Decree enacting several amendments and additions to the Civil Aviation Law and the Airports Law

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Decree enacting several amendments to the Civil Aviation Law Decree enacting several amendments and additions to the Civil Aviation Law and the Airports Law Background On June 18, 2018, the Mexican Executive branch published in the Federal Official Gazette (Diario Oficial de la Federación) to become effective on the following day (except as provided in the Transitory Provisions 1 ), the Decree by which several amendments and additions to the Mexican Civil Aviation Law and the Airports Law were approved. The Decree essentially aims to: (i) broaden 1 In accordance with the Decree, the Federal Executive will have a maximum of 180 days from the enactment thereof, to amend the corresponding aeronautic regulation and issue administrative provisions concerning unmanned air vehicles and operational security. the administrative scope and legal powers of the Ministry of Communications and Transport ( SCT ) regarding operational security; and (ii) incorporate certain definitions in the Civil Aviation Law, to update different concepts of such regulation, specifically in the case of unmanned air vehicles (drones) and other similar aircrafts, which were not previously recognized under Mexican law though currently contained in the binding circular number CO AV-23/10 R4 (the Circular ), issued by the Civil Aviation General Bureau ( DGAC ). The most relevant aspects of the aforementioned Decree are the following: Operational Security After the publication of the Decree, the SCT has now new powers to regulate, verify and supervise operational security for air transport services in Mexico. For such purpose, Sections XV to XVII were added to Article 6 of the Civil Aviation Law, granting powers to the SCT, without prejudice to the powers granted to any other governmental agencies, to:

Approve all the flight plans same that must be previously submitted by any operator in writing or by telephone, interphone, radio frequency or any other electronic means, in accordance with the administrative provisions that must be issued for such purposes; Grant permits for the establishment of aeronautical workshops and training facilities, as well as to issue certificates for the establishment for aircraft factories and their components, which may be granted to Mexican or foreign nationals; and Issue and implement the necessary legal measures and Official Mexican Standards ( NOMs ) related with operational safety that should be observed in the rendering of air transportation services (i.e., passenger, commercial, cargo or mail), as well as to verify compliance of operators therewith. The purpose of such actions is to provide the SCT with a better mechanism to verify and, where appropriate, sanction air operators failing to comply with any provision of aircrafts or airport security operations. Therefore, the Decree also establishes new sanctions for those operators that may be responsible for any violation of the new operational safety measures to be implemented. In a similar way, Article 78bis was added to the Airports Law, for concessionaires and permit holders of public service airports to certify themselves with the SCT, in accordance with the provisions that must be issued for such purposes. Unmanned and remote piloted aircrafts The Decree also includes the addition of certain definitions to the Civil Aviation Law related to certain aerospace technological innovations, as such type of aircrafts 2 are being used for commercial purposes, such as the following: i. Unmanned Aircraft: Aircraft intended to fly without a pilot on board. 2 In accordance with Article 3, Section I of the Civil Aviation Law, aircraft are considered: any vehicle capable of traveling autonomously in the airspace with persons, cargo or mail; (...) ii. Autonomous Aircraft: Unmanned aircraft that does not allow the intervention of any pilot during flight. iii. Aeromodel: Unmanned aircraft, controlled by remote control, manufactured on a reduced scale of the real size of a manned aircraft, for recreational use only. iv. Unmanned Free Balloons: Unmanned gas balloon, driven by non-mechanical means designed for free flight activities. For unmanned aircrafts, Remote Piloted Aircraft Systems ( RPAS ) definition was also included to the Civil Aviation Law, as the group of elements formed by a remotely piloted Aircraft, its station or connected pilot distance stations, the required command and control links and any other component. 3 The SCT will be the entity in charge of issuing and applying the measures and NOMs related with: (i) certification; (ii) operation, and (iii) manufacturing of civil and State unmanned aircraft, except military. The Decree also pursues a regulatory framework intended to improve the use of unmanned aircraft in a safe and efficient environment. Until the new guidelines and NOMs are issued, the provisions contained in the Circular will remain in effect. Such Circular establishes the current requirements to operate a Remote Piloted Aircraft System in Mexican airspace. Likewise, a fourth Section is added to Article 47 of the Civil Aviation Law, within which it is established that the documents by which the property or possession and other real rights on civil aircraft piloted from distance are acquired, transmitted, modified or extinguished must be registered in the Mexican Aeronautical Registry. Finally, sanctions are included for all those owners and/or holders of unmanned aircraft (with the exception of the military), for failing to comply with any of the obligations or conditions established in the Civil Aviation Law and in any other regulations issued for 3 Civil Aviation Law, Article 3, Section I. that purpose. These sanctions may range from 200 to 5,000 UMA, (measure units Unidad de Medida y Actualización ). It also provides for the possibility of suspending any permit, license or registration granted to an operator of unmanned aircraft, according to the seriousness of the fault. Other Relevant Aspects of the Decree The Decree also amended Article 26 of the Civil Aviation Law, for the effect that the operators (concessionaires or permit holders) of the regular aviation service submit to the SCT, for their knowledge, the commercial and cooperation agreements the execute with each other or with foreign airlines, within a period of thirty days as of their execution. The foregoing constitutes a new obligation for said operators, due to the fact that to date such obligation was limited to the national regular aviation service. On the other hand, the payload is modified for the authorized aircraft that provide air taxi services, so from the entry into force of the Decree, they may be up to 19 passengers (previously it was 15) or 3,500 kilograms of cargo.

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