Aviation Developments Beyond Dec 15 2008

8/7/2019 Aviation Developments Beyond Dec 15 2008

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Aviation DevelopmentsBe ond Dec. 15 2008

Drs. Disral G.D. Orphelin


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IntroductionThis is a revision of my powerpoint presentation

presented on May 4 2008 at Trupial Inn Hotel onthe occasion of the visit to Curaao of Prof. Dr.Pablo J.M. Mendes de Leon, director of the Air

Law Institute, University of Leiden, theNetherlands, to address the meeting with assubject The Future Aviation Policy for Curaao.

Disral Orphelin


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After the dismantling of theNetherlands Antilles the aviation

relationships between Curaao andthe Netherlands (including BSS), andbetween St. Martin and the

Statement

,greatly be determined by decisionsmade in Brussels and not in

The Hague!


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Island Political

Status

Relation to EU Part of Internal EU

Aviation Market

Curaao AutonomousIsland

OCT No, 3rd country

St.

Maarten

Autonomous

Island

OCT No, 3rd country

Aruba AutonomousIsland

OCT No, 3rd country

BonairePublic entityinte rated in UPR Yes

After the Netherlands Antilles

theNetherlands

SabaPublic entityintegrated in

the

Netherlands

UPR Yes

StatiaPublic entityintegrated in

the

Netherlands

UPR Yes


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Some airlines that could fly AMS BONand v.v. if Bonaire becomes a UPR


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ECJ Ruling Nov. 2002In November 2002 the European Court of

Justice (ECJ) affirmed that EU MemberStates have the ability to enter into

with 3rd countries to the extent that theseagreements do not affect EU Community

rules on air transport.


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ECJ Ruling Nov. 2002 contdThe ECJ furthermore found that some of

the provisions in these agreementsinfringed the EU Communitys exclusive

,and CRSs. ECJ also found that the clauseregarding ownership and control of airlines

infringed EU Community law of freedom ofestablishment.


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Result ECJ Ruling Nov. 2002The ECJ ruling of Nov 2002 (and which

was reconfirmed in the ECJ ruling of April2007 in which the Netherlands was

the USA) gave the European Commissionthe exclusive competence to develop the

agenda for the EU Communitys externalaviation policy.


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Result ECJ Ruling contdSince the rulings of the European Court

ASA negotiated between EU memberstates and third countries must comply

implementation of air service agreementsbetween Member States and third

countries.


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Because of the ECJ ruling EU Member States

now have to adapt their existing agreementswith 3rd countries in order to convert theminto horizontal aviation agreements.

Horizontal aviation agreements bring bilateralASAs between EU Member States and thirdcountries in line with EU community law.

ey o not rep ace atera agreements utremove their discriminatory clauses (such asarticle 4 in the MOU signed between the

Netherlands and the Netherlands Antilles in2000) that do not allow EU airlines to fly to 3rd

countries from a EU Member State other than

their country of origin.


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First consequence ECJ ruling for

N.A., CUR, AUA and SXM as OCTs

Any EU air carrier licensed in compliance

with EC Regulation 2407/92 on licensingof air carriers, with an establishment in theNetherlands can operate between the

Netherlands and the Netherlands Antillesand also Aruba.

After the dismantling, between the

Netherlands (including BSS), andCuraao, Aruba and St. Martin.


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Right of establishment The airline of a EU Member State must be

integrated in the national economy of theNetherlands;

The airline of a EU Member State must also

have a permanent presence in the Netherlands;and

The airline of a EU Member State must actually

and effectively exercise aviation activities on along term base in/ out of the Netherlands.


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Right of establishment contdThe right of establishment allows EU

nationals or companies from any memberstate to buy or set up an airline in any

.


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Principle of Right of Establishment

The principle of freedom of establishment

enables an economic operator (whether aperson or a company) to carry on an

continuous way in one or more MemberStates (Article 43 EC Treaty).


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Second consequence ECJ ruling for

N.A., CUR, AUA and SXM as OCTs

The ECJ ruling of Nov. 2002 and against

the Netherlands in April 2007 confirms thatthe Netherlands Antilles are a 3rd countrysince the N.A. is not a member of the EU.

Therefore the EU can grant other 3rdcountries the 5th Freedom rights fortransporting passengers and goods

between points in the EU and points in theNetherlands Antilles.


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Article 3 paragraph 2EC Regulation 2408/92

Since April 1 1997 all airlines registered in theEU plus Norway and Iceland (non EU memberStates, but members of the European EconomicArea), whether state or privately owned, are

cons ere omes c or ommun y carr ersanywhere within the EU and EEA.

Therefore all Community air carriers licensed incompliance with EC Regulation 2407/92 on

licensing of air carriers, can operate without anyrestrictions between BSS and between BSS andany other point within the EU and vice versa.


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COMMISSION REPORT ON THE MEASURES TOIMPLEMENT ARTICLE 299(2)

THE OUTERMOST REGIONS OF THE EUROPEAN UNION

The fact that Community carriers operating onintra Community routes can freely set fares, aslaid down by Council Regulation (EEC)

reduction in fares between those regions andthe rest of Europe. Those between France andthe French West Indies are currently among the

cheapest intercontinental fares in the world.

PS. Report published in 2000


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Air Carriers operating from Bonaire to Air Carrier The

Netherlands

Other EU

destinations

CUR, AUA,

SXM

Other

countriesAir carriers licensed in

the Netherlands Yes Yes Yes Yes

Other EU air carrierslicensed in compliance

with EC Regulation2407/92

without anestablishment in the

Yes Yes No No

Other EU air carrierslicensed in compliance

with EC Regulation2407/92 with an

establishment in the

Netherlands

Yes Yes Yes Yes

Air carriers from 3rdcountries

No Yes Yes Yes

Air Carriers from

AUA, CUR, SXM

Open for

discussion

Yes Yes Yes


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Public Service Obligation (PSO)

(Openbare Dienstverplichting)

In May 2008 there were 209 air routes

throughout the EU with a PSO imposed.

Other PSO air routes are Norway (29) and

Iceland (7). Both are also members of theEuropean Economic Area (EEA).


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What is a PSO?Article 2 of EC Regulation 2408/92 defines

a PSO as any obligation imposed upon an(EU) air carrier to take, in respect of anyroute which it is licensed to operate by a

Member State, all necessary measures toensure the provision of a service satisfyingfixed standards of continuity, regularity,

capacity and pricing, which standards theair carrier would not assume if it weresolely considering its commercial interest.


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In other words EC Regulation 2408/92 in essence allows

EU Member States to impose PSOs on(=to regulate) any air route connecting

,

developed regions, with the rest of thecountry or other EU Member States in

order to stimulate economic, social andcultural development of the island,peripheral or region.


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PSOs are imposed to guarantee minimum frequencies;

timetable constraints; qualitative standards ;

maximum tariffs;

like students, 60 years and older passengers, peopletraveling to go to funeral, people traveling for healthpurposes, etc.;

continuity of service;

reserved slots at big airports; and

special services in case of extraordinary events, etc. .


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PSO and subsidyIf no airline is prepared to provide a service under theconditions imposed, the government may restrict access

to the route to a single carrier and award financialcompensation (=subsidy) to the carrier in return forcompliance with the PSO. These are known as restricted

access routes, while the others, which may attract anumber of carriers, are open routes.A PSO can be imposed by a Member State for a routebetween its territory and that of another Member State,

although all but a very small proportion of PSOs havebeen in respect of domestic services.


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PSO is bottom up regulationWhile it is national governments who

impose PSOs, the initiative for imposingPSOs has come mainly from regional

commerce who are of the view thatregular, convenient and affordable air

service links to economic centers are asocial and economic imperative for theirisland, peripheral or region.


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PSOs in the CaribbeanFrance already has imposed PSOs on the

scheduled air services between mainlandFrance and Martinique, Guadeloupe and

,

French Guyana, and between Guadeloupeand St. Barths, Saint Martin, La Desirade,

Les Saintes and Marie-Galante.


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Similar Programs ElsewhereThe USA has a program similar to the PSO,

called Essential Air Services (EAS). The airroutes Mayaguez San Juan and Ponce - SanJuan in Puerto Rico (PR) are operated as EAS

service.Besides PR there are 140 EAS services in the

US (including Alaska and Hawaii).

Australia has its Remote Air Services (RAS) thatserves 250 remote communities.


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The Netherlands and PSOThe government of The Netherlands is not

in favor of imposing PSOs on any airroute, however they do have PSOs for

National rail routesserved by

NederlandseSpoorwegen

Ferry servicesconnecting e.g.

the Wadden Islandsand the mainland of

the Netherlands

RegionalBus servicesthroughoutthe

Netherlands


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Point of view Dutch Government

concerning PSONederland is in principe voorstander van versimpelingvan de regels met betrekking tot Openbare

dienstverplichting zoals bepaald in artikel 4(EU Verordening 2408/92). Het opzetten van eensoortgelijk systeem voor luchtdiensten naar derde

,

geven tot verschillende interpretaties van Openbaredienst-verplichting en daarmee kan het de vrijemarkttoegang belemmeren. Een uitbreiding van deOpenbare dienstverplichting naar derde landen kan de

levens-vatbaarheid van commercieel haalbare directe ofindirecte luchtdiensten tussen EU lidstaten en derdelanden ondergraven.


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ObservationAs a model that regulates bottom up instead of

top down, the PSO model can be an ideal modelfor regulating air travel within the Kingdom of theNetherlands. Also because the PSO model can

coexist with the free market model of supply anddemand that is applied by commercial airlines.

In its 2006 report titled Caribbean Air Transport,

the World Bank recommends Caribbean Statesto apply the PSO model to stimulate intraCaribbean air travel.

Wh t i ith thi i t ?


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What is wrong with this picture?


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AnswerIt doesnt contain an air carrier designatedby the Netherlands Antilles on the MidAtlantic route, only Dutch air carriers.The picture confirms the argument of the

a nego a ng s on alevel playing field with big states such asthe Netherlands or Great Britain doesnt

benefit the small island states. Theargument being


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Developing nations are at the least likely

to be in a position to make the extensiveand sustained capital investments,

whether through domestic public or privatesources, which are required in order toensure the operation of efficient and

dynamic air carriers. At the same timethese carriers are restricted from pursuingforeign capital by existing rules regarding

substantial ownership and effective controlof a designated airline.


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Principle of Community of InterestThat principle was embodied in a Resolution A24-12adopted by the Twenty Fourth Session of the GeneralAssembly of ICAO in 1983 that allowed, essentially, adeveloping country belonging to an economic grouping

such as CARICOM to seek, as an alternative to thetraditional criterion, to designate a carrier of anotherdeveloping country belonging to the same economicgrouping, to exercise its route rights under an air

.

have an economic value and that Resolution recognizedthat the strict application of the traditional criterion coulddeny many developing countries a fair and equalopportunity to operate international air services, ascontemplated in the Chicago Convention, and tooptimize the benefits to be derived from suchoperation.


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Community of Interest contdIt is on the basis of ICAO Resolution A36-15

that CARICOM countries that do not havetheir own airlines are able to designate Air

,or LIAT, for example, to exercise their routeand traffic rights under an air services

agreement. Those countries would otherwisehave to depend solely on foreign carriersdesignated by the other Party for vital air

services.


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ICAO Resolution A36-15The ICAO Assembly UrgesContracting States to

recognize the concept of community of interest

within regional or sub regional economicgroupings as a valid basis for the designation by

one develo in State or States of an airline of

another developing State or States within thesame regional economic grouping where such

airline is substantially owned and effectively

controlled by such other developing State orStates or its or their nationals


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RecommendationAn autonomous Curaao and St. Martin ought toseriously consider including the principle of

community of interest in air services agreementsthat they will negotiate with bigger parties suchas the Netherlands. Article 36 of the Statuut,a c e o e ea y, a a c e o eUN Charter should offer Curaao and St. Martinenough compelling arguments to persuade theNetherlands to include the principle ofcommunity of interest on their behalf in any ASAnegotiated between the Netherlands andCuraao and St. Martin.


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Article 36 of the Statuut

Nederland, de Nederlandse Antillen enAruba verlenen elkander hulp en bijstand.


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Article 182 of the EC TreatyMember States agree to associate with the

Community the non-European countries andterritories which have special relations withDK F NL and UK. The ur ose of the

association shall be to promote the economicand social development of the countries andterritories and to establish close economic

relations between them and the Communityas a whole.


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Article 73 of the UN CharterMembers of the United Nations which have orassume responsibilities for the administration ofterritories whose peoples have not yet attained afull measure of self-government recognize the

these territories are paramount, and accept as asacred trust the obligation to promote to theutmost, within the system of international peace

and security established by the present Charter,the well-being of the inhabitants of theseterritories, ().


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New Trends in ASA NegotiationsBilateral ASAs remain the primary vehicles forliberalization of international air transport services for

most States. More and more ASAs are emerging withthe involvement of regional groups including regionaleconomic integration organizations such as the EU,Caricom, Andean Pact, Mercosur and ACS (Associationo ar ean tates .

The Open Skies negotiations between the EU and theUS, has set the trend for regional economic blocs to startnegotiating ASAs with each other.The Netherlands Antilles and Aruba are associate

members of ACS and are both contracting states to theACS Air transport Agreement that still has to go intoeffect.


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Bloc to bloc ASADelegations of the European Commission and

the Commission of the Economic and MonetaryUnion of Western Africa (UEMOA, MemberStates: Benin, Burkina Faso, Guinea-Bissau,

Ivory Coast, Mali, Niger, Senegal, Togo) initialedon 7 May 2008 in Brussels an aviationagreement which will restore legal certainty to

the bilateral air services agreements between

the Member States of UEMOA and EU,respectively.


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RecommendationIn order to be able to create access to newmarkets (especially within the GreaterCaribbean) for their national air carriers or aircarriers of their nationals, it is important for an

.

becoming (associate) members of ACS and tobecome contracting states to the ACS AirTransport Agreement (ATA), and also tobecoming (associate) members of Caricom andcontracting states to the Caricom Multilateral AirServices Agreement.


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CaribotagePresently Caricom is developing a new conceptcalled Caribotage. The idea of Caribotage is tolimit commercial air transport of passengers,goods and freight between Caricom Member

States. Therefore if an autonomous Curaaodoesnt become a (n) (associate) member ofCaricom, in the future airlines from Curaao maynot be allowed to transport passengers, goodsand freight between e.g. Port of Spain andParamaribo!


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Acronym/ Abbreviation Explanation Dutch

BSS Bonaire, Saba, Statia

OCT Overseas Countries and Territories Landen en Gebieden Overzee

UPR Ultra Preipheral Region Ultra Perifere Gebied

ECJ European Court of Justice Europese Hof van Justitie

ASA Air Services Agreement Luchtvaartverdrag

Bilateral ASA Luchtvaartverdrag tusen twee landen

Multilateral ASA Luchtvaartverdrag tusen meerdere landen

EU European Union Europese Unie

CRS Computer Reservation System

MOU Memorandum of UnderstandingEEC European Economic Community Europese Gemeenschap

AUA Aruba

CUR Curaao

SXM Sint Maarten

ICAO International Civil Aviation Organization

EEA European Economic AreaPR Puerto Rico

EAS Essential Air Services

RAS Remote Air Services

Caricom Caribbean Community

ACS Association of Caribbean States

ATA Air transport Agreement Luchtvaartverdrag

DK DenmarkF France

NL Netherlands

UK United Kingdom

Andean Pact Pacto Andino Economische Gemeenschap Andes landen Zuid Amerika

Mercosur Mercado Comn del Sur Economische Gemeenschap Zuidelijke Staten Zuid Amerika

UEMOA Economic and Monetary Union of Western Africa

e.g. exampli gratia bijvoorbeeld


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For more informationDrs. Disral Orphelin

[email protected]: 599-9-5257489


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Thank You

Aviation Developments Beyond Dec 15 2008

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