The Government deepens changes in the national aeronautical policy 

By enacting the Decree of Necessity and Urgency 70/2023, published on December 20, 2023, the National Executive Branch considered that the current aeronautical policy limited the development of the air commercial industry in the country and introduced significant modifications to the Aeronautical Code, accompanied by the repeal of a series of essential norms under the previous regime (https://www.marval.com/publicacion/el-gobierno-modifica-la-politica-aeronautica-argentina-15689?lang=en). 

One of the aspects modified by Decree 70/2023 was that the air transport services ceased to be subject to concession of the Executive Branch and became only subject to authorization; at the same time, the new wording of article 102 of the Aeronautical Code no longer require a prior public hearing for its granting.

On the other hand, Decree 70/2023 eased the possibility that the Executive Branch allow the use of foreign aircraft for air commercial and general aviation services, seeking to obtain reciprocity and double surveillance agreements for operational safety, and ensuring that such aircraft are crewed, assisted and maintained by Argentine personnel.

Another relevant change introduced by Decree 70/2023 was a free regime for the setting of tariffs, allowing companies to set them without any restriction. Many of the reforms introduced by Decree 70/2023 were subject to further regulation.

To this end, on February 7, 2024, Resolution 6/2024 of the Ministry of Transport created the Commision for the Regulation of the Aeronautical Code within the Undersecretariat of Air Transport, with the aim of drafting a regulatory text for such regulatory body that contemplates the changes incorporated by means of Decree 70/2023.

Following this line, on July 10, 2024, the Executive Branch published in the Official Gazette Decree 599/2024, which covers three major axes that deepen the changes in the national air commercial policy. First, in order to streamline the system of access to the air commercial markets and provide it with greater legal certainty, a new Regulation of Access to the Air Commercial Markets was enacted.

On the other hand, the regulation of the new text of article 110 of the Aeronautical Code, which regulates intercompany agreements, was approved. Finally, the enactment of a new norm to regulate operationally the use of the capacities of the aeronautical system was ordered.

Within its recitals, Decree 599/2024 highlights that the air commercial activity must be governed by the principles of free access to the markets, commercial loyalty, tariff deregulation, strict protection of operational safety and aviation safety, contractual freedom, dynamism, efficiency, among others.

Based on this, the new Regulation on Access to the Air Commercial Markets provides for an expeditious system of authorizations, under principles such as free access to the market for new exploiters, encouragement of fair competition, tariff deregulation and freedom in the setting of frequencies.

Thus, in order to obtain authorizations to carry out national and international regular and/or non-regular air transport services, air work services, or operational and general ramp airport services, human or legal persons with legal domicile in the country must make a digital/electronic submission before the respective competent authority, which must issue a decision within a short period of time. As already foreseen in the reform introduced by Decree 70/2023, the suppression of the requirement of a prior public hearing for the authorizations of air transport services is reaffirmed, opting for a more agile procedure.

With respect to the requirement of article 99, paragraph 2, of the Aeronautical Code, which now provides that the control and direction of the company operating domestic air transport services must be in the hands of "human persons with legal domicile in the Republic", the new Regulation provides that this can be evidenced by submitting an affidavit signed by the legal representative, identifying the human person who exercises such substantial control.

As regards air commercial authorizations to foreign companies to provide the services listed above, the new Regulation establishes as a general principle that such authorizations shall be granted under strict reciprocity conditions. In turn, article 25 of Regulation provides that, unilaterally, the competent authority may grant authorizations that include cabotage traffic rights, under the same condition.

Together with the approval of the Regulation on Access to the Air Commercial Markets, a series of decrees and resolutions were repealed, among which were the tariff bands for national flights, and the previous regimes of concessions and authorizations for the exploitation of air transport services of cargo and combined air transport services, among others.

Title Two of Decree 599/2024 approves the regulation of article 110 of the Aeronautical Code, regarding intercompany agreements. First, it provides that these agreements must be submitted to the competent authority prior to their implementation. In turn, according to article 8 of the Regulation, the intercompany agreements may be carried out freely, provided that they do not result in a practice prohibited by the Law of Defense of Competition No. 27.442; in case of verifying a concentration under the terms of such law, the intervention of the National Competition Authority is foreseen.

Finally, Title Three of Decree 599/2024, instructs the Ministry of Transport to take the necessary measures to issue a Regulation for the Allocation of Capacity and/or Frequencies for Domestic and International Air Services. In principle, within a period of 180 calendar days, a transitory regulation will be issued, which will remain in force until October 31, 2025; as from such date, the permanent regulation will apply. Once the transitory regulation becomes effective, Decree 599/2024 provides for the repeal of Decree 879/2021 (regime of allocation of capacity and/or frequencies for international services) and Resolution 180/2019 of the ANAC.

As can be seen, Decree 599/2024 contains important modifications in aeronautical matters in line with the new policy of the Executive Branch and it is still expected that the government will continue to issue regulatory rules to implement the changes initiated with Decree 70/2023.

At the same time, by means of Decree 606/2024, the Executive Branch ordered the intervention of ANAC for a period of one hundred and eighty (180) days.

The intervenor appointed by the Executive Power is empowered to execute the actions and functions of the National Aeronautical Authority in Decrees 239/07 and 1170/07 and its complementary rules, as well as, among other functions, to: prepare and submit a report on the situation of ANAC, its current structure and propose its reorganization; report on its financial status, develop procedures to adopt the Latin American Aeronautical Regulations (LAR), implement the system of delegated aviation authority in Argentina and any other mechanisms to analyze and digitalize the agency's processes.