Wednesday, November 6, 2013
Reports of settlement talks between the DOJ and American Airlines and US Airways leaked out earlier this week. It appears to be the government that's pushing the settlement story at the moment, suggesting the DOJ at the very least wants to create a public impression that it made a reasonable attempt to resolve the matter before reaching trial. It's probable that the DOJ actually does want to settle the case, as its prospects of winning in court are highly uncertain. Attorney General Eric Holder's remarks suggest that the DOJ is seeking slot divestitures at Washington Reagan National, which was expected, and at least one other airport, likely New York LaGuardia, which comes as a surprise. Slot divestitures alone would fail to address many of concerns raised in the DOJ complaint, leading to speculation that the merged airline may also be required to continue US Airways' Advantage fares program for a specified duration post-merger.
Wednesday, October 30, 2013
The ongoing controversy over the public revelation that the United States security agencies have been spying on foreign leaders such as German Chancellor Angela Merkel, provides an excellent excuse to share the following excerpt from Jordan A. Schwarz's fine biography of Adolf Berle the president of the 1944 Chicago Conference that produced the Convention on International Civil Aviation. According to Schwarz, compromise between the British and American delegations to Chicago was made more difficult by British awareness that the Americans were intercepting communications between London and the British delegation. From page 250 of Liberal: Adolf A. Berle and the Vision of an American Era:
Yet Beaverbrook knew that London wanted to give Swinton new instructions for compromise, but what he could not say was that London dared not send them because it knew that the Americans were intercepting their messages to Swinton and tapping the telephones. Years later Masefield would recall that "We got totally confused. We had to cover up and reverse ourselves." Beaverbrook did not give Swinton new instructions or advise him of Roosevelt's interest in the Canadian compromise, "Nor could he be told with the Americans listening." London still hoped to bargain around the Canadian compromise and did not want to reveal its flexibility to the Americans. Even Swinton had a hint of the American spying; he later told Beaverbrook that, although he did not show Berle any telegrams from London, "he thought that Mr. Berle was well aware of them. The subject was not pursued any further."
Tuesday, October 29, 2013
The Volume 13, Autumn 2013 issue of the International Aviation Law Institute's journal, Issues in Aviation Law and Policy (IALP) will be available soon. Highlights include a lead commentary from Ruwantissa Abeyratne, recently retired from years of service to ICAO, which provides an unsparing critique of the organization and recommendations for areas in which it can better serve international aviation going forward. Additionally, this issue contains one of the earliest published analyses of the DOJ's challenge to the AMR/US Airways merger and a rare English-language article on the development of civil aviation policy in Kosovo. The full table of contents is as follows:
Ruwantissa Abeyratne, Reinventing ICAO’s Role in Economic Regulation – A Compelling Need
John Q. Mulligan, The End of Prosecutorial Discretion for Airlines: The DOJ’s Challenge to the AMR/US Airways Merger
Nithya Narayanan, Unwinding the Vicious Loop of Aircraft Finance Leases
Jeffrey J. Immel, The Montreal Convention and Recovery for Free-Standing Emotional Distress Under Article 17
P. Paul Fitzgerald, In Search of Greener Commercial Aviation
Md. Tanveer Ahmad, The CJEU’s Radical ETS Judgment: Destabilizing the Chicago Convention System
Eset Berisha, At the Boundaries of the Chicago Convention – ICAO’s Role in Civil Aviation Affairs in Kosovo
Daniel Friedenzohn, Delayed Flights and Delayed Action: The U.S. Department of Transportation’s Tarmac Delay Regulations and Their Impact on Air Travel
Blog readers interested in subscribing to IALP, ordering back issues, or browsing a list of published articles may do so at the Institute's website here.
Friday, October 11, 2013
The European Commission has defied recent precedent by deciding in favor of a proposal by Greece's Aegean Airlines to acquire Olympic Air, creating perhaps an interesting point of comparison to the U.S. Department of Justice's challenge to the proposed merger between American Airlines and US Airways which similarly broke with recent decisions though in the opposite direction.
The Commission had previously prohibited a merger between the two carriers in 2011, and by opening up a phase II investigation into the most recent proposal, provided cause to believe it would again deny the merger. The Commission has been somewhat forgiving of cross-border airline consolidation within the EU, but has taken a more skeptical view toward mergers between two carriers within the same member state, something that can be seen in both its previous decision on Aegean-Olympic as well as its multiple rejections of a combination between Ireland's Ryanair and Aer Lingus. In a speech explaining the decision, Vice President Joaquin Almunias indicated that the Commission has not changed its philosophy and remains concerned about the likely anticompetitive effects this merger will have on certain routes. In this instance though, the Commission appears to have concluded that its hand were tied by Olympic's precarious financial situation, creating a classic "failing firm defense" case. The key paragraph from the speech:
The detailed investigation revealed that, in contrast to its situation 2 years ago, Olympic today is simply not able to continue operating outside of Aegean. Had Olympic been able to continue operations outside the Aegean group, the decision would have been a prohibition. But now, because of both the on-going economic crisis in Greece and Olympic's very difficult financial situation, Olympic would be forced to leave the market soon, with or without merger. If it were not acquired by Aegean, Olympic would simply shut down. This means that on the 5 problematic routes, Aegean would remain in any event the only player.
Wednesday, October 9, 2013
Tuesday, October 8, 2013
Last week, as is done every three years, the ICAO general Assembly elected a new Council. This is highly important as the Council sets the policy agenda for the organization. The importance is magnified this time around because the incoming Council will oversee the development of the global emissions plan to be introduced in 2016.
The Council election process is segregated into three tiers, with the first grouping consisting of States of chief importance in air transport. All of the States in this tier retained their place on the Council. The second grouping consists of States which make the largest contribution to the provision of facilities for international civil air navigation (excluding States in tier 1). Norway, Portugal and Venezuela were newly elected in this grouping. The third tier is used to ensure adequate geographic representation of all areas making up the ICAO community. Most of the turnover on the Council occurs within this grouping. This year, Bolivia, Chile, Dominican Republic, Kenya, Libya, Nicaragua, Poland, and United Republic of Tanzania were newly elected within this category.
The full Council, including incumbents and newly elected States, is as follows: Australia, Argentina, Bolivia, Brazil, Burkina Faso, Cameroon, Canada, Chile, China, Dominican Republic, Egypt, France, Germany, India, Italy, Japan, Kenya, Libya, Malaysia, Mexico, Nicaragua, Nigeria, Norway, Poland, Portugal, Republic of Korea, Russian Federation, Saudi Arabia, Singapore, South Africa, Spain, United Arab Emirates, United Kingdom, United Republic of Tanzania, United States, and Venezuela.
Friday, October 4, 2013
Wednesday, October 2, 2013
Tuesday, October 1, 2013
Texas, one of six states to join the Department of Justice's complaint against the proposed American Airlines/US Airways merger, has withdrawn from the lawsuit after the carriers agreed to continue existing services to the state's airports. Texas' withdrawal is unlikely to have a significant bearing on the trial.
Also today, the presiding judge has denied the DOJ's request for a postponement due to the federal government shutdown. The DOJ attorneys assigned to the case are now expected to continue working on the case despite the shutdown.
Friday, September 27, 2013
Thursday, September 26, 2013
Reuters has a report out today describing the latest developments regarding ICAO's efforts to manage aviation emissions. The proposal currently under consideration appears to be a commitment to some form of global market-based-mechanism, the details of which would be drafted and finalized by 2016, and which would take effect beginning in 2020.
According to the report, there remains disagreement about the interim rules on emissions regulation. As has previously been reported, the EU would be permitted to keep its scheme, but only charge allowances to foreign carriers for the portions of flights over the collective territory of EU member states. The United States is reportedly objecting to plans that would exempt many developing countries from the obligation to comply with the EU regulations.
Wednesday, September 25, 2013
Tuesday, September 24, 2013
Monday, September 23, 2013
The New York Times reports that an F.A.A. aviation rulemaking committee is expected to formulate rule changes later this week that would allow passengers to use electronic devices such as e-readers and tablets during takeoff and landing. Restrictions are likely to remain in place on cell phone and Wi-Fi use. A brief explanation of the current policy can be found here.
Thursday, September 12, 2013
Greg Principato, past president of Airports Council International-North America, will present at the International Aviation Law Institute (IALI) and Chaddick Institute for Metropolitan Development's third annual lecture on October 21 at DePaul University. The title of his speech will be "Trouble on the Tarmac: Redirecting U.S. Aviation Policy to Promote Economic Growth."
Principato served eight years as president of Airports Council International-North America, before stepping down in June 2013. During his 30 plus-year career, he worked on a wide variety of aviation issues. His many achievements include serving as executive director of the 1993 National Airline Commission, helping negotiate a new air service agreement between the United States and Japan, working to develop a new global standard for aircraft noise, and helping negotiate an international airline alliance.
Each year, IALI and Chaddick invite an expert in national aviation policy and advocacy to discuss the role of commercial airports and their impact on U.S. cities and the national transportation network. Past presenters include Christa Fornarotto, the Federal Aviation Administration’s associate administrator for airports, and Professor John Kasarda, author of the book Aerotropolis: The Way We’ll Live Next.
Attendance is by invitation only. For more information, please contact IALI Executive Director Stephen B. Rudolph.
Wednesday, September 11, 2013
Tuesday, September 10, 2013
Thursday, September 5, 2013
Tuesday, September 3, 2013
Friday, August 30, 2013
Here's what you should know before beginning your three-day weekend:
- A November 25 trial date has been set for the antitrust challenge to the American/US Airways merger.
- More good news for American Airlines: the judge overseeing the carrier's bankruptcy appears willing to confirm its reorganization plan before the antitrust challenge is resolved.
- The U.S. Department of Transportation has released a show-cause order supporting antitrust immunity for the Delta/Virgin Atlantic joint venture.
- ICAO has rescinded India's significant safety concern designation.
- Chilean carrier LAN won a legal dispute with the Argentinian government over use of an airport.