ATM 3 International Regulation

8/18/2019 ATM 3 International Regulation

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July 2009 Transport and Logistics Department 1

Air Transport Management

Session 3: International Regulation


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Air Transport Trading

Agreements

BILATERAL

MLTILATERAL


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Types o! Air Transport

Trading AgreementsBilateral

"#pen $%ies&

'lurilateral

Multilateral


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Types o! Bilateral

AgreementFeatures Restrictive Bermuda 1 Liberal

3rd & 4th Freedoms Limited rights Limited rights Open route access

5th Freedom Few rights Several rights Some rights

esignation Single Single ! ouble "ultiple

#apacit$ 5%5% split

Revenue pool

sometimes re'uired

(ost)*acto capacit$

review

+o limits

(ricing ,ari**s based on cost -pro*it

ouble .pproval

/.,. tari**s applicable

,ari**s based on cost -pro*it

ouble .pproval

/.,. tari**s applicable

ouble isapproval


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Bilateral (egotiation

Topics Routes )* airports+ to ,e ser-ed and attac.ed /reedoms plus any T.ird ountry in-ol-ement

Airline)s+ designation

apacity )!reuency aircra!t type+ ,y route

'ricing regime

.arter and cargo pro-isions

Ancillary issues3 R$ access codes.aringarrangements

slots gate * terminal space


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T.e /i-e /reedoms o!t.e Air 1st 4 t.e rig.t to o-er5y

2nd 4 t.e rig.t to land !or tec.nical reasons

6rd 4 t.e rig.t to carry re-enue tra7c !rom your country to anot.er )e8g8 .ina $out.ern3 uang:.ou to $ydney+

;t. 4 t.e rig.t to carry re-enue tra7c to your country !rom anot.er )e8g8 .ina $out.ern3 $ydney to uang:.ou+

s .ome country )e8g8 Air India3 Del.i ? London Heathrow – New York JFK +


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'ost .icago /reedoms

@t. 4 om,ination o! 6rd and ;t. !reedom rig.ts ena,ling an airline to carry re-enue tra7c ,et=een t=o !oreign countries -ia its o=n

state )e8g8 /innair3 London ? elsin%i ? Bang%o%+

t. 4 T.e rig.t to carry re-enue tra7c ,et=een t=o !oreign countries

=it. no reuirement to originate or terminate t.e ser-ice in t.e carrier>s .ome state )e8g8 Ryanair3 London Stansted ? Bratisla-a+

Ct. 4 T.e rig.t to carry re-enue tra7c ,et=een t=o locations in a

!oreign country )ca,otage+ )e8g8 easyJet3 'aris )#rly+ ? (ice+

Sometimes the 8th freedom is split, so that consecutive caota!e isdeemed the 8th ri!ht and stand alone caota!e as the "th#


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#t.er Tra7c Rig.ts

$han!e of %au!e –

the ri!ht to transfer tra&c to a di'erent si(edaircraft at an intermediate point in a forei!n countr)*e#!# the +rst le! of nited-s London – Los .n!eles –

Honolulu service is operated ) /oein! 000, with achan!e to /oein! 010 for the transpaci+c sector2

$odesharin! –

the ri!ht to market the services of another airlineas if the) were )our own 3i!hts *e#!# .ustrian-s4ienna – /an!kok 5S67 service is marketed ) haias %069:2


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Regulation Applied to Air

Transport Route Rig.ts

Tra7c arrying Rig.ts

Designation

apacity

/ares


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$ ? $ingapore Agreement19C nrestricted designation !or $ carriers

nrestricted


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I(ITIAL #($EE(E$ #/ I(TER(ATI#(AL $ LIBERALI$ATI#(

(e= routes and more carriers operating

Lo=er !ares

'oor proGta,ility

ig. tra7c gro=t.

Increase in $ s.are o! tra7c


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$ "#'E( $HIE$&AREEME(T$;ositive features18/ull


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Anti4trust Immunity In ec.ange !or a country signing an "#pen

$%ies& ,ilateral agreement t.e $o-ernment =ill grant anti4trust immunity tot.e designated carriers !rom t.e t=orespecti-e states ena,ling t.em to ma%e Kointdecisions on pricing sc.eduling capacitypro-ision and ser-ice uality8

it.out suc. immunity airline alliances =ould,e -ery restricted in terms o! =.at aspects o!t.eir ,usinesses t.ey could Kointly underta%e8


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$ #pen $%ies Deals

92 li,eralised ,ilateral agreements .a-e no= ,een esta,lis.ed=it.

t.e $8 T.is includes all E states8

T.e Grst $ #pen $%ies deal =as agreed in 1992 =it. t.e

(et.erlands8

T.e long a=aited E4$ deal =as signed in April 200 and,ecame

eecti-e in Marc. 200C8

T.e most recent deal =as agreed in May 200C =it. Henya8

A !ull listing can ,e !ound at3

.ttp3ostp=e,8ost8dot8go-a-iationN4;0O20RoleP/iles,ilatosagreement8.tm


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lo,al Alliances

De-eloped ,y carriers to circum-ent ,ilateralrestrictions

Airlines need immunity !rom $ Antitrust Legislationin order !or an alliance to ,e a,le to !unction

In ec.ange !or a country agreeing an #pen $%iesdeal t.e $ =ill grant suc. immunity so ena,lingalliance carriers to collude

T.e $ goal in Europe .ad ,een to prise openeat.ro= ,y esta,lis.ing #pen $%ies deals =it.neig.,ouring countries


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Alliances roupings0urope +

.mericaS.merica

.sia(aci*ic .*rica!"0ast

.er LingusB. Finnair

/beria "alev

.merican L.+ #atha$ (aci*icragonair

2.L antas

Ro$al2ordanian

.ustrian bmiLO,Lu*thansaS.S SpanairSwiss ,.(

.ir #anada#ontinentalnited S.irwa$s

.ir #hina .ir+ .ll +ippon.sianaSingapore ,hai".S

0g$ptair S..

.ero*lot .irFrance 6 7L".litalia #S.

elta+orthwest

.erome8ico

#O(.

#hina Southern7orean

7en$a .irwa$s


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Anti4trust Immunity and

Alliance Acti-ity As t.e H .as not esta,lis.ed an "#pen

$%ies& deal =it. t.e $ 5neworld alliance

mem,ers Britis. Air=ays and AmericanAirlines do not .a-e anti4trust immunity8

T.ey are t.ere!ore at a disad-antagecompared to Lu!t.ansa and nited )Star alliance+ Air /rance4HLM and Delta)Sk)team alliance+8


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Europe>s MultilateralRegimeHey !eatures3All eig.t !reedoms o! t.e air may ,e eercised ,y carriers

=it. an E Air #perators ertiGcate

(o pricing controls

(o capacity restrictions

(ational o=ners.ip and control replaced ,y ommunityo=ners.ip


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Europe>s ommon A-iationArea

;articipatin! $ountries3

2 E Mem,er $tates 4 Austria Belgium Bulgaria yprus :ec.Repu,lic

Denmar% Estonia /inland /rance ermany reece ungary Ireland Italy Lat-ia Lit.uania Luem,ourg Malta (et.erlands

'oland 'ortugal Romania $lo-a%ia $lo-enia $pain $=eden

nited Hingdom

C (on4E Mem,er $tates 4 Al,ania Bosnia er:ego-ina roatiaIceland

Macedonia (or=ay $er,ia and Montenegro


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E T.ird ountry 'olicy

In 199C t.e European ommission )E+ too% C Mem,er$tates )Austria Belgium Denmar% /inland ermanyLuem,ourg $=eden H+ to t.e European ourt o!

Justice !or esta,lis.ing ,ilateral agreements =it. t.e $t.at discriminated against E airlines8

T.e ruling o! t.e ourt in (o-em,er 2002 !orced t.e E

ouncil o! Ministers in June 2006 to grant a mandate tot.e E allo=ing it to ,egin negotiating an E ,ilateral=it. t.e $8 T.e deal too% !our years to negotiate8


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Regulation C;200;

All eisting ,ilateral agreements ,et=een Mem,er$tates and T.ird ountries t.at contain pro-isionscontrary to ommunity la= must ,e amended orreplaced ,y ne= agreements t.at are =.olly

compati,le =it. ommunity la=8

Mem,er $tates must esta,lis. non discriminatoryand transparent procedures !or t.e distri,ution o!

tra7c rig.ts ,et=een ommunity air carriers8 Inapplying t.ose procedures Mem,er $tates s.ould.a-e due regard to t.e need to preser-e continuity o!air ser-ices8


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Mec.anisms to amend

eisting ,ilateralagreements/irst approac. comprises negotiations underta%en ,y

indi-idual Mem,er $tates =.ic. in-ol-e t.e insertion o!standard clauses de-ised ,y t.e ommission and Mem,er$tates8

$econd approac. in-ol-es ,ilateral negotiation at

ommunity le-el ,y t.e ommission in t.e !rame=or% o!t.e hori(ontal mandate =.ic. ena,les t.e insertion o! t.enecessary standard clauses in all o! t.e agreementsreac.ed ,et=een t.e Mem,er $tates and a T.ird ountry

6 hori(ontal agreements .a-e so !ar ,een esta,lis.edincluding =it. Al,ania Australia A:er,aiKan BosniaBulgaria .ile roatia eorgia Israel Ha:a%.stanMalaysia Molda-ia Morocco (epal (e= Qealand'a%istan Romania $ingapore and %raine8

Around


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/uture E Eternal

A-iation $trategy T.e ac.ie-ement o! an European #pen A-iation Area ,y

2010 comprising t.e E and all neig.,ouring countries

located along its eastern and sout.ern ,orders is t.eo,Kecti-e8

In addition t.e esta,lis.ment o! glo,al a-iationagreements =it. important trading partners suc. as

Australia anada .ile .ina India Japan (e= Qealand$ingapore and $out. Horea are identiGed as importantgoals8


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T.e /uture Regulatory'icture

In t.e longer term t.e !ormation o! a Transatlantic ommon A-iation Area could ultimately result in a common set o! economic regulations )including competition la=s+ ,eing applied to air transport ser-ices ,et=een and =it.in Europe and t.e $8

E ,ilateral agreements =it. ot.er maKor trading partners =ill !ollo= t.ose =it. t.e $ and anada8

. i l l il l


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#t.er regional plurilateralagreements+ame .greed (articpants

#aricom9#aribbean:

1;;< /n *orce b$ ; out o* 15 states

Fortale=a 1;;> < "0R#OSR states

Ban?ul .ccord 1;;> < @est .*rican states#L"A 1;;> #ambodia Laos "$anmar Aietnam

.#.# 1;;; 1< "iddle 0ast & + .*rican states

#0".# 1;;; < #entral .*rican states

#O"0S. 1;;; C% 0astern & Southern .*rican states

DamoussouEro C 1;;; 5C .*rican nion states

/", 1;;; /ndonesia "ala$sia and ,hailand


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#t.er regional

plurilateral agreements+ame .greed (articpants

B/"( 1;;; Brunei /ndonesia "ala$sia and(hilippines

".L/., C%%1 Brunei #hile +ew ealandSamoa Singapore ,onga and S

ATM 3 International Regulation

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