chicago Convention and the International Civil Aviation Organization (ICAO) Annex 13 Aircraft Accident and Incident Investigation, the ICAO Manual of Aircraft Accident and Incident Investigation (Doc 9756), EU Regulations (EU) 376/2014 and Regulation 996/2010, as amended by Regulation (EU) 376/2014 as well as the Cyprus Aircraft Accident and Incident Investigation Law of 2015 (L73(I)/2015), and the Internal Rules of the Aircraft Accident and Incident Investigation Board

5.4 What reporting requirements apply to accidents and incidents in your jurisdiction?

ICAO Annex 13, EU Regulation 376/2014 and the Cyprus Aircraft Accident and Incident Investigation Law apply. Incidents which are not required to be reported under mandatory occurrence reports (MORs) can be filed as safety or hazard reports. All MORs must be reported to the Cyprus Department of Civil Aviation (DCAC) within 72 hours of their occurrence. DCAC has issued AICs containing the administrative details on how individuals and organisations should report, as well as on the follow-up of reported safety incidents. These include both offline and online reporting methods. Online reporting requires that individuals or organisations wishing to report an occurrence do so using a software application that is compatible with the European Co-ordination Centre for Accident and Incident Reporting Systems. DCAC will then notify the AAIIB and, if necessary, other Cyprus government agencies and relevant organisations (eg, search and rescue, police) and other involved states (eg, the state of registration, operator, design and/or manufacturer), in accordance with ICAO Annex 13. The AAIIB investigation and analysis process remains independent from that which may be performed by DCAC. Air safety reports are collected and analysed for the sole purpose of preventing recurrence and not to apportion blame.

6 General operation

6.1 What requirements apply to charter services in your jurisdiction?

The European Aviation Safety Agency requirements.

6.2 What requirements apply to the carriage of cargo in your jurisdiction?

In order to carry passengers, cargo or mail for payment, air operators must first obtain an air operator certificate. In addition, they must hold an operating licence granted by Cyprus Department of Civil Aviation (DCAC), which will be granted where the operator meets the stipulated requirements, including those relating to safety, financial and insurance arrangements and nationality of control. Cargo operations must comply with the dangerous goods regulations. The DCAC approves cargo dangerous goods service providers.

6.3 What environmental requirements apply to operators in your jurisdiction?

Operators and aircraft must conform to the relevant laws relating to carbon emissions, engine exhaust emissions and noise abatement requirements. Chapter 24 of the Civil Aviation Law provides for the protection of the environment; under Article 190, airport operators, aircraft owners and pilots must avoid and reduce environmental pollution caused by the emission of inevitable noises, vibrations or gases. In accordance with Cyprus Aeronautical Circular C004/10, an aircraft noise certificate must be submitted prior to an aircraft being registered. Cyprus is a signatory to the 2015 Paris Climate Agreement, which aims to reduce the emission of gases; it came into force in Cyprus on 3 February 2017. As part of the Carbon Offsetting and Reduction Scheme for International Aviation, which addresses the increase in total carbon emissions from international aviation above 2020 levels, Cyprus air carriers must report their carbon emissions on an annual basis.

6.4 How are aviation services taxed in your jurisdiction? Do any special tax regimes apply to this sector? What indirect taxes are of relevance to operators?

Both ticket taxes and value added tax depend on the passenger’s destination and the country of departure.

EU law does not allow for the imposition of such duties on aircraft fuel used for commercial international and intra-EU flights. Aircraft fuel, other than that used in private pleasure flight, is exempt from excise duty under the Energy Tax Directive 2003/96. Even though EU countries can tax aviation fuel for domestic flights and, by means of bilateral agreements, also fuel used in intra-EU flights, Cyprus has not done so.

6.5 What is the applicable employment regime in your jurisdiction and what specific implications does this have for operators in the aviation sector?

The right to work is safeguarded by Article 25 of the Cypriot Constitution of 1960. National employment laws as well as EU regulations and directives on employment issues apply in Cyprus. The Cyprus Organisation of Working Time of Flying Personnel of the Civil Aviation Law No 12(I)/2004, as amended stipulates the minimum health and safety requirements, and covers issues such as annual leave, working rates, maximum working time, medical examinations and the role and powers of inspectors.

7 Ownership, financing and leasing

7.1 What body administers the aircraft register in your jurisdiction?

The Cyprus Department of Civil Aviation (DCAC) is responsible for maintaining the Cyprus Aircraft Register.

Article 11 of the Cyprus Civil Aviation Law sets out the conditions under which an aircraft can be registered in the Cyprus register. The registration procedure and Article 11 of the law are contained in Aeronautical Information Circular (AIC) C004/2010.

7.2 What are the formal and documentary requirements for registration?

• Evidence that the applicant meets the qualifications to be owner of aircraft as required under Article 11 of the Civil Aviation Law of 2002 as amended.
• 
  In the case of a body corporate applying for the first time, a copy of:

• • its certificate of registration;
  • its memorandum of association and articles of association of the company;
  • its certificate of composition of the board of directors and a statement of the members’ respective nationality;
  • its registered address certificate;
  • a certificate of composition of the company’s shareholders, with details of the nationality of each shareholder and the number of shares owned.

• A certificate of ownership of the aircraft or bill of sale.
• An insurance certificate against third-party and passenger liability covering loss, injury and damage to persons and property in accordance with European Regulation (EC) 785/2004 and Cyprus AICs C13/2005 and A03/2005.
• Confirmation of de-registration from the state of previous registration (if applicable).
• A statement from the Department of Customs and Excise confirming that there are no outstanding issues regarding the aircraft (both customs and value added tax).
• If the aircraft is on lease, a certified true copy of the lease agreement properly stamped by the Cyprus government commissioner of stamp duties.
• An official statement from the applicant stating the company’s main place of business and the usual base and area of operation of the aircraft.
• An aircraft noise certificate.
• A valid certificate of airworthiness in accordance with Article 16 of the Cyprus Civil Aviation Law, as amended.

A certificate of registration cannot be issued to an aircraft unless it is also issued with a certificate of airworthiness.

7.3 What is the process for registration?

The registration of aircraft in Cyprus is governed under Article 11 of the Civil Aviation Act, as amended, which specifies the qualifications required to own an aircraft registered in Cyprus. Persons wishing to register an aircraft in Cyprus should submit an application form to DCAC at least three weeks in advance, accompanied by the following documents:

• Evidence that the applicant meets the qualifications to be owner of aircraft as required under Article 11 of the Civil Aviation Law, as amended.
• 
  In the case of a body corporate applying for the first time, a copy of:

• • its certificate of registration;
  • its memorandum of association and articles of association of the company;
  • its certificate of composition of the board of directors and a statement of the members’ respective nationality;
  • its registered address certificate;
  • a certificate of composition of the company’s shareholders, with details of the nationality of each shareholder and the number of shares owned.

• A certificate of ownership of the aircraft or bill of sale.
• An insurance certificate against third-party and passenger liability covering loss, injury and damage to persons and property in accordance with European Regulation (EC) 785/2004 and Cyprus AICs C13/2005 and A03/2005.
• Confirmation of de-registration from the state of previous registration (if applicable).
• A statement from the Department of Customs and Excise confirming that there are no outstanding issues regarding the aircraft (both customs and value added tax).
• If the aircraft is on lease, a certified true copy of the lease agreement properly stamped by the Cyprus government commissioner of stamp duties.
• An official statement from the applicant stating the company’s main place of business and the usual base and area of operation of the aircraft.
• An aircraft noise certificate.
• A valid certificate of airworthiness in accordance with Article 16 of the Cyprus Civil Aviation Law of 2002 as amended.

7.4 Is registration of real estate rights, transactions and encumbrances mandatory? What are the consequences of failure to register?

Aircraft that do not meet one of the specified conditions may, by reasoned decision of the minister, be exceptionally registered in the Cyprus Aircraft Register.

In accordance with Article 14 of the Civil Aviation Law of 2002, as amended, the minister may, in the public interest, exceptionally prohibit the registration or transfer of an aircraft in the Cyprus Aircraft Register, or order its deletion from the register.

7.5 What operational requirements are of relevance for aircraft lessors and financiers in your jurisdiction?

There are no registered lessor companies in Cyprus. Cyprus operators use standard agreements with internationally recognised lessors that meet the European Aviation Safety Agency regulatory requirements and approvals. Leasing contracts and agreements are subject to the review of the DCAC during the air operator certificate approval process and during the final review for granting an operator’s licence.

7.6 What rules govern the detention and seizure of aircraft

Law 30/1972 implements the Convention for the Suppression of Unlawful Seizure of Aircraft (Hague Convention 1970).

8 Airports

8.1 How are airports owned and regulated in your jurisdiction?

The Cyprus Department of Civil Aviation (DCAC) is responsible for the supervision and operation of the country’s airports. In May 2006 Hermes Airports Ltd commenced the operation and management of Larnaca and Paphos International Airports under a 25-year build-operate-transfer (BOT) concession agreement with Cyprus, ratified by an agreement that was signed on 12 May 2006.

8.2 What requirements must be satisfied to obtain airport authorisation in your jurisdiction? What is the procedure for obtaining authorisation?

The BOT agreement between the Cyprus government and the consortium of domestic and international airports that formed HERMES Airports Ltd has been awarded the contract to operate the airports. The airports have been approved by the DCAC in accordance with International Civil Aviation Organization (ICAO) Annex 14 (Aerodromes) and European Aviation Safety Agency (EASA) applicable regulations, and are subject to audit and inspections by ICAO and EASA to obtain authorisation and maintain compliance.

8.3 What key safety and maintenance requirements apply to airports in your jurisdiction?

DCAC has a supervisory role in matters concerning civil aviation and licensing/certification of airports in accordance with ICAO Annex 14 (Aerodromes) and EASA procedures. Both airports have implemented effective safety management systems and an emergency response plan.

8.4 What requirements can airports impose on operators that use their facilities?

Chapter 24 of the Civil Aviation Law provides for the protection of the environment. In particular, Article 190 obliges airport operators, aircraft owners and captains to avoid and reduce environmental pollution caused by the emission of inevitable noises, vibrations or gases. In this area, the Evaluation and Management of Environmental Noise Law 224(I)/2004 requires, among other things, the determination of exposure to noise emitted by means of air traffic through noise mapping.

8.5 How are the following regulated in your jurisdiction: (a) Airport charges? (b) Slot allocation? (c) Air traffic control? and (d) Ground handling?

(a) Airport charges?

Airport charges are determined by Hermes Airports.

The indexation of additional regulated airport charges is applicable on 1 May every year. The additional regulated airport charges applicable are the passenger fees, common user terminal equipment fee, baggage reconciliation fee, persons with reduced mobility fee, fire service recovery fee, security fee, landing fee, parking fee, fuel throughput fee, air bridge rental charge, power supply fee and pre-conditioned air fee. In addition, special fees for police guard of aircraft, fire brigade services and special security apply when required.

The indexation of existing regulated airport charges is applicable on 1 May every two years. The existing regulated airport charges include the remaining major charges, such as passenger fees and landing fees.

Hermes Airports reserves the right to request the minister of transport, communication and works to initiate court proceedings to issue an order for the grounding of any aircraft with overdue airport charges, as provided by the Civil Aviation Law.

(b) Slot allocation?

EU Regulation 95/93 and the relevant amending Regulation 793/2004 on slot allocation is in force. Cyprus’ airports are designated as Schedules Facilitated (Level 2) and therefore the government has appointed has appointed a schedules facilitator to facilitate the flights of air carriers operating or intending to operate to and from the country’s airports. Following a transition period, the schedules facilitator completely took over this work from Cyprus Airways in March 2007. The funding of the schedules facilitation service is shared between the Cyprus-registered/based air carriers, the airport’s operator and the state.

Air carriers must submit their schedules or schedule changes using the standard format and within the set timeframe, according to the procedures laid down by the International Air Transport Association (IATA) manuals, the Standard Schedules Information Manual and the Worldwide Slot Guidelines, as well as the relevant EU regulations.

The process of schedules facilitation is carried out in an independent, neutral, non-discriminatory and transparent manner, according to:

• EU Regulation (EEC) 95/93, as amended;
• the IATA World Slot Guidelines;
• the IATA Standard Schedules Information Manual; and
• the European Airport Coordinators Association EU Slot Guidelines.

(c) Air traffic control?

DCAC is responsible for the provision and regulation of air traffic services in the Nicosia Flight Information Region (FIR) and the control towers at Larnaca and Paphos airports. Only air traffic controllers in the internationally recognised southern part of Cyprus are permitted to issue flight instructions to aircraft passing through the Nicosia FIR.

The Nicosia Area Control Centre provides air traffic control for all controlled flights (ie, those that are in contact with the air traffic controllers) within a controlled area (airways) that lies under its jurisdiction.

The Air Traffic Control Units provide advice and information for the safe and efficient conduct of flight, including light or training aircraft operating in the designated training areas, routes and agreed heights within the limits of each unit in the Cyprus airspace. They are also responsible for notifying appropriate organisations regarding aircraft in need of search and rescue aid, and assisting such organisations as required.

(d) Ground handling?

In 2008 the monopoly in the area of ground handling and ramp aircraft servicing changed following the release of tenders after which two private consortia undertook this work. The authorisation to conduct this work is valid for seven years and both DCAC and the airport operator have a supervisory role in exercising quality control for the provision of such services.

9 Competition

9.1 What specific challenges or concerns does the aviation sector present from a competition perspective? Are there any pro-competition measures that are targeted specifically at operators?

The small number of local operators in Cyprus has resulted in increased dependence on low-cost carriers and the dominance of a number of strong foreign operators. In addition, direct access to a number of major EU destinations such as Paris, Rome, Amsterdam and Brussels has been limited, resulting in increased travel time and cost of air fares. Long-haul operations are limited.

9.2 How are forms of industry cooperation such as pooling, code-sharing, alliances and joint ventures treated from a competition perspective?

At present, no Cyprus operator is a member of any alliance. One operator has limited code-sharing agreements. The current EU regulatory framework and Cyprus Department of Civil Aviation policy encourage and support code sharing and alliances.

9.3 Does the aviation sector in your jurisdiction benefit from state aid? What forms does this typically take and what rules apply in this regard?

The former Cyprus Airways benefited from state aid. However, in 2015 the European Commission found that this contravened European competition law and the airline was ordered to pay back €65 million. The current airlines registered in Cyprus are held by private shareholders; however, the Cyprus government has approval, based on a 2004 European Commission decision, to compensate Cyprus operators for their inability to operate in Turkish airspace due to the current political situation. In May 2020 the Cyprus government compensated Cyprus Airways with €1 million based on that decision.

9.4 Are there any applicable obligations or incentives to ensure service on routes that are socially desirable, but not commercially viable (eg, to remote areas)?

Operations to Paphos Airport are supported by special agreements concluded between HERMES Airports and operators on a case-by-case basis and by the local Chamber of Commerce for destinations to Athens and the United Kingdom.

10 Disputes

10.1 In which forums are aviation disputes typically heard in your jurisdiction?

Most claims are heard by the district courts at first instance and by the Supreme Court on appeal.

A few claims are heard by alternative dispute resolution bodies.

Passenger claims can be heard by the National Enforcement Body established under Regulation (EC) 261/2004, but its decisions are not binding.

Industrial disputes are governed by the Cyprus Industrial Code and are normally resolved through arbitration.

10.2 What issues do such disputes typically involve? How are they typically resolved?

The Cypriot courts have issued a few decisions on aviation issues. Disputes generally involve passenger rights under Regulation EC 261/2004 and the Montreal Convention 1999.

Subsequent to the Helios Airways Flight 522 accident on 14 August 2005, when a scheduled passenger flight from Larnaca to Prague via Athens crashed, killing all 121 passengers and crew on board, court proceedings were filed in the criminal courts in both Cyprus and Greece.

In 2013 the European Commission informed Cyprus that it had decided to initiate the procedure laid down in Article 108(2) of the Treaty on the Functioning of the European Union as regards three measures adopted by Cypriot authorities in favour of Cyprus Airways. In 2015 the European Commission found that the Cypriot government had breached European state aid rules on support for struggling companies and the airline was ordered to repay €65 million. The company then ceased being a viable entity and ceased operations.

In October 2017 Cobalt Air suspended operations after failing to secure the necessary financial backing to continue. Many court proceedings followed, some of which are still ongoing. The Ministry of Transport, Communications and Works revoked the commercial and operating licences of Cobalt Air.

10.3 Have there been any recent cases of note?

In Rusu v Blue Air a Cypriot court filed a request for a preliminary ruling to the Court of Justice of the European Union, which held as follows:

• Article 7(1)(b) of Regulation (EC) 261/2004 must be interpreted as meaning that the amount provided for in that article is not intended to compensate for damage such as loss of salary; that damage may be the subject of further compensation provided for in Article 12(1) of the regulation; and that it is for the referring court to determine and assess the various constituent elements of that damage, as well as the extent of the compensation for it, on the relevant legal basis.
• The regulation, and in particular the second sentence of Article 12(1) thereof, must be interpreted as allowing the national court with jurisdiction to deduct the compensation granted under that regulation from further compensation, but does not require it to do so, as the regulation does not impose conditions on the national court with jurisdiction on the basis of which it can make that deduction.
• Article 4(3) of the regulation, read in conjunction with Article 8(1), is to be interpreted as requiring the operating air carrier to present the passengers concerned with comprehensive information on all options set out in the second of those provisions, with the passengers in question being under no obligation to contribute actively to seeking information to that end.
• Article 8(1)(b) of the regulation is to be interpreted as meaning that, for the purposes of that article, the burden of proving that the rerouting was performed at the earliest opportunity rests with the operating air carrier.

11 Trends and predictions

11.1 How would you describe the current aviation landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The aviation industry faces grave challenges as a result of the COVID-19 pandemic, which is draining the financial resources of airlines around the globe. As Cyprus is heavily reliant on tourism, the impact of the pandemic will have a very negative effect on the Cyprus economy and on the survivability of the nation’s airlines.

The current COVID-19 pandemic and restructuring of airlines may result in some airlines reducing flights to Cyprus and decreased connectivity of the island.

Airports, all operators and passengers will need to comply with health and protective measures which will be introduced at a local and international level.

12 Tips and traps

12.1 What are your top tips for operators in your jurisdiction and what potential sticking points would you highlight?

Air transport is vital to Cyprus for commercial purposes, to support Cypriot exporters and to underpin the tourist industry. Cyprus has only two small airlines registered in Cyprus and as such is heavily reliant on foreign airlines.

Cyprus lacks direct flights to major European capitals.

There is great potential for improved air connectivity of Cyprus with the rest of the world, as the trading nation sits between regions and continents. There is also great potential for investment in airlines, for partnership agreements and for expansion.

There is increasing interest from a number of investors in obtaining additional air operator certificates and additional ground-handling facilities as the government has devised an action plan to encourage additional airlines to operate in Cyprus.

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