AIRPORT ECONOMIC ġ L.S.232.12 1
SUBSIDIARY LEGISLATION 232.12
AIRPORT ECONOMIC REGULATIONS
1st October, 2002
LEGAL NOTICE 299 of 2001.
Title.
Regulations.
Interpretation.
S.L.232.05
"aerodrome" shall have the same meaning as that assigned to it
by article 2 of the Air Navigation Order;
"agreed service levels" means minimum levels of service which
the Airport operator is required to provide to users of the airport;
S.L.232.13
Allocation of Slots at Airport Regulations;
Cap. 405.
"airport" shall have the same meaning as that assigned to it by
article 2 of the Airports and Civil Aviation (Security) Act;
"airport charges" means charges payable in respect of one or
more of the following:
- landing and taking off of aircraft, (landing charges)
- use of aircraft parking areas and aprons (parking
charges);
- charges which a passenger has to pay directly or
indirectly to the Airport operator for the use of the air
terminal at the time of arrival and departure;
- charges which a passenger has to pay directly or
indirectly to the Airport operator for aviation security
services in respect of personnel security screening and
the security screening of the passenger’s hand and
hold baggage;
"airport facility charges" means all those charges, not being
airport charges;
"Airport operator", in relation to an airport and, or, an
aerodrome, means the person for the time being having the
management of that airport and, or, aerodrome;
"Minister" means the Minister responsible for Civil Aviation; 
"rate of inflation" means the rate of inflation as determined by
the Government of Malta and indicated as such in the Government
Gazette.
Airport Charges 
Regulatory Board.
3. (1) The determination, review, regulation and, where
necessary, the imposition of airport charges shall be the sole
responsibility of the body established by this regulation.
(2) ( a ) There shall be established a board, to be known as the
Airport Charges Regulatory Board, hereinafter referred
2 L.S.232.12 ħ AIRPORT ECONOMIC
to as "the Board".
( b ) The Board shall be chaired by a person of recognised
standing and experience in the economic regulation of
airports, and who shall be jointly appointed by the
Minister and the Airport operator.
( c ) The Chairman, who shall have a casting vote in the
case of an equality of votes, shall hold office for a
period not exceeding three years, which may be
renewed for a further period or further periods of three
years each.
( d ) The Board shall  be composed also of the following
members:
(i) three representatives of the Airport operator;
(ii) a representative of the Department of Civil
Aviation;
(iii) a representative of the largest carrier, as
measured by number of passengers embarked
and disembarked at Malta in the previous twelve
months; and
(iv) a representative of  air carriers, other than that
referred to in sub-paragraph (iii), operating to
and from Malta.
(3) (a) The Board shall be deemed to be composed
notwithstanding that one or more of the above
representatives are not nominated.
( b ) The quorum for meetings of the Board shall be of four
individuals and the Chairman.
(4) ( a ) Airport charges for the period ending on the 31st
March, 2007, may be increased on the 1st April of each
year by no more than the rate of inflation in the
preceding calendar year minus 0.5% (hereinafter
referred to as "the formula"). Thereafter airport
charges are to be permitted to increase or required to
decrease on the 1st April of every fifth year and shall
remain in place for the following five year period by a
percentage amount equal to  the previous period’s rate
of inflation as adjusted in accordance with paragraph
(b).
( b ) Every five years, the Board shall set a percentage
which must be added to or deducted from the rate of
inflation each year to calculate the maximum increase
or minimum decrease by which airport charges must be
changed for the following five year period. In
determining the percentage, the Board must have
regard to the criteria established in regulation 4.
( c ) Every five years, the Board may also, in consultation
with the Airport operator, amend, remove or add
agreed service levels which will apply during the next
review period.
AIRPORT ECONOMIC ġ L.S.232.12 3
(5) The Airport operator may at any time request the Board to
review and, if necessary, alter the formula by which airport charges
are set if unexpected economic circumstances warrant such a
review.  In carrying out this review, the Board shall have regard to
the considerations set out in regulation 4.
(6) In addition to airport charges determined by the formula,
the Airport operator shall be entitled to recover from users, whether
through increases in airport charges or otherwise, the increase in
costs or loss of revenue resulting from exceptional or unforeseeable
events including, but not limited to, discriminatory changes in
taxation or similar levies, Government measures which impose
additional costs in respect of aviation security or the protection of
the environment.
Functions of the 
Board.
4. (1) The Board shall, in the execution of its functions, seek
to promote the following:
( a ) the interests of airport users, and the Maltese
economy; and
( b ) the efficient, economic and profitable operation of the
airport and the aerodrome.
(2) In considering the interests of users and of the Maltese
economy, the Board shall seek to balance the application of the
following principles:
( a ) charges shall be reasonably related to costs, including
depreciation and a return on capital employed;
( b ) the Airport operator is to be encouraged to invest in
airport facilities to meet demand;
( c ) charges should be comparable to those levied at other
airports which serve areas competing with Malta as a
tourist destination;
( d ) the achievement of service standards applicable
internationally in the industry.
(3) In considering the need to promote the efficient and
profitable operation of the airport, the Board shall seek to balance
the application of the following principles:
( a ) allow the Airport operator to benefit from any increase
in aviation and non-aviation revenues and
improvements in efficiency by permitting the Airport
operator to enjoy above-average returns on capital
employed by reference to the industry; 
( b ) allow the Airport operator experience below-average
returns on capital employed that may result in the
course of normal commercial operations of an airport
while ensuring that the Airport operator has the
minimum financial means to provide users with a safe
and reliable service:
For the purpose of this paragraph, the Board shall
normally permit levels of return on capital, taking into
account aviation and non-aviation revenues earned and
4 L.S.232.12 ħ AIRPORT ECONOMIC
the value of related assets located at the airport and
aerodrome, within a range of one-half to one and a half
times of the risk adjusted return on capital for the
industry;
( c ) any activities not existing on the entry into force of
these regulations, including but not limited to, retail
outlets, shall not be included in the calculations
reckoned pursuant to those stipulated in paragraph (b).
The Airport operator’s revenues, costs and assets
associated with such activities will not be included in
the calculations of the Airport operator’s return on
capital employed.
Review. 5. The Airport operator and the Board shall agree the detailed
process for conducting each review, including a timetable for
completion of the review, which will -
( a ) enable careful consideration of the criteria specified in
regulation 4;
( b ) permit users and the Airport operator to prepare for the
effects of the conclusions of any review; and
( c ) limit the impact on the resources of the Airport
operator.
Costs. 6. In conducting its review, the Board will be permitted to
charge the Airport operator its reasonable costs, including the costs
of retaining appropriate consultants and experts necessary to carry
out its functions in a proper manner.
Airport facility 
charges.
7. Airport  facility charges shall be determined by the Airport
operator.
Investigation. 8. (1) Upon receiving a complaint, or if the Minister has
reasonable grounds for suspecting that the Board is failing to
comply, or has failed to comply, with these regulations, the
Minister may, within one month from the receipt of the complaint
or from the date on which the airport charges have been
determined, conduct an investigation in terms of subregulations (2)
and (3).
(2) The investigation shall be conducted in an independent and
transparent fashion with the assistance of individuals of recognized
standing in the economic regulation of airports.
(3) The investigation shall be concluded by a reasoned written
report. 
(4) The recommendations contained in the above-mentioned
report shall be accepted or rejected by the Minister who will then
determine the appropriate course of action.
Offences. 9. (1) Any person who fails to provide the Board with the
relevant information requested within the time specified in a
written notice shall be guilty of an offence.
(2) Any person who knowingly provides false information to
the Board shall be guilty of an offence.
AIRPORT ECONOMIC ġ L.S.232.12 5
Penalties.
9(1) shall be liable, on conviction, to a fine ( multa ) not exceeding
five hundred liri, and, in the case of a second or subsequent
conviction, to a fine ( multa ) not exceeding one thousand liri.
(2) A person who commits an offence under regulation 9(2)
shall be liable, on conviction, to a fine ( multa ) not exceeding one
thousand liri or to imprisonment for a term not exceeding six
months or to both such fine and imprisonment.
