Aviation Law Prof Blog

Autumn Issue of IALP

The Volume 12, Autumn 2012 issue of the International Aviation Law Institutes's journal, Issues in Aviation Law and Policy (IALP), will be available early next month. The following articles will appear in the issue:

• Ruwantissa Abeyratne, Aircraft Emissions - In Search of a Global Framework for Market-Based Measures
• Mitchell Garber, Douglas Amster & Douglas McQueen, Undisclosed Medical Conditions in the International Aviation Community: The Risks of Medical Certification Systems Based Upon Voluntary Self-Disclosure
• David E. Rapoport, Jan Brown & Lindsey A. Epstein, Babies Have a Right to a Safe Seat with Proper Restraints - The Infant Seat Exception Should be Abandoned
• Pamela C. Hicks, Injuries from Turbulence: Forecasting Conditions for Liability
• Ana Dedijer, Extending the Aviation Regime of the European Union: The EU External Aviation Policy Toward Its Neighbors
• Moses George, Private Airports in India - Private or Public?

Blog readers interested in subscribing to IALP, ordering back issues, or perusing a list of published articles may do so at the Institutes's website here.

Flexibility in ETS Enforcement

A column in Reuters today speculates that EU States may move slowly next Spring to penalize non-compliant carriers in the hopes of buying more time to find an international solution.

EU Ministers Reach General Approach on Slot Trading

Air Transport World has the details.

Virgin Australia Attempts to Consolidate Australian Market

Virgin Australia has announced plans to acquire regional Australian carrier Skywest Airlines as well as a 60% stake in Tiger Airways, but the moves will need to pass muster with Australian competition authorities. In a related move, Virgin Australia sold a 10% stake to Singapore Airlines.

Canada Approves Air Canada/United Continental Joint Venture

The Canadian Competition Bureau has reached an agreement with Air Canada and United Continental to allow the two carriers to proceed with a joint venture, first announced in 2010, on 14 routes between the two countries. The agreement bars the airlines from coordinating on prices, seat availability, pooling revenue or costs, and sharing commercially sensitive information.

HNA Acquires Stake in French Carrier

HNA Group, the Chinese conglomerate that owns Hainan Airlines, has reached an agreement to purchase a 48% interest in French carrier Aigle Azur.

Greek Carriers Give Combination Another Try

Aegean Airlines reportedly plans to purchase Olympic Air and operate Greece's former state carrier as a subsidiary. Those plans will be contingent upon approval from the European Commission, which blocked a proposed merger between the two Greek carriers in early 2011. 

Canada Moving Closer to Cape Town Ratification?

It appears that the Canadian government is considering ratification of the Convention on International Interests in Mobile Equipment and its related Aircraft Protocol (often referred to collectively as the Cape Town Convention). Canada would be the 53rd contracting party to the convention.

Portugal Selects Tap Bidder

Portugal has chosen Brazil's Synergy Aerospace, the majority owner of AviancaTaca, to purchase flag carrier Tap Air Portugal. Both Tap and AviancaTaca belong to the Star Alliance, simplifying that part of the deal. However, it is as of yet unclear how the parties intend to work around EU's 49% foreign ownership cap. This is yet one more example of the emerging trend toward cross-border consolidation. Restrictions on foreign ownership are looking increasingly obsolete.

Gulf Carriers Brought Into Fold

A fairly sharp article in Reuters today recaps the recent developments involving the three prominent Gulf carriers and briefly discusses the significance of their incorporation into the alliance system. Last week, Qatar Airway joined the oneworld alliance, following Etihad's codeshare agreement with Air France-KLM and Emirates' codeshare with Qantas.

Turkey Bans Syrian Aircraft From Airspace

As tensions escalate between the two States, Turkey has barred all Syrian aircraft from entering Turkish airspace, one day after Syria imposed a similar ban on Turkish aircraft.

Emirates Fined for Price Fixing in Australia

An Australian Court has hit Emirates with a $10 million fine for price fixing on cargo routes between Indonesia and Australia from 2001 to 2006.

Potential ICAO Solution on Emissions?

An intriguing report surfaced in the Economic Times today of a potential ICAO-designed market-based-mechanism for aviation emissions that could prove acceptable to India and presumably other countries that have so far resisted the idea. According to the article, the proposal would only apply to developed countries at first, but would eventually encompass developing countries as well. Once it is fully in place, revenues from developing countries' carriers would be directed back to those countries to be used for aviation emissions reductions while revenues from carriers in developed countries would be shared globally. 

The Argument for Incremental Emissions Regulation

In Defense of Incrementalism for International Aviation Emissions Regulation, by Gabriel S. Sanchez, is now available via the Virginia Journal of International Law.

Regulator Intervenes with Kingfisher Ticket Sales

Kingfisher Airlines, which temporarily suspended operations last week in response to an employee strike, has been prohibited from selling tickets by India's Directorate General of Civil Aviation. The regulator is scrutinizing Kingfisher's continued viability.

Air France, Etihad Enter Code-Share Agreement

In what may be the first step toward a deeper integration, Air France and Etihad have announced a code-share agreement.

CJEU Requires Compensation for Passengers Delayed by Strike

The Court of Justice for the European Union (CJEU) has delivered its judgment in Case C-22/11, Finnair Oyj v Timy Lassooy. The Court ruled that Regulation (EC) No 261/2004, which requires carriers to compensate passengers for delayed or cancelled flights, applies to delays caused by employee strikes. Finnair had attempted to argue that strikes constitute "extraordinary circumstances" under Article 5(3) of the regulation, and thus carriers should be exempt from their compensation obligations when delays are caused by strikes. The Court rejected this interpretation, decreeing that the Article 5(3) exemption was intended for events that "could not have been avoided even if all reasonable measures had been taken."

This ruling should give industry employees additional leverage in future labor disputes, and given the frequency of airline strikes within the EU, could prove costly for Europe's already struggling carriers.

EU Asks WTO for $12 Billion in Sanctions Over Boeing Subsidies

Reuters has the latest details from the ongoing Boeing-Airbus subsidy dispute.

US Senate Passes ETS Opposition Bill

Over the weekend, the United States Senate unanimously passed a bill opposing the EU's inclusion of foreign carriers in its emissions trading scheme. The issue is starting to draw increased media attention, and a few good recent summaries of the issues at stake can be found here and here. We won't repeat the substance of those summaries, but will discuss how most of the reports on the legislation are less dismissive of the bill's potential impacts than our post from when it first became clear that passage was likely. For those that have written about the bill, their primary emphasis has been on the provisions that prohibit U.S. operators from participating in the program and hold operators harmless for that non-participation. The latter is an issue we have not yet discussed, but it raises the possibility that if U.S. operators are fined for non-participation, the Secretary of Transportation would have to hold the operators "harmless" by either paying the fines with U.S. tax dollars or levying offsetting fines on EU operators and sparking a trade war.

Our skepticism about the consequence of these provisions was largely based on the discretionary language used in both provisions, instructing the Secretary of Transportation to prohibit U.S. participation and hold operators harmless only after determining that such a prohibition "may be in the public interest." Thus, while the legislative branch will have expressed its hostility to the EU scheme, the participation of U.S. carriers will ultimately be determined by the executive branch. It is important to note that such discretionary language was not included in the House version of the bill passed last summer, so our analysis could change if the House does not approve the more flexible language included in the Senate bill. Additionally, given the politics involved, we probably overstated in our earlier analysis the actual amount of discretion afforded the Secretary of Transportation. If the President were to sign the bill it would make little sense for a cabinet official within the same administration to then determine a prohibition was not in the public interest and essentially render meaningless the majority of the bill's contents. This suggests that the discretionary language may be unimportant, because the policy decision will be made when the President signs the bill. 

However, it is equally possible that the discretionary language affords the Obama administration flexibility that will be helpful to its negotiations toward an ICAO solution. If the law is passed and signed with that flexibility intact, the administration can negotiate with the EU and within ICAO while holding the law in its back pocket as an implied threat should international negotiations fail.  Without the discretionary language, the administration may be forced to negotiate with a trade war already unleashed. 

 

Arik Air Resumes Domestic Flights

The Nigerian government and the State's largest carrier have, at least for now, resolved whatever disagreements led to the grounding of aircraft last week.