Aircraft with foreign registration will be able to fly domestically in Ecuador

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With resolution No.. 018/2017, the National Civil Aviation Council agreed to update and issue the operating permit regulations for the provision of commercial air transport services, where among others, It is mainly highlighted that aircraft with foreign registration will be able to fly domestically in Ecuador without restriction..

With date 11 from December to 2017, the resolution that will allow Ecuadorian airlines to operate aircraft with foreign registration on regular domestic flights was approved, without already having the obligation to operate with the Ecuadorian license plate assigned to the country that is HC-.

This measure can be taken as part of the Government's plan to improve air connectivity with the measures of the JET A1 aviation fuel subsidy and the Open Skies policy.

resolution 018/2017

as we comment, the resolution has some measures and updates for the granting of permits, but today we will only talk about the measure that will allow Ecuadorian airlines to operate aircraft with foreign registration:

The General Directorate of Civil Aviation will authorize Ecuadorian companies that are operating domestic and international commercial air transport services., the use of foreign registered aircraft, as long as:

1. The requirements established in article 60 of the Civil Aviation Law and other applicable regulations.
2. Are listed in the operator's operational specifications.
3. The internal and external connectivity of the country is promoted.

(…)

Operation with aircraft leased for domestic transportation may only be carried out under the Dry Lease modality*.

(…)

In a manner compatible with industry needs and international practice, Ecuadorian airlines will have the flexibility to use aircraft in different leasing modalities, contractual figures that are recognized in the international aeronautical community (dry lease, wet lease, interchange or hourly rental).

(…)

Routes and frequencies that promote connectivity within the Ecuadorian territory will be included., provided that the economic performance of the commercial routes operated reflect a profitability higher than the national average. These routes and frequencies must be operated within a period of 3 months, counted from the notification of the resolution.

(…)

This regulation will enter into force as of its issuance. (11 from December to 2017) without prejudice to its publication in the Official Registry.

*It should be noted that Dry Lease means that the lease is only for the aircraft, no cabin crew or pilots.

Prior to this resolution and with the aim of promoting healthy competition between airlines operating domestic flights in Ecuador, The operating permits were granted only for the operation of airplanes duly registered with Ecuadorian registration..

Now, This restriction will no longer exist and will allow the current 3 Ecuadorian airlines operate with foreign aircraft with registration from other countries, as has already occurred on some occasions due to their necessity, but with a maximum period of operating in Ecuador with another license plate, from 90 days from authorization.

The debate

Having consulted with several people from the local aeronautical environment, who have requested to keep their names withheld, It has been identified that this resolution may have some advantages and disadvantages for the Ecuadorian airline market.. We list them below:

Possible advantages:

• Benefit internal connectivity.
• Airlines will be able to incorporate airplanes with registration plates from other countries and put them to fly in Ecuador in less time.
• Less procedures to incorporate new aircraft into fleets.
• Rotation of aircraft with other fleets of partner airlines or holding companies.
• Cost reduction for airlines.
• Possible reduction in maintenance times.
• Better fleet availability.
• Have alternatives in case of AOG aircraft (unscheduled maintenance).
• Potential reduction in air fares as procedures are released and international rotation is allowed.

Possible disadvantages:

• Potentially transnational airlines will operate only with foreign-registered aircraft.
• Cut of aeronautical personnel such as flight dispatchers, mechanics, pilots, etc.
• Ecuador could become only a transit point for airplanes.
• There would be no fixed base for the planes.
• Local airlines without the support of a large group would be at a disadvantage.
• When operating with foreign license plates, all tariff issues, maintenance and other aspects, They will be benefits only from the countries of registration.

¿Cómo se opera en otros países?

It is worth noting that other countries in the region have already had this modality or operating permits for some years..

Basically the idea is that an airline that has subsidiaries in several countries, You can rotate your aircraft between those countries. One idea of ​​this operation is that a plane arrives from Lima with a foreign registration and that same plane will be able to fly to Manta without any problem., make the round trip flight to Lima or to other national destinations in Ecuador until the airline needs it.

The best examples are Colombia and Peru, where airlines that operate there can fly with aircraft registered in other countries without any restrictions. Aircraft with Chilean registration CC operate in these countries., of the United States N, from Colombia HK- (in the case of Peru) and others, that have allowed these countries to be among those with the greatest annual growth in aeronautical matters in Latin America.

The other extreme is Argentina and Brazil, which are an example in Latin America., where above all considerations are the aeronautical personnel and the national industry where the use of aircraft with foreign registration is prohibited by regulation., although in recent years, These countries have also presented a large increase in their domestic traffic, without the need to resort to other measures.

¿Qué podemos esperar ahora en Ecuador?

with this measure, In the coming months we could see how the airlines LATAM Airlines Ecuador and Avianca-Ecuador will gradually increase their fleet, although this would not have an Ecuador base, there would be an increase in the number of aircraft operating in Ecuador.

These would rotate with their respective HUBs in Lima and Bogotá, so it will be very difficult to see what it is like now, fixed license plates flying in Ecuador.

We will only be able to see the positive or negative results of this measure over time and whether each of the advantages and disadvantages occur..

I leave the debate open so you can comment on what you think about this measure., that in the end what we all hope for, is to improve the Ecuadorian commercial air business.

Civil Aviation Law

Chapter III, Art. 6, 1. g):

“Encourage the development of commercial aviation and support the establishment and operation of flying clubs, training and training centers for civil pilots, civil piloting schools, model airplane clubs and, usually, the activities of institutions that have the purpose of contributing to civil aviation development; and, controlar su operación y desenvolvimiento”

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