Belgium - general overview

Author: Pierre Frühling, Field Fisher Waterhouse, Brussels

2007 has proven a good year for Belgian aviation.

Corporate aviation transactions have substantially expanded in 2007 and the prominent operator, Abelag, was taken over by a private equity fund which develops operations in Brussels, Antwerp and Kortrijk.

While Macquarie continues to develop Brussels airport, regional airports substantially expand. Liège ranks now among the top 10 among European cargo airports and celebrates 10 successful years of operations of TNT, which re-introduced brand new B747's in Belgium. Charleroi airport enjoys well over 2 millions passengers thanks to Ryanair's local hub. Even helicopters' operations have expanded, especially in Ostend where the dynamic operator Noordzee Helikopters Vlaanderen has launched its new private heliport close to the airport and operates a dozen medium sized helicopters.

The installation of the Cape Town Convention on international interests on mobile assets has not led to the modernization of Belgian laws in aircraft security. To date, Belgium has not signed the Convention and the Protocol and is still bound by the 1948' Geneva Convention, which did not lead to the creation of the registry referred to in the Convention, nor to the mortgage on aircraft envisaged in the early nineties. Belgium is therefore one of the few European countries where the only available security in rem over aircraft is a pledge.

Recent amendments to the Belgian code of private international law and the implementation in Belgium of the so-called European Collateral Directive, have partially changed the approach to security interests in aircraft financing in Belgium. Security deposit, whose validity was previously under discussion, are now valid and enforceable in Belgium. On the other hand, following changes to the Belgian Code of private international law, lessors and financiers now opt for Belgian pledges over insurances instead of security assignments governed by foreign law since doubts remain about the enforceability of the latter in Belgium in case of bankruptcy of the lessee.

In respect of liability, case law relating to the 1999 Montreal Convention and the complementary EU Regulation 889/2002 which applies to passengers remains rare. Often, passengers claims quickly tend to focus on the level of compensation to be granted, which mostly results in debates according to Belgian law. Baggage claims tend to be confusing as it is not possible anymore to rely on the old system based on weight and as many claimants are not familiar with the new system.

Now, most claims are still related to the application of the much-debated EU regulation 261/2004. The years 2008/2009 should bring interesting developments as the European Court of Justice is likely to rule on several conflicting issues such as the interpretation of the wording 'cancellation' (case C-402/07), the distinction between a 'delay' and a 'cancellation' (C-432/07, which relates to a 22 hours long delay) and the 'extraordinary circumstances' which result in the exoneration of the airline (cases C-549/07 and C-396/06). In the case C-396/06, the ECJ Advocate General has already expressed the opinion in 2007 that:

• the 'reasonable measures' imply proper and timely compliance with the schedule of maintenance and checks on the aircraft and, once signs of the technical problem appear, every reasonable step in the circumstances to resolve it without withdrawing the aircraft from operation; as regards the unavailability of a replacement aircraft, they comprise adequate provision for replacements in the light of past experience;
• 'extraordinary circumstances' as regards the withdrawal from operation may include technical problems which are neither of a kind typically occurring from time to time on all aircraft and/or a particular aircraft type nor of a kind known to have affected the aircraft in question before; as regards the unavailability of a replacement aircraft, they comprise circumstances unforeseeable by a carrier making adequate provision for replacements in the light of past experience.

Finally, the long standing Brussels noise row reached another milestone on January 8 2008 when the Belgian Supreme Court annulled the decision of March 21 2006 of the Brussels Court of Appeal which had ruled that the Federal authorities should spread the flights over the Brussels areas, (the Court also provided requirements to be met in order to ensure such dispersion). The Supreme Court considered that the Court of Appeal had breached the principle of separation of powers; and only the government had the right to decide on an appropriate dispersion policy. While the Supreme administrative jurisdiction, the Council of State, had confirmed in May 2006 the legality of the rules enacted by the Region of Brussels in 1999 which provided for regional noise standards and enforcement of infringements, the Council has still not ruled on the many appeals brought before it by the fined airlines since 2000. The Council of State appears to wait for a political solution which would provide for noise rules to be adopted only at Federal level, to avoid the existing conflicting standards, and this sensitive matter remains high on the agenda of the Belgian government.