organization and regulation of air...

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Strategic Airport Management Programme9-13 April 2007

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Organization and Organization and Regulation of Air TransportRegulation of Air Transport

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OutlineOutline

�� Introduction Introduction �� Chicago Convention (1944)Chicago Convention (1944)�� Types of regulationTypes of regulation

�� Understanding Air Services Understanding Air Services Agreements (Agreements (ASAsASAs))

�� Air Services NegotiationsAir Services Negotiations

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��1944 Chicago Conference1944 Chicago Conference

��Convention on International Civil Convention on International Civil Aviation (Chicago Convention) Aviation (Chicago Convention) sets forth the purpose of ICAOsets forth the purpose of ICAO

��Establishment of ICAO in 4 April Establishment of ICAO in 4 April 19471947

��Specialised agency of the Specialised agency of the United Nations under the United Nations under the Economics and Social Council Economics and Social Council (ECO SOC)(ECO SOC)

International Civil Aviation OrganizationInternational Civil Aviation Organization


�� Ensure the safe and orderly growth of international Ensure the safe and orderly growth of international civil aviation throughout the worldcivil aviation throughout the world

�� Encourage the development of airways, airports, and Encourage the development of airways, airports, and air navigation facilities for international civil aviationair navigation facilities for international civil aviation

�� Meet the needs of the peoples of the world for safe Meet the needs of the peoples of the world for safe regular, efficient and economical air transportregular, efficient and economical air transport

�� Avoid discrimination between contracting StatesAvoid discrimination between contracting States

�� Promote safety of flight in international air navigationPromote safety of flight in international air navigation

Main Objectives of ICAOMain Objectives of ICAO

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�� ICAO has 190 Contracting ICAO has 190 Contracting States, an increase from States, an increase from 146 in 1980 146 in 1980

�� 33 States elected as Council 33 States elected as Council Member States at the Member States at the 3333rdrdsession of the ICAO session of the ICAO Assembly in 2001Assembly in 2001

�� Three additional states Three additional states elected at the 34elected at the 34thth session session (Extraordinary) on 31 Mar to (Extraordinary) on 31 Mar to 1 Apr 20031 Apr 2003

ICAO Council Member StatesICAO Council Member States


States ensuring geographical representationStates ensuring geographical representationPART 3PART 3Algeria, Cameroon, Chile*, Costa Rica, Cuba, Czech Algeria, Cameroon, Chile*, Costa Rica, Cuba, Czech Republic, Ethiopia, Lebanon, Mauritius, Pakistan, Republic, Ethiopia, Lebanon, Mauritius, Pakistan, Paraguay, Republic of Korea and SenegalParaguay, Republic of Korea and Senegal

13 13 StatesStates

Argentina, China, Egypt, India, Ireland, Mexico, Saudi Argentina, China, Egypt, India, Ireland, Mexico, Saudi Arabia, Singapore*, South Africa*, Spain, Sweden and Arabia, Singapore*, South Africa*, Spain, Sweden and VenezuelaVenezuela

11 11 StatesStates

States which makes the largest contribution to the States which makes the largest contribution to the provision of facilities for international civil air provision of facilities for international civil air navigation navigation

PART 2PART 2

Australia, Brazil, Canada, France, Germany, Italy, Australia, Brazil, Canada, France, Germany, Italy, Japan, Russia Federation, United Kingdom, the United Japan, Russia Federation, United Kingdom, the United StatesStates

10 10 StatesStates

States of chief importance to air transportStates of chief importance to air transportPART 1PART 1

ICAO Council Member StatesICAO Council Member States

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�Article 37: Adoption of International Standards and Procedures�� Each contracting State undertakes to collaborate in Each contracting State undertakes to collaborate in

securing the highest practicable degree of uniformity securing the highest practicable degree of uniformity in regulations, standards, procedures, and in regulations, standards, procedures, and organisation in relation to aircraft, personnel, organisation in relation to aircraft, personnel, airways and auxiliary services in all matters in which airways and auxiliary services in all matters in which such uniformity will facilitate and improve air such uniformity will facilitate and improve air navigation.navigation.

International Standards and ProceduresInternational Standards and Procedures


International Standards and PracticesInternational Standards and Practices�� ICAO adopts and amends from time ICAO adopts and amends from time

to time, as may be necessary, to time, as may be necessary, international standards and international standards and recommend practices and recommend practices and procedures dealing with:procedures dealing with:�� Communications systems and air Communications systems and air

navigation aids, including ground navigation aids, including ground marking;marking;

�� Characteristics of airports and landing Characteristics of airports and landing areas;areas;

�� Rules of the air and air traffic control Rules of the air and air traffic control practices;practices;

�� Licensing of operating and mechanical Licensing of operating and mechanical personnel;personnel;

�� Airworthiness of aircraft;Airworthiness of aircraft;�� Registration and identification of aircraft;Registration and identification of aircraft;

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�� Collection and exchange of Collection and exchange of meteorological information;meteorological information;

�� Log booksLog books

�� Aeronautical maps and charts;Aeronautical maps and charts;

�� Customs and immigration procedures;Customs and immigration procedures;

�� Aircraft in distress and investigation of Aircraft in distress and investigation of accidents;accidents;

�� And such other matters concerned with And such other matters concerned with the safety, regularity, and efficiency of the safety, regularity, and efficiency of air navigation as may from time to time air navigation as may from time to time appear appropriateappear appropriate

International Standards and PracticesInternational Standards and Practices


Units of Measurement to be used in Air and Ground Operations

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Aeronuatical Charts44

Meteorological Service for International Air Navigation

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Rules of the Air22

Personnel Licensing11TitleTitleAnnexAnnex

ICAO AnnexesICAO Annexes

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Operation of Aircraft:Pt1 - International Commercial Air Transport

and AeroplanesPt2 - International General Aviation -

AeroplanesPt3 - International Operations - Helicopters

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Aircraft Nationality and Registration Marks77

Airworthiness of Aircraft88

Units of Measurement to be used in Air and Ground Operations

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TitleTitleAnnexAnnex



Facilitation99

Aeronautical TelecommunicationsAeronautical TelecommunicationsVolVol 1 1 –– Radio Navigation AidsRadio Navigation AidsVolVol 2 2 –– Communication ProceduresCommunication ProceduresVolVol 3 3 –– Communication SystemsCommunication SystemsVolVol 4 4 –– Surveillance Radar and Collision Surveillance Radar and Collision

Avoidance SystemsAvoidance SystemsVolVol 5 5 –– Aeronautical Radio Frequency Aeronautical Radio Frequency

Spectrum UtilisationSpectrum Utilisation

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Air Traffic ServicesAir Traffic Services1111



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Facilitation99

Aeronautical TelecommunicationsAeronautical TelecommunicationsVolVol 1 1 –– Radio Navigation AidsRadio Navigation AidsVolVol 2 2 –– Communication ProceduresCommunication ProceduresVolVol 3 3 –– Communication SystemsCommunication SystemsVolVol 4 4 –– Surveillance Radar and Collision Surveillance Radar and Collision Avoidance SystemsAvoidance SystemsVolVol 5 5 –– Aeronautical Radio Frequency Aeronautical Radio Frequency Spectrum UtilisationSpectrum Utilisation

1010

Air Traffic ServicesAir Traffic Services1111




Search and RescueSearch and Rescue1212

Aircraft Accident and Incident InvestigationAircraft Accident and Incident Investigation1313

AerodromesAerodromesVolVol 1 1 –– Aerodrome Design & OperationsAerodrome Design & OperationsVolVol 2 2 –– HeliportsHeliports

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Aeronautical Information ServicesAeronautical Information Services1515

Environmental ProtectionEnvironmental ProtectionVolVol 1 1 –– Aircraft NoiseAircraft NoiseVolVol 2 2 –– Aircraft Engine EmissionsAircraft Engine Emissions

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SecuritySecurity1717

The Safe Transport of Dangerous Goods By AirThe Safe Transport of Dangerous Goods By Air1818




�� Article 1 (Sovereignty)Article 1 (Sovereignty)

The Contracting States recognise that The Contracting States recognise that every State has complete and exclusive every State has complete and exclusive sovereignty over the airspace above its sovereignty over the airspace above its territory.territory.

�� Article 6 (Scheduled air services)Article 6 (Scheduled air services)No schedules international air service No schedules international air service may be operated over or into the may be operated over or into the territory of a Contracting State, except territory of a Contracting State, except with the special permission or other with the special permission or other authorisation of that State, and in authorisation of that State, and in accordance with the terms of such accordance with the terms of such permission or authorisation.permission or authorisation.

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Types of RegulationTypes of Regulation��Technical RegulationTechnical Regulation

��Safety and airworthiness of aircraftSafety and airworthiness of aircraft��Personnel LicensingPersonnel Licensing��Standards for aviation infrastructure, e.g. Standards for aviation infrastructure, e.g.

airports, meteorological services, navigational airports, meteorological services, navigational facilitiesfacilities

��Economic RegulationEconomic Regulation��Exchange of traffic rights/Exchange of traffic rights/““freedoms of the airfreedoms of the air””��Control of routes and capacityControl of routes and capacity��Control of tariffsControl of tariffs


Air Services AgreementsAir Services Agreements��Air Services Agreement (ASA) = bilateral Air Services Agreement (ASA) = bilateral

agreement between governments regulating air agreement between governments regulating air services operated between the two territoriesservices operated between the two territories

�� Important components of Important components of ASAsASAs::�� Routing rightsRouting rights�� Traffic rights (or Traffic rights (or ““Freedoms of the airFreedoms of the air””)) ““Hard rightsHard rights””�� Capacity entitlementsCapacity entitlements�� ““SoftSoft”” rights (e.g. coderights (e.g. code--share, coshare, co--terminal)terminal)�� Airline designation provision (no. of airlines, designation Airline designation provision (no. of airlines, designation

criteria)criteria)�� Tariffs provisionTariffs provision

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Routing RightsRouting Rights��Allow an airline to physically operate on a particular Allow an airline to physically operate on a particular

routeroute��Determined by the Determined by the ““Route AnnexRoute Annex”” to the ASA which to the ASA which

could come in the following forms:could come in the following forms:�� ““WordyWordy”” form, e.g. form, e.g. ““Airlines from Country A may operate Airlines from Country A may operate

from Country A from Country A via intermediatevia intermediate points P and Qpoints P and Q to Country to Country B and beyond to points R and SB and beyond to points R and S””

�� Tabular equivalent, e.g.Tabular equivalent, e.g.

Points in Country F,G

Any point Country B

Points in Country D, E

Any point in Country A

Beyond pts.DestinationIntermediate pts.

Origin


Traffic RightsTraffic Rights

If an airline has If an airline has routingrouting rights but no rights but no traffictraffic rights between 2 points, its aircraft rights between 2 points, its aircraft can physically operate between the 2 can physically operate between the 2 points but points but it cannot carry revenue trafficit cannot carry revenue traffic(passengers or cargo) between the 2 (passengers or cargo) between the 2 points.points.

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Airline of Airline of Nation ANation A

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Traffic RightsTraffic RightsExample for 3Example for 3rdrd/4/4thth/5/5thth freedom traffic rightsfreedom traffic rights��For LAN Chile to operate Santiago For LAN Chile to operate Santiago –– Lima Lima –– Los Los

Angeles services with revenue traffic on all Angeles services with revenue traffic on all sectors, there needs to be the following:sectors, there needs to be the following:--��Under the ChileUnder the Chile--United States ASA:United States ASA:

�� 33rdrd/4/4thths between Santiago and Los Angeless between Santiago and Los Angeles�� Intermediate 5Intermediate 5thths from Lima to Los Angeless from Lima to Los Angeles

��Under the ChileUnder the Chile--Peru ASA:Peru ASA:�� 33rdrd/4/4thths between Santiago and Limas between Santiago and Lima�� Beyond 5Beyond 5thths from Lima to Los Angeless from Lima to Los Angeles

��The necessary routing rights under both The necessary routing rights under both ASAsASAs


Soft RightsSoft Rights��CodeCode--share rightsshare rights

The right for Airline A to sell seats on services The right for Airline A to sell seats on services operated by Airline B using Airline Aoperated by Airline B using Airline A’’s own flight s own flight numbernumber

��CoCo--terminal rightsterminal rightsThe right to serve two or more points within the The right to serve two or more points within the same foreign country on a single servicesame foreign country on a single service

��OwnOwn--Stopover rightsStopover rightsThe right to discharge and take on its own traffic The right to discharge and take on its own traffic that is destined for another city after a stopoverthat is destined for another city after a stopover

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Capacity EntitlementsCapacity Entitlements��Traffic rights must be accompanied by Traffic rights must be accompanied by

capacity entitlements which determines the capacity entitlements which determines the frequency and aircraft typesfrequency and aircraft types

��Specified in Specified in weekly unitsweekly units, , e.ge.g::�� 7 weekly B747 7 weekly B747 units of 3rd/4th freedom traffic units of 3rd/4th freedom traffic

rightsrights�� 55thth freedom traffic rights between Country A and freedom traffic rights between Country A and

Country B on Country B on 4 weekly services with any aircraft 4 weekly services with any aircraft typetype

�� Unlimited capacityUnlimited capacity of 3rd/4of 3rd/4thth freedom traffic freedom traffic rightsrights


Airline DesignationAirline Designation�� No. of airlines that can be designated by each No. of airlines that can be designated by each

sideside�� Single/Dual/Multiple designationSingle/Dual/Multiple designation

�� The airline designation criteria: The airline designation criteria: �� Substantial ownership and effective controlSubstantial ownership and effective control�� Principal place of business and effective controlPrincipal place of business and effective control�� Effective regulatory control only (most liberal)Effective regulatory control only (most liberal)

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�� Establishes procedures for priceEstablishes procedures for price--regulation on regulation on the air services operated by carriers of both the air services operated by carriers of both sidessides

�� 3 main types of provisions (from most restrictive 3 main types of provisions (from most restrictive to most liberal):to most liberal):�� Double approvalDouble approval�� Double disapprovalDouble disapproval�� No filingNo filing

TariffsTariffs


Other ASA ArticlesOther ASA Articles�� Aviation Security articleAviation Security article�� Aviation Safety articleAviation Safety article�� Customs duties and taxes articleCustoms duties and taxes article�� Consultations articleConsultations article�� Settlement of disputes articleSettlement of disputes article�� Termination articleTermination article�� Registration articleRegistration article�� Entry into force articleEntry into force article

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Multilateral AgreementsMultilateral Agreements�� Most Most ASAsASAs are bilateral in nature, but there is an are bilateral in nature, but there is an

emergence of multilateral agreements. emergence of multilateral agreements. Examples are:Examples are:--

�� Multilateral Agreement on the Multilateral Agreement on the LiberalisationLiberalisation of of International Air Transport (US, Singapore, Brunei, International Air Transport (US, Singapore, Brunei, New Zealand, Chile, Samoa, Tonga)New Zealand, Chile, Samoa, Tonga)

�� EU Common SkiesEU Common Skies�� EU Horizontal Aviation AgreementsEU Horizontal Aviation Agreements�� GULAC GULAC �� USUS--EU Open SkiesEU Open Skies�� ASEAN Cargo Open Skies AgreementASEAN Cargo Open Skies Agreement


Air Services NegotiationsAir Services Negotiations�� PreparationPreparation

�� Inputs from government agencies and airlinesInputs from government agencies and airlines�� Preparation of negotiating positionPreparation of negotiating position�� PrePre--negotiation meetingnegotiation meeting

�� NegotiationsNegotiations�� Drafting of agreements to reflect outcomeDrafting of agreements to reflect outcome

�� Air Services Agreement textAir Services Agreement text�� Confidential Memorandum of Understanding (CMU)Confidential Memorandum of Understanding (CMU)�� Agreed MinutesAgreed Minutes

�� Initialing/Signing of documentsInitialing/Signing of documents�� Implementation of air servicesImplementation of air services

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Air Services NegotiationsAir Services Negotiations�� Negotiating team comprises:Negotiating team comprises:

�� Leader of delegation (official Ministry of Transport, Leader of delegation (official Ministry of Transport, Civil Aviation Authority, etc.)Civil Aviation Authority, etc.)

�� Government representatives (from Ministry of Government representatives (from Ministry of Transport, Civil Aviation Authority, Tourism/Trade Transport, Civil Aviation Authority, Tourism/Trade Boards)Boards)

�� State CounselState Counsel�� Airline representativesAirline representatives

�� Forces at play during negotiationsForces at play during negotiations�� Intricate cost/benefit assessment of Intricate cost/benefit assessment of ““national national

interestsinterests””�� Balancing interests of different national carriersBalancing interests of different national carriers�� Balancing national carriersBalancing national carriers’’ commercial interests commercial interests vsvs

““national interestsnational interests””


Air Services NegotiationsAir Services Negotiations

Defining Defining ““national interestsnational interests”” and and strike balance with strike balance with ““national national carrierscarriers’’ interestsinterests””

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Recent DevelopmentsRecent Developments�� Recent developments with implications on air Recent developments with implications on air

transport regulation transport regulation �� Airline AlliancesAirline Alliances�� Airline ConsolidationAirline Consolidation�� European Union (Horizontal Mandate)European Union (Horizontal Mandate)�� Low Cost CarriersLow Cost Carriers

organization and regulation of air...

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