DOLJ COUNTY COUNCIL 19, UNIRII STREET, CRAIOVA 200585 : +40 251408200, +40 251408205; Fax:+ 40 251408230; + 40 251414524 www.cjdolj.ro

TERMS OF REFERENCE “OPENING OF NEW AIR ROUTES DEPARTING FROM CRAIOVA AIRPORT”

Dolj County Council and The Autonomous Administration of Craiova Airport (CA) organize the procurement procedure through the public selection of tenders for granting the financial aid for the opening of new air routes or frequencies departing from Craiova Airport (CA). The start-up aid is granted on the basis of the start-up aid scheme approved by the European Commission by the Decision regarding the State aid SA 35053 (2012/N).

1. The objective of the call for tenders 1.1. The increase of the direct connections (new destinations) between Dolj County/ South West development region and a series of European destinations. 1.2. The performance by the air carrier of air transport services for passengers on the route/ routes for which they benefit of start-up aid from the acquisitor. 1.3. The opening of new routes departing from CA with one or several air carriers which will be selected through a public selection procedure.

1. The eligibility of applicants Any air carrier complying with the following requirements may be an applicant: 2.1. The applicants must have a valid air operating license issued by a Member State of the EU, in accordance with (EC) Regulation 1008/2008 of the Council with respect to the common norms for operating air services in the Community. 2.2. The applicants must have compulsory insurance against accidents covering passengers, cargo, mail, and third-party liability under the terms of EC Regulation 785/20041;

1 2.3. The applicants must not be on the European black list of airline companies that fail to satisfy safety standards, as published at: http://ec.europa.eu/transport/air-ban/. 2.4. The applicants must have a European air operator certificate or other equivalent document issued by a competent authority in his country of origin. 2.5. The applicants must not have received subsidies or public aids of any kind which cover the same costs for the same services. 2.6. The applicants must not have any financial debts to CA, and must not be in any litigation with CA at the deadline of submitting the tenders.

3.Defining a new route A route is considered to be new if it complies with the following requirements:

3.1. The proposed route is promoted and/or sold as a route that has not been operated by AC and follows the model of routes coupling promoted by the International Air Transport Association (IATA); 3.2. A route which is closed by an existing air carrier will be considered as a "new route" only for other carriers, not for the carrier which has ended the exploitation of the route and that only after a period of minimum two seasons (one year) since it was closed by the former carrier. The air carrier which closed the route is eligible only for other public selection procedures organized by Dolj County Council; 3.3. A route may be considered a "new route" in the case in which a carrier proposes the expansion of the existing services by transforming a route from a seasonal one to a regular one. 3.4. Only the routes opened within the European Union are eligible within this aid scheme.

4. Financing conditions 4.1. The financing will not be granted to an air carrier which operates on CA, for a new route which functions in substitution for, and after quitting an old route which has not been operated for less than two seasons. 4.2. The financing cannot be granted in order to help a new air carrier to open an already existing route and which would place this one in direct competition with an already existing carrier functioning on the same route. 4.3. No retroactive application can be made in order to support the opening of a new route in case that route has already been announced. 4.4. The period during which the air carrier will operate the route on CA must be at least double the period during which the air carrier benefits of the start-up aid for the respective route.

5. Details regarding the aid scheme 2 5.1. This aid scheme proposed by Dolj County Council was approved by the European Commission through the Decision C (2012) 7293 final. 5.2. This scheme envisages to encourage the opening of a new route departing from CA by granting financial compesations for additional start-up costs, marketing and promotion costs. The financial compesations will not be granted for standard operating costs such as aircraft leasing or depreciation, fuel costs, salaries of flight personnel, airport charges or catering services. All remaining eligible costs must correspond to the real costs incurred under normal market conditions. 5.3. The aid granted to any air carrier for opening a new route will be calculated for each boarded passenger from CA. The requested financing will be digressive in time and correlated with the number of transported passengers, as follows: while the number of passengers increases, the aid per passenger will decrease in time. 5.4. Granting the aid for opening new routes will be made on non discriminating grounds for any air carrier which meets the requirements stipulated in the present Terms of Reference. 5.5. The aid will be granted in a digressive way for a maximum period of 5 years. The amount of the aid in one year may not exceed 50% of total eligible cost for that year and the total aid may not exceed an average of 40% of the eligible costs. 5.6. The aid for opening a new route will not exceed 5,50 Euro / boarded passenger in the first year and will be paid under a digressive scheme (e.g. 5,00 Euro / boarded passenger in the second year, 4,50 Euro / boarded passenger in the third year, 4,00 Euro / boarded passenger in the fourth year and 3,5 Euro / boarded passenger in the fifth year).

6. The documentation and necessary information The tenderers must prepare a complete documentation for the tendered route, written in Romanian and in English and containing the information and documents required below: 6.1. The valid operating license, as air carrier, issued by the competent authority for the regulation of civil passengers carriage from a European state.

6.2. The air carrier certificate, which certifies the fact that the air carrier holds the professional capacity to ensure secure aeronautical conditions for the activities specified in the certificate.

6.3. The air carrier must specify if he holds any certificates issued by a body responsible with the quality control of the aerial transport services and with the certification of these services conformity with the legislative rules in force (for example: Quality JAR 145 – Joint Aviation Regulation or EASA – European Aviation Safety Agency). If the air carrier does not hold such certificates or does not have the possibility to obtain them until the deadline for submitting the tenders, other equivalent certificates

3 certifying the quality of the services provided by the air carrier may be taken into consideration. 6.4. A power of attorney from the air carrier for the person nominated to sign the offer for the participation in the tender, to participate in the tender procedure on behalf of the company and to sign all the documents issued during and/or after the tender. 6.5. A declaration stating that the information provided in the tender are accurate. 6.6. The business plan covering both the period in which start-up aid will be granted for opening the new air route as well as the period in which the carrier will operate without receiving any financial compensation. The business plan shall include the following information: 6.6.1. The period for which the start-up aid is required and the period for which the operator commits himself to operate the respective route. 6.6.2. The commercial activities for promoting the new route during the start-up aid granting period. 6.6.3. The modality of selling the tickets for the new route. 6.6.4. Financial implications of the activities described above. 6.6.5. Human resources allocated by the air carrier for the operation and development of this route. 6.6.6. The viability starting with year x of the scheme (from the moment it doesn’t receive the state aid anymore) 6.7. The operational plan of the route which should contain the following information: 6.7.1. The proposed route, if the final destination is the same as according to IATA classification. 6.7.2. The date of opening the new route. 6.7.3. The frequency of flights to be operated on the route. CA’s request: a minimum of 2 flights per week. 6.7.4. The aircraft type which will operate the route and the seats configuration. 6.7.5. The passenger traffic estimated for each of the years in the operating period (minimum for a period double than the duration of the start-up aid programme). 6.7.6. The operating programme, indicating the days and the hours of the flights proposed. 6.8. The financial plan of the route which shall contain the following information: 6.8.1. The amount of financing required per passenger boarded from CA. 6.8.2. The estimated budget of the net costs for starting-up and promoting the new route for each year of the aid programme (maximum 5 year). 6.8.3. The estimated turnover for each operating year, with and without the start-up aid for the new route.

4 6.9. The declaration regarding the flight cancellation: the flight cancellation is allowed only under circumstances which are not imputable to the air carrier (e.g.: temporary closure of the airports, technical problems, weather conditions, etc.). The air carrier may cancel certain flights planned according to the operational plan, without exceeding 3% of the number of annual flights. 6.10. A document which revels the experience of the carrier in the field of civil air transportation of passengers and the commercial evolution of the carrier in question. 6.11. Documents regarding the similar experience in case the air carrier previously benefited from start-up aids for new routes, specifying the destination, the number of passengers and the frequency of the operation. 6.12. A declaration that the carrier will continue to operate the route after the termination of the start-up aid period. 6.13. Documents which contain:

6.13.1. The types and number of the aircrafts the carrier’s fleet is formed of, their average age and also the type of aircraft which will operate on the tendered route. Also it will be specified the type of aircraft which will be made available by the carrier in case of major force, for replacing the main aircraft. 6.13.2. The aircrafts operating on the new route must fulfil the ICAO requirements regarding the phonic pollution (Annex 16 ICAO), and also other ICAO international standards. 6.13.3. The IT resources the carrier disposes of and the way they will be used for serving the tendered route. 6.13.4. The booking-system and the system of selling the tickets. 6.14. A document mentioning the entity in charge with the technical assistance for the aircrafts, on Craiova Airport. 6.15. A document which will specify the prices policy of the carrier for the tendered route. This document will also specify how other possible supplementary taxes will be paid. 6.16. The compulsory accident insurance policy covering the passengers, the cargo, the post, and the liability policy in accordance with the conditions of the EC Regulation 785/2004. 6.17. A document proving that the air carrier fulfilled his payment obligations regarding taxes and contributions to the national budget, in the carrier‘s country of origin.

7. Selection criteria All the tenders will be evaluated according to the “Community guidelines on financing of airports and start-up aid to airlines departing from regional airports 5 OJ C 312, 9.12.2005, and to the Decision of the European Commission for the approval of the aid. The tenders that do not contain the technical, financial and operational information requested, those that do not contain the documents requested by the present Terms of Reference, or those that are not being submitted on time, will not be taken into consideration. The first stage of the selection of the tenders envisages the eligibility of the applicants. Only the tenders of the air carriers that meet the eligible criteria mentioned at article 2 and that have submitted the documents mentioned at article 6, will be evaluated according to the following criteria: 7.1. Technical criteria: the quality and the opportunity of the technical, commercial, marketing, sales and human resources, made available for the development of the new route: - 30% - The score will be assigned as follows: a) The tenderer that submits a detailed, complete and applicable documentation, which covers all the requirements of the Terms of Reference, regarding the quality and the opportunity of the technical, commercial, marketing, sales and human resources made available for the development of the new route, will receive the maximum score settled for the technical criteria, 30 points.

b) The tenderer that submits a sketchy or incomplete documentation regarding the quality and the opportunity of the technical, commercial, marketing, sales and human resources made available for the development of the new route, will be downgraded according to the frame structure presented above, receiving ½ from the maximum score, assigned for the technical criteria, 15 points.

c) The tenderer that submits an incorrect and/or a non-applicable documentation or does not present the requested information regarding the quality and the opportunity of the technical, commercial, marketing, sales and human resources made available for the development of the new route, will receive 0 points.

Note: - Detailed, complete and applicable information is considered the information which, apart from the general character of statement, it presents also descriptions, explanations, and accurate data, adjusted to the requirements of the Terms of Reference. - Sketchy, incomplete information is considered the information which is missing explanatory notes and which has only a declarative and/or enuntiative character, with no reference to the technical requirements, the quality and the opportunity of the technical, commercial,

6 marketing, sales and human resources made available for the development of the new route respectively. - The lack of information. Incorrect and non-applicable information. In the content of the technical requirements, is considered: incorrect and/or non-applicable information those dates that are not adjusted and cannot be applied to demonstrate the fulfillment of some quality and opportunity factors regarding the technical, commercial, marketing, sales and human resources made available for the development of the new route.

7.2. Financial criteria: amount of the financing requested for each boarded passenger: -30%- The score will be assigned as follows: a) for the smallest financing value requested for each boarded passenger, 30 points are assigned; b) for other value than the one provided at the letter a), the score will be calculated as follows: P(n) = (minimum value/ (n) value x 30;

7.3. The number of the operating years of the route for which it will receive financial aid: -10%- The score will be assigned as follows: a) for the maximum number of the operating years of the route, 5 year respectively, for which it gets financial aid, maximum score is assigned, 10 points respectively. b) for other number of years than the one provided at the letter a), the score will be calculated as follows: P(n) = (the number of the years (n)/ maximum number) x 10;

7.4. The number of the operating years of the route after the financial aid ends: - 10% - The score will be assigned as follows: a) For the largest period of operating the route, after the end of the financial aid, maximum score is assigned, 10 points. b) For other number of years than the one estimated at letter a), the score will be calculated as follows: P(n) = (the number of the years (n)/ the largest number of years) x 10;

7.5. Date of opening the new route: - 20% - The score will be assigned as follows: a) For the closest date of the route opening, maximum score is assigned, 10 points; b) For other date than the one provided at letter a), the score will be calculated as follows: P(n) = (the closest date of the route opening/ the date of route opening (n) x 10;

7 Dolj County Council and CA reserve the right to request additional information and clarifications on behalf of the tenderers, at any moment of the evaluation process of the tenders.

8. The evaluation of the tenders and the selection of the winning offer The tenders admitted within the tender and declared eligible will be evaluated according to the criteria defined at art. 7 from the present Terms of Reference. The evaluation committee may decide not to declare any eligible tender as a winner, and also it may not declare a winner the offer that is the most profitable, considering the economical and financial point of view. The air carrier whose tender was designated as the winning offer is responsible for the implementation of the business plan for the new route and for its continuous development.

9. Submitting the tenders The offers will be submitted in a sealed envelope bearing the mention “Tender for opening new destinations – The Destination – Do not open”. The tender will be presented in five copies, out of which 1 original copy, bearing the mention “Original” and 4 copies, bearing the mention “Copy”. The tenders will be submitted at the Registry of Dolj County Council , 19, Unirii Street, from Monday to Thursday between 8.00 and 16.00 and Friday between 8.00 and 13.00. In addition, the tenders may be transmitted via the Post to the address: Dolj County Council, 19, Unirii Street, post code: 200585, Craiova, Romania. The tenders must submitted in Romanian and English, not later than 10 a.m. the date of the deadline for submitting the tenders, which is 10.10.2013. The tenders submitted after the deadline will not be taken into consideration. Also, the tenders sent independently from the described procedure, via fax or mail, and not in a sealed envelope will not be taken into consideration. Additional information may be obtained from Dolj County Council, 19, Unirii Street, post code: 200585, Craiova, contact person Ileana MAJINA , tel : +40 251408205, fax : +40 251408245, e-mail : [email protected] or from the Craiova Airport, 325, Cl. Bucuresti, post code: 200785, Craiova, contact person – Mircea DUMITRU , tel : +40 251416860, +40 754022501, fax : +40 251411112 , e-mail : [email protected].

Any request for clarifications regarding this tender must be sent, in writing, by the tenderers, via fax or e-mail, to the addresses and to the attention of the contact persons mentioned above. Dolj County Council and Craiova Airport reserve their right to refuse to answer the requests for clarifications which can affect the evaluation process or hamper the equal treatment of the tenderers.

8 10. Validity of the offers All offers must be valid 6 months (180 days) starting with the submission date.

11. Payment details The payments will be made only after a contract has been signed by the parties. Dolj County Council will pay a monthly compensation for the setup of a new route, taking into account the real number of passengers embarked, based on the monthly report elaborated by the air carrier - as beneficiary of the start-up aid - for the elapsed month, and following the confirmation of the number by Craiova Airport.

12. Appeal procedures 12.1. Any appeal made by a tenderer during the selection procedure or within 10 days from the notification sent to the air carrier designated to operate the new route, will be settled by Dolj County Council. Dolj County Council will nominate a committee for the analysis and the resolution of the appeals. This committee will formulate a response within 5 days from the date of filing the appeal. 12.2. In case the air carrier does not agree with the solution given by the committee, the former can bring the action before the competent administrative courts.

13. Penalties In case an air carrier fails to fulfil its contractual service obligations under this programme, the contract to be concluded between Dolj County Council and the air carrier will provide that payment of the aid may be ceased, either in whole or in part, and the air carrier must reimburse the received financial aid, as well as any other penalties that may be provided by Romanian law or the European legislation in force, in the field of the state aid. The air carrier must operate on Craiova Airport the route for which it benefited from the start-up aid, for a period at least twice as long as the period for which it requested financial aid – the operation period will be established within the operation contract, but will not be shorter than the equal of the financially sustained period – otherwise, the air carrier will have to reimurse the entirety of the aid received for the setup of the route, plus the legal penalty interest for the period for which it benefited from financial aid. In case the air carrier decides to close the route for which it receives financial aid before the end of the period it was bound to maintain the route, all aid received will be repaid to Dolj County Council together with the legal penalty interests, according to the Government Decision no. 13/2011 regarding the 9 penalty and remunerative legal interest for monetary obligations, as well as for some financial and fiscal measures in the banking sector.

14. Legal basis 14.1. Any litigation regarding the present tender will be settled according to the Romanian legislation. 14.2. The European legislation regarding the present tender, includes: the European Guidelines on financing of airports and start-up aid to airlines departing from regional airports (2005/C 312/01) and the Decision C (2012) 7293 - final.

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