Jump to Content

Ownership and Control of Airports

Airports Act 1996: Ownership Rules with Regard to Investment Funds

The Airports Act 1996 (the Act) establishes the regulatory arrangements which apply to the airports formerly owned and operated on behalf of the Commonwealth by the Federal Airports Corporation, and Sydney West Airport.

In respect of airport ownership and control, the Airports (Ownership-Interests in Shares) Regulations 1996 establish that a foreign investment fund can be classified as ‘substantially Australian’ in relation to the foreign ownership provisions or a ‘distanced investment fund’ in relation to the airline-ownership provisions of the Airports Act 1996.

It is essential that fund managers refer to and meet the requirements of the Act, the Schedule to the Act, and the Regulations to ensure legislative obligations are fulfilled.

‘Substantially Australian’ declaration

Certain investment fund managers may apply for a declaration that can disregard certain interests, for the purposes of determining whether an unacceptable foreign ownership situation will arise.

For a person to be eligible for this declaration, the person's interest in a share must have arisen solely as a result of an action by the person in their capacity as trustee or manager of an investment fund.

Under Regulation 2.07 of the Airports (Ownership-Interests in Shares) Regulations 1996, if a person conforms to the criteria above, they can make an application to the Secretary of the Department in writing for a declaration that an investment fund is a substantially Australian investment fund.

The application must be accompanied by evidence to establish that the investment fund is a fund in which a beneficial interest in less than 40% of the capital, and 40% of the income is held by persons who are foreign persons.

If declared, the Secretary has the right to request any information reasonably available to the person that could affect the eligibility of the investment fund to remain declared.

The holder of the declaration is required, within 30 days of each anniversary of the date on which the declaration was made, to provide the Secretary of the Department with a written statement that the holder believes that the fund is still eligible for the declaration.

‘Distance investment fund declaration’

Certain investment fund managers may apply for a declaration that can disregard certain interests, for the purposes of determining whether an unacceptable airline ownership situation will arise.

For a person to be eligible for this declaration:

  1. the interest must be an interest in a share in an airline; and
  2. the person in their capacity as a manager or trustee is an associate of an airline; and
  3. the interest arose solely as a result of an action by the person in their capacity as a manager or trustee of an investment fund.

Under Regulation 4.03 of the Airports (Ownership-Interests in Shares) Regulations 1996, if a person conforms to the criteria above, they can make an application to the Secretary in writing for a declaration that an investment fund is a distanced investment fund.

The application must be accompanied by evidence to establish that the manager or trustee is not under an obligation to act in accordance with directions or instructions of the airline (either formally or informally). Evidence must also be provided to establish that the investment fund is a fund in which a beneficial interest in less than 40% of the capital and 40% of the income is held by persons who are foreign persons.

If declared, the Secretary has the right to request any information reasonably available to the person that could affect the eligibility of the investment fund to remain declared.

The holder of the declaration is required, within 30 days of each anniversary of the date on which the declaration was made, to provide the Secretary of the Department with a written statement that the holder believes that the fund is still eligible for the declaration.

Revocation

The Secretary may revoke either declaration if there are reasonable grounds for believing that the circumstances have changed or the fund does not comply with the other provisions.

Within 7 days of a declaration revocation, the Secretary must give a notice of reasons, date of revocation, and right of appeal against the decision to revoke the declaration.

Submission of completed declaration forms

Completed declaration forms and annual statements for both the distance fund investment declaration and the substantially Australian fund declaration should be addressed to the Secretary of the Department and sent c/o:

The General Manager
Airports Branch
Aviation and Airports Division
Department of Infrastructure and Regional Development
GPO Box 594
Canberra ACT 2601

Print

Last Updated: 11 June, 2014