Programme initiative.pt 2.0 Regulations

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1 Programme initiative.pt 2.0 Regulations Article 1 Object 1. The object of the present Regulations is the definition of the terms of the support granting to projects aimed at attracting or developing air routes of tourist interest for Portugal, which promote increased passenger flows and the generation of tourism business for national destinations. 2. The support granting regimen referred to in the preceding number is enforced from 1 April 2012 to 31 October 2015, inclusively. Article 2 Eligible projects 1. Projects may be supported under the present Regulation when aimed at the attraction or development of air routes of tourist interest for Portugal and which, cumulatively, meet the following conditions: a) Involve international air routes or operations, point-to-point, of a scheduled character, with direct sale of aircraft seats to the final consumer, or charter operations, whose sale is fully brokered by tour operators or travel agents; b) Are mainly directed at inbound traffic, with the exclusion of the international transit segment, calculated through estimate, based on the characteristics of the market; c) Involve the increased offer of aircraft seats available on the market through the startup of new routes or operations, the annual expansion of seasonal operations or increased frequency of operations currently underway. 2. For the effect of eligibility, the projects referred to in number 1 of the present article should also cumulatively comply with the following five requirements: a) Market - support may only be given to air routes or operations which involve the markets defined in the strategic matrix of the National Plan of Tourism Promotion for each region where the national airports are located, under the terms of annex 1; b) Offer support may only be given to air routes or operations which promote the increased offer of aircraft seats available on the market through one of the following situations: i. New city pair routes; ii. Replacement routes;

2 iii. Operations which involve the entry of a second company in a city pair route already served by scheduled flights or, in the case of the airports of Faro, Funchal, Porto Santo and Ponta Delgada, also by charter flights; iv. Operations which involve the entry of a third company in a city pair route already served by scheduled flights or, in the case of the airports of Faro, Funchal, Porto Santo and Ponta Delgada, also by charter flights, if the proposed segment is not yet being offered on the route; v. Annual expansion of seasonal operations; vi. Increase of a weekly frequency to the minimum number of weekly frequencies defined in subparagraph c) of number 2 of the present article and up to three weekly frequencies, or increase of two or more weekly frequencies up to the maximum daily flight, in both cases for operations that are already underway; c) Intensity - support may only be given to air routes or operations with a minimum of three weekly frequencies to Lisbon, two weekly frequencies to Porto or Faro and one weekly frequency to each of the remaining national airports; d) Periodicity support may only be given to annual routes or operations, routes or operations limited to the IATA winter and experimental routes; e) Capacity support may only be given to air routes which are operated with aircraft whose capacity is above 100 seats, except for the airports of Madeira and Azores islands where the minimum limit of the aircraft capacity will be 80 seats. 3. For the purposes of the preceding number, these terms are defined as follows: a) New city pair route when, for at least 3 consecutive years, there has been no scheduled operation or, in the case of the airports of Faro, Funchal, Porto Santo and Ponta Delgada, no charter operation, between the targeted national airport and the metropolitan area where the international airport is located,; b) Replacement route route which replaces a city pair route which has not been operated for at least 12 consecutive months; c) Experimental route new city pair route that, in the launch year, is temporarily interrupted during the IATA season subsequent to that of its initial season, in which case the support to the launch campaign or strengthening of the operation in the target markets is only given upon the annual re-starting of the route. 4. In duly substantiated situations and of evident interest and relevance to the promotion of national destinations, support may also be given to projects aimed at the attraction or development of air routes which do not meet some of the eligibility requirements identified in number 2 of the present article, in which case the application will be analysed on a case-bycase basis, under the terms established in articles 7 and following of the present Regulation. 5. For the purposes of application of the present Programme, operations are excluded when carried out by aircraft which do not comply with the requirements established in Annex 16, Chapter 3 of ICAO and Regulation number 216/2008 of the European Parliament and

3 Council of 20 February 2008, as well as by the airline companies included in the list published under Regulation (EC) number 2111/2005 of the European Parliament and Council of 14 December 2005, relative to the establishment of a Community list of air carriers which are prohibited from operating in the Community, with the updates in force at any given time. Article 3 Promoters 1. Airline companies are the eligible promoters for access to the granting of support under the application projects for the Programme initiative.pt For the cases of charter operations established in number 1 of article 2, tour operators are also eligible promoters when they assume the majority of the risk of the operation. Article 4 Form and nature of the support 1. The support to be granted is expressed as a financial contribution, of a non-reimbursable nature, without prejudice to the provisions in number 4 of the present article. 2. In view of the impact of the air routes and operations on the development of tourist traffic to national destinations, and respective generation of wealth, the support referred to in the preceding number is expressed in the co-financing of campaigns to launch the route or strengthen the operation in the target markets, directed at the consumer, which promote the route in coordination with the communication of the national destination on an exclusive basis. 3. In the case of the launch of new city pair routes, the support referred to in number 2 of the present article is increased with the granting of a performance award according to the number of passengers processed on the route, measured by the number of arriving passengers at the national airport where the route operates. 4. The support referred to in number 1 of the present article may be increased through the implementation of annual plans of promotion of the route and destination, developed by the regional tourism entities covered by the operation, and. supplementary to the launch of the route or strengthening of the operation in the target markets.

4 Article 5 Assessment criteria and intensity of the support 1. The projects referred to in number 1 of article 2 are assessed based on criteria which vary according to the form and nature of the support: a) The support allocated to the co-financing of the campaigns to launch the route and strengthen the operation in the target markets, established in number 2 of article 4, are fixed and defined according to the relevance of the market and the priority and scale of the operation in terms of the matrix presented in annex 2.1; b) The support granted under the form of route performance awards, established in number 3 of article 4, is variable according to the number of passengers landed at national airports, where the respective unitary value is established according to the destination airport, flight sector and IATA season when the route operates, pursuant to the matrix presented in annex For reasons of strategic nature, the regional tourism entities may also add the co-financing presented in the table of subparagraph a) of number 1 of the present article, of a value to be defined on a case-by-case basis. Article 6 Financing ceiling 1. The granting of the support established in numbers 2 and 3 of article 4 of the present Regulations is subject to a financing ceiling. 2. The financing ceiling referred to in the preceding number observes the following principles: a For the purposes of the provisions in number 1 of article 5, Turismo de Portugal, I.P., the regional tourism entities, ANA - Aeroportos de Portugal, S.A. and ANAM - Aeroportos e Navegação Aérea da Madeira, S.A., contribute for the granting of support in the following proportions: i. Turismo de Portugal, I.P.: 30%; ii. Regional tourism entities: 20%; iii. ANA - Aeroportos de Portugal, S.A. or ANAM - Aeroportos e Navegação Aérea da Madeira, S.A.: 50%. b For the effect of the provisions in number 2 of article 5, the addition to the support is fully granted by the regional tourism entities. 3. The support granted under the form of route performance awards, referred to in number 3 of article 4, is fully assured by ANA - Aeroportos de Portugal, S.A. or by ANAM - Aeroportos e Navegação Aérea da Madeira, S.A.

5 4. The supplementary support granted through the implementation of annual plans of promotion of the route and destination, referred to in number 4 of article 4, is fully assured by the regional tourism entities, being added to the expenses defined in numbers 1 and 2 of the present article, and should be formalised through an addendum to the contract, to be concluded with the promoter. Article 7 Programme management and governance 1. The management of the Programme is ensured by Turismo de Portugal, I.P., in coordination with ANA Aeroportos de Portugal, S.A. and ANAM Aeroportos e Navegação Aérea da Madeira, S.A., in accordance with the governance model of initiative.pt Turismo de Portugal, I.P. is responsible for: a) Validating the applications submitted by the Promoters; b) Deliberating on the granting of the support, taking into account the opinions referred to in the following number; c) Preparing the contracts granting the support and the joint liability of the partners in this context which shall be granted by all the parties involved. 3. Under the terms of the governance model of initiative.pt 2.0, ANA - Aeroportos de Portugal, S.A., the territorially competent regional tourism entity and, in the case of operations relative to the Autonomous Region of Madeira, ANAM - Aeroportos e Navegação Aérea da Madeira, S.A., issue prior opinions on the granting of the support. 4. Without prejudice to the provisions in number 4 of article 2, the procedures of validation of the applications are limited to the clearance of the application case file and to verification of compliance with the eligibility requirements identified in articles 2 and 3 and of the budgetary availability of the programme, including that of each partner. Article 8 Applications and subsequent procedures 1. The applications for the granting of support may be submitted at any time. 2. The application case files are prepared and submitted by the promoters to ANA - Aeroportos de Portugal, S.A. or to ANAM - Aeroportos e Navegação Aérea da Madeira, S.A. in the case of air operations in the Autonomous Region of Madeira. 3. The preparation of the application case files includes the characterisation of the air route or operation, through the completion of a specific form, as well as a description of the strategy and marketing plan for the promotion and communication that the company or tour operator

6 proposes to carry out with a view to serving the national destination, including indication of the means and target groups of the campaign. 4. After the deliberation established in subparagraph b) of number 2 of article 7, Turismo de Portugal, I.P. notifies the promoter of the decision which has been made on the application. 5. The notification established in the preceding number, when the decision is favourable, is accompanied by a draft contract for the granting of support, comprising: a) Indication of the financial support and respective terms and conditions; b) The identification and joint liability of the funding entities; c) The manner and period of execution and payment of the support; d) The identification and manner of implementation of the annual plans of promotion of the route and destination, referred to in number 4 of article 4. Article 9 Contracts for the granting of the support The granting of the support is the object of a contract to be concluded between Turismo de Portugal, I.P., ANA - Aeroportos de Portugal, S.A. or ANAM - Aeroportos e Navegação Aérea da Madeira, S.A., the territorially competent regional tourism entity and the eligible promoters pursuant to numbers 1 and 2 of article 3, under the terms of the previously approved draft. Article 10 Dissolution of the contracts 1. The contracts may be terminated by Turismo de Portugal, I.P., under the following situations imputable to the promoters: a) Cancellation of the air routes or operations; b) Alteration of the characteristics of the air routes or operations; c) Non-compliance with the other obligations stipulated in the contracts; d) Provision of false information or fraudulent alteration of data in the presentation of the applications or implementation of the contracts. 2. The dissolution of the contracts is always preceded by an opinion issued by the funding entities. 3. Without prejudice to the provisions in the preceding number, ANA Aeroportos de Portugal, SA, ANAM Aeroportos e Navegação Aérea da Madeira, SA or the territorially competent tourism entity may propose the dissolution of the contract to Turismo de Portugal, I.P., on the grounds of number 1 of the present article. 4. The dissolution of the contracts implies the loss of the right to charge the support, without prejudice to the payment of the amounts owed for activities that have already been carried out by the contract termination date.

7 Article 11 Obligations of the promoters 1. The obligations of the promoters are as follows: a) Ensure the monitoring and control of the implementation of the projects; b) Ensure that the air route or operations are carried out within the periods and under the conditions established in the contracts; c) Communicate any alteration or occurrence which puts in question the assumptions relative to the approval of the granting of support, in particular with respect to the characteristics of the air routes or operations; d) Ensure that the support granted under subparagraph a) of number 1 and number 2 of article 5 is applied exclusively in the implementation of the campaigns to launch routes or boost and strengthen operations in the target markets, under the terms defined in the contracts; e) Send reports on the operation of the routes and implementation of the campaigns confirming their good implementation, within the period of 30 days counted as of the end date of each IATA season, containing, amongst other aspects, all the elements defined as critical for the granting of the support. 2. The promoting airline companies are responsible for obtaining the necessary time slots from the Slots Coordinator.

8 ANNEX 1 National plan of tourism promotion Strategic matrix

9 ANNEX 2.1 Campaigns co-financing matrix

10 ANNEX 2.2 Performance awards matrix

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