DoT tentative No to Virgin America

On 27 December 2006 Virgin America was advised that a tentative decision had been reached not to grant it a licence to operate domestic services within the United States on the basis that it was not considered to be under the actual control of US citizens. The company, which recently obtained the necessary US Federal Aviation Administration (FAA) safety certification and has been planning an SFO hub, has issued a media statement responding to the US Department of Transportation (DoT) "show cause" announcement (see also the Order and related documents).

Back in 1990 when the Virgin Group was looking to setup Virgin Blue in Australia and operate international air services to New Zealand similar issues about foreign ownership and control arose and the then Minister of Transport, Hon Mark Gosche, issued a media statement. Subsequently after it became Australian owned and controlled, Virgin Blue set up a 100% owned New Zealand company, Pacific Blue (NZ) Ltd, that qualifies as a SAM airline to operate trans-Tasman services. Christchurch-based Pacific Blue (NZ) does not, however, qualify to be designated as a New Zealand international airline so can only operate within the Australasian Single Aviation Market (SAM) under the Australia - New Zealand open skies air services agreement. Pacific Blue (NZ) therefore wet leases its New Zealand registered aircraft for services by Pacific Blue (Aust) Pty Ltd beyond New Zealand to its South Pacific destinations. Such services must orginate in Australia because Australia has not agreed to exchange seventh freedom passenger rights with New Zealand. Samoan airline Polynesian Blue (49% owned by Virgin Blue) also wet leases its aircraft from Pacific Blue (NZ).

In New Zealand, however, since 1986 as a matter of foreign investment policy - no reciprocity is required - it has be possible for foreign nationals to have 100% ownership and control of a purely domestic airline. Australia also subsequently changed its policy.

In the jargon what is permissable in New Zealand and Australia, but not in the United States, is called ninth freedom cabotage.

DoT approval for United Airlines alliance with Star partners including Air Canada

On 19 December 2006 the US Department of Transportation announced tentative approval of alliance arrangements between Star Alliance airlines, including expanded cooperation between Air Canada and United Airlines. Should this decision be confirmed it will clear the way for the signing of a comprehensive "open skies" agreement between Canada and the United States. This follows the conclusion by Canada of an "open skies" agreement with the United Kingdom announced on 21 April 2006.

The Canada-United States agreement, which was initialled on 10 November 2005, includes a full exchange of fifth freedom rights. At the time separate official media statements were made in the United States and Canada.

Air Canada announced back on 25 January 2006 that it is seeking to operated from Toronto beyond LAX non-stop to SYD but this would also require the necessary traffic rights to have been agreed between Canada and Australia. Los Angeles was not included as an intermediate point for Canadian airlines in the 1988 Australia-Canada air services agreement. The Canadian Transportation Agency summary of the bilateral arrangements indicates that Australian Government agreement would be required. Australian-based Virgin Blue's trans-Pacific plans which apparently require amendment to the Australia-United States air services arrangements, reported on 14 December 2006, may complicate matters.

Finding deleted web pages using the Internet Archive

Today I was trying to track down a published academic journal article that I had linked to from my Transport page. The article, which contained a significant error, was available free on the web site of the University where the academic concerned had been based. He has recently moved however and the paper has disappeared from that web site.

This is where the Internet Archive and specifically the Wayback Machine is brilliant. This site now holds over 85 billion web pages (including of my home page back on 3 December 1998)! If you know the old URL just enter it in the Wayback Machine and with any luck the old page will still be available. Almost understandably, the Internet Archive's search function does not seem to work so well though.

FAI World Air Sports Challenge coming to New Zealand

Last month I attended the launch at Parliament of the FAI World Air Sports Challenge to be held at Omarama and Wanaka in the South Island of New Zealand during December 2007. One of the potentially most exciting proposed features is the use of Virtual Eye computer technology from Animation Research Ltd to cover the gliding competitions. This technology is based on that used for Americas Cup coverage and, with the added dimension of altitude, should make for some exciting viewing.

Google Analytics

As well as this weblog and my Home Page, I also act as webmaster for the Wellington Aero Club and the Titahi Bay Canine Obedience Club. I have now signed all four up for the free Google Analytics service and will be interested to see the reported results.

Morgan is now a Good Citizen Dog

At the end of the "school" term at the Titahi Bay Canine Obedience Club this month Morgan, our Standard Poodle dog, qualified with me at the Basic level as a Canine Good Citizen Dog. This is a New Zealand Kennel Club qualification.

Bree, our Standard Poodle bitch, qualified with Wendy at both the Basic and Bronze levels back in October 2006. They are now training towards the Silver qualification. Bree is almost a year older than her brother, Morgan.

Linking up with Technorati

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An easy way to exercise the dogs

If your dog likes fetching a tennis ball, I would throughly recommend using a Chuckit! ball launcher. It is a great way to get considerable distance with your throw and you don't have to pick up the slobbered on ball each time you want to throw it. Our two Standard Poodles, Bree and Morgan, love it when we take them down to the enclosed grounds at the Titahi Bay Canine Obedience Club in Mana for a game of fetch.

Takeover bid for Qantas

Qantas is currently the subject of an A$5.60 per share (A$11.1bn) takeover bid from Airline Partners Australia made on 13 December 2006 that, if successful, would see the company delisted from the stock exchange.

Because of the way air services agreements work, international airlines generally need to take care that they remain "substantially owned and effectively controlled" by nationals of the country designating the airline, in this case Australia. With Qantas the protection to ensure that this remains the case can be found in the Qantas Sale Act 1992 (see in particular section 7), which inter alia requires that two thirds of the airline's board of directors is made up of Australian nationals. Two thirds of the Airline Partners Australia board will also be Australian nationals.

The bidders note that foreign ownership of Qantas would actually decline from 46% to 40% if their bid is successful.

Kiwis in the United Kingdom

The BBC has produced a cartogram of where the 57,916 New Zealanders that were living in the UK at the time of the 2001 census were located. It is no great surprise that almost half the Kiwis ended up in London.

This compares with around 215,000 Britons resident in New Zealand.

Fedex flight pattern over the USA

An interesting clip on YouTube shows the daily pattern of Fedex aviation operations complete with music. Note the focus on the Fedex hub at Memphis International Airport. Logistics in action!

Canada releases "Blue Sky" international air policy

On 27 November 2006 the Canadian Minister of Transport, Infrastructure and Communities, Honourable Lawrence Cannon, released Blue Sky: Canada's New International Air Policy. This followed the Canadian House of Commons Standing Committee on Transport undertaking a study on Air Liberalization and the Canadian airports system. In October 2006 the Canadian Minister of Transport had released a consultation document UPDATED on a New International Air Policy.

Canada now joins a small but growing list of countries proactively seeking to negotiate "open skies" type air services agreements - at least in some circumstances. Earlier this year Canada had announced new open air services agreements with the United Kingdom and Portugal.

It is interesting to compare this new Canadian statement with the media statement on Australian international air services policy made Australia's Minister of Transport, Honourable Warren Truss, on 21 February 2006.

New Zealand's International Air Transport Policy was last comprehensively updated in a restatement in 1998. It also receives brief mentions, particularly on page 17, in the December 2002 New Zealand Transport Strategy.

New Growth Theory

I am currently enjoying reading "Knowledge and the Wealth of Nations: A Story of Economic Discovery" by David Warsh who writes the online newsletter Economic Principals. The book is about endogenous growth theory, an important breakthrough in economic theory. It backgrounds the work of Paul Romer to internalise technological change in how economists explain economic growth.

Those who follow the development of the airline industry will appreciate how technological change has lead to a massive reduction in the cost and price of air travel over the years.

Nordic Views on Competition Regulation and the Airline Industry

Having just emerged from spending the last few months focussed on the application from Air New Zealand and Qantas to form a joint venture for trans-Tasman flights, I have been hunting down recent academic articles on competition regulation and the airline industry. In the process I came across an interesting 120 page long 2002 report from the Nordic competition authorities entitled "Competitive Airlines - Towards a more vigorous competition policy in relation to the air travel market".

Updated Economics page

I spent part of yesterday updating the Economics page of my web pages. Amongst other changes I added to the page links to Worldmapper, which has a growing collection of cartograms on a wide range of topics including transport, and RTable.NET from the USA, which picks up on some of the best in blogging on economics.