worldjet777
Posts: 131
Joined: Sun Oct 23, 2005 4:07 am

International Route Applications

Sun Jan 28, 2007 7:30 am

Hello All!

It didn't look like a topic like this had ever been discussed, and with all the news and controversy over the new US/China Routes, I thought this an appropriate question:

Which international routes require government approval for service, and how are they regulated? And air carriers that fly direct international routes- say NW which goes from MSP through AMS into BOM, does that require a different, albeit harder to attain certification?

Hypothetically: If a new entrant was trying to secure the right to fly internationally from LAX, would it be easier to get LGW frequencies as opposed to HKG?

Any info is appreciated!

Worldjet777
Now Your Flying Smart
 
EGBJ
Posts: 475
Joined: Sun Jan 21, 2007 10:05 pm

RE: International Route Applications

Sun Jan 28, 2007 7:25 pm

Hi Worldjet777

It all depends on the agreements between nations. I know it was [is?] very difficult to get permission to fly to Taiwan without upsetting the Chinese Government and carriers had to set up subsidaries, e.g. KLM Asia to serve this market.

Another case study would be US links from LHR. I believe there is a set of cities that can be served direct....and others that can't....the agreement doesn't cover LGW which is why BA have a lot of services to US secondary cities from there.

BMI have long wanted to inaugurate long haul flights from LHR but have always been blocked as far I know.

The setting up of the EU however created an open skies environment for internal services with carriers being able to fly between any two points without transiting their own country. Hopefully soon we will see a similar agreement between the EU and US.

Hope this goes some way to answering your question,
Rich
 
ANother
Posts: 1833
Joined: Thu Nov 03, 2005 2:47 am

RE: International Route Applications

Tue Feb 13, 2007 5:12 pm

Perhaps some basic background information may help with your question.

International aviation is governed by the Chicago Convention. Held in 1944 at the end of the second world war this Convention did a number of things, including the establishment of ICAO. ICAO's Resolutions and Recommended Practices are the underlying rules governing every aspect of aviation, except one.

The one thing that Chicago failed to do was to reach agreement on 'economic regulation' of the industry. Economic Regulation includes the 'freedoms of the air' route rights, capacity, aircraft types, tariffs, etc. Since a Multilateral agreement on these issues (with one minor exception re 1st freedom rights) couldn't be reached these were left to bilateral agreements between countries.

The first of these agreements Bermuda I, was reached the following year between the US and the UK. This agreement granted 'rights' to the designated airlines of each party. i.e where they could fly, how often, and with what capacity. It also required these 'designated airlines' to agree on tariffs - which would be approved by both governments before coming into effect. One additional item included was the requirement that 'designated airlines' had to be substantially owned and effectively controlled by citizens of the designating country. Following Bermuda I some thousands of bilateral air services agreements were reached between nations basically following this model.

So aviation rights are the product of bilateral negotiations between nations. More recently (1992) the US government policy has been to seek 'open skies' agreements, which do away with this economic regulation between the US and the country concerned. i.e. no restriction on markets served, capacity or on tariffs. However the ownership and control provisions still apply in these agreements.

So, in a market like US-China where we have the traditional route by route negotiations the government must secure rights for their airlines. Where an open skies agreement has been agreed it is basically free entry. The vast majority of markets are between these two extremes.
 
Gemuser
Posts: 4295
Joined: Mon Nov 24, 2003 12:07 pm

RE: International Route Applications

Wed Feb 21, 2007 3:04 pm

ANother
Well done, excellent summary of a complex topic. Welcome to my respected users list.

Gemuser
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macilree
Posts: 106
Joined: Fri Dec 29, 2006 12:13 pm

RE: International Route Applications

Sat Feb 24, 2007 7:18 pm

Here is some further detail.

Quoting ANother (Reply 2):
Since a Multilateral agreement on these issues (with one minor exception re 1st freedom rights) ...

This is the International Air Services Transit Agreement (IASTA) which also covers 2nd freedom rights (technical or refueling stops). The ICAO web site has a description of the nine freedoms of the air.

Quoting ANother (Reply 2):
The one thing that Chicago failed to do was to reach agreement on 'economic regulation' of the industry.

A provision that did get into the Chicago Convention was that relating to the economic regulation of non-scheduled flights (Article 5). This allowed the growth of the charter industry (notably within Europe) outside of the bilateral agreements.

Quoting ANother (Reply 2):
The first of these agreements Bermuda I, was reached the following year between the US and the UK.

I have seen reference to a US-Spain air transport agreement being concluded between the Chicago Conference and Bermuda 1 but totally agree that it was Bermuda 1 that was the model for future bilateral agreements.

Incidentally, the first bilateral air services arrangement that I have seen reference to was that between Germany and France in 1913 with air ships in mind.

Quoting ANother (Reply 2):
One additional item included was the requirement that 'designated airlines' had to be substantially owned and effectively controlled by citizens of the designating country.

Strictly speaking what is involved is the right for the other party to refuse to grant operating authorisation if an airline being designated is not substantially owned and controlled (SO and EC) by the party (government) doing the designating or its nationals. Thus, for example, although Aerolineas Argentinas was Spanish owned and controlled it could still operate international services because no other country objected. There is now an ICAO model article adopted in some of the latest bilaterals that has the criteria as "principal place of business" of the airline and "effective regulatory control" rather than SO and EC.

Quoting ANother (Reply 2):
However the ownership and control provisions still apply in these agreements.

In the MALIAT for the first time the US agreed with a number of countries to "open skies" arrangements without the "substantial ownership" criterion.

Also note that the US definition of "open skies" does not permit cabotage operations - the exercise of traffic rights by a foreign carrier within another country - hence in part the controversy over Virgin America. New Zealand and Australia both now permit 100% foreign ownership of domestic airlines (9th freedom). New Zealand has exchanged cabotage rights (8th freedom) with a number of countries.

A key dilemma for some countries comes if they have more than one international airline and bilateral arrangements that limit capacity to another country that more than one carrier wishes to operate to. This is the case currently between the US and China. In that case there must be some form of government allocative decision-making process to decide which airline gets what rights. In Australia this is done by the IASC while in the UK the CAA is involved.

Quoting Worldjet777 (Thread starter):
And air carriers that fly direct international routes- say NW which goes from MSP through AMS into BOM, does that require a different, albeit harder to attain certification?

In that case two sets of bilateral arrangements will be involved - that between the US and the Netherlands and separately that between the US and India. If NW wishes to uplift passengers in AMS for BOM and vice versa (highly likely to be the case to enable the route to be economic) then the arrangements the US has with the Netherlands and separately with India need to include and exchange of 5th freedom rights.

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highflyer9790
Posts: 1189
Joined: Thu Jul 07, 2005 1:21 am

RE: International Route Applications

Wed Feb 28, 2007 9:16 am

Quoting EGBJ (Reply 1):
It all depends on the agreements between nations. I know it was [is?] very difficult to get permission to fly to Taiwan without upsetting the Chinese Government and carriers had to set up subsidaries, e.g. KLM Asia to serve this market.

former subsidaries included BA Asia, AF Asia, and i think thats it...

Just for the sake, there is Bermuda II which only permite AA, UA, BA, And VS to operate flight from LHR to select US destinations..
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ANother
Posts: 1833
Joined: Thu Nov 03, 2005 2:47 am

RE: International Route Applications

Sat Mar 03, 2007 12:52 am

Quoting Gemuser (Reply 3):
Well done,

Thank you very much, kind sir!

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