Analysis of the impact the change of ownership may have upon the two parties (the buyer and seller)
From both operative and legal perspectives, the change of ownership will have significant impacts upon the two parties. First and foremost, there will be the transfer of company ownership from Air Australia to Durian Airways (DA). In this case, Durian Airways (DA) will acquire all the products and services offered by Air Australia. Essentially, for a company operating in the aviation industry, the main assets are the fleet of airplanes operated, offices, human capital, existing leases and the licensed routes being plied (Heilbronn and von Nessen, 2009). As such, after acquiring Air Australia, Durian Airways (DA) will gain access to all the products, services and operations previously associated with Air Australia and will be able to either use them or encapsulate them in the company’s operations (Wheeler, 2014). Secondly, there will be a change in control. In a situation whereby Air Australia is fully acquired by Durian Airways (DA), then the latter will take control of the former company’s management accordingly. Additionally, it is imperative to look at the financial impact of the change of ownership. Since Durian Airways (DA) intends to buy Air Australia, in a situation whereby the preparatory of Air Australia are offered a good deal, then here is a big chance that they will gain from it and hence will make a considerable profit with respect to the investment input in the company. On the other hand, Durian Airways (DA) will have acquired a whole airlines and hence will have increased its operations, an action which has a high likelihood of increasing the companies productivity and hence its profitability.
Relevant AOC Regulatory Requirements
In order for Durian Airways (DA) to acquire an Australian company; Air Australia, it is imperative for the major AOC regulatory requirements to be met. In this case, an air operator’s certificate (AOC) refers to the approval given by national aviation authority to aircraft operators for permission to use the aircraft for commercial purposes. The following are some of the relevant AOC regulatory requirements to be taken into consideration by Durian Airways (DA) when buying Air Australia.
Foreign operator’s permission. It is noted that Durian Airways (DA), a Singaporean Company wishes to acquire an Australian Airliner and hence start new return services from Singapore to the major airports of Australia. In this case, the company will need comply with Section 26(1) of the Civil Aviation Act (1988) which stipulates that an aircraft arriving into or departing from Australia to foreign countries must not do so except with the permission of CASA. As such, Durian Airways (DA) will need to acquire a foreign aircraft air operator’s certificate, Non-scheduled flight permission and Section 27(A) permission (Wheeler, 2014).
Carrier’s Liability Insurance. Before Durian Airways (DA) acquires Air Australia, the company will have to comply with requirements of the Civil Aviation (Carrier’s Liability) Act 1959 which requires Airliners to hold insurance to ascertain that compensation is paid in case of accidents leading to death or personal injury suffered by passengers on aircraft (CASA, 2016). Moreover, Durian Airways (DA) will be required to review Air Australia’s compliance with Carrier’s Liability Insurance stipulations since it will take full control of the company and hence will have to deal with any existing compliance issues.
Access and knowledge of technical data. AOC requires that operators must have a system to control approved maintenance data which is crucial in the maintenance of their aircraft. As stipulated in Vol 3 Chapter 12 of the AOC Handbook, operators of different classes of aircraft are supposed to have most of their procedures clearly detailed in their company Operations Manual. In this case, for Durian Airways (DA) to be viable in acquiring Air Australia and being allowed to fly into and out of Australia, the company is expected to be able to clearly understand and use Air Australia’s technical data with respect to different situations.
Training and Checking Manual. This manual outlines all the procedures and stipulations on training and checking organization by all the relevant personnel. This requirement is stated in Vol 2 Chapter 5.6 of the AOC Handbook. As such, Durian Airways (DA) will be required to present its training and checking manual for analysis to ascertain that its operations are in compliance with requirements of the AOC (CASA, 2016). Additionally, before acquisition of the Air Australia, the company’s training and checking manual will also be reviewed so as to ensure a change of ownership which takes into consideration the required training and checking stipulations (“Civil Aviation Safety Authority”, 2016).
Fuel policy. This is a policy which is different with respect to different AOCs. The policy stipulates on the computation of the quantities of fuel to be used or carried on respective routes. As such, Durian Airways (DA) fuel policy will be reviewed to align with the Australian AOC. Additionally, Air Australia’s fuel policy also needs to be reviewed to ascertain that it complies with set regulations before the acquisition takes place.
|Relevant AOC Regulatory Requirements|
|Foreign operator’s permission|
|Carrier’s Liability Insurance|
|Access and knowledge of technical data|
|Training and Checking Manual|
CASA, 2016. Foreign operators. Retrieved from https://www.casa.gov.au/aircraft/standard-page/foreign-operators
Civil Aviation Safety Authority, 2016. Requirements to Support an AOC Application. Retrieved from https://www.casa.gov.au/standard-page/requirements-support-aoc-application
Heilbronn, G. and von Nessen, P., 2009. Airline and aviation industry information retention: Problems for privacy law proposals on data breach notification in Australia. Air & Space L., 34, p.261.
Wheeler, J., 2014. Enforcement of Australian aviation law. Precedent (Sydney, NSW), (120), p.14.
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