Wednesday, January 14, 2015
In a post last week we took a skeptical view of Indonesia's plans to introduce a price floor for air fares. An analysis out today from CAPA shares our criticism and includes alternative suggestions for how to fix Indonesia's air transport sector, beginning with upgrades to infrastructure and improving the safety oversight apparatus which carries a Category 2 rating from the United States Federal Aviation Administration. Promisingly, there have been reports that the Indonesian government is aware of the need for reforms to the State's transport bureaucracy.
Tuesday, January 13, 2015
Japan is reportedly on the verge of completing bilateral air services agreements with both Cambodia and Laos. The agreements will presumably be similar to those between Japan and the other eight Association of Southeast Asian Nations (ASEAN) Member States. Once these agreements are in place, Japanese airlines will be able to serve all ten ASEAN members directly.
Friday, January 9, 2015
Cyprus Airways has suspended operations effective today in response to an earlier announcement by the European Commission that the restructuring package provided the carrier by the Cypriot government was in violation of EU state aid rules and would have to be repaid. Cyprus was deemed to be in violation of numerous conditions of EU rules, including the "one time, last time" principle which restricts companies to one restructuring package per ten-year period. Cyprus Airways was the recipient of government aid in 2007, 2012, and 2013. Additionally, the Commission concluded the restructuring proposal would not render the airline commercially viable absent future state aid.
Wednesday, January 7, 2015
According to a report, Indonesia's Transport Ministry is considering prohibiting carriers from offering cut-rate fares as a policy response to the AirAsia Flight QZ 8501 crash. The purported reasoning is to ensure carriers have sufficient revenue to fund safe operations. If true, this would be a needlessly inefficient mechanism by which to raise the safety standards of Indonesian carriers. The more straight-forward method, of course, would be to directly increase the safety standards required by the Indonesian government and to penalize carriers that fail to meet those standards. This would likely lead to an increase in fare prices, but only as a byproduct of efforts to increase safety, which is the primary objective. By contrast there is no guarantee that the elimination of ultra-low fares will lead to increased spending on safety measures, as opposed to either greater carrier profits or fewer passengers being served. The only reason I can think of for addressing the issue in this way is that monitoring compliance with restrictions on ticket prices is likely easier and less expensive than inspecting and assessing compliance with operational standards. But ease of monitoring cannot justify a decision to monitor behavior that is only tangentially related to the problem in question. It reminds one of the parable about the man looking for his keys under the lamp post instead of where he lost them because it's easier to see in the light.
Thursday, December 11, 2014
This past Monday, the International Aviation Law Institute conducted a Symposium in conjunction with the special ceremonies held by the International Civil Aviation Organization (ICAO) to commemorate the 70th anniversary of the Convention on International Civil Aviation, or the Chicago Convention. All of the events took place at the Hilton Chicago, formerly the Stevens Hotel and the location of the 1944 conference where the Chicago Convention was negotiated and signed.
The IALI Symposium was co-moderated by Professor Brian F. Havel and Jalal Haidar, and featured contributions from IALI board members Jeffrey Shane and John Byerly. The Symposium was preceded by a white paper "International Aviation's Living Constitution: The Chicago Convention and ICAO - Past, Present, and Future" which will be published in an upcoming edition of Issues in Aviation Law and Policy. The paper's central thesis is that the Chicago Convention is ICAO's constitution, and as a result has had to operate as a flexible, "living" document to permit the organization to evolve as needed over the past seventy years. Much of the Symposium discussion was devoted to the original decision not to include economic regulation in ICAO's initial responsibilities and whether ICAO should expand its efforts in that area. The discussion also covered ICAO's responsibility for aircraft emissions and the various legislative mechanisms at the organization's disposal. There were insightful remarks from current Council members, industry representatives, and academics.
Friday, October 31, 2014
The Volume 14, Autumn 2014 issue of the International Aviation Law Institutes's journal, Issues in Aviation Law and Policy (IALP), will be arrive in November. The issue will feature a commentary by Enyinnaya Uchenna-Emezue, Addressing the Contractual Quagmire in the Nigerian Aviation Industry, as well as the following articles:
- Alan Khee-Jin Tan, The 2010 ASEAN-China Air Transport Agreement: Much Ado over Fifth Freedom Rights?
- Gregory McGuire, Fight or Flight, or Both? Article 17 "Accidents" and Flight Crew Misconduct
- Victoria Seabra Ferreira, The Anticompetitive Effects of Slot Allocation in the EU
- Jae Woon Lee, The U.S.'s New Divide and Conquer Strategy in Northeast Asia
- Danielle Edwards, Comparative Climate Change Law & Policy: Challenges for Regulating Aircraft Emissions in the United States and the European Union
- James Rappaport, Northwest Airlines v. Ginsberg: Bad Business or High-Altitude Chutzpah?
- Rumani K. Sheth, The FAA Downgrade of Indian Aviation - What Went Wrong?
Friday, October 24, 2014
Earlier this week, FAA Deputy Administrator Michael Whitaker spoke at DePaul's College of Law in an event jointly sponsored by the International Aviation Law Institute and the Chaddick Institute for Metropolitan Development. This was the fourth in the annual lecture series hosted by the two institutes. His comments predominantly concerned the status of the United States' Next Generation Air Traffic Management System (NextGen). Whitaker described the rollout as on-schedule, with many of the necessary upgrades to technological infrastructure already finished, or scheduled to be completed by the end of 2015. He also said that NextGen would eventually allow the FAA to assign responsibility for airspace in a manner that will allow the agency to more effectively avoid delays and shutdowns in the event of a crisis such as the one affecting the Aurora, Illinois control center late last month. The entirety of the program will take decades to implement. Details about NextGen's various components can be found in the 2014 update provided by the FAA. Whitaker also stressed the importance of international collaboration on the adoption of new technologies to ensure compatibility. Interestingly, he highlighted ICAO's role in fostering international agreement on a variety of issues, which has not always been a subject of great importance to U.S. transportation officials.
Tuesday, October 21, 2014
Monday, October 20, 2014
Earlier this month the European Commission took the rare step of requesting a meeting of the Joint Committee overseeing the U.S.-EU open skies agreement to discuss Norwegian Air International's pending application for permission to operate to the United States. Article 18 of the landmark 2007 multilateral agreement between the U.S. and the EU created a Joint Committee responsible for reviewing the implementation of the agreement and for holding consultations on any issues that arise. The Joint Committee held its required annual meeting in January, but either party can request additional meetings to resolve questions related to the agreement's interpretation or application. When such a request is made, the meeting is supposed to be held within 60 days of the request, which would allow the U.S. enough time to postpone any confrontations over NAI's bid until after the mid-term elections, which is believed to be a motivating factor behind the delay.
Wednesday, October 8, 2014
The U.S. government has decided to move ahead with plans to begin screening passengers arriving from Sierra Leone, Liberia and Guinea at five U.S. airports. The screenings will be conducted by representatives of the Center for Disease Control and will involve taking passengers temperatures and requiring them to complete additional questionnaires.
Monday, October 6, 2014
Representatives from top industry trade group Airlines for America reportedly met with U.S. government officials today to discuss the utility of introducing additional passenger screening measures to prevent spread of the Ebola virus. There are no plans to temporarily ban flights to the worst-affected countries, but U.S. government officials appear to be seeking industry input regarding less intrusive and disruptive safeguards.
Wednesday, October 1, 2014
The European Commission has determined that state aid provided to airports in Zweibrucken, Germany and Charleroi, Belgium violated the EU's new state aid guidelines for airports and airlines. The EC announced those decisions in a press release earlier today, along with decisions finding state aid to five other airports in Germany, Italy, and Sweden to be compliant with the new guidelines.
Tuesday, September 30, 2014
In the wake of last Friday's incident in which a contract employee set fire to an FAA air traffic control center, the FAA has announced it will be conducting a 30-day review of security practices as well as procedures for restoring operations in response to an emergency.
Monday, September 29, 2014
The World Route Development Forum was held in Chicago last week. Given the location, DePaul's International Aviation Law Institute was able to participate. Professor Brian Havel moderated a panel on airline regulation during the Strategy Summit accompanying the event. IALI advisory board member Sandra Chiu also participated as a panelist.
Thursday, September 25, 2014
The FAA announced today that six aerial photography and video production companies had been granted exemptions that would allow them to use unmanned aircraft systems (UAS) for commercial purposes. The particular UAS operated by the companies under the exemption will not need certificates of airworthiness.
Thursday, September 11, 2014
The Court of Justice for the European Union issued a judgment last week clarifying the exact moment to use as the "arrival time" when measuring the length of a delay for purposes of a compensation claim brought under the EU's passenger rights regulation. Under prior rulings, the Court had determined that passengers were entitled to compensation under Regulation 261 for delays of at least three hours. In Case C-452/13 Germanwings GmbH v Ronny Henning, the passenger sought compensation for a flight in which the aircraft had landed and reached a parked position two hours and 58 minutes after the scheduled arrival time, but the aircraft doors were not opened until after the delay had exceeded the three hour mark. The Court determined that the delay satisfied the three-hour minimum because passengers were not free to leave the aircraft until after the doors had opened.
Wednesday, September 3, 2014
The U.S. Department of Transportation has dismissed an application by Norwegian Air International (NAI) for an exemption under 49 U.S.C. § 40109, which would have temporarily authorized NAI to operate additional services to the United States while the DOT considers its application for a foreign air carrier permit. The case has been highly contentious since NAI, an Ireland-based subsidiary of the Scandinavian LCC, Norwegian Air Shuttle (NAS), announced plans to expand its U.S. service. Labor unions and U.S. carriers have been the primary opponents, accusing Norwegian of pioneering a "flags of convenience" model to avoid labor regulations, while European officials have criticized the United States for engaging in protectionism and ignoring its obligations under the US-EU Open Skies Agreement. Yesterday's decision was only a temporary setback for NAI, as the DOT's final decision on the application is still pending.
Thursday, August 14, 2014
A column in the forthcoming print issue of the Economist uses last week's announcement that Malaysia Airlines may return to full state control as an excuse to criticize governments' unwillingness to allow airlines to fail. Given the unique trials Malaysia Airlines has faced this year, it is an unfair example. While it is true that Malaysia Airlines was losing money before either of this year's tragedies hit, we have no way of knowing whether the state's sovereign wealth fund would have offered to buy out the approximately 30 percent of Malaysia Airlines shares that are privately owned had 2014 been merely business as usual for the airline. What we do know is that the carrier's near-term forecast is entirely different because of the two high profile disasters that have befallen its aircraft. In that way, Malaysia's circumstances arguably resemble that of the U.S. airline industry immediately following the 9/11 attacks when it received considerable financial support from the U.S. government. Obviously, the actions of the U.S. government then and Malaysia today can both be criticized, but neither can accurately be characterized as indicative of the normal relationship between States and their airlines.
Perhaps in recognition of this weakness, the piece includes a brief reference to Etihad's recently announced agreement to purchase a 49 percent stake in Alitalia to broaden its case that governments continue to throw good money after bad in the air transport sector. Unfortunately, this example is no better chosen. Etihad's investment is not an example of political pressures and national pride motivating a domestic government to futilely prop up a failing flag carrier, but the most recent iteration of an ambitious and controversial expansion strategy by a rival with no concern for protecting Italian jobs.
This isn't to say that privatization and liberalization continue unchallenged in the international air transport sector. In fact, the Etihad-Alitalia partnership is likely to raise concerns about the European Union's commitment to both objectives, though it may also provide some needed clarification regarding the EU's restrictions on foreign ownership and control. But any argument that these two carriers should have been allowed to fail needs to first accurately explain why they were rescued.
Friday, August 1, 2014
The United States Trade and Development Agency has announced an agreement to work with two Indian agencies, the Airports Authority of India and the Bureau of Civil Aviation Security, to develop standards and testing procedures suitable for international baggage and passenger scanning systems. It is encouraging to see the two countries working together on improvements to the Indian aviation sector after the United States downgraded India to Category 2 status earlier this year.
Tuesday, July 29, 2014
After meeting with representatives from IATA and other aviation organizations earlier today, ICAO has announced that it will create a task force to study potential policy responses to the security issues raised by the downing of Malaysia Airlines flight MH17. It appears the task force will be focused on how best to ensure that airlines and civil aviation authorities are provided with the necessary information to accurately determine when the airspace over conflict zones should be avoided. There was some mention of possibly including military or security agency officials on the task force, which seems wise considering those are the agencies with which civilian aviation officials will have to partner more closely to obtain the information necessary to avoid future disasters. Unsurprisingly, institutional changes that would transfer authority to issue airspace restrictions from national authorities to ICAO were ruled out. Hopefully, ICAO's task force will be able to at least devise some best practices for States to follow when evaluating potential threats and approving routes, and the consequences of this recent tragedy will provide sufficient motivation for States to faithfully implement those recommendations.