Rabat, 21-22 December 2005ACAC Presentation1 A RAB A IR T RANSPORT L IBERALISATION A GREEMENT : B...
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Transcript of Rabat, 21-22 December 2005ACAC Presentation1 A RAB A IR T RANSPORT L IBERALISATION A GREEMENT : B...
Rabat, 21-22 December 2005ACAC Presentation 1
ARAB AIR TRANSPORT
LIBERALISATION AGREEMENT:
BRIDGING THE GAPS
Rabat, 21-22 December 2005ACAC Presentation 2
Arab Air TransportLiberalisation Agreement:Bridging the Gaps
Arab aviation scene
Existing world models
ACAC agreement: Strengths and weaknesses
Gaps and how to bridge them
Rabat, 21-22 December 2005ACAC Presentation 3
Arab Aviation SceneGrowth & Development
Impressive economic growth 5.6% Extraordinary traffic growth
Jan-Oct 2005 Passenger: 12.6% Cargo: 14.1%
Fleet expansion (orders $60 b) Infrastructure development ($30 b) Emerging low cost carriers Better airline profitability Uneven growth/expansion across the region
Rabat, 21-22 December 2005ACAC Presentation 4
Arab Aviation SceneLiberalisation Status
Wide spectrum of attitudes towards aviation regulation
Liberalisation as growth catalyst: e.g UAE, Lebanon
Generally slow pace towards liberalisation
Only six states with fully or partially liberalised agreements
ACAC agreement: a leap forward, but gaps need to be filled
Serious support and political will are needed
Rabat, 21-22 December 2005ACAC Presentation 5
Arab Aviation SceneImplications of ACAC Agreement
Higher traffic growth rates Easier rules on market access and entry Increased competition Changes in regulatory environment to support liberalisation
Freer movement of persons and goods Competition laws to create level playing field (airlines operating like
any other business)
Revision of ownership and control clauses Multinational/cross border ownership Mergers, takeovers?
Rabat, 21-22 December 2005ACAC Presentation 6
Existing World Models European Union
Fully deregulated internal market Any EC carrier can fly from
anywhere to anywhere
Now enlarging scope External dimension
EC Clause (horizontal mandate) EU/US deal Soon other mandates?
Development of EASA Influence on technical issues European licenses
Rabat, 21-22 December 2005ACAC Presentation 7
Existing World Models EU “horizontals” – various models
Designation Clauses negotiated by EU Partners Traditional National Ownership and Control Regional O&C + safeguard
…[non EU State] may refuse, revoke, suspend or limit the operating authorisation… if by exploiting traffic rights granted under an existing bilateral with a member State, [EC carrier] circumvents limitations imposed under a bilateral with another member State…
Principal place of business + regulatory oversight Principal place of business + regulatory oversight + safeguard Mixed (e.g. Morocco)
Rabat, 21-22 December 2005ACAC Presentation 8
EU “horizontals”
EU ‘HORIZONTALS”
National O&C
Regional+safeguard
Regional- in negotiation
Princ.pl.of business+reg.ctrl
Princ.pl.of business+reg.ctrl +safeguard
Rabat, 21-22 December 2005ACAC Presentation 9
Existing World Models So-called APEC
Chile, NZ, Brunei, Singapore, USA
Traffic rights not completely multilateral Service must have a point in the country
designating the airline (Except all cargo) No cabotage
National Ownership and Control + Principal Place of Business
X
Rabat, 21-22 December 2005ACAC Presentation 10
Existing World Models Latin America: Going around the restrictions
No multilateral treaty framework in place
But countries unilaterally negotiating “CLAC clause” with EU Chile (soon: Argentina, Uruguay, Nicaragua)
“Multi-national” airlines emerging TACA LAN COPA
• Minority stakes in foreign carriers• Doing business under one brand• Some still use separate codes for diff’t operators
Rabat, 21-22 December 2005ACAC Presentation 11
ACAC Liberalisation Agreement
Rabat, 21-22 December 2005ACAC Presentation 12
ACAC Liberalisation AgreementExcellent foundation !
Agreement contains all basic elements of a regional block Regional Clause (art 5.2.a)
In line with developments in other regions CLAC Clause EC Clause
“Traffic Rights” More than the EC Package 2
Stops short of Cabotage but still very generous External dimension
in place (Art 32) Could lead to creation of one or several pan-Arab carriers
Rabat, 21-22 December 2005ACAC Presentation 13
ACAC Liberalisation Agreement
Weaknesses Problems will not emerge from conflict with national laws
But from gaps in the Agreement …which can be filled…
“regional/multilateral” vs “bilateral” aspects Agreement still contains left-overs of bilateralism Is this balance stable?
Probably not
Rabat, 21-22 December 2005ACAC Presentation 14
ACAC Liberalisation Agreement Left-overs from bilateralism
Tariff filing : Why? Capacity and frequency are fully deregulated Internet = increased transparency Embryo of competition rules in place
Safety checks With possible multinational carriers emerging, need for common standards ECAC experience with SAFA: common checklists, but not common interpretation
Viz. “Blacklist” debate in EU IOSA?
Dispute resolution mechanism Dry-Leases only? (art 15)
Ability to transfer crews at short notice
Rabat, 21-22 December 2005ACAC Presentation 15
Competition Law National? Bilateral? Multilateral? Annex 2: Basic Rules Yet basic rules need to be developed
E.g. Arts 81, 82 of EC Treaty Case-Law Guidelines Regulations
Recent developments in EC Law Large devolution to national competition authorities BUT: EC may ‘pull’ cases where
Unity of doctrine is required Case affects cross-border trade Air Transport, typically
E.g. EC / US Draft Open Skies Art 19
“Minimize differences re competition law” “cooperation among competition authorities”
Annex 2: Cooperation on Competition Law issues
Rabat, 21-22 December 2005ACAC Presentation 16
Competition Law (2) Annex 2
Too reliant on national laws / authorities But not all ACAC countries have them
And traditions may differ
Risk of diverging interpretations
Subsidies Problem area
Loose definition
No dispute resolution mechanism
No remedies E.g. countervailing measures
Competition LawNo Competition LawIn transition
Rabat, 21-22 December 2005ACAC Presentation 17
Competition Law (3)
Dispute Resolution Problem area Traditional bilateral (consultation, negotiation, arbitration) Strong enough? What about a permanent arbitration panel ?
Development of common case-law on aviation
Conflict will not be solely between States Airline vs airline State vs Airline
Airlines should have recognized roles in dispute resolution mechanism Active Passive
Rabat, 21-22 December 2005ACAC Presentation 18
ACAC Liberalisation AgreementGaps & How to Bridge Them
Weak Dispute Resolution Mechanism Power based, not rule based
Weak rules on competition & subsidies Need developing
A possible solution: Permanent arbitration body Interprets the Treaty Develops Competition Law aspects of the treaty through case law Solves general disputes re implementation of the Treaty
Rabat, 21-22 December 2005ACAC Presentation 19
THANK YOU