The Government upends the Argentine aeronautical policy

Citing reasons of necessity and urgency, the National Executive Branch issued Decree 70/20023, published in the Official Gazette on December 20, 2023, through which it repealed important regulations regarding air commercial policy and introduced significant changes to the Aeronautical Code.

To justify the changes introduced, the Decree considered that Argentine aeronautical policy had been limiting the development of the commercial aviation industry, which is a fundamental pillar for federal integration and economic and tourist development of the country. The modifications are inspired on the intention of increasing competition in the market, for which many of the restrictions that had been in force until the present are loosened. In this sense, the Decree provides radical changes in matters of internal and international commercial air transport.

Likewise, the Decree enables the possibility of transferring the shares of Aerolíneas Argentinas to its employees.

Repealed legislation

The Decree begins by repealing Decree-Law 12,507/56 (national policy on aeronautical matters), Law 19,030 (national policy for commercial air transport) and Decree 1654/02 (on the emergency of the commercial air transport), all essential regulations under the previous regime.

Amendments to the Aeronautical Code

In addition, the Decree provides for the modification of several provisions of the Aeronautical Code, which in many cases will be subject to greater implementing regulations to be issued in the future.

Among the main changes to the Aeronautical Code, we can mention the following:

1. The new text of Article 2 qualifies commercial civil aeronautics as an essential service. Here it is important to point out that the Decree, by previously reforming the labor regime of Law 25,877, qualifies commercial aeronautics and air traffic control as essential services—and establishes the guarantee of their provision at no less than 75% in case of collective conflicts.

 

2. Furthermore, the Decree introduces the possibility of strongly liberalizing internal and international air transport services while seeking, at the same time, reciprocity with other nations. In this sense, free reciprocal access to the circulation and operation of general and commercial aviation aircraft is to be promoted (new text of article 18 of the Aeronautical Code). In addition, airport services are made more flexible, in relation to which it is established that the aeronautical authority must regulate them based on the principles of safety, free competition and access to markets (new article 29 bis). The requirements to own an Argentine aircraft are also made more flexible, given that now in the cases of human persons and co-owners, the Argentine domicile to be proved will be the “legal” one instead of the “real” one (new article 48). Regarding contracts for the use of aircraft, the forms and types are to be decided by the parties, who are free to govern them as they wish; only those contracts by which the role of operator is transferred are required to be in writing and registered (new article 68). The new article 95 provides that when the authorization for the exploitation of commercial air activity is for foreign flag companies, it will be subject to international standards and agreements and that the Executive Branch will seek to obtain principles of reciprocity. Regarding the operation of internal air transport services, the paragraph that limited the possibility of foreign airlines taking passengers, cargo or correspondence in the country for transport to another point in the country is eliminated from article 97. Likewise, the incorporation requirements that companies that operate internal air transport services must comply with are made more flexible (new article 99). Air transport services will no longer be subject to concession from the Executive Branch but only to its authorization--moreover, the code no longer expressly requires a prior public hearing to grant it (new article 102). The granting of these authorizations will promote healthy competition, in accordance with the principles of market freedom (new article 104). The possibility of the Executive Branch allowing the use of foreign aircraft is also made more flexible, based on reciprocity and double operational safety surveillance agreements and guaranteeing that said aircraft are manned, assisted and maintained by Argentine personnel (new article 107 and, in the case of aerial work, article 131). The new regime frees the setting of rates, which will be set by companies without any restrictions (article 109). Intercompany agreements are subject to the Antitrust Law and no longer require prior approval (new article 110). Regarding international air transport services, a new article 128 bis is incorporated, which provides that the Executive Branch will regulate and carry out a civil aviation policy that allows for the growth of the market, based on the principles of safety and freedom of trade, to promote free reciprocal access to commercial airline markets and international and cabotage connectivity among national and foreign operators.

 

3. In what appears to be an attempt to reinforce the autonomy of aeronautical law to ensure an adequate balance between the interests of passengers and carriers, the Decree incorporates a new article by which it provides that the aviation authority must sanction a regulation relating specifically to the protection of passenger rights.

 

4. The new provisions also consider the modernization experienced in the airline industry. This takes into account the existence of unmanned aircraft or possible regulation of aircraft operated by artificial intelligence. The Decree also provides for the digitalization of aeronautical procedures and documents.

The modifications promoted by the Decree are undoubtedly the most resounding change experienced in the national aviation market in decades.