Aviation is among the most tightly regulated activities in Pakistan and among the least understood by businesses entering it — including the growing number using drones commercially without appreciating that they are flying into a licensing regime.

Civil aviation is regulated federally, and the regulatory function has been the subject of restructuring in recent years, separating the regulator from airport operations. Confirm the current institutional position before making an application, since forms and designations have moved.

Commercial air operations

Operating aircraft commercially requires an air operator certificate, which is not a document so much as a demonstrated organisational capability:

  • Corporate substance — a properly constituted entity, with ownership and control disclosed. Nationality and ownership conditions apply to Pakistani operators
  • Financial capacity to sustain operations, evidenced
  • Accountable manager and postholders — nominated individuals for operations, maintenance, training and safety, each accepted by the regulator
  • Manuals — operations manual, maintenance control, minimum equipment list, security programme
  • A safety management system that functions rather than exists on paper
  • Aircraft on the certificate, with airworthiness established
  • Insurance at the required levels

Approval is a process measured in many months, and applications fail on organisational readiness far more often than on aircraft.

Related approvals cover maintenance organisations, training organisations, ground handling, and — for anyone building infrastructure — aerodromes and heliports.

Aircraft registration, leasing and finance

Aircraft are financed and leased internationally, and the documentation is correspondingly complex: dry and wet leases, deregistration powers of attorney, mortgages, and the arrangements lenders require for enforcement.

Points that matter in a Pakistani transaction:

Registration and deregistration. A lessor's ability to deregister and export on default is the security it is actually relying on. The mechanics and any required consents should be established before the lease, not on default.

Detention for dues. Aircraft can be exposed to detention for unpaid airport, navigation and related charges — a lessor's exposure to a lessee's arrears.

Import and duty treatment of aircraft, engines and parts.

Foreign investment and repatriation where a foreign lessor or investor is involved. See getting money out of Pakistan.

Leases are almost always governed by foreign law with arbitration abroad. Awards are enforceable in Pakistan under the New York Convention. See the arbitration clause you sign today.

Drones and unmanned aircraft

This is where ordinary businesses now encounter aviation law.

Commercial drone use — survey, photography, agriculture, inspection, delivery — is regulated, and the requirements typically include registration of the aircraft, authorisation of the operator, pilot competency, and clearance for particular flights, with restrictions around airports, sensitive installations and populated areas. Security clearance requirements apply as well.

Two warnings for businesses.

Importing a drone is separately controlled. Consignments held at customs because the importer had no authorisation are routine. See customs disputes at Karachi port.

Flying without authorisation carries real consequences, including seizure and prosecution. Media and survey businesses that "just fly it" are taking a risk disproportionate to the fee.

Data and privacy considerations arise where drones capture identifiable footage. See customer data and privacy.

Passengers and cargo

Carrier liability to passengers and cargo interests for delay, baggage and injury is largely governed by international convention for international carriage. See flight cancelled, baggage lost.

Airlines' own exposure runs the other way too: consumer complaints to the regulator, contractual claims from freight customers, and disputes with ground handlers and airports.

Employment in the sector

Aviation employment carries its own features — licensing of the individual, training bonds, rostering and duty time limits, and medical fitness as a condition of holding a licence.

Training bonds are frequently challenged and are enforceable only within limits; a bond that operates as a penalty rather than a genuine recovery of cost is vulnerable. Note also that post-employment restraints on working for a competitor are largely unenforceable in Pakistan. See when a key employee leaves.

Where disputes go

Regulatory — internal review and appeal within the regulatory framework, and constitutional petition where the regulator has acted without lawful authority. See constitutional and writ petitions.

Commercial — as the contract provides, usually arbitration for leasing and service agreements.

Passenger and cargo — carrier's complaints process, the regulator, the consumer forum, or the courts.

How the firm can help

We advise operators, lessors, financiers, service providers and commercial drone users: approvals and licensing, aircraft leasing and registration documentation, ground handling and service agreements, and employment arrangements for licensed personnel.

We act in regulatory proceedings and constitutional challenges, in commercial disputes and arbitration, and in passenger and cargo claims.

If you are entering the sector, or flying commercially without an authorisation, contact the firm.