Friday, October 11, 2013

EC to Approve Aegean Acquisition of Olympic Air

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.

October 11, 2013 | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 9, 2013

European Parliament Approves New Flight Time Rules

Contrary to the position of the transport committee, the European Parliament has voted down a resolution opposing the new flight time rules drafted by the European Commission. The text of the new regulations can be found here.

October 9, 2013 | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 8, 2013

New ICAO Council

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.

October 8, 2013 | Permalink | Comments (0) | TrackBack (0)

Friday, October 4, 2013

ICAO Concludes Assembly with Emissions Accord

The ICAO Assembly ratified an emissions agreement on the final day of its triennial meeting. The plan commits ICAO to drafting by 2016 a detailed global market-based-mechanism for limiting carbon emissions from aviation. The MBM would enter into effect starting in 2020. In somewhat of a surprise, ICAO voted not to permit the EU to apply its ETS to foreign airlines, even if limited to the portion of the flight taking place over EU airspace. Legally, the EU has the right to regulate its own airspace, and as such the EU Parliament could choose to ignore ICAO's position on this issue. It is highly unlikely to do so, however, as the rest of the international community clearly does not intend to comply with the EU regime. Next week the blog will provide some more detailed commentary on the results of the 2013 assembly, but for now a summary can be found here

October 4, 2013 | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 2, 2013

EC May Have to Redraft Flight Time Rules

The European Parliament Transport Committee voted to reject the European Commission's draft rule changes regarding on-duty time limits for pilots and crew. The rules are designed to enhance safety by prohibiting work schedules that lead to dangerous levels of pilot fatigue. The Committee appears to have opposed the draft changes because it felt they weren't strong enough. The proposal will be voted on by the full Parliament later this month. If rejected again, the Commission will have to rewrite the proposed changes or leave the current standards in place.

October 2, 2013 | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 1, 2013

Texas Drops Out of DOJ Suit Against American/US Airways

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.

 

October 1, 2013 | Permalink | Comments (0) | TrackBack (0)

Friday, September 27, 2013

EC Calls Out Italy, Cyprus and Greece for Non-compliance with Single European Sky

The European Commission has asked Italy, Cyprus and Greece for an account of their progress toward the establishment of Functional Airspace Blocks (FABs) as required by 2004 legislation designed to create a Single European Sky. The plan is intended to reduce congestion, costs and emissions while increasing efficiency by making air traffic control less fragmented between EU member states. The FABs were supposed to be in place by the end of 2012.

September 27, 2013 | Permalink | Comments (0) | TrackBack (0)

Thursday, September 26, 2013

Latest on ICAO Emissions Negotiations

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.

September 26, 2013 | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 25, 2013

Delta/Virgin Atlantic Joint Venture Receives Antitrust Immunity

The United States Department of Transportation earlier this week issued its final order approving antitrust immunity for Delta Airlines and Virgin Atlantic Airways to engage in a joint venture on routes between North America and the United Kingdom. The agreement between the carriers will include codesharing, proration of fares, lounge access and frequent flier programs. The entire docket regarding this application for antitrust immunity can be found here.  

September 25, 2013 | Permalink | Comments (0) | TrackBack (0)

Tuesday, September 24, 2013

Ukraine Upgraded to Category 1

The FAA announced last week that a July review found the Ukraine's civil aviation authority to be compliant with ICAO's safety oversight standards and practices, earning the country an upgrade under the FAA's International Aviation Safety Assessment program. Ukraine, which had been classifed as Category 2 since 2005, has been granted Category 1 status. Ukraine does not currently offer service to the United States.

September 24, 2013 | Permalink | Comments (0) | TrackBack (0)

Monday, September 23, 2013

F.A.A. Expected to Revise Portable Electronic Device Policy

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.

 

 

September 23, 2013 | Permalink | Comments (0) | TrackBack (0)

Thursday, September 12, 2013

Principato to Present Third Annual IALI/Chaddick Lecture

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.

September 12, 2013 | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 11, 2013

New Filings in US/AMR Merger Case

Late last week the Department of Justice filed an amended complaint against the proposed merger of US Airways and American Airlines. The two carriers have submitted their responses, which are available through the always excellent Airline Biz Blog at Dallas Morning News. Airline Biz Blog is also reporting that the two carriers are seeking to push back the original December 17 date by which they had planned to complete the merger. We'll have more detailed thoughts on the contents of these latest filings later in the week.

September 11, 2013 | Permalink | Comments (0) | TrackBack (0)

Tuesday, September 10, 2013

Russia, Kyrgyzstan Agree to Add Frequencies

According to ATW Online (subscription only), Russia and Kyrgyzstan are working on an amended bilateral air services agreement that would increase the number of weekly frequencies permitted on flights between Moscow and the Kyrgyz cities of Bishkek and Osh. The new agreement will also reportedly include additional rights for air cargo carriers. 

September 10, 2013 | Permalink | Comments (0) | TrackBack (0)

Thursday, September 5, 2013

EU Likely to Limit ETS Scope

The reports coming out of yesterday's ICAO Council meeting have been far from conclusive about what to expect with regard to an emissions resolution at the upcoming Assembly session. The most significant development is that the EU has indicated it will amend regulation 101/2008 to only apply to emissions generated in the airspace of EU Member States. This concession is reportedly conditional on the Assembly committing to having a global emissions plan in place by the 2016 Assembly, but it is probably safe to assume that the change will happen. The Assembly will produce some kind of resolution, though the details appear to remain very much up in the air at this late date. The best indications are that there will be some kind of pledge to adopt a plan at the 2016 Assembly meeting that would go into effect in 2020, but the details of that plan will be left open for future discussion. The EU wants the Assembly to commit to a plan that includes marked based measures, while some in the industry are still holding out hope that ICAO representatives refrain from endorsing anything stronger than a scheme involving carbon offsets.

September 5, 2013 | Permalink | Comments (0) | TrackBack (0)

Tuesday, September 3, 2013

Conflicting Reports on Emissions Standoff Before ICAO Meetings

Bloomberg and Reuters published dueling stories yesterday on the status of emissions talks going into tomorrow's ICAO Council meeting and the triennial assembly later this month. The quotes within the two articles displayed varying levels of optimism regarding what ICAO will be able to accomplish. There were also indications that the EU is willing to permanently amend its emissions trading policies to apply only to Member States' airspace. Hopefully we will know more by the end of tomorrow.

September 3, 2013 | Permalink | Comments (0) | TrackBack (0)

Friday, August 30, 2013

Labor Day Weekend Links

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.

August 30, 2013 | Permalink | Comments (0) | TrackBack (0)

Thursday, August 29, 2013

More Reading on Coordinated Effects, Mavericks and the AMR/US Merger

As an addendum to my earlier posts on the concepts of coordinated effects and mavericks as applied to the DOJ's challenge to the American/US merger, I wanted to pass along a 2002 speech by former U.S. Department of Justice Antitrust Division Deputy Assistant Attorney General William J. Kolasky entitled Coordinated Effects in Merger Review: From Dead Frenchmen to Beautiful Minds and Mavericks. The speech provides an excellent overview of both concepts and, though its more than a decade old, it sheds some light on how coordinated effects have been viewed within the agency.

August 29, 2013 | Permalink | Comments (0) | TrackBack (0)

Wednesday, August 28, 2013

New Zealand Aggressively Pursuing Open Skies Agreements

CAPA Centre for Aviation posted a very helpful article yesterday describing the extent to which New Zealand has worked to implement its new air transportation policy emphasizing an expansion of open skies agreements, even in cases where the liberalization of traffic rights has not been reciprocal.

August 28, 2013 | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 27, 2013

All Nippon Becomes First Foreign Carrier to Invest in Myanmar Market

Japanese carrier All Nippon Airways has announced plans to purchase a 49 percent stake in Myanmar-based Asian Wings Airways. It is the first investment in a Myanmar-based carrier by a foreign airline. Asian Wings has been a purely domestic carrier to date, but is scheduled to begin international operations later this year.

August 27, 2013 | Permalink | Comments (0) | TrackBack (0)