Monday, July 30, 2012
Beginning tomorrow, the U.S. State Department and Department of Transportation will host a two-day meeting with 16 other non-EU nations that oppose the EU's application of its Emissions Trading Scheme to foreign carriers. Unlike February's Moscow meeting, which primarily dealt with retaliatory measures, this week's summit is intended to foster discussion of an alternative plan that can form the basis of a global agreement that would replace the EU scheme. While the meeting is unlikely to resolve the many lingering disagreements over the shape and components of global aviation emissions plan, the very fact that such a meeting is being held has to be considered a positive sign for those who desire a global agreement.
There are essentially three potential outcomes to the ongoing dispute over the EU aviation ETS. The first, and least likely, is that the non-EU States will grudgingly comply with the EU program, submitting data and payments as required. China and India have both demonstrated a clear unwillingness to abide by the EU regulation. The second is that the EU will bow to international pressure (possibly including a trade war) and exempt non-EU carriers from participation in the ETS, or rescind the program's application to aviation entirely. The third is for an alternative, global plan, negotiated through ICAO, to replace the EU’s regional plan. Time pressures could also dictate a combination of the latter two options where the EU backs down before an ICAO alternative is fully in place but after ICAO has put forth some kind of tenuous commitment to a future plan or draft agreement that would allow the EU to partially save face.
There appears to be an honest, good faith effort ongoing within ICAO to produce a credible alternative plan. However, the matter is naturally contentious and according to reports the expected date for ICAO’s draft proposal has already been pushed back from this fall to next spring, which would run right up against the April deadline when payments under the EU scheme fall due. If the “coalition of the unwilling” were only interested in pressuring the EU to repeal the offending directive, and less concerned about reaching an ICAO agreement, they would likely restrict their meetings to discussion of retaliatory measures and allow the ICAO process to proceed in its usual protracted manner. Judged on its face, this week’s meeting appears to be genuinely directed at making progress toward a global solution. The meeting was likely motivated by a recognition that if such a solution is to be found within the time period necessary to avoid a potential trade war next spring, it will be necessary for ICAO Member States to supplement ICAO's efforts by continuing work on resolving their differences outside of ICAO’s scheduled meetings. This week's meeting suggests some of the non-EU States, notably the U.S., which called the meeting, legitimately want to see a global agreement that breaks the current impasse. Whether these efforts are successful may not be apparent until ICAO's draft proposal is put to a vote. Comments by participating officials after Wednesday’s conclusion may, however, prove revealing as to whether participants think such a global agreement is possible or conversely, that the various States are too far apart, most likely on issues related to non-discrimination, to stave off confrontation next spring.
Friday, July 27, 2012
Thursday, July 26, 2012
Multiple reports today of talks between Qantas and Emirates over a possible code-sharing arrangement have caused a surge in Qantas' share price. It has been suggested that such a pact could threaten other airlines currently serving the Australia-London route, particularly Singapore Airlines. Qantas' oneworld partners are also likely to suffer unless Emirates can eventually be brought into the oneworld alliance so that they may benefit as well.
Tuesday, July 24, 2012
A three-judge panel of the D.C. Court of Appeals upheld three DOT regulations introduced last year that had been challenged by U.S. carriers. At issue were the requirements that airlines include taxes and fees in their advertised fare prices, that airlines allow passengers to cancel tickets at no cost within 24 hours of purchase and that airlines be prohibited from increasing baggage fees and other costs after a passenger has purchased a ticket. The Court sided with the DOT on all three rules. The full opinion can be read here.
Monday, July 23, 2012
Late last year, Saudi Arabia made the monumental decision to allow foreign carriers to operate flights within its domestic market. The Saudi General Authority for Civil Aviation (GACA) has now revealed that it has produced a shortlist of seven companies out of 14 applicants that are under consideration for one or more licenses to operate domestic routes within Saudi Arabia. Qatar Airways, Bahrain Air and the parent company of China's Hainan Airlines are all under consideration. The GACA intends to make a decision on licenses by October, and to allow licensees to begin operating in late 2013. This development marks a big step forward for aviation liberalization in the Middle East.
Friday, July 20, 2012
In April the International Aviation Law Institute recorded an interview with former U.S. Department of Transportation Undersecretary of Transportation for Policy, Jeffrey N. Shane, as part of the Institute's "Conversations with Aviation Leaders" Oral History Program. That interview can now be viewed in its entirety here.
This also provides an opportunity to wish a happy 90th birthday today to Alan Boyd, the first U.S. Secretary of Transportation, who is mentioned in the interview.
Thursday, July 19, 2012
Wednesday, July 18, 2012
A Times of India story yesterday sheds some light on the Indian government's plans for revamping the country's struggling civil aviation sector. Parliament is expected to consider replacing India's primary aviation regulator, the Directorate General of Civil Aviation, with a new Civil Aviation Authority during its winter session. Plans also include measures to reduce the cost of aircraft fuel and a long-discussed loosening of restrictions on foreign direct investment in Indian carriers.
Monday, July 16, 2012
Friday, July 13, 2012
Thursday, July 12, 2012
The UK Department for Transport today released its long-awaited and previously delayed aviation policy framework (available here). Unfortunately, the framework contains no answers for the problem industry observers consider most pressing, how to satisfy London's imminent need for increased airport capacity. According to Transport Secretary Justine Greening, decisions on airport expansion have been pushed off until later in the year. This delay is certain to provoke yet another round of industry criticism of the Cameron government.
Wednesday, July 11, 2012
Tuesday, July 10, 2012
Monday, July 9, 2012
An interesting report from today's Times of India suggests the States currently in opposition to the EU's ETS may not share a vision for aviation emissions policy going forward. The article implies that the U.S. is supporting a global cap-and-trade program through ICAO and reports that the U.S. will host a meeting to discuss the issue later this month. Intriguingly, the story says that developing countries perceive the broader U.N. climate negotiations as more sympathetic to their interests than ICAO, and would prefer to address aviation emissions through those forums. If true, this would appear to be in conflict with the process agreed upon in the Kyoto Protocol, which explicitly assigns aviation emissions to ICAO.