farhad emam Farhad Emam
Publish Date : 01/29/2016

Air Transport Law of Iran and Airbus Deal

EXECUTIVE SUMMARY

Key terms

Airbus, IKIA airport-city, Warsaw Convention, Chicago Convention, Civil Aviation Act.

Summary

The air transport of Iran has entered a new era. Very important agreements are signed between Iran and Airbus in order to purchase new Airbus airplanes that will enable the Iranian air fleet to rejuvenate itself after years of using old airplanes or applying different strategies to purchase second hand or even older airplanes in the international market. Under another agreement with Dutch company NACO, the Imam Khomeini International Airport will go through a process of modernization and internationalization.

The legal regime of air transport in Iran is composed of specific rules under the domestic and the international law. We will go through a list of the relevant laws, regulations, conventions and protocols that shape the transport law of Iran. Then two major issues, namely purchase of airplanes and construction of airports will be discussed. Detailed explanations about the air transport law of Iran will appear in our Booklet on Air Transport Law of Iran, Opportunities and Challenges.

I. Air transport and domestic law of Iran

Air-space policy of Iran is defined by the “Comprehensive Decree on Development of the Air-Space of Iran (2013)”. Section 5(2)(a) of the Decree states that one of the main objectives of the air transport industry in Iran is to develop and produce airplanes that can carry 100 to 150 passengers in regional flights. Another major project of the government is to transform Imam Khomeini International Airport (IKIA) to the second air transport hub of the region.

The Civil Aviation Act (1949) is the cornerstone of the air transport law of Iran. The National Consultative Assembly (Majlis) of the country in 1949 passed another Act to ratify the Chicago Convention on Civil International Aviation (1944). As a result, the Civil Aviation Act plays a complementary role to the Act on ratification of the Chicago Convention.

Under Article 1 of the Act on Determination of the Liability Limits of the Iranian Civil Aviation Companies, the liabilities of these companies in their international flights and the internal transport of luggage shall be determined according to the Warsaw Convention of 1929 and The Hague Protocol of 1955 while in the internal flights, the liabilities of these companies related to transport of passengers shall be determined according to the provisions of the Islamic Penal Code. It is evident that in the latter case, the compensation to be paid shall not be equal to the amounts to be paid under The Warsaw Convention and The Hague Protocol. The question that calls for an answer is how well this new Act meshes with the expectations of international passengers in Iran.

Two other important legal texts are the “Regulations on Considering the Civil Aviation Accidents and Events” and the “Regulations on the High Council of Civil Aviation”. They will be analyzed by our Booklet on Air Transport Law of Iran, Opportunities and Challenges.

II. Air transport industry of Iran and international law

Iran has signed and ratified all of the major international conventions and protocols on civil aviation including the following:

1. The Warsaw Convention for the Unification of certain Rules relating to International Carriage by Air signed at Warsaw on October 12, 1929 and the Protocol Modifying the said Convention signed at The Hague on September 28, 1955.

2. The Convention on International Civil Aviation signed at Chicago on December 7, 1944.

3. The Convention, Supplementary to the Warsaw Convention for the Unification of Certain Rules relating to International Carriage by Air Performed by a Person other than the Contracting Carrier signed at Guadalajara on September 18, 1961.

4. The Protocol to Amend the Convention for the Unification of Certain Rules relating to International Carriage by Air signed at Warsaw on October 12, 1929 as amended by the Protocol done at The Hague on September 28, 1955 signed at Guatemala City on March 8, 1971.

5. The Protocol relating to an Amendment to the Convention on International Civil Aviation (1974).

The above texts, among the others, complete and update the provisions of the Civil Aviation Act (1949) of Iran that is outdated and needs to be amended by the Islamic Consultative Assembly as soon as possible.

III. Purchase of airplanes and construction of airports

It is reported on the website of Bloomberg.com on January 28, 2016 that:

Iran placed an outline order 118 Airbus Group SE jetliners including 12 A380 superjumbos and secured an accord with PSA Peugeot Citroen for the modernization of a Tehran car plant as President Hassan Rouhani’s post-sanctions European shopping trip reached Paris.

According to the same news, Iran will receive the following types of airplanes:

a) 45 single-aisle planes comprising 21 from the current-generation A320 family and 24 re-engined A320neos; and

b) 73 wide-body aircraft including 27 A330s, 18 A330neos, 16 of Airbus’s latest A350s -- in the stretched -1000 variant -- plus the A380s.

The Financial Tribune also reported on December 21, 2015 that:

Iran on Saturday awarded a deal to the Netherlands Airport Consultant Company for the development of a town in the vicinity of the Imam Khomeini International Airport, Iran’s largest airport 35 km south of Tehran…
The Dutch firm has agreed to provide consulting services during Phase 1 of the development plan for five years. The project’s first phase includes completion of Salam Terminal, slated for 2016, and Iranshahr Terminal, expected to become operational two years later.
Salam will accommodate five million travelers a year while Iranshahr will have a capacity of 20 to 22 million passengers every year. The two terminals will increase IKIA’s annual capacity from eight million to 30 million passengers.

These two major contracts concluded with the Airbus and the NACO will be analyzed by our Booklet on Air Transport Law of Iran, Opportunities and Challenges.

GOOD TO KNOW

To learn more about the issues mentioned in this Legal Report, you may read the following texts. If after reading them, you still have questions that call for detailed responses, you may send your questions to us by clicking on “Our Services” button and following the procedure explained there.

RELEVANT LEGAL NEWS:

1. Law in Iran Legal News: Iran Buys Airbus A380s, Seals Peugeot Deal at Paris Signing, Friday, January 29, 2016.

2. Law in Iran Legal News: Dutch Firm Signs IKIA Deal, Friday, January 29, 2016.

3. Law in Iran Legal News: Sace Signs Agreements with Iranian Private Banks, Friday, January 1, 2016.

RELEVANT LEGAL REPORT:

Law in Iran Legal Report No. 4: Legal Analysis of the Transport Corridors of Iran, Monday, August 24, 2015.

RELEVANT BOOKLET:

Law in Iran Booklet No. 4: Transport Corridors of Iran, Monday, August 24, 2015.

 

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