September 22, 2010
Aviation Ground Handling Market and GATS
Aviation's circumscribed position within the General Agreement on Trade in Services has received scant discussion in the secondary literature over the past several years. A new working paper discussing GATS and ground handling services may help to rectify this lacunae. See Sumangal Narendra, Aviation Ground Handling Market and GATS (Working Paper Sept. 16, 2010) (available here). From the abstract:
This paper aims at exploring the prospects of opening the Aviation Ground Handling Market vis-à-vis the GATS provision. The study is focused on the developments in terms of review and open market access to aviation ground handling services and in the GATS Air Transport Review. Air transport auxiliary services are emerging as important services, especially the Ground Handling Services. Expenditure on Ground handling services forms a substantial part of the operating expense of the airlines. As a response to the changes in the aviation environment, many policy changes and new initiative have been made by the governments. The study focuses on the constraints and implications of further liberalization of these services to boost competitiveness and facilitate efficient movement of goods and passengers. The study revealed that the gradual liberalization of Ground Handling market in India though widely criticized for its slow pace by the airlines, the major user of the services, has been successful so far, considering the response from the stakeholders, especially the regulatory bodies, is concerned. While naturally the airlines but not so much the national carrier, are clamouring for the full liberalization of the market with self-handling rights, the airport operators are concerned about the loss of business, monopoly status, and space constraints. Another dimension to liberalization is the safety and security concerns of the State where the regulators have been advising cautious approach to ensure the safety and security. This paper is divided into four sections: Section 1 giving the GATS and the position of Air transport, specifically the Ground Handling services, Section 2- traces the regulatory developments in the Air Transport with specific reference to Ground Handling market, as also addresses the implications for liberalization of these services through existing bilateral, to increasing pluri-lateral /multi-lateral and regional agreements. Section 3 discusses the Regulatory concerns vis-à-vis suggested course of liberalization. Conclusions are based on the findings. Section 4 enumerates the recommendations regarding areas for further research in.
Aviation and the Environment
Blog readers may be interested to read a new report by the U.S. Government Accountability Office on aviation and the environment. See U.S. GAO, Aviation and the Environment: Systematically Addressing Environmental Impacts and Community Concerns Can Help Airports Reduce Project Delays, GAO-10-50 (Sept. 13, 2010) (available here). From the summary:
The Federal Aviation Administration (FAA) estimates that the number of flights in the United States will increase 20 percent by 2024. It also has identified numerous airports that will need to expand to handle more flights. However, increasing airport capacity and operations poses potentially significant impacts on the environment and quality of life for surrounding communities. This report addresses (1) airports' actions to reduce their environmental impacts, (2) the extent airports believe environmental issues delay development or operational changes, and (3) the strategies airports can adopt to address environmental issues. GAO reviewed pertinent federal laws and regulations; interviewed airport officials, state and local regulatory agencies, metropolitan planning organizations, and community groups for 10 selected airports, as well as federal officials and national industry and advocacy groups; and surveyed the 150 busiest airports as measured by the number of operations. This report does not contain recommendations. A draft was provided to the Department of Transportation, the Environmental Protection Agency, and two organizations representing airports and airport officials. GAO incorporated technical clarifications they provided as appropriate.
Almost all the airports GAO surveyed took some actions to address their environmental impacts in four key areas: reducing noise levels, controlling water pollution, reducing emissions, and using environmentally sustainable practices. These include voluntary actions, such as asking pilots and controllers to use aircraft operational procedures that lower noise levels, as well as actions required by federal and state laws, such as in the areas of controlling water and air pollution. Larger airports, which can have more environmental impacts, were more likely than other surveyed airports to take a wider range of actions, such as soundproofing homes or installing loading bridges that supply aircraft with electric power to lower engine usage and emissions. Finally, GAO found that airports were moving toward a more holistic approach to environmental management, including following environmentally sustainable standards and implementing an Environmental Management System (EMS). Less than half of the surveyed airports believe that addressing environmental issues somewhat or greatly delayed a development project (35 percent) or operational change (42 percent) at their airport over the last 5 years, even though the vast majority had undertaken a capital development project or operational change during this time period. Both the reported delay and the extent and significance of delay were determined by the responding airport. Less than half similarly believe that addressing environmental issues will cause delays in the next 5 years. More airports reported that they had been somewhat delayed than greatly delayed. Larger airports were somewhat less likely than all surveyed airports to believe that addressing environmental issues will cause a delay in development projects (30 percent) or operational changes (36 percent). Addressing water issues and noise issues was the most commonly cited environmental issue that led to delay in implementing development projects and operational changes, respectively. A number of airports have adopted strategies to systematically address environmental impacts and community concerns, which can help both mitigate environmental impacts and anticipate and reduce problems with communities and other stakeholders that can lead to delays. Airports are integrating environmental considerations into their planning process, including 7 of the 10 airports GAO visited. Some airports are also finding success in streamlining the federal environmental review process and in integrating their EMS processes with the federal environmental review process. Finally, effective community outreach that solicits stakeholder input, fosters interactive communication with local communities, and evaluates its outreach efforts can help airports better anticipate and deal with community opposition.
September 20, 2010
United/Continental Not Clear Yet?
Despite clearance from the U.S. Justice Department, the European Commission, and the airlines' own shareholders, the United/Continental merger may be delayed U.S. District Court Judge Richard Seeborg due to the pending private antitrust suit targeting the tie-up. See Judge Mulls Delaying Merger of United. Continental, Assoc. Press, Sept. 17, 2010 (available here).