Turkey: Aviation Law 2020

1. GENERAL

1.1 Please list and briefly describe the principal legislation and regulatory bodies which apply to and/or regulate aviation in your jurisdiction.

The aviation sector is regulated by the Turkish Civil Aviation Code No. 2920 (the "Aviation Code") and the General Directorate of Civil Aviation Duties Code No. 5431.

Turkey is a party to the below agreements in relation to international carriage by air:

• 1929 Warsaw Convention for the Unification of Certain Rules relating to International Carriage by Air and the Hague Protocol to Amend the Warsaw Convention.
• 1944 Chicago Convention on International Civil Aviation.
• 1944 International Air Services Transit Agreement.
• 1944 International Air Transport Agreement.
• 1963 Tokyo Convention on Offences and Certain Other Acts Committed On-board Aircraft.
• 1970 Hague Convention for the Suppression of Unlawful Seizure of Aircraft.
• 1971 Montreal Convention for the Suppression of Unlawful Acts Against the Safety of Civil Aviation and the Montreal Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation.
• 1999 Montreal Convention for the Unification of Certain Rules relating to International Carriage by Air.
• 2001 Cape Town Convention and Protocol on International Interests in Mobile Equipment.

The Directorate General of Civil Aviation (the "DGCA") is the main government body regulating the aviation industry. The DGCA is authorised to grant certificates of airworthiness and operating licences as well as to regulate, investigate, prosecute and audit civil aviation operations under the applicable law.

1.2 What are the steps which air carriers need to take in order to obtain an operating licence?

According to the Regulations on Commercial Air Carriage Enterprises (the "SHY-6A"), the general conditions for granting an operating licence are as follows:

• The applicant's principal place of business must be within the territory of Turkey.
• A joint stock company must be formed for licences for 20+-seater aircraft or for cargo carriage licences.
• For cargo carriers and 20+-seater passenger air carriers, the business activities of the company must be restricted to solely aviation-related activities.
• Turkish citizens must hold the majority of the shares, and voting and management rights.
• Requirements regarding the minimum share capital, minimum number of aircraft and aircraft capacity, an organisational chart involving licensed employees, operation and training manuals and insurance are stipulated in the SHY-6A.

Applicants must submit to the DGCA proof of conformity to the requirements of the SHY-6A and the DGCA shall then carry out an investigation to approve or reject the licence application.

1.3 What are the principal pieces of legislation in your jurisdiction which govern air safety, and who administers air safety?

As a party to the 1944 Chicago Convention, the regulations of the International Civil Aviation Organisation ("ICAO") are applicable in Turkey. Furthermore, Turkey has implemented the safety requirements of the European Aviation Safety Agency under a special protocol.

The DGCA administers air safety in accordance with the Regulation on Safety at Civil Airports, Ports and Border Gates, the Regulation on Continuing Airworthiness and Maintenance Liability (SHY-M) and the DCGA Directive SHT-50, which regulates maximum flight hours.

1.4 Is air safety regulated separately for commercial, cargo and private carriers?

No. The Regulation on Safety at Civil Airports, Ports and Border Gates is applicable to all types of aircraft.

1.5 Are air charters regulated separately for commercial, cargo and private carriers?

No. The Air Charters Procedures and Principles Instructions issued by the Directorate, based on the Aviation Code and the General Directorate of Civil Aviation Duties Code No. 5431, regulate all air charters.

1.6 As regards international air carriers operating in your jurisdiction, are there any particular limitations to be aware of, in particular when compared with 'domestic' or local operators? By way of example only, restrictions and taxes which apply to international but not domestic carriers.

In accordance with Article 15 of the Chicago Convention, international and domestic carriers enjoy equal charges for the use of aerodromes.

Domestic transportation of passengers, mail and freight by air for commercial purposes within the boundaries of Turkey may only be conducted by Turkish-registered aircraft. Also, any carriers arriving from or departing to a foreign airport must do so from airports with customs offices.

1.7 Are airports state or privately owned?

Airport construction and operation in Turkey was carried out by the government for many years. In 1994, under Law No. 3996, airports were approved for privatisation. Today, most airports are contracted to private companies under build-operate-transfer contracts.

1.8 Do the airports impose requirements on carriers flying to and from the airports in your jurisdiction?

Charges for slots, landing, parking, navigation and bunkering are imposed by Turkish airports. Such charges are regulated by a tariff issued by the Directorate General of State Airports and Enterprises for state-owned airports. Private airport operators levy their own charges for the same services with the approval of the Ministry of Transport and Infrastructure.

1.9 What legislative and/or regulatory regime applies to air accidents? For example, are there any particular rules, regulations, systems and procedures in place which need to be adhered to?

If an air accident occurs within the territory of Turkey, the Aviation Code applies. Article 10 of the Code provides that any civil aircraft accident must be reported to the Ministry of Transport by the responsible pilot or, where this is not possible, one of the crew members, the operator or the local authorities by the most rapid means. Article 13 of the Code indicates that an investigative board, to be selected from persons with renowned expertise in the field of aviation, shall be assigned to investigate the causes of the accident by the Ministry of Transport. The Ministry shall send copies of the accident investigation report to the relevant parties and to the ICAO states.

1.10 Have there been any recent cases of note or other notable developments in your jurisdiction involving air operators and/or airports?

The Directive on Civilian Unmanned Aerial Vehicles to be operated or used in Turkish airspace was issued on 22 February 2016. The Instructions for Unmanned Air Vehicle Systems (SHT-UAV) brought provisions regarding the importation of unmanned aerial vehicle systems, their sale, recordkeeping, registration and flight availability.

2. AIRCRAFT TRADING, FINANCE AND LEASING

2.1 Does registration of ownership in the aircraft register constitute proof of ownership?

In accordance with Article 50 of the Aviation Code, the Ministry of Transport maintains the Aircraft Registry. Article 52 of the Code provides that registration of ownership constitutes proof of ownership. Any change of ownership must be registered in the Aircraft Registry, which makes such changes of ownership binding on third parties.

2.2 Is there a register of aircraft mortgages and charges? Broadly speaking, what are the rules around the operation of this register?

Mortgages must be registered in the Aircraft Registry in order to become binding on third parties according to Article 69 of the Aviation Code. Mortgage agreements must be in writing and notarised. Contingent rights can also be subject to a mortgage agreement.

Mortgagees can also be registered in foreign currency should the mortgagee obtain permission from the DGCA; such permission must also be registered in the Registry.

According to Article 77 of the Aviation Code, the mortgagee is entitled to receive an insurance indemnity in the event of loss or damage to the aircraft.

2.3 Are there any particular regulatory requirements which a lessor or a financier needs to be aware of as regards aircraft operation?

Lessors and financiers are entitled to register their rights in the Aircraft Registry. According to Articles 74 and 119 of the Aviation Code, lessors and financiers must register lease agreements in the Aircraft Registry in order for them to become binding on third parties. The owner's liability against third parties will be subjected to proof of negligence should the lease agreement be registered.

Article 119 of the Aviation Code foresees two kinds of lease agreements with different regulation. In case of charter by demise, the competence and approval of the aircraft crew must be confirmed by the lessor.

2.4 As a matter of local law, is there any concept of title annexation, whereby ownership or security interests in a single engine are at risk of automatic transfer or other prejudice when installed 'on-wing' on an aircraft owned by another party? If so, what are the conditions to such title annexation and can owners and financiers of engines take pre-emptive steps to mitigate the risks?

Articles 619 and 621 of the Civil Code apply to the accessory and component parts of the aircraft in accordance with Article 68 of the Turkish Civil Aviation Law. According to the Civil Code, a component part is defined by local custom as an essential element of the main thing, which cannot be separated from it unless it is destroyed, damaged or altered. The engine of an aircraft is considered to be a component part, and the owner of the aircraft will also have the right of ownership over the engine. In the transfer of ownership, accessories may be excluded but component parts cannot be excluded.

In the event that the Cape Town Convention on International Guarantees on Movable Equipment conflicts with the Turkish Civil Code, the Convention takes precedent.

2.5 What (if any) are the tax implications in your jurisdiction for aircraft trading as regards a) value-added tax (VAT) and/or goods and services tax (GST), and b) documentary taxes such as stamp duty; and (to the extent applicable) do exemptions exist as regards non-domestic purchasers and sellers of aircraft and/or particular aircraft types or operations?

Aircraft and helicopters registered with the General Directorate of Civil Aviation of the Ministry of Transportation are subject to motor vehicle tax. Stamp tax is charged on the papers listed in table (1) attached to the Stamp Tax Law.

Special Consumption Tax applies on imports to Turkey as a one-time tax during their registration. The fact that these vehicles have been registered or used in the country of origin does not prevent the application of the tax at the time of importation.

2.6 Is your jurisdiction a signatory to the main international Conventions (Montreal, Geneva and Cape Town)?

Turkey ratified the 1999 Montreal Convention on 25 January 2011 and the convention came into force on 26 March 2011. Turkey is also a signatory state to the Warsaw/Hague Convention.

Turkey is not a signatory state to the 1948 Geneva Convention on the International Recognition of Rights in Aircraft.

The 2001 Cape Town Convention entered into force in Turkey on 1 December 2011.

2.7 How are the Conventions applied in your jurisdiction?

International treaties signed under the competence granted by the Constitution come into force after being ratified by the Parliament and published in the Official Gazette. Such treaties prevail over domestic Turkish law.

2.8 Does your jurisdiction make use of any taxation benefits which enhance aircraft trading and leasing (either in-bound or out-bound leasing), for example access to an extensive network of Double Tax Treaties or similar, or favourable tax treatment on the disposal of aircraft?

Companies that have civil aviation as their main business activity are exempt from VAT on the importation of aircraft that will mainly be used for transportation or charter purposes.

Turkey has signed bilateral Double Tax Treaties with a number of countries. Each specific case is to be reviewed under such treaties' stipulations.

3. LITIGATION AND DISPUTE RESOLUTION

3.1 What rights of detention are available in relation to aircraft and unpaid debts?

In accordance with Article 68/A of the Aviation Code, the Cape Town Convention on International Guarantees on Movable Equipment prevails over Turkish domestic law in relation to the right of detention of the debtor's assets.

3.2 Is there a regime of self-help available to a lessor or a financier of an aircraft if it needs to reacquire possession of the aircraft or enforce any of its rights under the lease/finance agreement?

A lessor or financier must seek an injunction in order to repossess an aircraft. No self-help regime is recognised under Turkish law.

3.3 Which courts are appropriate for aviation disputes? Does this depend on the value of the dispute? For example, is there a distinction in your jurisdiction regarding the courts in which civil and criminal cases are brought?

Depending on the nature of the claim, the Civil Court of First Instance, Consumer Court or Commercial Court may be appropriate. Additionally, criminal courts are competent for criminal cases. For instance, passenger claims shall be heard at the Consumer Court, or the criminal courts in case of death or injury, whereas a dispute between an operator and an owner shall be heard by a Commercial Court.

The relationship between the courts is a duty relationship and does not depend on the claimed amount.

3.4 What service requirements apply for the service of court proceedings, and do these differ for domestic airlines/parties and non-domestic airlines/parties?

Upon receiving the claim petition, the court serves the documents on the defendant. Any service to the registered office address of a Turkish company is valid. Turkey is a party to the 1954 HCCH Convention on Civil Procedures and the 1965 HCCH Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters. Therefore, in case of a claim between domestic and non-domestic parties, service of court documents is to be made in accordance with such conventions.

3.5 What types of remedy are available from the courts or arbitral tribunals in your jurisdiction, both on i) an interim basis, and ii) a final basis?

The types of interim remedies are: provisional attachment; precautionary measure; court survey; provisional advance payment for bodily injuries including death; and payments to be made on the basis of a hull insurance policy.

The types of final remedies are: compensation for damages; an injunction to do or not to do something; and change of ownership or possession.

According to the Aviation Code, the air carrier's liability includes moral damages as well.

3.6 Are there any rights of appeal to the courts from the decision of a court or arbitral tribunal and, if so, in what circumstances do these rights arise?

Decisions of Courts of First Instance involving values of TRY 3,000 and higher can be appealed at the Regional Courts of Appeal. Decisions of Regional Courts of Appeal for values involving TRY 40,000 and higher can also be appealed at the Court of Appeal.

4. COMMERCIAL AND REGULATORY

4.1 How does your jurisdiction approach and regulate joint ventures between airline competitors?

There are no specific competition rules for the aviation sector. All joint ventures between airline competitors are monitored by the Turkish Competition Board in accordance with Turkey's anti-trust rules.

4.2 How do the competition authorities in your jurisdiction determine the 'relevant market' for the purposes of mergers and acquisitions?

The relevant market would be assessed in terms of its relevant products and geography. In regard to relevant products, the supply and demand chain would be taken into account.

4.3 Does your jurisdiction have a notification system whereby parties to an agreement can obtain regulatory clearance/anti-trust immunity from regulatory agencies?

The Turkish Competition Board accepts applications for regulatory clearance/anti-trust immunity for mergers and acquisitions. Regarding the determination of the relevant market and the impact of such merger or acquisition, the Competition Board should obtain the opinion of the Directorate General of Civil Aviation ("GDCA").

4.4 How does your jurisdiction approach mergers, acquisition mergers and full-function joint ventures?

The same regulations are applicable to both domestic and international investors. In accordance with the rules of cabotage, any foreign licensed air carrier acquiring a Turkish company must obtain a Turkish licence for the transport of carriages between Turkish airports.

4.5 Please provide details of the procedure, including time frames for clearance and any costs of notifications.

The Competition Board reviews the notification and decides either to approve or to further investigate the transaction. In case of the latter, the Competition Board shall notify the parties within 30 days of the filing. A fast-track procedure was introduced by Communiqué No. 2010/4 to accelerate the clearance process. There is no applicable filing fee in the Turkish system.

4.6 Are there any sector-specific rules which govern the aviation sector in relation to financial support for air operators and airports, including (without limitation) state aid?

Investments into airports and ground operations are listed as first-priority investments in the Decision on State Subsidies for Investments. Companies investing at least TRY 200,000,000 can apply for general investment subsidies and companies investing at least TRY 5,000,000 can apply for regional investment subsidies. The subsidies range from VAT exemptions to insurance premium aids.

4.7 Are state subsidies available in respect of particular routes? What criteria apply to obtaining these subsidies?

Periodic state subsidies are granted to tourism agencies bringing visitors to touristic cities, especially during the low season.

4.8 What are the main regulatory instruments governing the acquisition, retention and use of passenger data, and what rights do passengers have in respect of their data which is held by airlines and airports?

Paragraph (1) of Article 12 of Law No. 6698 on the Protection of Personal Data (Law):

1. prevents unlawful processing of personal data;
2. prevents unlawful access to personal data; and
3. protects personal data.

In order to ensure that the appropriate level of security is applied for all kinds of technical and administrative measures, paragraph 5 of the abovementioned law provides that, if processed personal data is obtained by others by illegal means, the data officer in question must notify the affected person and the Personal Data Protection Board as soon as possible. The Board may declare this situation on its website or by any other method it deems appropriate, if necessary. The purpose of notification of data infringement to the Board and the affected person is to ensure that measures can be taken to prevent or minimise the negative consequences of such infringement. The European General Data Protection Regulation, which abrogated Directive 46/EC, includes detailed regulations on data breach notifications and ensures that there is no inconsistency between decisions taken by the Board and that standardisation can be achieved in practice.

4.9 In the event of a data loss by a carrier, what obligations are there on the airline which has lost the data and are there any applicable sanctions?

Article 136 of the Turkish Penal Code provides that a person who unlawfully distributes or seizes the personal data of another person will be sentenced to imprisonment for two to four years.

4.10 What are the mechanisms available for the protection of intellectual property (e.g. trademarks) and other assets and data of a proprietary nature?

The mechanism available for the protection of intellectual property rights is provided in the Turkish Intellectual Property Code.

4.11 Is there any legislation governing the denial of boarding rights and/or cancelled flights?

The main regulation on denial of boarding and cancelled flights is the Regulation on the Rights of Passengers Travelling by Airline ("SHY-YOLCU"), which is in line with EU Regulation 261/2004. According to the provisions of the regulation, the rights of the passengers regarding the cancellation of flights, landing and boarding rights are calculated in accordance with the distance of the flight.

4.12 What powers do the relevant authorities have in relation to the late arrival and departure of flights?

This issue is also regulated by SHY-YOLCU. The air transport operator is responsible for late arrivals and departures of flights, taking into consideration the duration of the delay.

4.13 Are the airport authorities governed by particular legislation? If so, what obligations, broadly speaking, are imposed on the airport authorities?

Airport authorities are subject to two different regulations:

• The Airport Ground Services Regulation (SHY-22) regulates the duties, competence and liability of ground service operators, which organise, in particular, the landing and departure of aircraft, and luggage and cargo handling services.
• The General Directorate of Civil Aviation Duties Code No. 5431 stipulates the duties, competence and liabilities of GDCA, which oversees licensing requirements, including all kinds of registry requirements.

4.14 To what extent does general consumer protection legislation apply to the relationship between the airport operator and the passenger?

In case of any claims arising between airport operators and passengers, Consumer Courts would be competent and consumer legislation is applicable.

4.15 What global distribution suppliers (GDSs) operate in your jurisdiction?

All IATA-recognised global distribution suppliers, such as Amadeus, Galileo and Sabre, operate in Turkey.

4.16 Are there any ownership requirements pertaining to GDSs operating in your jurisdiction?

No, there are no ownership requirements pertaining to GDSs operating in our jurisdiction.

4.17 Is vertical integration permitted between air operators and airports (and, if so, under what conditions)?

Vertical integration is possible under the Turkish system. No specific conditions have been foreseen for such integration. It should be noted that most Turkish airports are built under the build-operate-transfer system, and therefore any air operator wishing to enter into vertical integration should be a part of such system.

4.18 Are there any nationality requirements for entities applying for an Air Operator's Certificate in your jurisdiction or operators of aircraft generally into and out of your jurisdiction?

There is no such nationality requirement. In case of a change of nationality of the holder of an Air Operator's Certificate, permission must be obtained from the GDCA.

5. IN FUTURE

5.1 In your opinion, which pending legislative or regulatory changes (if any), or potential developments affecting the aviation industry more generally in your jurisdiction, are likely to feature or be worthy of attention in the next two years or so?

The Aviation Code should be reviewed and revised in accordance with the stipulations of the 1999 Montreal Convention because the rules in force were imported from the Warsaw/Hague Convention. Additionally, new legislation has started to appear, especially on unmanned aerial vehicles.

Originally published by The International Comparative Legal Guide to: Aviation Law 2020.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.