How to comply with Part-NCC requirements

Philippe Renz

The countdown is about to expire. Starting on Aug. 25, Part-NCC will apply to the non-commercial operations of aircraft in Europe. Whereas some legal and practical issues related to the content of this new regulation still have to be solved and harmonized, numerous aircraft owners are wondering today how to re-organize and what steps to take to be compliant in  time. Through this Q&A, attorney Philippe Renz aims to answer some of these concerns.

1) As an aircraft owner, how do I know if my operations will be subject to Part-NCC?

If you operate, today, non-commercially, a complex motor-powered aircraft registered in an EASA member state, or if your aircraft is registered in another country but your principal place of business or residence (see questions 8 and 9 below) is located in an EASA member state, your operations will be subjected to Part-NCC.

All business jets and all aeroplanes with more than one turboprop engine and a maximum certificated take-off mass exceeding 5,700 kg are caught by the new regulation.

2) Who should be the operator of my aircraft from Aug. 25?

Today, the majority of aircraft owners are, at the same time, operators of their aircraft. However, only a few of them have implemented an internal structure taking care, on a daily basis, the safety of their flight operations. This is precisely what Part-NCC is seeking to achieve— to give a real operational life to their flight activities. Hence the question: to whom should this task be entrusted?

By defining the notion of the operator by “any legal or natural person, operating or proposing to operate one or more aircraft,” the regulation does not help to clearly determine who should be the operator. Moreover, this is not the role of civil aviation authorities to answer this question. Their only interest is to have an operator take responsibility for the operations, by which they can conduct inspections to ensure that all standards are implemented and monitored daily.

Thus, this is up to you and to you alone, as an aircraft owner, to decide who will be the operator of your aircraft for the purposes of Part-NCC. You have the absolute discretion to determine if you want to set up your own operational structure or to appoint a third party as the operator. The only requirement is that the entity in charge of the operations has the ability to fulfill the tasks assigned to it by the law.

3) Can I nominate myself or my pilot as operator?

Yes you can, but in practice this is not advisable. Indeed, this would mean that an individual would take the entire responsibility and liability for damages in case of a mistake in the management of the flight operations. Like a special purpose company set up to own an aircraft, the operational structure should also, for liability reasons, be a company and not an individual.

4) Can I entrust a third party with the operations of my aircraft?

The EU law allows it, but always check whether the state of registration does not impose restrictions on the transfer of the operational control over the aircraft to a third party (e.g. an AOC holder running a non-commercial structure or any third party operator). In particular, and in the usual case, the regulations of the U.S., Bermuda, Cayman Island and Isle of Man do not impose restrictions on such transfer.

Given that there can only be one operator for each aircraft, the operational control over the latter and its related regulatory responsibility and legal liability should be transferred in their entirety to the third party, by contract, and be effective in practice, including the respective control over the pilots.

Furthermore, it is worth mentioning that in case of a transfer, the scope of passengers having access to the non-commercial flights performed by the third party operator on behalf of the owner may be more restrictive.

5) What will be the main tasks of an operator under Part-NCC?

To ensure the safety of its flight operations, the operator shall set up a safety management system, including compliance monitoring; define training requirements and define standard operating procedures for each individual aircraft type; ensure that aircraft equipment requirements are fulfilled; maintain records; document process and procedures in an operations manual; request the specific approvals (RVSM, MNPS, PBN, LVO, DGR, as applicable); appoint personnel duly trained to handle it and appoint a continuing airworthiness management organisation.

An operator may subcontract tasks to third parties provided that these tasks do not concern the operational control over the aircraft. Furthermore, the operator has to declare its activity and compliance to the competent authority. The challenge for the owner is to set up an operational structure he can maintain for years. So it is important that he surrounds himself with the right experts and staff and carefully plans the financial resources annually dedicated to the structure.

6) Could my pilot assume the management of the operations?

The pilot should concentrate on his flight tasks and should have enough rest periods between any two missions. However, if he has time next to his pilot activities and if he is trained accordingly, he may assume some or even all of the tasks assigned to the operator by the regulations. This might be the case if the activity of the operator he is working for is considered as non-complex by the competent authority.

7) Could the holding structure of my aircraft also be responsible for the new operational tasks?

Yes, if an operational life is given to this holding structure. However, the choice to combine or to separate the two structures, as well as the choice of the location, the legal form and the organization of the operational structure will require a thorough analysis on a case-by-case basis, taking into account operational, regulatory, commercial, tax and customs factors. Furthermore, any owner willing to combine the two structures into one will have to consider the risks that the operational activities may pose to the holding structure, and vice versa.

8) If I spend as much time in Europe as compared to other parts of the world, how do I know if my principal place of business or residence is located in Europe?

The EU regulations define the principal place of business as “the head office or registered office of the organization within which the principal financial functions and operational control of the activities are exercised.”  This definition leaves room for interpretation and some flexibility for owners having activities in multiple countries to decide where the principal place of business of the operator should be.

If your aircraft is based in one EASA member state and your flights are mostly performed across Europe, your principal place of business is probably in Europe. In the other cases, a case-by-case analysis should be done to determine where this principal place of business is located. To be certain, you may apply to the competent authorities potentially responsible for the oversight of your operations, for a special ruling, to determine where exactly your principal place of business is located, in an EASA Member State or somewhere else.

The notion of “residence” which applies to individuals, is irrelevant for a non-commercial operator because the operator should, for liability reasons, be a legal entity and not an individual (see above).

9) If my aircraft is registered in a third-country but my principal place of business is located in an EASA member state, what regulations will apply to my operations?

As you might know, Part-NCC is problematic from the point of view of the ICAO standards. However, and as related in a previous article, EASA wants to find solutions to avoid any unnecessary duplication for operators of third-country aircraft complying with the standards of its state of registry, if the latter comply itself with ICAO Annex 6 Part II.

Thus, and even if it still requires further confirmation, it appears today that many European Civil Aviation Authorities will recognize the standards, the operational oversight and the airworthiness management system of the third-party countries complying fully with the ICAO standards. This would mean that the European-based operators of aircraft registered in Bermuda, Cayman Islands and Isle of Man could avoid a double, expensive and unnecessary, compliance and oversight system. On the contrary, Part-NCC will be applicable in full to European-based operators with aircraft registered in countries that have not implemented the obligations of Annex 6 Part II yet (e.g. USA).

10) What are the next steps to take to be ready in due time?

As a business jet owner running non-commercial flight activities in Europe, you should, as soon as possible, with your team of experts:

  • Determine if you are subject to Part-NCC and, if in doubt, get a ruling from the competent authorities.
  • If you are subject to Part-NCC, determine which entity will be the operator under Part-NCC.
  • If you want to transfer the responsibility for the operations to a third party, check if this is feasible from the point of view of the state of registry of your aircraft. Then enter into an agreement with the operator.
  • If the operator remains in the owner’s sphere, determine whether the operator’s activity is complex or not.
  • Then set up the operational structure (if different from the holding structure of the aircraft). Manage the relations between these two entities and conclude the necessary agreements (lease, employment, etc.)
  • Start the compliance process with Part-NCC and apply for the specific approvals by the competent authority.
  • Declare the new activity and submit relevant documentations to the competent authority by the Aug. 25, at the latest.

11) What if I am not ready and compliant by Aug. 25?

If by then you have not set up your operational structure but you had to, the authorities could well ground your aircraft and/or impose other administrative and criminal sanctions to the operator and its staff. In case of an accident or incident, the operator could, in addition, face civil lawsuits for damages and there would be a high risk that the lessor and/or insurer of the aircraft do not anymore consider themselves bound by their obligations.