Ryanair 2016 Annual Report Download - page 85

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GOVERNMENT REGULATION
Liberalization of the EU Air Transportation Market
Ryanair began its flight operations in 1985, during a decade in which the governments of Ireland and the U.K.
liberalized the bilateral arrangements for the operation of air services between the two countries. In 1992, the Council of
Ministers of the EU adopted a package of measures intended to liberalize the internal market for air transportation in the
EU. The liberalization included measures that allow EU air carriers substantial freedom to set air fares, provided EU air
carriers greatly enhanced access to routes within the EU, and also introduced a licensing procedure for EU air carriers.
Beginning in April 1997, EU air carriers have generally been able to provide passenger services on domestic routes within
any EU member state outside their home country of operations without restriction.
Regulatory Authorities
Ryanair is subject to Irish and EU regulation, which is implemented primarily by the Department of Transport,
Tourism and Sport (“DTTAS”), the Irish Aviation Authority (“IAA”), the European Commission, and the EASA.
Management believes that the present regulatory environment in Ireland and the EU is characterized by high sensitivity to
safety and security issues, which is demonstrated by intensive reviews of safety-related procedures, training, and
equipment by the national and EU regulatory authorities.
Commission for Aviation Regulation “CAR”. The CAR is currently primarily responsible for deciding maximum
airport charges only at Dublin Airport. See “Airport OperationsAirport Charges” above.
The CAR also has responsibility for licensing Irish airlines, subject to the requirements of EU law. It issues
operating licenses under the provisions of EU Regulation 1008/2008 (formerly 2407/92). An operating license is an
authorization permitting the holder to transport passengers, mail and/or cargo by air. The criteria for granting an operating
license include, inter alia, an air carrier’s financial fitness, the adequacy of its insurance, and the fitness of the persons
who will manage the air carrier. In addition, in order to obtain and maintain an operating license, Irish and EU regulations
require that (i) the air carrier must be owned and continue to be owned directly or through majority ownership by EU
member states and/or nationals of EU member states and (ii) the air carrier must at all times be effectively controlled by
such EU member states or EU nationals. The CAR has broad authority to revoke an operating license. See “Item 10.
Additional Information––Limitations on Share Ownership by Non-EU Nationals.” See also “Item 3. Risk Factors––Risks
Related to Ownership of the Company’s Ordinary Shares or ADRs—EU Rules Impose Restrictions on the Ownership of
Ryanair Holdings’ Ordinary Shares by Non-EU nationals and the Company has Instituted a Ban on the Purchase of
Ordinary Shares by Non-EU Nationals” above.
Ryanair’s current operating license became effective on December 1, 1993, and is subject to periodic review. The
Flight Operations Department is also subject to ongoing review by the IAA, which reviews the department’s audits,
including flight audits, training audits, returned flight document (RFD) audits, and quality audits. Ryanair’s current Air
Operator Certificate (“AOC”) No IE 7/94 was issued on October 28, 2014. There is no expiration date on the AOC.
Irish Aviation Authority. The IAA is primarily responsible for the operational and regulatory function and services
relating to the safety, security and technical aspects of aviation in Ireland. To operate in Ireland and the EU, an Irish air
carrier is required to hold an AOC granted by the IAA attesting to the air carrier’s operational and technical competence
to conduct airline services with specified types of aircraft. The IAA has broad authority to amend or revoke an AOC, with
Ryanair’s ability to continue to hold its AOC being subject to ongoing compliance with applicable statutes, rules and
regulations pertaining to the airline industry, including any new rules and regulations that may be adopted in the future.