February 23, 2012
British Columbia Rescinds Fuel Tax on International Flights
In a move that runs contrary to current trends in public aviation policy, the province of British Columbia, Canada today announced the elimination of the aviation fuel tax on international flights. See Press Release, British Columbia News Room, B.C. Delivers on Commitment to Eliminate Jet Fuel Tax, Feb. 23, 2012 (available here). With environmental, security and passenger rights concerns contributing to the proliferation of taxes and regulatory costs on airlines in many States over the past decade this is an uncommon development and one that carriers such as Air Canada are certain to welcome. While it is unlikely that we'll see a broad shift in government policies anytime soon, the uncertain economic outlook for many airlines may prompt at least a few more States to reconsider the burden government policies impose on the industry.
February 22, 2012
ETS Critics Coordinate Opposition Strategy
Representatives of 26 countries, headlined by Russia, China, India and the U.S., met in Moscow today and reportedly identified several options for combating the EU's attempts to include their carriers in the EU Emissisions Trading Scheme. See Jennifer Ranken, Foes of EU Airline CO2 Rules Agree on Tactics, Reuters, Feb. 22, 2012 (available here). Meeting participants discussed prohibiting airlines from participating in the EU scheme (as China has already done and Russia and the U.S. are reportedly considering), bringing a formal complaint to ICAO, refusing cooperation with EU carriers looking to expand services, and foisting retaliatory charges upon EU carriers. Each State will pursue such measures at its own discretion. The article notes that Russia could also reinstate the excessive and largely illegal overflight charges on EU carriers flying Siberian routes that were only recently eliminated. Additionally, the report suggests that the States are as of yet reluctant to pursue formal dispute resolution through ICAO, as laid out in Article 84 of the Chicago Convention, out of concern that the process could be too slow-moving and may impede ICAO efforts to broker a global agreement. The States plan to meet again in Saudi Arabia this summer.
February 21, 2012
ICAO Air Transport Symposium
The International Civil Aviation Organization (ICAO) Air Transport Symposium will be held from April 18-20, 2012 in Montreal. The event will address some of the blog authors' favorite regulatory topics including liberalization, market access and limitations on air carrier ownership and control. More information is available here.
February 20, 2012
Kingfisher Latest Carrier to Suffer Liquidity Shortfall
The spate of news reports about struggling airlines continues today with word that Kingfisher Airlines had to cancel more than 100 flights over the weekend, stranding numerous passengers, and is now under scrutiny from the Director General of Civil Aviation as a result. See Travel Firms Dump Kingfisher Airlines; KFA Pulls Out Inventory on Many Travel Portals, Economic Times, Feb. 21, 2012 (available here). Apparently, Kingfisher's troubles were precipitated by having its accounts frozen last week by tax authorities. The Indian government has not yet enacted an expected rule change, of which Kingfisher has been a vocal proponent, that will allow carriers to seek investment from foreign airlines. Whether the change is enacted in time to help Kingfisher remains to be seen. The Indian government has rejected the possibility of a bailout, but Kingfisher is insisting it will continue to operate.