European Regulation 1008/2008 allows EU member states to grant an Air Operator Certificate (AOC) to an airline – among other things – only if the airline is owned and effectively controlled by EU nationals. This legal requirement has to be fulfilled when applying for the AOC and must be upheld to maintain the licence’s validity.
This rule comes from the time of bilateral air transport agreements, and is related to the ownership clauses agreed therein. As long as this rule exists, national aviation authorities need to verify compliance with this provision. This, in particular, includes the delicate issue of defining and examining effective control based on the functioning of an airline’s governance.
In the age of liberalised air transport, and the newly arising business models of aircraft operators, it is increasingly questioned if this requirement is still up-to-date. In particular, it is doubtful whether the industry itself can fulfil this requirement, as well as whether aviation authorities can effectively control it.
This issue has become more and more relevant due to cross-border cooperation and investment between airlines. These interdependencies between carriers challenge the application of the discussed rule. This chapter will deal first with current rules according to ownership. Second, it will discuss the criteria that constitute effective control.