Friday, June 29, 2012
Earlier this week, the European Union and the Republic of Moldova signed an air services agreement that will gradually incorporate Moldova into the European Common Aviation Market. Moldova will have to harmonize its aviation rules with European standards. The agreement will remove restrictions on prices, frequencies or destination airports for flights between Moldova and EU Member States.
Thursday, June 28, 2012
Readers might be interested in an article from today's Wall Street Journal discussing attempts by airlines to work around legal restrictions on international mergers. On a related note, the Journal also has a story on Emirates' potential interest in investing in one of India's struggling carriers.
Tuesday, June 26, 2012
United CEO Jeff Smisek indicated that he would raise no objections to a much-discussed potential tie-up between US Airways and American. Smisek's willingness to support a move that could potentially strengthen a rival and cost United a Star Alliance partner suggests a strong conviction that the industry will benefit from further consolidation.
Monday, June 25, 2012
Thursday, June 21, 2012
Case C-150/12, Brannstrom, may be one worth following. At issue is whether ticket holders for a cancelled Ryanair flight are entitled to compensation under Article 19 of the Montreal Convention, or whether the causes of the cancellation, inclement weather and technical problems at the airport, qualify as "extraordinary circumstances" under Article 5(3) of EU Regulation 261/2004. A more complete description is available at EU Law Radar.
Wednesday, June 20, 2012
The ICAO governing council, which had previously hoped to have a draft global emissions proposal by the end of this year, is now indicating that its plan won't be ready until next spring. The proposal would still be ready to be voted on at ICAO's 38th assembly in fall of 2013. The new timing could complicate attempts to defuse tensions between the EU and States such as China, India and the U.S. over the EU's aviation emissions plan, as States may not know the full details of ICAO's alternative plan before charges under the EU's plan come due. Of course, reports from last week suggest that such concerns may be moot as the disagreement between the EU and China appears destined to reach a head long before the end of 2012. At this point, ICAO's plans are perhaps best described as peripheral to the present conflict.
Monday, June 18, 2012
The compromise that enabled passage of February's FAA Modernization and Reform Act (pdf) claimed its first victim this week as U.S. District Court Judge Terry R. Means issued a temporary restraining order preventing the Communication Workers of America (CWA) from proceeding with plans for an election to unionize American Airlines' passenger-service agents. At issue is the provision requiring unions to obtain signature cards from at least 50 percent of workers before conducting a union-representation election. The CWA secured enough signature cards to meet the prior minimum threshold of 35 percent of workers that was in place when it filed for an election in December, but the National Mediation Board (NMB) did not rule on CWA's application until after the new standard was in effect. The NMB voted 2-1 to approve the CWA application under the 35 percent standard in place at the time of filing, and scheduled the election to take place from June 21-August 2. The entire NMB decision, which is available here (pdf), is worth reading. The majority cited Landgraf v. USI Film Products, 511 U.S. 244 (1994) for the proposition that legislation shouldn't be held to apply retroactively unless that is specifically intended, thus leading to the conclusion that CWA's application should be considered under the standard that was in place at the time of filing. The dissenting opinion, however, cites a bevy of case law to support its contention that Landgraf's retroactivity rule doesn't apply to applications to federal agencies which have yet to be considered. Judge Means apparently thought American has a good enough chance of successfully overturning the NMD decision to grant the temporary restraining order. The case is scheduled for hearing June 21. While this particular legal issue is unlikely to have any ramification for airline unions going forward, as the new 50 percent threshold is clearly in place for future union elections, the outcome of this dispute is significant for American and for the workers involved. Passenger-service agents are the largest class of non-unionized workers at American.
Wednesday, June 13, 2012
Reuters reports that US Airways would like to initiate the regulatory review process for its proposed merger with American Airlines this summer. According to the article, US Airways hopes to, with American's consent, file paperwork with antitrust regulators as early as next month. It seems unlikely that American management, which still holds out hope of emerging from bankruptcy without merging, will be willing to work with US Airways on a regulatory filing so soon. Reading between the lines of the article, US Airways appears willing to push back its time frame if necessary to secure cooperation from American.
Tuesday, June 12, 2012
The latest war of words in the ongoing dispute over the EU's Emissions Trading Scheme (ETS) suggests that the conflict may come to a head this week. According to Reuters, EU Climate Commissioner Connie Hedegaard threatened enforcement action against Chinese carriers that fail to submit emissions data by the end of this week. The Chinese government prohibited its carriers from complying with the original March 31 submission deadline and the article quotes a Chinese official as saying the government's position will not change. Instead, China threatened retaliation for any sanctions imposed on its carriers, expressing a willingness to impound EU aircraft if necessary. While both sides reiterated their desire to avoid a trade war, it appears serious diplomatic efforts will be necessary over the next few days or initial hostilities may commence.
Monday, June 11, 2012
According to a TravelDailyNews International story, the EU Council of transport ministers decided last week to recommend the aircraft noise regulation portion of the EC's Better Airports package of legislative proposals for adoption into law. If passed by the European Parliament, the proposed legislation would replace Directive 2002/30/EC in an attempt to better harmonize noise regulation across EU Member States and promote greater adherence to ICAO's "balanced approach" to aircraft noise management. Member States would still determine the substance of their noise regulations under the new proposal as the proposed changes are directed at the processes by which noise regulations are adopted rather than the substance of the regulations. The Council endorsed the proposed changes to ground handling in March and will next take up the Better Airports proposal on slots. The European Parliament is expected to vote on the entire package by the end of this year.
Friday, June 8, 2012
Yesterday's Financial Times included this interesting article on Southwest Airlines' plans for increasing its international business. The ambitious strategy represents a significant change for one of the most successful U.S. carriers. It also reflects the realities of the mature U.S. domestic market, which offers limited potential for growth in the coming decade.
Thursday, June 7, 2012
The Association of European Airlines (AEA) has announced that Ulrich Schulte-Strathaus will be ending his term as AEA Secretary General, an office he has held for the past ten years. Athar Husain Khan will take over as acting Secretary General until a replacement is chosen. Mr. Schulte-Strathaus is a member of the International Aviation Law Institute's advisory board and has been a strong supporter of the Institute and its projects since his prior affiliation with Lufthansa.
Wednesday, June 6, 2012
Last month's DePaul-Beihang workshop generated an interesting question, whether the ETS could have been applied to aviation in a way that circumvented the current criticisms of the scheme's extraterritorial reach. Professor Alberto Coll of DePaul inquired about the legality of a scheme that only measured an aircraft's emissions over the portion of the flight occurring within EU airspace, rather than the duration of the flight. He suggested that to get the same deterrent effect the EU significantly increase the allowances charged for what would inevitably be a much lower total of emissions measured. While on its face, this addresses the extraterritoriality complaint, this proposed solution raises practicability issues. Such a scheme would undoubtedly harm service to cities within the interior of the contiguous airspace belonging to EU Member States, which would become substantially more expensive for foreign carriers than flights to cities on the European periphery. EU carriers that fly domestic routes would be certain to object to the resulting competitive disadvantage. It was also speculated that there could simply be a flat amount surrendered for all emissions, regardless of flight duration or landing point within the EU. Such a change would counteract a central purpose of the cap-and-trade scheme, providing operators with an incentive to limit their emissions. A flat charge would sever the connection between emissions and costs, removing that incentive. Additionally, a set fee (even one determined in allowances rather than dollars) would only increase the legal questions about the scheme's resemblance to an illicit tax, rather than a permissible regulation. The end result of this thought experiment is a further illustration of how international law almost requires that aviation emissions be regulated by international agreement, rather than a more cleverly devised unilateral scheme.
Tuesday, June 5, 2012
At the recent Beihang-DePaul workshop there was some discussion about what happens to revenue generated by the scheme. A recent Reuters article reported that EU climate officials want to see the funds used for climate change mitigation efforts, but States are not required to do so and to this point, only Germany has pledged its revenue specifically for that purpose. This has fueled criticism that the ETS violates Chicago Convention prohibitions against fuel taxes or charges unrelated to the provision of services, despite the CJEU's judgment to the contrary. EU Climate Commissioner Connie Hedegaard is quoted in the article acknowledging this criticism. Defining what is and isn't a tax is a murky issue, that may not be entirely resolved even if the funds are set aside to combat climate change. However, if the EU States can assure their detractors that ETS revenues won't go to States' general treasuries, it would significantly weaken one of the strongest legal complaints levied against the measure. Unfortunately, getting all of the EU States to commit to earmark the funds for climate change does not yet appear close to happening.
Friday, June 1, 2012
Last Friday, Beihang University Law School and DePaul University College of Law co-sponsored a half-day workshop on legal and policy issues related to the inclusion of foreign carriers in the EU's Emissions Trading Scheme (ETS). The workshop, which took place at Beihang University in Beijing, China, began with welcoming addresses by Professor Jerold Friedland of DePaul and Dean Long Weiqiu of Beihang. They were followed by opening remarks from Susan Kurland, Assistant Secretary for Aviation and International Affairs, U.S. Department of Transportation, and Julie Oettinger, Assistant Administrator, Office of Policy, International Affairs and Environment U.S. Federal Aviation Administration. Both officials proclaimed the United States' commitment to the goal of aviation emissions reduction, but emphasized that the government's position was that an emissions reduction agreement needed to be negotiated through ICAO.
John Mulligan, IALI's FedEx-United Airlines Resident Research Fellow, delivered the first presentation, a summary of the paper he co-authored with Professor Brian Havel, The Triumph of Politics: Reflections on the Judgment of the Court of Justice of the European Union Validating the Inclusion of Non-EU Airlines in the Emissions Trading Scheme. The presentation focused on the many unsettled legal questions persisting even after the Court of Justice ruling, and expressed dismay at the inability of international law to help solve what has become a primarily political dispute. His presentation was followed by a discussion period moderated by John Byerly, former U.S. Deputy Assistant Secretary for Transportation Affairs.
The second half of the workshop featured separate presentations by Professor Li Bin, Associate Director of Beihang's Institute of Space Law as well as its Institute of Aviation Law, and Professor Yang Caixia, also of Beihang. Professor Li highlighted a few of the foremost legal issues connected to the dispute and questioned how effective the scheme will be in achieving its aviation emissions reduction goals. Professor Yang discussed the disparate impact the use of 2005 emissions levels as benchmarks might have on States such as China with rapidly growing aviation sectors.
Next week we'll discuss in more detail a few of the more interesting ideas raised at the workshop.