Monday, October 31, 2011
The debate over the EU's ability to unilaterally impose its Emissions Trading Scheme on the rest of the international aviation community moves to ICAO this week as twenty-six nations are expected to file a formal protest against the EU measure on Wednesday. See Pilita Clark, Air Carbon Permit Fight Escalates, Financial Times, Oct. 30, 2011 (available here). The issue is expected to be discussed at the November 2 ICAO council meeting in Montreal. Following the Advocate General's opinion from earlier this month, ETS opponents have moved beyond the ECJ in their attempts to block the EU's plans. This shift in focus to ICAO was likely motivated by a lack of confidence that the high court will deviate greatly (if at all) from the Advocate General's opinion, as well as the practical reality that the full ECJ opinion is not expected until after the scheme is scheduled to go into effect. It is worth noting that the Financial Times article contains new cost estimates released last week by the Bloomberg New Energy Finance consultancy that anticipate a less severe economic impact for carriers under the ETS. For more commentary on this latest development, blog readers are invited to look at yesterday's Reuters' article on the same subject in which Institute Senior Fellow Gabriel S. Sanchez was quoted at length. See Barbara Lewis, Airlines Ready for Next Battle Against EU Carbon Law, Reuters, Oct. 30, 2011 (available here).
Friday, October 28, 2011
Earlier today the D.C. Court of Appeals vacated an FAA ruling on a proposed offshore wind farm and remanded the matter back to the FAA for further consideration. See Jay Lindsay, Court Says Cape Wind's Offshore Project Won't Fly, USA Today, Oct. 28, 2011 (available here). The FAA had determined that the Cape Wind turbines presented no hazard to the aviation industry, but the Court held that the FAA failed to analyze how the turbines would affect planes flying by visual flight rules.
Thursday, October 27, 2011
Taiwan and Japan remain committed to signing an open skies agreement in the near future. See Nancy Liu, Timetable for Taiwan-Japan Aviation Pact to be Set Soon, Central News Agency, Oct. 27, 2011 (available here). The originally scheduled signing was canceled last month, and Taiwanese officials have since denied speculation that China is pressuring Japan to pull out of the agreement. Taiwan currently has open skies agreements with the U.S. and Singapore.
Wednesday, October 26, 2011
On Monday, the U.S. House of Representatives passed legislation forbidding U.S. carriers from taking part in the EU's cap-and-trade program. See John Crawley, US House Votes to Ban Airline Compliance with EU Law, Reuters, Oct. 25, 2011 (available here). The Senate has yet to act on the measure, and it is unlikely that the bill will actually become law. Still, this latest signal of resistance to the EU plan is yet another indication that some form of resolution to the issue is needed before January, as non-EU countries appear unwilling to allow their carriers to be subject to the EU regulation.
Tuesday, October 25, 2011
The International Aviation Law Institute and the Chaddick Institute for Metropolitan Development hosted Professor John D. Kasarda at DePaul Law School for a luncheon and lecture yesterday. Kasarda is the Kenan Distinguished Professor of Strategy and Entrepreneurship and Director of the Kenan Institute of Private Enterprise at the University of North Carolina's Kenan-Flagler Business School. He is also co-author of Aerotropolis: The Way We'll Live Next, and has written extensively on the importance of intelligently developing airports and their surrounding areas to achieve greater economic growth, regional competitiveness, and business supply chain efficiency. The event was well-attended, with guests including Chicago Department of Aviation Commissioner Rosemarie Andolino. Readers interested in learning more about Professor Kasarda's work can do so here.
Monday, October 24, 2011
Today we address the Advocate General's dismissal of the third and final argument levied by the international carriers against the legality of the EU's proposed emissions scheme - that the ETS constitutes a tax or fee in violation of Articles 15 and 24 of the Chicago Convention. The relevant portion of Article 15 is as follows, "No fees, dues or other charges shall be imposed by any contracting state in respect solely of the right of transit over or entry into or exit from its territory of any aircraft of a contracting State or persons or property theron." Additionally, Article 24 states, "Aircraft on a flight to, from or across the territory of another contracting State shall be admitted temporarily free of duty, subject to the customs regulations of the State." Article 24 makes it clear that this includes duties on fuel. As discussed in a prior post, the Advocate General maintains that the EU is not bound by the Chicago Convention but considers these two Articles applicable by reference through Articles 3(4) and 15(3) of the EU/US Open Skies Agreement.
The opinion contends that the cap-and-trade scheme, requiring carriers to surrender emissions allowances that they have either been granted free-of-charge or have purchased on the free market, does not equate to a fee, due, charge or duty under the meaning of Articles 15 and 24. In support of this contention the opinion asserts that taxes and charges are, by definition, fixed in advance, and that because the price of the emissions allowances is market-dependent, requiring payment of emissions allowances cannot be considered a tax or charge. It is difficult to read this argument as anything other than a semantic dodge. If carriers were required to hand over actual euro each time one of their aircraft landed at an EU airport it would surely be considered a tax or charge, regardless of whether the amount to be surrendered was undetermined prior to landing and ultimately chosen through some market-based mechanism or even arbitrarily. The fact that the emissions allowances aren't euro shouldn't alter that analysis, as the emissions allowances unquestionably have value, especially because they can be bought and sold on a market which prices them in actual euro. Requiring carriers to surrender something of value upon landing or taking off from an EU airport is clearly a charge by any sensible definition of the word. For support, the AG claims ICAO has in the past distinguished between environmental charges and emissions trading schemes. However, for a contrary reading of ICAO pronouncements blog readers are invited to look at pages 12-14 of Toward A Global Aviation Emissions Agreement, where authors Brian F. Havel and Gabriel S. Sanchez conclude that ICAO has found market-based-mechanisms to be a charge in violation of the Chicago Convention (available here). The AG also notes that the need to harmonize competing emissions schemes is contemplated in Article 15(7) of the 2010 amendment to the US/EU Open Skies agreement. The article says nothing, however, about one State applying emissions schemes to foreign carriers on the basis of landing or departing from domestic airports. For Article 15(7) to be read to contradict explicit prohibitions in the Chicago Convention, one should reasonably expect more specific language than can be found in that article.
Additionally, the AG is forced to grapple with the prohibition against excise duties on fuel in Article 24 of the Convention because the amount of emissions allowances charged under the ETS is calculated by measuring the amount of fuel consumed on a given flight. For this reason, the American carriers argued that the charged emissions allowances should be considered a duty on fuel, citing in support Braathens, a 1999 case in which the European Court held that an emissions tax calculated by measuring fuel consumption equated to an excise duty on fuel, for support. See Case C‑346/97 Braathens  ECR I‑3419 (available here). The AG attempts to distinguish the Braathens opinion by claiming that under the ETS there isn't a direct link between emissions and fuel consumption because carriers could use biofuels, which are considered emissions-free under the plan. However, there is no legally significant distinction between the case at hand and Braathens, other than the factual issue that biofuels were not in the contemplation of the earlier court. Additionally, the AG's opinion does not explain how the ETS ceases to be a fuel excise tax simply by virtue of not being applied to all fuels.
Ultimately, the Advocate General's answer to this third and final argument appears to rest largely on the notion that because the ETS is intended to be an environmental regulation, it should not be viewed as a tax, charge or duty of the type the Chicago Convention intended to prohibit. To its discredit, this line of reasoning ignores the reality that a tax or charge is part of the mechanism by which the ETS aims to discourage environmentally destructive behavior. However noble the EU's intentions may be, the unilateral imposition of its rules on foreign carriers appears to put it at odds with international law.
Friday, October 21, 2011
Ethiopian Airlines and Singapore Airlines announced a new codeshare agreement, effective November 1. See press release, Singapore Airlines, Oct. 21, 2011 (available here). Ethiopian Airlines is still in the process of being integrated into the Star Alliance after being accepted as a future member last year.
Thursday, October 20, 2011
It appears that without a reduction in airline taxes, Air France-KLM will stop serving the Philippine market in early 2012. See Jay Chua, Air France-KLM Has Had Enough of Promises, Malaya Business Insight, Oct. 19, 2011 (available here). Other European carriers have already ended their operations in the Philippines over similar concerns.
Wednesday, October 19, 2011
Blog readers may be interested in reading about a new security measure TSA is testing. See Bart Jansen, Next Layer of Air Security: Chat-downs on Top of Pat-downs?, USA Today, Oct. 13, 2011 (available here). Passengers are subjected to a brief verbal questioning in addition to the current screening procedures. The article quotes multiple passengers and civil-liberties advocates as unhappy with the questioning, but even if this program goes nationwide it's difficult to imagine this prompting the level of public outcry caused by the full body scanners. The more serious legal complaints are likely to be connected to concerns over profiling, in particular the method by which persons are chosen for questioning and the nature of the questions asked.
Tuesday, October 18, 2011
Having previously analyzed the Advocate General's claims that the EU is not bound by the Chicago Convention and that the ETS does not violate prohibitions on extraterritorial regulation, today we look at the opinion's assertion that the EU is free to act unilaterally on emissions regulation, rather than being compelled to work through ICAO to achieve a multilateral solution. The Advocate General identifies two potential sources of law that might prohibit unilateral action, Article 2(2) of the Kyoto Protocol and Article 15(3) of the EU/U.S. Open Skies Agreement.
Article 2(2) of the Kyoto Protocol says that the parties "shall pursue limitation or reduction of emissions of greenhouse gases ... working through the International Civil Aviation Organization ... ." See Kyoto Protocol to the United Nations Framework Convention on Climate Change (available here). The Advocate General interprets this clause as a "preference" for finding a multilateral solution through ICAO, but not a commitment to working exclusively through ICAO. The AG bases this opinion on two practical considerations: not all ICAO members were parties to the Kyoto Protocol, so an assignment of exclusive authority to ICAO would give outsider nations a prominent role in implementing obligations under an agreement they didn't sign; and not all Kyoto signatories are ICAO members (including, notably, the EU) so exclusive ICAO authority would prevent a Kyoto party from participating in the implementation of its Kyoto obligations. One could argue in response that the question shouldn't be whether it was a good idea for the Kyoto parties to assign airline emissions exclusively to ICAO, but whether that is what the Kyoto parties did. The AG seems to be of the opinion that because it wasn't a good idea, it couldn't have been what was intended by the Kyoto Protocol. It would be interesting to look at minutes from the Kyoto meetings to see if there is any extrinsic evidence supporting the AG's conclusion that the word "shall" in Article 2(2) was meant as a preference and not an exclusive commitment. The AG goes on to argue that this "preference" constitutes only a "very general obligation of conduct" and that, by attempting to work through ICAO on the emissions issue for a decade, the EU had satisfied that general obligation of conduct and must now be free to "take the measures necessary to achieve the Kyoto objectives." This perhaps summarizes the underlying theory of treaty interpretation the AG appears to be applying: reading the treaty as broadly or generously as necessary to permit conduct in furtherance of the treaty's underlying objectives.
Article 15(3) of the EU/U.S. Open Skies Agreement requires the parties to follow the environmental standards adopted by ICAO in the annexes to the Chicago Convention. Because ICAO has not adopted any emissions standards in the Convention annexes, the AG is on firmer ground in finding no prohibition to unilateral action here. The AG does note the 2007 and 2010 ICAO Assembly resolutions. In support of the AG's opinion, the 2010 resolution seemingly permits unilateral action as Brian F. Havel and Gabriel S. Sanchez point out in Towards a Global Aviation Agreement (available here). It is interesting to observe that, despite the more favorable 2010 resolution, the AG took the time to discuss the 2007 resolution that was more negatively disposed toward unilateral action, calling it "a non-binding political declaration." This could be seen as a blow to those who tout the efficacy of pluralism and "soft" law, as the AG seems to make clear that only binding commitments matter. It also should give notice to the ICAO Assembly in advance of the November meeting that a resolution condemning the EU's emissions scheme is unlikely to carry much weight with the Europeans. Multilateral approval of adding emissions standards to the Chicago Convention annexes or some kind of brokered agreement between members will likely be necessary to alter the EU's plans.
Edited for clarity 10/19.
Monday, October 17, 2011
While we're not yet finished dissecting the Advocate General's ETS opinion, we'd be remiss if we failed to call attention to another significant opinion handed down by the ECJ last Thursday. The ECJ held that flights that fail to reach their final destination because of technical difficulties are to be considered cancelled flights under EU law, and passengers on cancelled flights are entitled to recover non-material damages caused by the cancellation such as meal costs and taxi fares. Blog readers interested in the full opinion can find it here.
Friday, October 14, 2011
The Australian Competition and Consumer Commission announced Thursday that it would approve Virgin Australia's alliance with Singapore Airlines. See Matt O'Sullivan, Virgin Gets Green Light for Singapore Alliance, BusinessDay, Oct. 13, 2011 (available here). Virgin Australia already had alliances with Etihad, Air New Zealand and Delta.
Thursday, October 13, 2011
Lost in the attention given to the many nations opposing the EU's plan is discussion of how the ETS will affect carriers within the EU. Readers may be interested in an article from today's Wall Street Journal that reports that while many EU states and carriers support the plan, they are wary of any concessions or compromises to non-EU states that would leave EU carriers at a competitive disadvantage. See, Allessandro Torello, Emissions Plan Sparks Concerns, Wall St. J., Oct. 13, 2011 (available here). The legislation creating the ETS allows the EU to exempt carriers from non-EU states that have enacted similar measures to limit aviation emissions. This should be a signal to any observers expecting the EU to concede to foreign pressure that such a concession, if it comes, is unlikely to take the form of waivers to foreign airlines on the basis of vague promises or half-measures to address the emissions issue. EU members concerned about the possibility of foreign carriers operating under less burdensome regulatory schemes will want assurances that alternate plans are indeed comparable. How all of this plays out at the November 2 ICAO meeting is anyone's guess.
Wednesday, October 12, 2011
Advocate General Opinion Charts New Ground on Extraterritorial Jurisdiction Over Environmental Issues
Continuing our discussion of last week's ECJ Advocate General Opinion upholding the EU's proposed emissions plan, today we tackle the opinion's take on extraterritoriality. To keep the legal issues distinct, we'll reserve discussions of Chicago Convention articles 12 and 15 for a future blog post and focus today on the issue of sovereignty of states over their air space embodied in Article 1 of the Chicago Convention. The Advocate General addresses the air sovereignty rule because, despite holding the EU is not bound by the Chicago Convention, the EU is bound by customary international law which recognizes the principle of air sovereignty. The Advocate General claims that the EU is not exercising extraterritorial jurisdiction, but merely exercising its rights under the territorial principle, which allows a state to regulate foreign actors operating within the state's territory. According to the Advocate General, the application of the ETS regulation to foreign carriers is based on conduct occurring within EU territory, namely the departure or arrival of foreign aircraft to or from EU airports. This by itself is uncontroversial since the EU has the clear territorial right to apply its regulations to emissions by foreign carriers within EU airspace. But the Advocate General insists that, although the emissions charges will include the portions of flights by foreign carriers prior to entering and after leaving EU airspace, this should not be considered a regulation of extraterritorial activity but rather a regulation of territorial activity that takes into account events that happen outside of the EU's territorial jurisdiction. In other words, the rule (a carrier must have sufficient emissions allowances) only applies to the activity occurring in EU airspace (taking off or landing at an airport within the EU). There is no rule applying to the extraterritorial activity (flying outside of EU airspace), that activity simply factors into the overall calculation of allowances required once the territorial activity has triggered application of the rule. This clever formulation may seem like nothing more than a creative evasion of customary limitations on extraterritorial jurisdiction, but one can conceive of analogous situations that might support the Advocate General's position. For example, if a state charges a foreign national with conspiracy for actions occurring within the state's territorial jurisdiction, can the state not take into account evidence of the conspiracy occurring outside of the state's territorial jurisdiction?
More intriguing was the Advocate General's implicit indication that she was also basing her claim of territorial jurisdiction on an effects analysis, which is a subset of territorial jurisdiction allowing a state to exercise jurisdiction over conduct occurring outside of the state's territory but intended to have or having substantial effect inside its territory. The Advocate General did not expressly cite this idea but certainly invoked its spirit by analogizing the ETS issue to antitrust law, which, as opposed to environmental law, is an area of law in which the effects test is commonly used. In addition, the opinion included the following statement, "Such an approach reflects the nature as well as the spirit and purpose of environmental protection and climate change measures. It is well known that air pollution knows no boundaries and that greenhouse gases contribute towards climate change worldwide irrespective of where they are emitted; they can have effects on the environment and climate in every State and association of States, including the European Union." This reasoning mimics the rationale behind application of the effects test in antitrust law: anticompetitive foreign conduct that negatively impacts a state's market should be subject to the state's territorial jurisdiction. The analogy between the cross-border market effects of anticompetitive behavior and the cross-border effects of emissions contributing to global climate change has some merit, but the application of the effects test in this way is still largely unprecedented. This boundary-pushing use of the effects test has wide-ranging implications for environmental law that should excite environmental activists and terrify businesses. For instance, following the Advocate General's logic, why couldn't the EU apply its emissions requirements to the production and transport of any product produced in or shipped to the EU?
Tuesday, October 11, 2011
We'll resume our analysis of the Advocate General's opinion in the ETS case tomorrow, but for now we thought it was worth pointing blog readers to a story from yesterday's New York Times on the recent spate of high-profile incidents of airlines removing passengers from flights. See Christine Negroni, Fliers' vs. Airlines' Rights, N. Y. Times, Oct. 10, 2011 (available here). Recall that highly publicized events were an important catalyst for the recent passenger rights regulations concerning tarmac delays, though any efforts to limit airlines' discretion to remove passengers would likely be a tougher sell because of security concerns. This may be an issue where passenger advocates' best tactic is continuing the public relations pressure already being employed.
Monday, October 10, 2011
Before moving on to analysis of the other legal aspects of EU Advocate General Juliane Kokott's non-binding opinion, we feel compelled to devote one more day to discussion of the opinion's fascinating declaration that the EU is not bound by the Chicago Convention. While it isn't clear that the Advocate General's opinion is wrong on this point, it is worth considering the ramifications. Clearly the EU has not as a body signed the Chicago Convention, and as Kokott's opinion observes, the terms of the EU incorporation treaty do not obligate the EU to uphold all of the provisions of its member states' treaties. Under prevailing rules of state succession, a successor state, though not formally a signor, would assume the treaty obligations of the prior state. See Vienna Convention on Succession of States in respect to Treaties (1978) (available here). However, the EU is not formally a successor to its member states which still retain independent legal identities. The question then becomes whether the EU is a functional successor to its member states in the areas governed by the treaty in question by virtue of having replaced its member states in the international aviation trade arena and in the duties assigned to those member states under the Chicago Convention. For a description of functional succession theory, See Noelle Quenivet, Binding the United Nations to Human Rights Norms by way of the Laws of Treaties, 42 Geo. Wash. Int'l L. Rev. 587, 606-07 (2010). One could point to the aviation agreements the EU has entered into on behalf of its member states, notably the 2007 and 2010 EU-US agreements as evidence supporting the argument. However, the opinion notes that the member states still retain some autonomy in aviation decisions, and appears to place a lot of weight on the fact that the individual member states still represent themselves at meetings of the ICAO, the international body established by the Chicago Convention, rather than have the EU represent them. The opinion described the level of EU replacement of member state functions in the aviation area as "mixed" and stated that the EU could not be considered a functional successor until replacement in the aviation area was complete. Again, the opinion is not necessarily incorrect in its application of functional succession theory, and functional succession theory is not customary international law. However, this interpretation creates exactly the type of problem the theory was intended to avoid: the ability of some states to use an international organization to vitiate their commitments. Under this line of thinking the EU could presumably violate any of the Chicago Convention's commitments without penalty, as could a hypothetical U.S.-Canadian union formed explicitly for that purpose. Perhaps to deflect from this criticism and to discourage any attempt to hold individual EU member states accountable for violations committed by the EU institutions in which they participate, the opinion went on to argue that the ETS wouldn't violate the Chicago Convention even if the Convention were applicable, a claim we'll examine further tomorrow. Still, for now, it's worth calling attention to the significant implications of this opinion.
Edited for clarity 10/12.
Saturday, October 8, 2011
Given the length of the advocate general's opinion yesterday and the number of legal issues involved, analysis will be conducted in pieces over the course of multiple blog posts this week and next. One of the most surprising assertions in the advocate general's opinion was that the EU was not bound by the Chicago Convention. The advocate general bases this finding on the fact that the EU, as a body, has never signed the Convention. According to the opinion, the reality that each of the EU member states has signed the Convention does not obligate the EU in any way, as "the European Union itself does not enter into any international-law commitments towards the third countries concerned as a result of existing treaties concluded by Member States." The opinion also dismisses the functional succession theory the ECJ had previously endorsed in a case involving the EU's GATT. Under that theory, because all member states had signed GATT, and the EU had assumed the duties of the states under GATT, the EU had functionally succeeded the individual states to become a party to the treaty. The advocate general here distinguished the Chicago Convention from GATT, by asserting that the EU has "not yet" fully assumed the duties of its member states within the aviation sector. For support, the opinion notes that the EU only has observer status at ICAO meetings. This is quite a slippery distinction, made even more suspicious by the use of the phrase "not yet." It is unclear from the opinion whether, should the EU be deemed at some future point to have fully assumed these air transport sector duties from its member states, the EU will then become a functional successor and party to the Chicago Convention (which might not be something that ICAO would necessarily acknowledge, of course). But given the time frame of the current dispute, with the ETS entering into effect in January, it is likely the emissions standoff will have been resolved in some other fashion by the time the question of functional succession is revisited.
Thursday, October 6, 2011
The advocate general of the European Court of Justice released a much-anticipated opinion this morning, finding the EU's emissions trading scheme valid under applicable international law (full opinion available here). The American carriers had alleged that the EU's plan violates the Chicago Convention, customary international law and the US/EU Open Skies agreement by regulating flights over non-EU airspace in excess of EU's regulatory authority, unilaterally implementing a scheme in an area under ICAO purview, and subjecting non-EU carriers to the equivalent of a tax for entering and exiting EU airspace or airports. The advocate general was unconvinced by any of these arguments. The advocate general in fact declared that the Chicago Convention was not binding on the EU, as the EU is not a contracting party to the Convention, though all 27 of its member states are. The advocate general went on to explain that even if the Convention were binding, the Convention would still be unlikely to prohibit the EU scheme. The opinion concludes that because the scheme only applies to flights that land at or take off from EU airports, there is a sufficient territorial connection to the flights being regulated to satisfy the Convention as well as customary international law. Additionally, according to the opinion, the designation of the emissions issue to the ICAO was not exclusive and does not prohibit unilateral action and the ETS emissions allowances are distinguishable from a tax because of the market-based system through which they are purchased. The blog will provide a detailed analysis of each of these legal conclusions tomorrow, but readers interested in an opposing take on these interpretations should read Brian F. Havel and Gabriel S. Sanchez's Toward a Global Aviation Emissions Agreement available from SSRN here.
Though the advocate general's opinion is nonbinding and the full court may come down differently when it provides its opinion, today's opinion suggests that if the ETS issue is to be resolved before taking effect in January it will likely require a political as opposed to a legal solution. Had the opinion come down on the side of the carriers the EU might have felt pressure to compromise on the issue. Many of the ETS opponents had recently expressed optimism about the legal challenge. The next step in the ongoing diplomatic standoff over aviation emissions may not come until the ICAO meeting next month.
Wednesday, October 5, 2011
Senior Research Fellow Gabriel S. Sanchez is quoted in an article on the international dispute over the EU emissions plan appearing today in the Atlantic. See Mark Schapiro, Green War in the Skies: Can Europe Make U.S. Planes Pay for Pollution?, the Atlantic, Oct. 5, 2011 (available here). For those interested, the entire piece is a good summary of the issue to date, but the final paragraph was particularly intriguing:
What happens in the airspace over the North Atlantic, and how the European Court of Justice handles the contribution that the greenhouse gases emitted there make to climate change, has in many ways become a stand-in for the airspace of the world--a distinction in the sky that is, of course, not a natural but diplomatic creation. When the world's diplomats convene in Durban in late November for another round of climate negotiations, they will most likely be contending with the European Union as the sole government demonstrating a sustained commitment to the global principles of the (about to expire) Kyoto Protocol. Few new global initiatives are expected, leaving individual governments to devise their own widely varying approaches to climate change. The dispute in Luxemburg could be the harbinger of tensions to come.
Despite aviation law lagging behind international trade law in other sectors in its degree of liberalization, climate change is one area where the aviation sector has the potential to serve as a leader or test case for the future of global cooperation in other sectors. The reality that aviation emissions occur in international air space through activity serving multiple states makes air transport an ideal sector in which to approach greenhouse gas emissions as an international issue. The possibility that the airline emissions dispute will have ramifications for global emissions agreements beyond the aviation sector adds even more reason to follow the issue closely, beginning (if you haven't been following already) with the ECJ opinion expected tomorrow.
Tuesday, October 4, 2011
Brazilian carrier TAM and Chilean flagship LAN Airlines have announced their intention to appeal to Chile's Supreme Court three of the conditions imposed by Chile's antitrust tribunal TDLC for allowing the merger of the two airlines to proceed. See LAN Airlines press release (available here). While LAN and TAM insist that this appeal does nothing to jeopardize the scheduled completion of the merger by the end of first quarter 2012, the appeal should still be of interest to the international air transport sector because one of the conditions appealed concerns the intriguing question of how LAN and TAM will resolve their code share agreements. LAN is currently a member of Oneworld, while TAM belongs to the Star Alliance. LATAM, when formed, will only participate in one of the two alliances, but according to the press release, the airlines object to the proposed scrutiny of any code share agreements retained outside of the chosen alliance.