Wednesday, August 16, 2006

Welcome To Our New Blog and China Route Case

Welcome To Our New Blog

The International Aviation Law Institute at DePaul University College of Law welcomes you to our Aviation Law Prof Blog, part of the Law Professor Blogs Network.  In coming months you will be able to turn here for critical analysis of current issues in domestic and global aviation law and policy.  We will have commentary from our resident experts at the Institute as well as invite guest bloggers to join us from the academy, from the media, and from across the entire spectrum of the air transport industry.  We welcome your comments and invite your contributions.

The Institute, founded in 2004, is the first of its kind in the United States.  It strives to provide a thriving intellectual environment for our faculty, our students and graduates, and for experts in the fields of aviation regulatory, competition, finance, and tort law.  We are engaged in a number of major scholarly research projects, including a global aviation law treatise for the International Air Transport Association and a systematic oral history of the U.S. and European airline deregulation experiments.  We are working with the World Economic Forum on developing an agenda for regulatory approaches to aviation emissions in the carbon economy.  We contribute commentaries and make submissions on major industry issues (including, for example, the U.S. Department of Transportation’s pending NPRM with respect to relaxing the criteria for assessing foreign control of U.S. air carriers).  We have inaugurated a seminar course in International Aviation Law and Policy and are currently developing a complete curriculum for the nation’s first master’s program in aviation law.

The Institute’s legal and policy interests extend to issues of competition, privatization, deregulation, globalization, safety and security, and we are engaged in hosting conferences and seminars in the United States, Europe, and Asia, as well as meetings of experts and roundtable discussions on current industry issues.  We will co-host an aviation leadership summit with the Chicago Council on Foreign Relations in Chicago this coming October, and in 2007 we will host conferences in Beijing (with the Beijing University of Aeronautics and Astronautics) and in Dublin (with the European Air Law Association).  To serve the needs of a global industry, we are proud to have established associations with distinguished foreign institutions such as the Air and Space Law Institute at Leiden University in the Netherlands and the aviation law and policy program of the Federal University of Rio de Janeiro, Brazil.

For more information, please see the following "backgrounder" on the Institute.

China Route Case

On July 10, 2006, the U.S. DOT instituted the 2007 U.S.-China Combination and All-Cargo Frequency Allocation Proceeding.  Effective March 27, 2007, the U.S.-China aviation agreement will allow an increase of seven combination and fifteen all-cargo frequencies for U.S. airlines to serve points in China Zone 1 (Beijing, Shanghai or Guangzhou) or China Zone 2 (e.g. Guangdong (except Guangzhou), Hunan, etc.).  The agreement also provides for seven additional combination or all-cargo frequencies that can only be used for service to points in China Zone 2.  As the proceeding is limited to incumbent carriers only, Northwest, United, Continental and American are eligible to receive the additional combination carrier frequencies, and Northwest, Federal Express, UPS, and Polar Air Cargo are eligible to receive the additional all-cargo frequencies.

Key procedural dates that we are watching are: (1) August 17, when the airlines must make their final selection of the U.S. and Chinese gateway points they propose to serve; (2) September 25, when the airlines must submit direct exhibits supporting their proposal; and (3) October 16, when the airlines must submit exhibits rebutting the other airlines' proposals in the case. If the DOT follows a similar schedule to the 2005/2006 China Air Services Case a final decision on the proceeding can be expected sometime late in the first quarter of 2007.

Initial questions that we have are:

(1)  Why did United file for Washington, D.C.-Beijing service instead of San Francisco-Guangzhou authority as they did in the 2005/2006 China Air Services Case?  Do they believe that they can convince the DOT to use the next round of U.S.-China air service agreement talks to get Guangzhou removed from Zone 1 of the bilateral agreement into a category that would more easily facilitate service to this market?

(2)  Will Northwest file for additional combination carrier frequencies or only focus on all-cargo service as they did in the 2005/2006 China Air Services Case?

(3)  Will the DOT’s policy of favoring new entry (meaning in this case more services for Continental and American) over incumbents (Northwest and United currently operate more weekly round-trips to China than Continental and American) hold true in this proceeding?

(4) Will American’s Dallas-Fort Worth/Beijing proposal be hurt by the small Dallas-Fort Worth/Beijing local market much as Delta’s Atlanta-Beijing proposal was in the 2005/2006 China Air Services Case?

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