Friday, May 11, 2007

Virgin Galactic and Cabotage, U.S.-China Aviation Negotiations and Other News

Virgin Galactic and Cabotage

A recent article in the Financial Times raised the interesting legal issue of whether Virgin Galactic's planned suborbital space flights from New Mexico would be a violation of U.S. cabotage laws.  Download Loophole.doc

U.S.-China Aviation Negotiations

According to a report in Aviation Daily, U.S. negotiators are willing to exchange an extended timetable for reaching a full open skies agreement with China for significantly more flight frequencies between the two nations over the next few years.

Small Community Air Service Development Program Docket

As we mentioned in a blog posting a few weeks back, applications for grants under the 2007 Small Community Air Service Development Program were due at the U.S. DOT by the end of April.  After perusing the docket, two of the most interesting proposals were filed by the cities of Wichita, Kansas and Rockford, Illinois.

The Wichita proposal asks for a modest $500,000 to help provide ground handling services for existing and potential airlines.  Of greater interest, the application contains an history of Wichita's struggles and successes in their longstanding, aggressive efforts to recruit new air service.  Wichita's previous efforts to recruit AirTran Airways made it the target of an FAA investigation examining if the agreement between AirTran and the City of Wichita constituted a discriminatory and illegal subsidy.  Download awst_wichita_article.doc

A far more costly proposal by the City of Rockford would ask for $3 million to cover the break-even requirements necessary to recruit a charter operator to fly B737-400 service between Rockford and New York City, Phoenix and Ft. Meyers.  Under this "Charters for Starters" program, the city hopes to demonstrate the viability of these routes in hopes that a scheduled airline would consider adding service to these cities in the future.  An article from the Rockford Register Star discusses the city's plans in greater depth.

Ryanair Pricing and Merger Plans

Ryanair recently announced that it has begun selling all of its tickets with required taxes and fees included in the advertised price to quell EU regulators' complaints of deceptive advertising.  See AP article.  Michael O'Leary also stated that he would file a lawsuit challenging the decision if the EU decided to block its proposed merger with Aer Lingus.  A decision is expected from the EU by July 4. See MarketWatch article.

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