The Aviation Law Review: Turkey

Introduction

Civil aviation in Turkey has undergone major reforms in the past decade, enabling private enterprises to operate scheduled domestic services. Air travel, both domestic and international, has become cheaper and more accessible, resulting in phenomenal traffic growth as more and more people choose it over traditional motor transport. This has also been reinforced by the construction of new airports and the expansion of existing ones in many cities throughout Turkey. On an international level, Istanbul has become an important hub because of its convenient geographical location at the crossroads of the Commonwealth of Independent States and the Middle East, and it has attracted very fast-paced growth in transit traffic.

The covid-19 pandemic has undoubtedly dealt a severe blow to the air passenger industry's rapid growth, and has caused passenger traffic to decline at an unprecedented rate. Cargo traffic, on the other hand, has seen moderate growth and keeps fleets busy to a certain extent.

There are 10 licensed air carriers in Turkey. The largest operator in the field is the flag carrier Turkish Airlines, which is a state-owned entity. Notable competitors are Pegasus Airlines, Onur Air and SunExpress, which operate both domestic and international scheduled services. Other competitors in the international arena are Corendon Airlines and Freebird Airlines. Tailwind Airlines does not operate scheduled services, but it is a niche charter operator for many other air carriers and operators. ACT Airlines, MNG Cargo and ULS Cargo are cargo carriers who operate a mix of scheduled and chartered cargo services, and offer cargo capacity on wet lease to other carriers.

Since its commissioning in October 2018, Istanbul International Airport has won international acclaim and accommodated increased passenger traffic with room to spare. This of course changed abruptly in March 2019 because of the covid-19 pandemic, but nevertheless, the capacity is still there and will most likely contribute to the success of Turkish airlines and an increase in transit traffic in the next decade. The second-largest airport in terms of passenger traffic is Antalya on the Mediterranean coast, and it is coordinated during the summer season. The bulk of traffic there comes from tour operators catering to nearby vacation resorts. There are scheduled air services in operation to about 40 airports in Turkey.

The main regulatory instrument for civil aviation is the Civil Aviation Act of 1983. This Act touches on all aspects of aviation, such as the regulatory authority, safety, accident investigation, licensing of operators and airports, flight crew licensing, basic principles of flight operations, liability, contracts of carriage by air, property rights and other limited rights in rem on aircraft, aircraft registration and insurance. It has recently been amended to accommodate rules on unmanned aerial vehicles.

The regulatory authority for civil aviation is the Directorate General of Civil Aviation (DGCA), which is a department of the Ministry of Transportation, Maritime Affairs and Communication. The DGCA has wide regulatory powers as prescribed in the Civil Aviation Act.

Slot allocation at fully coordinated airports is made under the relevant regulation enacted by the State Airports Administration. The regulation complies with Council Regulation (EEC) No. 95/93 on slot allocation principles.

The high rate of traffic growth makes Turkey an attractive market for aircraft manufacturers and financial institutions. Turkey has ratified the Cape Town Convention on International Interests in Mobile Equipment, which is expected to further facilitate leasing and financing of aircraft. The ratification took effect in December 2011. The primary benefit of the Convention to aircraft lessors is that repossession, deregistration and export of aircraft that are taken out of lease are now much easier as they can be performed by the lessor without the requirement for consent from the lessee. Before the ratification, this was a slow and problematic process as it would require a court decision if the lessee objected.

Most of the Turkish civil aviation legislation and regulations are modelled on the European Union legislation and, as such, complies with almost all the rules, freedoms and restrictions that are in effect within the European Union.

Legal framework for liability

Liability of air carriers is regulated by the Civil Aviation Act and international treaties to which Turkey is a party. International treaties to which Turkey is a party have the force of law, just as any other domestic legislation.

i International carriage

Turkey has ratified the 1999 Montreal Convention for Unification of Certain Rules for International Carriage by Air, and the Convention became effective in March 2011. As mentioned above, the Convention is deemed a part of national legislation and, as such, is applicable to international carriages as defined by the Convention. Previously, Turkey was a party to the 1929 Warsaw Convention as amended by the Hague Protocol and the Montreal Protocol No. IV.

ii Internal and other non-convention carriage

Liability of the carrier in domestic or non-convention carriages is subject to the Civil Aviation Act.

The carrier is liable for damage in cases of bodily injury or death of a passenger if the accident causing the injury or death occurred in the aircraft, or during boarding or disembarking.

The carrier is liable for damage or loss to registered baggage or cargo if the loss or damage occurred in the aircraft or on the ground at an airport while the baggage or cargo was still in custody of the carrier.

The carrier is also liable for damage resulting from delays in the carriage of passengers, baggage and cargo.

The liability of the carrier is strict liability; in other words, the carrier will be held liable even if it has not acted negligently. On the other hand, the carrier will be relieved from liability if it proves that it has taken all possible measures to prevent the damage from occurring or that it was impossible to take all such measures.

The liability of the carrier is limited unless it is proven that the carrier or its agents acted with the intent of causing damage or recklessly with the knowledge that damage may result. The relevant article of the Act provides that the limit will be determined according to the 1929 Warsaw Convention and other conventions and protocols to which Turkey is a party. Now that the Warsaw Convention is no longer applicable, this article should now be interpreted as defining the limits according to the 1999 Montreal Convention. At the time of writing, the limits were 128,821 special drawing rights (SDR) for death and injury, 5346 SDR for damage arising from delay, SDR 1288 for loss of or damage to or delay of baggage, and 22 SDR per kilogramme for cargo.

For the carrier's liability to be limited as provided, the carrier has to issue and submit a ticket bearing the name of the carrier and the passenger, date and place of issue, date and place of departure and destination, the price of the ticket and a statement that liability is limited under the Civil Aviation Act.

Liability of agents and employees of the carrier is also similarly limited where it is proven that they were acting within the scope of their duty.

iii General aviation regulation

The liability regime for air carriers is also applicable to general aviation operators. There is no distinction between different types of aerial vehicles.

iv Passenger rights

The DGCA has, within the scope of its mandate and authority, issued a Passenger Rights Regulation, which came into effect on 1 January 2012. This Regulation is very similar to Regulation (EC) No. 261/2004. Under this Regulation, the passenger is entitled to alternative arrangements or pre-determined compensation in cases of flight delays, cancellations and denied boarding. Accepting alternative arrangements or getting compensation does not prevent the passenger from seeking further compensation under relevant legislation.

The most relevant legislation is the Consumer Protection Act. Passengers can seek compensation before consumer arbitration panels for disputes up to a certain value (circa US$1,350 at the time of writing), and before consumer courts for disputes of higher value.

v Other legislation

Turkey has in place legislation governing the protection of competition, protection of the environment, consumer protection, tax laws, corporate governance, labour and social security, and similar laws, that must be observed by all business entities.

Perhaps of higher relevance for airlines, employment and social security law imposes special liabilities on employers on issues of safety, compensation and work-related accidents. Employers have strict liability for any injuries or death of employees in the course of their duty.

Licensing of operations

i Licensed activities

Any activity that involves flying an aircraft requires the person or entity operating the flight to have an appropriate aircraft operator's certificate (AOC).

AOCs are issued by the DGCA in accordance with the relevant operator licensing regulations adopted by the DGCA. There are several different categories and subtypes of AOC.

The most stringent licensing requirements are to be found in the Regulation on Commercial Air Carriage Operators, known in the industry as 'SHY-6A'.

Commercial operators are classified as air carriers, non-scheduled-only air carriers, cargo-only air carriers and air taxi operators. There are different minimum capital and equipment requirements for each category. The procedure for applying and obtaining these licences are quite long and onerous. There are stringent requirements for the qualifications and experience of key personnel. The entity applying for an AOC for commercial air carriage is required to demonstrate its financial and operational capabilities for operating commercial aircraft.

The second major category of operators is to be found in the General Aviation Regulation, known as 'SHY-6B'. This was renewed entirely in April 2020. Basically, any type of flight operation that is not commercial carriage of passengers and cargo falls into this category. Major subcategories are flight training, aerial work and amateur aviation activities. Operation of business aircraft also falls within this category, provided that the entity holding the AOC is a shareholder of, or some or all of its shares are owned by, another entity.

Requirements for obtaining a general aviation AOC are generally much less stringent than for a commercial AOC.

ii Ownership rules

An aircraft (or other type of aerial vehicle) is deemed a Turkish aircraft if its owner is a Turkish citizen.

Aircraft owned by legal persons other than companies registered in the Turkish Commercial Registry are deemed Turkish aircraft if the majority of the members of its governing body are Turkish citizens. These entities would typically be associations, foundations, trade unions and similar non-profit organisations.

Aircraft owned by Turkish companies are deemed Turkish aircraft if the majority of the persons authorised to direct and represent the company are Turkish citizens, and more than half of the voting shares are owned by Turkish citizens.

Both the Regulation on Commercial Air Carriage Operators and the General Aviation Regulation require applicants to own a minimum number of aircraft registered in Turkey. This means that any entity or person who wishes to have an AOC in Turkey is required to fulfil the aforementioned ownership rules.

An aircraft owned by a foreign entity can be temporarily registered in Turkey and fly the Turkish flag if it has been dry-leased for a period of at least six months to an entity that fulfils the aforementioned nationality requirements. This provision allows Turkish air carriers to acquire aircraft by way of financial or operating leases from aircraft leasing companies.

iii Foreign carriers

The Civil Aviation Act provides that rules applicable to foreign operators performing air transport services between Turkey and foreign countries shall be determined by the Ministry of Transportation, taking into consideration bilateral and multilateral treaties to which Turkey is a party, and also the principle of reciprocity.

In practice, foreign operators are required to obtain flight permits prior to operating flights into or out of Turkey. Scheduled or charter air services operators can obtain prior permits for each tariff season. Other operators need to apply, preferably five days, in urgent cases at least 48 hours, before the planned flight. The operator has to be in possession of an AOC issued by its own state.

Points of contact, required documentation and procedures for obtaining flight permits can be found in the Turkey aeronautical information publication published and maintained by the State Airports Authority.

Safety

Although Turkey is not a Member State of the European Union Aviation Safety Agency (EASA), there are technical cooperation and working arrangements between them. Turkish civil aviation regulations are modelled after EASA regulations, and there is a high degree of similarity and compatibility between EASA and Turkish safety regulations.

All operators are required to implement a continuing airworthiness programme in compliance with the Regulation on Continuing Airworthiness and Maintenance Responsibility. This requires operators to put in place and implement a continuous airworthiness scrutiny and compliance programme. This responsibility can be outsourced to organisations accredited by the DGCA and named as a continuing airworthiness management organisation.

Accident reporting and investigation rules in the Civil Aviation Act are in harmony with the International Civil Aviation Organization standards, Annex 13. Incidents or accidents are investigated by the Transport Safety Investigation Center, which is a department of the Ministry of Transportation and Infrastructure.

There are several detailed regulations and directives issued by the DGCA concerning safety management, reporting of incidents, ramp checks and similar subjects.

Insurance

The Civil Aviation Act requires all national and foreign operators landing in or departing from Turkey to carry liability insurance to cover damage that may result from their operations for carriage of passengers, baggage and cargo, and also damage to third persons. The details of mandatory insurance are determined by the DGCA in two separate regulations.

Operators of aircraft registered in Turkey are required to submit valid policies and policy renewals to the DGCA. The DGCA is authorised to verify the validity of such policies directly with the insurer. Failure to maintain valid insurance will entail grounding of the aircraft. Breach of the requirement for a second time will entail cancellation of the AOC.

Foreign operators are required to submit their valid policy when applying for a flight permit. Non-compliance will result in denial of a flight or landing permit, and grounding if the aircraft is already on the ground in Turkey.

At the time of writing, the minimum coverage limits for air carriers is 250,000 SDR for bodily injury and death of passengers. These amounts are lower for light aircraft (maximum takeoff weight of less than 5,700 kilogrammes) that are not under a commercial AOC and for balloon operators. Minimum coverage for baggage per passenger is 1,131 SDR, and for cargo per kilogramme it is 19 SDR.

Competition

Competition in Turkey is governed by the Law on Protection of Competition, which was promulgated in 1994. This Law is quite similar in its philosophy and system to the EU rules on competition.

Infringements of competition law are investigated by the Competition Commission, which has wide powers of investigation, and may act on its own accord or upon complaints. Since the proliferation of private and low-cost carriers within the domestic market, there have been quite a few investigations in the aviation sector. None of them have resulted in spectacular fines, but the state-owned airline, THY, was more frequently investigated than others, mainly for allegations of abuse of dominant position, predatory pricing and several other acts considered restrictive.

Although to this day no significant decision or fine has been issued by the Commission, the Commission's decisions do point out areas where certain practices may lead to infringements of competition rules. The general stance of the Commission is considered to be fair and equitable to THY's competitor carriers, which probably feel justifiably threatened by THY's historical market dominance.

Wrongful death

Wrongful death entitles close relatives of the deceased person to moral compensation. The magnitude of moral compensation is left to the discretion of the judge. Since there is no explicit and hard-set rule in the relevant codes, such as the Code of Obligations, for determining the extent of moral compensation payable upon wrongful death, a comprehensive body of jurisprudence has developed in this respect. The paramount rule that emerges from jurisprudence is that moral compensation should not be so high as to cause an inordinate increase in the wealth of the person receiving it. It is beyond dispute that wrongful death in relation to aviation activities will entitle the claimant to moral compensation. The degree of negligence of the party who caused the death, the nature and degree of the relationship between the claimant and the deceased, the circumstances of the death and other reasonable, relevant factors will affect the level of compensation. Traditionally and culturally, the magnitude of moral compensation awarded in Turkey used to be very low when compared to European countries and the United States. However within the past decade the levels of compensation have been observed to increase considerably compared to earlier decisions of the court of appeals. It is very difficult to obtain exact figures, but moral compensation of between US$10,000 to US$25,000 for spouses and next of kin can be expected in wrongful death claims.

Establishing liability and settlement

i Procedure

The customary forum for settlement of disputes is the civil court. Air carriers would invariably be merchants according to the Commercial Code, therefore the correct court for filing a claim against an air carrier or other commercial operator would be the commercial court. Where the operator is not a merchant, the correct court would be the court of first instance. Arbitration, although available as a forum, is almost never used unless a contract includes an arbitration clause. We have not, to this day, seen or heard of an aviation claim being referred to arbitration.

Mediation has very recently been introduced to the Turkish legal system by way of the Law on Mediation in Civil Disputes, which came into effect in June 2013.

For claims under the Montreal Convention, jurisdiction rules in the Convention will apply. For claims under the Civil Aviation Act, there is no specific provision on jurisdiction. The general rules of jurisdiction provided in the Code of Civil Procedure will apply. According to these rules the claim can be filed either at the court where the carrier is domiciled, or at the place of performance of the contract of carriage. Under Turkish law, the place of performance of a contract of carriage is the place of destination. Claims based on tort can be filed at the domicile of the plaintiff, or the place where the tort occurred. The statutory limitation period for claims arising from air carriage is two years starting from the date on which the carriage was or should have been completed. However, in cases where the case involves an accident or incident on which an official investigation report has to be issued, the time limit does not start running until the report is published.

The carrier is primarily liable for compensation, but it is also possible to sue the carrier's employees. Even in such a case, the carrier has strict liability for the acts or omissions of its employees. Manufacturers are also known to have been joined in liability cases. Regardless of the apportionment of liability between defendants, all of the defendants are liable to pay the entire award to the claimant. It is, however, possible for the party who made the payment to have recourse against the other defendants in proportion to the extent of its contribution to the cause of the accident.

ii Carriers' liability towards passengers and third parties

Liability towards passengers is established according to the Montreal Convention in cases arising from international carriage, and the Civil Aviation Act in cases arising from domestic carriage. In both cases, the scope of the carrier's liability against passengers in the event of injury or death is determined according to the Code of Obligations.

Liability for damage to third persons or to property is provided for in the Civil Aviation Act. The rules stipulate that the operator of an aerial vehicle is liable for damage caused to third parties. The registered owner of an aircraft is presumed to be its operator, unless proven otherwise. This liability is strict and unlimited. However, the operator may be relieved from liability in part or in full where it can prove that acts or negligence of the aggrieved party caused or contributed to the damage.

iii Product liability

Manufacturers of aircraft and aviation equipment may have liability towards passengers if they are found to be negligent in the design or production of their products and such negligence is the main or contributory cause for bodily injury, death or property damage. The legal basis for this liability is the recent Product Liability Act, which was promulgated in 2020. The scope of damages will be determined according to the Code of Obligations.

Aircraft owners would not be liable against passengers for any defect in the aircraft and equipment that they own unless they are also the operator of the aircraft. The registered owner will be considered the operator of the aircraft unless it is proven otherwise. The burden of proof rests with the owner.

iv Compensation

According to the Code of Obligations, an injured passenger has the right to be compensated for medical expenses, loss of earnings, loss of or decrease in earning power arising from permanent disability, and losses arising from impairment of economic future.

In cases of death, dependants of the passenger are entitled to compensation for losses arising from deprivation of the financial support of the deceased. If the death does not occur immediately, medical expenses and loss of earnings can also be claimed.

In all cases, the passenger, and relatives of deceased passengers, are entitled to moral compensation. The magnitude of moral compensation is determined by the judge taking into account the circumstances of the case.

When considering material compensation, the most significant items of loss are the earning power and age of the deceased or permanently injured passenger. As a very rough rule of thumb, the level of this compensation is the annual income of the passenger, multiplied by his or her statistical life expectancy. Income in this case refers only to income obtained by professional or other work; income from assets is not a factor. In determining annual income, it is not relevant whether the passenger was employed at the time of death. What is important is the average earning power of a person with similar qualifications and profession. Even in the case of illiterate and unemployed persons, the minimum wage is used as the minimum figure for material compensation. As a guideline, the annualised minimum wage in Turkey is around US$4,500.

The next important item is the number and ages of dependants of a deceased passenger. A surviving spouse is entitled to a certain portion of his or her income, and children are entitled up to a certain age. Note that dependants can include siblings, parents or anyone else who, morally and traditionally, can be reasonably expected to enjoy material support from the deceased passenger.

Dependants need not be heirs; this special form of compensation has no relevance to matters and issues concerning inheritance.

Moral damages are a sensitive issue. There are no specific guidelines in the Code of Obligations concerning moral damages. In jurisprudence, it is generally accepted that moral damages should be of such a magnitude as to be sufficient to at least alleviate the suffering and impart a minimal degree of consolation to the aggrieved party. It is said that it should not be so large as to make its recipient rich; nor should it be so high as to financially cripple the liable party. This is a very controversial issue. Moral damages awards are becoming higher and higher in Turkey, although not nearly as high as in the United States or Europe. As a very basic rule of thumb, it is very unlikely for moral compensation to be any higher than material compensation. In most cases, it would be less than half the material compensation.

All working persons in Turkey, whether they are employees or independent workers or professionals, are included in the social security system. If the passenger had social security cover, he or she would be entitled to medical treatment, temporary disability payments and permanent disability benefits if permanently disabled. In cases of death, dependants would be entitled to death benefits, which may be in the form of a pension.

The Social Security Administration has a right of recourse to the carrier or other liable parties for the total or current value of these social security benefits. These amounts are, however, deducted from the material compensation to be paid by the carrier or other liable parties.

Drones

Article 144 of the Civil Aviation Act as amended in 2016 is the primary regulation on drones. It basically states that companies that sell drones heavier than 500 grammes are required to keep records of persons purchasing drones and to notify these to the DGCA. It also lays down fines to be levied against persons who violate drone regulations. The Article authorises the Ministry of the Interior and the Ministry of Transportation and Infrastructure to jointly publish a regulation for details of drone operations.

Based on this authorisation, the operation and licensing of drones, drone pilots and operators is regulated in detail by the Unmanned Aerial Vehicle Systems Directive, which was introduced in 2016. Any unmanned aerial vehicle (except state unmanned aerial vehicles (UAVs) and tethered balloons) heavier than 500 grammes is subject to this regulation.

The Directive is very detailed. Its main features are as follows:

Drones up to 25 kilogrammes are required to be notified. Drones heavier than 25 kilogrammes are subject to registration in the aircraft registry, type certification and airworthiness requirements.

Commercial operators of drones are required to obtain a light UAV operator certificate. There are stringent requirements for the issuance of this licence.

Drones up to 25 kilogrammes can be operated without a UAV pilot licence, but these persons are required to notify the DGCA. There is no training requirement for hobby and similar non-commercial operations with these drones. Commercial operators are required to demonstrate that they have obtained training from licensed training organisations. A UAV pilot licence is required to operate drones heavier than 25 kilogrammes.

Drone flights are subject to permission. Non-commercial drone flights are issued a permit automatically by the flight permit registration system. There are detailed rules for applying for and issuance of flight permits, and the rules are more stringent for drones heavier than 25 kilogrammes.

Drones up to 25 kilogrammes must be operated in visual meteorological conditions at visibility of no less than 2 kilometres, no more than 400 feet above ground level and no more than 500 metres laterally away from and within sight of the pilot. Drones heavier than 25 kilogrammes are considered aircraft operating in visual flight rules and are subject to all relevant flight rules.

The Directive includes liability rules, and states that operators are liable for damage caused by drones. However, it is our opinion that liability regimes established by the Code of Obligations and other relevant legislation that have the force of law cannot be changed by a directive. It is difficult to say that a drone operator or pilot can be held liable for damage unless they are proven to be negligent.

Voluntary reporting

Both mandatory and voluntary reporting of safety incidents are regulated by the Directive on Reporting of Civil Aviation Safety Incidents.

The Directive states that all civil aviation personnel must be encouraged to report incidents that may place aircraft, passengers or any other person at risk. It also provides that both mandatory and voluntary reporters shall not be held liable in connection with the reported incident or persons.

The directive further provides that identities of voluntary reporters shall be kept confidential by the DGCA.

The year in review

Turkey was not spared the huge impact of the covid-19 pandemic on civil aviation. A large number of pilots and cabin crew have been sent on leave without pay. The government has alleviated their loss marginally by introducing a ban on termination of contracts, and paying a certain portion of the base pay to crews and other employees who would otherwise have been terminated. The ban started in April 2020, and has been extended several times. The growth in cargo volume has somewhat relieved crews, but the outlook remains rather grim. It will most likely not be possible to attain pre-pandemic levels of staffing, and many pilots and cabin crew will either have to retire or find other employment.

Former directors of the wet lessor and lessee of the ill-fated MD88, which crashed in Isparta in 2008, killing all 57 occupants, have been found guilty of manslaughter. The former director and deputy director of the DGCA have also been convicted in connection with the crash for abuse of their public duty of oversight. The case is pending after appeal.

Outlook

The DGCA's efforts to streamline regulatory instruments particularly in view of the increasing volume of general aviation operations (aerial work, balloon operations, commercial seaport and seaplane operations) have been remarkably intense especially within the past year, which has been a welcome relief for general aviation operators. Still, capacity-wise there is a long way to go as general aviation operators are increasingly being squeezed out of major airports because of the sheer volume of air carrier traffic.

An important development all sector participants are anxious to see would be the passing of an employment law addressing the unique characteristics of the professions that fly for a living. There is a draft bill before the Parliament, but it is not known at this time when it may pass the committees and reach the general assembly. This would certainly be a welcome development both for aviation professionals and their employers.

Footnotes

1 M Ali Kartal is the founding partner at Kartal Law Firm.

Get unlimited access to all The Law Reviews content