Monday, April 28, 2014
A federal judge has just recently issued the final approval necessary for the settlement of the U.S. Department of Justice's lawsuit opposing the American Airlines/US Airways merger. The settlement received a preliminary approval in November, but U.S. law requires the proposed settlement be subject to a public comment period, followed by time for the DOJ to respond and the judge to consider all comments and responses.
Thursday, April 24, 2014
The Volume 13, Spring 2014 issue of the International Aviation Law Institutes's journal, Issues in Aviation Law and Policy (IALP), will be available next week. The following articles will appear in the issue:
- Bruce L. Ottley, Airline Immunity for Reporting Suspicious Activities Under the Aviation and Transportation Security Act: Air Wisconsin Corp. v. Hoeper
- Gregory O. Principato, Trouble on the Tarmac: Redirecting U.S. Aviation Policy to Promote Economic Growth
- Vincent Correia, Air Passengers' Rights, "Extraordinary Circumstances," and General Principles of EU Law: Some Comments After the McDonagh Case
- Wouter Oude Alink, The Regulation of Registered Traveler Programs
- Mark Ells, Unmanned State Aircraft and the Exercise of Due Regard
- Gabriel D. Kaim & Nicholas A. Morrow, Examining the Standard of Care for Failure to Divert During In-Flight Emergencies
- Eric Johnson, Heads I Win, Tails You Lose: The Illusory "Option" of Montreal Convention Article 33(1) in West Caribbean Airways
- Moses George, The User Development Fee (UDF) in Indian Airports - Legal and Regulatory Issues
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.
Thursday, April 17, 2014
A recent story from the Economic Times highlights the difficulties States encounter as they try to relax restrictions on foreign ownership of airlines without actually allowing foreign ownership or control. India has recently opened up its carriers to investment by foreign airlines, which has allowed Etihad to make a significant investment in Jet Airways. The Directorate General of Civil Aviation is currently introducing measures, such as limiting the number of foreign directors that can be part of a joint venture, that are designed to prevent newly permitted foreign investment from resulting in a transfer of control abroad.
Because of the need for capital, States have become more accepting of foreign investment in airlines. However most still want to have their cake and eat it too, with foreign money coming in, but control remaining local. States will eventually have to decide whether efficient capital allocation or strict ownership rules are of greater importance.
Tuesday, April 15, 2014
Last week the European Commission released the 23rd version of its EU air safety list, identifying airlines that are subject to an operating ban or operational restrictions within the EU because of concerns about their level of compliance with international safety standards. The list can be found here.
Friday, April 11, 2014
ICAO has announced the adoption of a new Protocol to the 1963 Tokyo Convention on offenses committed on aircraft. The Protocol enhances states' authority to penalize passengers who commit disruptive acts on-board aircraft. It is now open for signature and will require 22 ratifications before taking effect. The full text of the Protocol is available here.
Monday, April 7, 2014
A judge has ordered Mexicana de Aviacion, one of the world's oldest airlines at the time it ceased operations in 2010, to begin selling assets to satisfy creditors. Employee unions, who have been keeping alive the possibility of a financial rescue and resumption of operations, announced plans to appeal the decision.
Thursday, April 3, 2014
In a vote earlier today, the European Parliament approved an agreement that had previously been negotiated with the Council that would restrict the application of the EU's Emissions Trading Scheme to intra-EU flights for the next few years. Carriers will not be required to submit allowances for emissions on arriving or departing flights between an EU and non-EU State. The exemption only runs through the end of 2016, by which time ICAO has pledged to produce a global plan for reducing emissions from the air transport industry. Should ICAO fail to produce an adequate proposal, the EU would presumably decline to extend the exemption any further. The agreement also imposes a transparency requirement on Member States, to monitor the allocation of revenue from allowances and to ensure that revenue is used for purposes related to climate change.
Wednesday, April 2, 2014
The Supreme Court today delivered its opinion in Northwest v. Ginsberg, this term's case considering the pre-emptive effect of the Airline Deregulation Act of 1978 (ADA). The unanimous opinion, written by Justice Alito, provided few surprises, falling mostly in line with the predictions in our December blog post. The primary question arising from oral arguments was whether the Court would announce a new, more expansive rule regarding the pre-emption of all implied covenants or leave the matter open for state-by-state consideration of the particular workings of each state's various implied covenants. To the dismay of the airlines, the Court chose the latter approach. The opinion includes an acknowledgement of the airlines' concern that differing treatment of various state covenants would subject airlines to a patchwork of legal regimes in contravention of the purpose of federal pre-emption as follows:
But the airlines have means to avoid such a result. A State's implied covenant rules will escape pre-emption only if the law of the relevant State permits an airline to contract around those rules in its frequent flyer program agreement, and if an airline's agreement is governed by the law of such a State, the airline can specify that the agreement does not incorporate the covenant.
Essentially, the Court is reiterating its position in Wolens that pre-emption does not apply to state law rules necessary for the enforcement of "privately ordered obligations" but does apply to covenants that represent policies imposed by the state. The Court clarifies this distinction by declaring that when parties have the ability to contract out of the covenant the covenant is merely a device used for interpreting the wishes of contacting parties, but when parties are prohibited from waiving the implied covenant by contract, as was the case here, then the covenant represents a separate policy choice imposed by the state and one that is subject to the ADA's pre-emption provision. Thus, airlines only have to include waivers of implied covenants in their contracts, and can rely on pre-emption in states where such covenants are not waivable, to ensure that a standardized set of national rules govern their frequent flyer programs.
With regard to the other notable question to arise during oral arguments, whether the evolution of frequent flyer programs to represent material benefits distinct from airline prices and services removes them from the scope of the ADA pre-emption, the Court, as expected, declined to address the matter as it wasn't a part of Ginsberg's complaint.