Tuesday, May 3, 2016
Cofece, Mexico's competition commission, yesterday approved a proposed joint venture between Aeromexico and Delta. The two airlines seek to collaborate more closely in setting prices, capacity, and schedules, and need assurance that such efforts will not be determined to violate antritrust laws. They are still waiting for the U.S. Department of Transportation (DOT) to grant immunity from U.S. antitrust laws. Cofece has conditioned its approval on the surrender of eight slots at Mexico City Airport.
The Mexican senate has also reportedly ratified the changes to the U.S.- Mexico Air Transport Agreement signed in December. The Aeromexico-Delta JV could prove an interesting case for the DOT's antitrust immunity process. In prior cases, the DOT has relied heavily on the existence of an Open Skies agreement between the U.S. and the countries being served before granting antitrust immunity to a pending joint venture. The new U.S.-Mexico agreement, while significantly liberalized, falls short of being a full "Open Skies" agreement.
Monday, May 2, 2016
Thursday, April 28, 2016
Despite the likelihood that the U.S. Congress once again struggles to pass a long-term FAA reauthorization bill in a timely fashion, there is bipartisan support for legislation that would empower the TSA to play a more active role regarding security at non-U.S. airports from which flights operate to the United States. Proposed changes include authorizing the donation of security equipment to foreign airports and requiring the agency to explore inspection agreements with foreign governments. Sovereignty considerations obviously limit the extent to which the United States can dictate the operations of foreign airports, but congress appears determined to remove any internal barriers that could prevent the TSA from taking as active a role in airport security as foreign governments will allow.
Wednesday, April 27, 2016
A curious NY Times story from earlier this week, Start-Up Airline Idles on a California Runway, Stymied by Bureaucracy, describes the complaints of a 95 year-old entrepreneur who has been thus far unable to secure an operating certificate for California Pacific Airlines. The slant of the article is extremely sympathetic to the individual, a Mr. Vallas, and clearly implies the blame for his stalled airline lies at the feet of the sluggish F.A.A. bureaucracy. This tone struck me as strange given that the article quotes an F.A.A. letter describing the documentation Mr. Vallas submitted in support of his application for an operating certificate as "incomplete, inaccurate and do not appear to have been reviewed for quality." The author of the story appears to give no consideration to the possibility that perhaps Mr. Vallas' application was deserving of rejection. While nobody wants a return to era when the federal government rejected any new entrants into the air services market on the grounds that new carriers were not in the nation's interest, those rules have long since been abolished. That the F.A.A. still requires certain criteria to be met to ensure that the prospective operators of a new airline have adequate managerial experience, financial backing, and clean legal and safety backgrounds is hardly cause for complaint. It is possible that those criteria are being enforced too rigidly, but this story provides scant evidence in support of such a claim.
Friday, April 15, 2016
The U.S. Department of Transportation today issued a show cause order proposing that Norwegian Air International (NAI), an Ireland-based subsidiary of Norwegian Air Shuttle (NAS), be granted a foreign air carrier permit that will allow it to begin operating flights to the United States. Norwegian's application has been pending for an unprecedented 28 months as the U.S. has attempted to assess the applicability of Article 17 bis of the US-EU Air Services Agreement. In article 17 bis, both parties pledge support for high labor standards. Unions have accused Norwegian of establishing the subsidiary in Ireland to take advantage of lower labor costs compared to Norway. The delay has drawn repeated criticism from EU officials, who insist the Air Services Agreement requires the U.S. to approve the application of any carrier owned by nationals of an EU Member State operating under the "common carrier" designation, thereby rendering any questions of labor arbitrage a strictly internal matter for the EU. The show cause order is a precursor to a final approval, which will likely be issued in the coming months.
Thursday, March 31, 2016
A new blanket Certificate of Waiver or Authorization issued by the FAA earlier this week allows small UAS operating under a Section 333 exemption or under the authority of a government agency to operate at altitudes up to 400 feet, an increase from the 200 feet altitude cap that was previously in place. Even at the increased altitude, the aircraft must remain within the pilot's visual line of sight and obey restrictions on airspace surrounding airports and metropolitan areas.
Tuesday, March 22, 2016
Over the weekend, the Wall Street Journal published an in-depth article on China's past and current forays into aircraft manufacturing. The story provides an excellent case study in the operation of international safety standards in the aviation sector. It would be impractical for a state to perform a safety check on every foreign aircraft entering its airspace, so a state will instead recognize the airworthiness certificate granted by the aircraft's state of registry. Of course, it would be impractical for the state of registry to conduct the thousands of hours of engineering, testing, and scrutiny that went into the aircraft's design and manufacture, so the state of registry will rely on a type certificate issued by the state of manufacture, and will then issue its own certificate with regards to the aircraft's continued airworthiness on the basis of an evaluation of the aircraft's current condition and the operator's adherence to maintenance requirements. For this system to work, states need to have confidence in the ability of other states to honestly and competently assess the airworthiness of aircraft both at the type certificate stage and the continuing airworthiness stage. For a new manufacturer to successfully enter the commercial passenger aircraft market, airlines will not only need to be reassured about the quality of its products, foreign states will want to know that type certificates issued by the manufacturer's home state are based on a diligent application of international standards. Transparency and cooperation will be necessary if Chinese aviation officials are to convince their counterparts in foreign markets that they can be trusted to vouch for Comac's work.
Thursday, March 17, 2016
The following is a guest post by Daniel L. Spivey, a 2nd-year J.D. student at DePaul University College of Law.
For the first time since the Civil Aeronautics Board was in existence, an airline has been challenged on whether it is allowed to place a blanket embargo on a particular type of cargo. Conservation Force et al v. Delta Airlines, is a case that was filed in the Northern District of Texas challenging Delta's ban on the Big Five hunting trophies (lion, leopard, elephant, rhino, and buffalo).
In July 2015, one of Africa's most well known lions, Cecil the Lion, was shot and killed by Dr. Walter Palmer while he was on a hunting expedition. In response to public pressure, all three major U.S. airlines – American, United, and Delta – decided to ban the transport of big game hunting trophies across their respective fleets. Delta is the only airline named in the complaint because Delta is the only airline that flies directly from the United States to Johannesburg, South Africa and through its alliance partner to Tanzania and Zimbabwe. There are several plaintiffs named in the complaint. Plaintiff Conservation Force is a non-profit 501(c)(3) public foundation formed for purposes of conserving wildlife and wild places. Both Dallas and Houston Safari Clubs, the Community Areas Management Programme for Indigenous Resources ("CAMPFIRE"), Mr. Core Knowlton (a hunter), and the Tanzania Hunting Operators Association ("TAHOA") are also named.
Plaintiffs allege that Delta's discrimination violates its duty as a common carrier under federal common-law and the Federal Aviation Act, specifically 39 U.S.C. §41310. Plaintiffs also allege tortious interference with business relations – claiming that Plaintiffs' businesses will suffer because hunters will be discouraged from going to Africa. Plaintiffs also put forth a public policy argument claiming that conservation efforts will be harmed in Africa because the money used to obtain hunting permits is instrumental in conservation efforts.
Courts have not dealt with this issue since the case of Delta Airlines, Inc. v. Civil Aeronautics Board in 1976. In that case, the court held that airlines could not create a blanket ban on hazardous materials because Congress had already set out the guidelines for transporting such goods and deemed them safe. In the present day, where the FAA is now the aviation regulatory agency, there have been no cases challenging an airline's ban on cargo based on discrimination.
Plaintiffs will face an interesting challenge in convincing the court that they are being discriminated against unreasonably. Delta argues that as a common carrier the common-law only requires it to treat all shippers alike not all cargo. Delta argues that because this ban applies to anybody trying to ship a big game hunting trophy then it is allowed under common-law. A separate but interesting topic is whether there is an implied private cause of action under the Federal Aviation Act. Courts have actually decided this issue both ways. However, even if there is an implied private cause of action under the Federal Aviation Act then the Plaintiffs still must show that they were unfairly discriminated against. Plaintiffs argue they are being discriminated against because it a certain class of people, from a certain part of the world, trying to ship a particular item that are being treated differently. This is an interesting argument and it will be fascinating to see how the court responds.
Plaintiffs' claim for tortious interference with business relations is expressly preempted under the Airline Deregulation Act because it relates to an airline's service. The case law is clear on this issue.
Wednesday, March 2, 2016
The U.S. Department of Transportation has issued a final rule prohibiting the use of electronic cigarettes on scheduled and charter flights. Like the broader smoking ban, the rule applies to both domestic and foreign carriers despite past criticisms that applying smoking bans to foreign airlines oversteps U.S. regulatory authority. Passengers are also barred from packing electronic smoking devices in their luggage out of concern for the fire risk presented by the devices' lithium ion batteries.
Tuesday, March 1, 2016
Late last week news reports confirmed that U.S. House of Representatives Transportation Committee Chairman Bill Shuster's ambitious, but controversial version of the FAA Reauthorization bill has been abandoned. The Senate still intends to introduce a bill this month, but it is unlikely to include some of the far-reaching changes contemplated for the House Bill, most notably the privatization of air traffic control. FAA authorization expires March 31, and it is almost certain that a short-term extension will be required.
New York Senator Chuck Schumer announced plans to introduce an amendment to the forthcoming Senate Bill that would establish minimum seating requirements for passenger aircraft. The details of Senator Schumer's proposal are not yet known, but presumably they would include minimums for leg room and seat pitch. There is no identifiable market failure present that would make it necessary to regulate passenger comfort, passengers who desire increased leg room can easily express that preference by paying extra for a higher class seat, but measures like this are often politically popular. Nonetheless, I would be surprised to see the amendment included in the final bill.
Wednesday, February 24, 2016
A controversial new report emerged today, accusing Russian military forces of firing the missile that downed Malaysian Airlines Flight MH17 in 2014. The report's conclusions have not been confirmed or endorsed by other experts or representatives of the Joint Investigation Team responsible for investigating culpability for the incident, and at this point it would be premature to make assumptions about the accuracy of the analysis. If true, however, it would dramatically change the international law implications of the tragedy. The operating theory until now has been that the aircraft was downed by Ukrainian separatists, non-State actors who would likely prove difficult to bring to justice. If this was an act of representatives of the Russian state new possibilities will be introduced, including reparations, sanctions, and international tribunals.
Tuesday, February 16, 2016
The U.S. Department of Transportation announced this morning the finalization of an agreement to permit the operation of scheduled air services between the United States and Cuba for the first time in approximately half a century. Beginning March 2, U.S. carriers will have the opportunity to apply to operate the 110 daily round trip flights between the two countries permitted under the new agreement.
Tuesday, February 9, 2016
The Committee on Aviation Environmental Protection (CAEP) yesterday recommended that the ICAO Council adopt a new standard that has been prepared with regard to CO2 emissions from aircraft. It would be the first international standard concerning CO2 emissions, though standards exist for other types of aircraft emissions and engine noise. The standard is intended to apply to all aircraft designs beginning in 2020 and to deliveries of in-production aircraft types beginning in 2023, with production of non-compliant aircraft to be phased out entirely by 2028. This is a major step for international efforts to reduce aviation emissions, though it is not to be confused with ICAO's ongoing efforts to draft a global plan for emissions reduction that applies to airline operations as opposed to aircraft design and manufacture.
Thursday, January 28, 2016
In a somewhat unexpected development, the Wall Street Journal is reporting that ICAO's air navigation commission will recommend to the ICAO Council that lithium ion batteries be banned from cargo holds of passenger aircraft. The decision is surprising because it runs contrary to the recommendations of ICAO's dangerous goods panel which advised against such a ban late last year.
Wednesday, January 20, 2016
Europe has a new lobbying group, Airlines for Europe (A4E), which hopes to replace the Association for European Airlines (AEA) as the primary trade association for European carriers. AEA was beset by defections last year over the association's opposition to the growth of middle eastern carriers in the European market. The new association includes remaining members of AEA such as Lufthansa and Air France-KLM, along with some of the association's most significant defectors, such as IAG, and major LCCs such as Ryanair and easyJet. A4E's first campaign is targeting airport charges, an area of agreement for all carriers.
Friday, January 15, 2016
Air Transport World is reporting that LATAM will seek antitrust immunity for joint ventures with American Airlines and IAG. Competition authorities in South America, the European Union, and the United States will all need to acquiesce. The prospects for success will be analyzed in a future post. For now, it is simply worth calling attention to this potentially significant development. This would be the first extension of the immunized, metal-neutral joint ventures to include an airline outside of Europe or North America.
Wednesday, January 13, 2016
Vietnam has filed a complaint with ICAO about recent Chinese flights to the Fiery Cross Reef in the hotly contested South China Sea, to which Brunei, China, Vietnam, Malaysia, Taiwan and the Philippines all register territorial claims. Vietnam is responsible for supervision of international flights in the area, and complains that China has recently conducted dozens of flights through the region without properly notifying Vietnamese aviation authorities.
China contends that because these are state flights, they are not subject to the same air traffic requirements as civil aviation. The characterization of the test flights to the Fiery Cross air strip as state flights appears reasonable despite the use of State-owned commercial airliners. The flights did not transport ticketed passengers, and given that the islands in question are primarily uninhabited, commercial services to the area are unlikely. Vietnam's complaints are not limited, however, to the question of state or civil operations, as Vietnam asserts the island area comprises part of Vietnam's sovereign airspace, through which even state flights are prohibited absent prior approval by Article 3 of the Convention on International Civil Aviation (the Chicago Convention). ICAO will have no interest in getting drawn into the larger question of which State has sovereignty over the islands and surrounding areas. Should ICAO take a position, it is likely to be sufficiently narrow to be read as neutrally as possible on the sovereignty question.
Wednesday, January 6, 2016
Etihad appears poised to increase its ownership stake in India's Jet Airways to 49%, the maximum amount permitted by Indian law. India only recently relaxed its restrictions on foreign investment of airlines and Etihad is taking advantage. The rule changes are, of course, benefiting Jet Airways as well, as the carrier is desperate for the capital Etihad is providing. Despite the newly relaxed rules, Indian government officials retain the authority to scrutinize the transaction and may decide against approval. This latest investment, if approved, will be the last equity infusion of this type that Etihad will be able to provide Jet for the foreseeable future. Not only do India's national laws prohibit Etihad from acquiring a majority ownership in Jet, but Jet's ability to serve international routes under most bilateral air services agreements would be jeopardized should it become majority foreign-owned.
Tuesday, January 5, 2016
A recently published study on the effects of the U.S. Department of Transportation's 2010 Tarmac Delay Rule is receiving considerable media attention. The study by researchers at Dartmouth and MIT found that the rule has been successful in its intended goal of reducing the number of delays in which passengers are stranded on the tarmac for an excessive period of time, but that flight cancellations and non-tarmac delays have increased as a consequence of airlines' attempts to comply with the rule. The study's authors propose alterations to minimize the rule's negative effects, such as increasing the tarmac delay threshold from 3 to 3.5 hours and exempting evening flights from the rule to reduce cancellations that strand passengers overnight.
Wednesday, December 16, 2015
The EU General Court today struck down €790 million in fines levied by the European Commission against 11 airlines in a 2010 antitrust decision. The Commission had accused the airlines of colluding on prices for fuel surcharges and security measures, but the court found the Commission's case wanting. It is not yet known whether the Commission will appeal the ruling to the European Court of Justice.