Fiji-Nauru Air Services Agreement signed

On 26 January 2007 the Fiji Government announced the signing the day before of the first Air Services Agreement between it and Nauru.

Air Nauru, recently relaunched as Our Airline, has in the past operated scheduled services into Nadi (NAN), a significant hub for aviation activity in the South Pacific. Air Nauru was not able to operate beyond Nadi to New Zealand because Nauru and Fiji had not exchanged the necessary fifth freedom rights.

UK Air Passenger Duty doubles tomorrow

Increases in the UK Air Passenger Duty announced on 6 December 2006 by the Chancellor in the 2006 Pre-Budget Report (see pages 174 and 175) come into effect on 1 February 2006.

Ryanair, British Airways and other airlines are reported to have criticised the increases while environmental groups have stressed the importance of tackling growing emissions from aviation.

The BBC has recently published Questions and Answers on the increases and also carried a story predicting chaos at airports when airlines look to recover the increase from passengers who purchased tickets before the announcement was made for travel on or after 1 February.

New Zealand faced similar issues when increased per passenger airport security charges were introduced but the lead time was much longer.

bmi to suspend London-Paris air services

Star Alliance partner, bmi (British Midland Airways Ltd) announced on 19 January 2007 that it is to "suspend" air services between London Heathrow (LHR) and Paris Charles de Gaulle (CDG) airports from 26 February 2007. bmi cites intense competition, including from the Eurostar train service that will be significantly faster when the second section of the new Kent-London high-speed Channel Tunnel Rail Link is completed later this year.

bmi is the second largest airline at Heathrow and code shares with many long-haul airlines, including Air New Zealand, providing feeder services to and from Heathrow.

South Korea-France air services negotiations

An AFP story reports on the issues being addressed last week in two days of air services negotiations between France and the Republic of Korea.

The outcome was announced in a statement issued on 26 January 2007 by the Korean Ministry of Construction & Transportation.

Regional Air Services Agreements from the Caribbean and the South Pacific

Late last year I was searching the web, with somewhat mixed success, for the full texts in English of regional air services agreements.

Published last year on the CARICOM Law web site is the full text of the 1996 Multilateral Agreement Concerning the Operation of Air Services in the Caribbean Community which entered into force on 17 November 1998 following ratification by eight countries. The parties are Antigua, Barbados, Belize, Dominica, Grenada, Guyana, St Kitts/Nevis, St Lucia, and Trinidad and Tobago.

A similar regional air services agreement in my region is the Pacific Islands Air Services Agreement (PIASA) negotiated at meetings I attended in Nadi, Fiji and Vava'u, Tonga, with facilitation by the Pacific Islands Forum Secretariat (the Secretariat's web site has recently be revamped and now has an Aviation page). The PIASA has yet to come into force, with the Secretariat announcing on 13 November 2006 that ratification by two more Pacific Island countries is needed to give the required six. So far it has been ratified by the Cook Islands, Nauru, Samoa and Tonga - Kiribati, Papua New Guinea, Solomon Islands, Tuvalu and Vanuatu are signatories but have yet to ratify. To date Fiji has publicly indicated that it does not intend to become a party, favouring bilateral air services arrangements instead.

The most notable regional air services arrangements are those covering the European Union and some neighbouring states but others exist in South East Asia, South America and Africa.

The MALIAT, which governs the air services arrangements between a number of Pacific Rim and South Pacific countries, including New Zealand, is not really a regional agreement as it is open to membership by any country around the world (and APEC member, Taiwan).

A comprehensive 2004 research report, Preparing ASEAN for Open Sky by Peter Forsyth, John King, Cherry Lyn Rodolfo and Keith Trace, summarises many of these regional air services agreements.

Peanuts! provides news about Low-cost Airlines

As well as having a very good web site for airline industry news, Sydney, Australia-based aviation consultancy and publisher, on 23 January 2007 the Centre for Asia Pacific Aviation (CAPA) launched a new web site, Peanuts! that carries news about low-cost airline developments. Even better it is free (so far).

Morgan wins two more ribbons

Morgan, our Standard Poodle dog, and I competed today at the Avalon Canine Obedience Club's ribbon trial. I will concede that the number of entries was low but we managed to place first Elementary 1 and second in Elementary 2. As this is the second time we have got a first placing at Elementary 1 level we can no longer compete at that level again.

Bree, our Standard Poodle bitch, and Wendy got a ribbon at the Special Beginners level.

Swissair trial continues

Further to my earlier post, the International Herald Tribune continues to carry wire agency coverage of the Swissair trial:

16 January 2007 - Swissair executives assert innocence at first day of Switzerland's biggest corporate trial
17 January 2007 - Former Swissair board member regrets damage caused by Swissair financial collapse
18 January 2007 - Swissair executive says he's innocent but answers questions
19 January 2007 - Another ex-Swissair executive denies wrongdoing in financial collapse
22 January 2007 - Former top Swissair executives say charges unfounded in trial on financial collapse and Swissair's last chief defends his tenure in court

Singapore-Ireland "open skies" Air Services Agreement concluded

On 13 December 2006 the Singapore Ministry of Transport announced that Singapore and Ireland had concluded an "open skies" air services agreement. The parallel announcement on the same day by the Irish Minister of Transport, Martin Cullen, is available here.

Singapore now claims to have 17 such "open skies" arrangements. This takes it just ahead of New Zealand in this count.

New version of Microsoft Train Simulator coming

On 19 January 2007 Microsoft (MS) announced that it is making a second attempt at developing a new, second version of Train Simulator, this time based on its recently released Flight Simulator X (FSX) software platform.

As happened with FSX, key members of the MS team, such as Tdragger (Mike Gilbert), Yard Limits (Rick Selby), Sim Elations and Mavyryk, are blogging on the development process.

I enjoyed the first version of Train Simulator (particularly the Marias Pass) and look forward to trying the latest product when it is released.

United States viewpoint on US-European Union air services negotiations

On 17 January 2007 the US State Department released a short article on the "open skies" negotiations. This may point to the possibility of "another way forward".

In signing the MALIAT, negotiated near the end of the second term of the Clinton Administration, the United States has already shown that it can be flexible with respect to foreign ownership of international airlines wishing to serve the US (see Articles 3 and 4). Note that the standard "substantial ownership" criterion traditionally found in bilateral air services agreements is not included.

European Commission proposes European Union-Canada air services negotiations

On 9 January 2007 the European Commission (EC) announced that it proposed that it should hold negotiations with Canada with a view to replacing all the air services agreements Canada has with European Union (EU) member states. The same day the Canadian Minister of Transport, Lawrence Cannon, welcomed the EC's announcement and indicated that Canadian officials would be holding preliminary discussions with the EC at the end of February. This follows the release of Canada's "Blue Sky" policy.

Before the EC can hold such negotiations of "vertical" air services agreements it must first secure the agreement of members states. This is decided at the Transport Council, a meeting of EU Transport Ministers. The agendas for these Transport Council meetings are set by the EU member state holding the Presidency, currently Germany.

To date the EC has received mandates to negotiate comprehensive air services agreements with the United States and some neighbouring states, most recently the Ukraine (announced on 12 December 2006). The EC also announced on 12 December 2006 that it had concluded such an agreement with Morocco.

In September 2005 the EC announced that it was seeking mandates to negotiate comprehensive agreements with Australia, Chile and New Zealand following the conclusion of "horizontal" agreements with these countries. At the same time the EC also proposed negotiations with India, having in March 2005 requested a mandate for negotiations with China. EU member states have yet to agree.

Virgin America files revised proposal with US DoT

On 17 January 2007 Virgin America filed with the US Department of Transportation (DoT) a revised proposal (5.74MB .pdf) with significant changes with respect to control of the airline "... to remove any doubt of US citizenship." The company media statement summarises the changes.

Virgin America has also set up a web site called Let VA Fly! as part of a public relations campaign in support of its application.

India-Singapore air services arrangements expanded

India and Singapore signed a new air services Memorandum of Understanding on 9 January 2007. A summary of the outcome is included in a 10 January 2007 press release from the Singapore Ministry of Transport.

The negotiations enhanced an earlier Memorandum of Understanding signed on 11 July 2006.

India-Qatar air services arrangements expanded

On 20 December 2006, in a new Memorandum of Understanding, India and Qatar agreed to an expansion of the routes and capacity available under their air services arrangements. On 21 December 2006 the Financial Express reported on what extra services Qatar Airways plans to provide to India. The subsequent announcement by the airline about its "huge" increase in services to India is available here.

Not only is there a significant market between India and the Gulf but also Qatar Airways is well placed to exercise sixth freedom rights to carry traffic between India and the European Union via Doha.

Swissair trial

Articles in the International Herald Tribune, the Guardian and on Swissinfo report on the background to and 16 January 2007 start of the trial near Zurich of 19 Swissair board members and senior executives.

Swissair was grounded on 2 October 2001 shortly after the 11 September 2001 tragedy in the United States and three years after one of its MD-11 aircraft crashed off Nova Scotia. The airline had tried to execute a strategy of purchasing shares in foreign international airlines (the "hunter strategy"), something that is in effect generally restricted to minority stakes by the terms of international air services arrangements.

Around the same time in Australasia there was also a major airline financial collapse. Ansett Australia, which had been taken over the year before by Air New Zealand, was placed in voluntary administration on 13 September 2001.

The last similar court trial in New Zealand following an airline collapse was that of Ewan Wilson, the founder of short-lived Kiwi Travel International Airlines, which provided trans-Tasman services pioneering international operations out of New Zealand provincial airports. The short history of Kiwi, which ceased services on 9 September 1996, is now used as a case study in university courses.

Other recent airline financial collapses in New Zealand have included:

• Tasman Pacific Airlines, which purchased Ansett New Zealand and traded as Qantas New Zealand in a franchise arrangement (went into receivership on 21 April 2001); and
• Origin Pacific Airways (ceased operating passenger services on 10 August 2006)

Note: I have linked to the Wikipedia articles on the airlines concerned but none yet provide entirely satisfactory historical accounts.

Airline Route Maps

If you are looking for the current route map for a particular airline but don't want to have to find and then search through the airline's web site then AirlineRouteMaps.com is the place to go.

If you wish to see a collection of route maps for many of the world's major airlines that show how they have developed over time, a very interesting collection of hand-drawn maps has been created by a young Canadian travel agent, Jim Liu. The maps go as far back as networks in the 1950s.

China-United States "open skies" negotiations?

Aviation Daily has an article reporting that US Department of Transportation (DoT) officials have persuaded their Chinese counterparts to resume "open skies" negotiations, possibly as soon as late this month.

This follows the 9 January 2007 tentative awarding of rights for a daily US-China service to United Airlines. The proposed service would be between Washington DC and Beijing.

European Union-United States Air Transport Negotiations

A scan of the short Record of Consultations signed in Brussels on 11 January 2007 is now available on the web.

For official information on this long-running negotiation there are a couple of useful web pages to look at:
Global Partners - United States from the Air Transport Portal of the European Commission web site
Open Skies & Aviation Services from the US Mission to the European Union web site

Also worth a read is a 2004 article by John Byerly's predecessor at the US State Department, Allan Mendelsohn, entitled The US and the EU - Aviation Relations: An Impasse or an Opportunity?

AltaVista Babel Fish added

For the convenience of some readers whose first language is not English I have added AltaVista's Babel Fish to the column on the right of this weblog. I appreciate that the machine translations may not be perfect!

I have also moved the Civil Aviation Swicki to the bottom of the page.

Civil Aviation and the EU Emissions Trading Scheme

On 20 December 2006 the European Commission adopted a proposal for legislation that would include civil aviation in the European Union's emissions trading scheme starting in 2011. The announcement and background information are available here on the European Environment Directorate General's web pages.

There has been a range of reactions to the proposal, including from the International Air Transport Association (IATA), the US Air Transport Association (ATA), the Association of European Airlines (AEA), the European Low Fares Airline Association (ELFAA) and the European Federation for Transport and Environment. An article in the Guardian reported on some other initial reactions. On 9 January 2007 the New York Times had an article reporting on the US Government position.

A particular issue of interest is disagreement over the legal basis of a move that would include all flights taking off from and landing at European Union (EU) airports.

Following work by the Committee on Aviation Environmental Protection (CAEP) of the International Civil Aviation Organization (ICAO), global solutions are due to be considered by the ICAO Assembly when it meets in Montreal in September 2007. The web page of ICAO's Environmental Unit has links to some relevant background information.

In announcing the proposal for legislation, the European Environment Commissioner, Stavros Dimas, is reported by ATW to have said that "If we wait for ICAO to move on emissions trading we will be waiting forever."

Comment from Wolfgang Tiefensee, the Federal Minister of Transport in Germany, the current holder of the EU Presidency, is available here.

Hong Kong's Air Services Agreements available on the web

The Hong Kong SAR Department of Justice makes available the texts of Hong Kong's air services agreements here on its web site. Because Hong Kong was a British Crown Colony until the handover in July 1997, all of these agreements are relatively recent, often replacing provisions relating to Hong Kong that were included in the UK's air services agreements.

The leadership of the Hong Kong SAR delegation at air services negotiations comes from the Economic Development and Labour Bureau. Its site provides access to relevant press releases.

The relevant provisions of the 1984 Sino-British Joint Declaration spelling out Hong Kong SAR's degree of autonomy with respect to air services agreements are available here UPDATED (see Chapter IX of the Annex of the Joint Declaration).

UAE News on new air services arrangements

With two United Arab Emirates-based international airlines, Emirates Airline (EK) and Etihad Airways (EY), both growing very rapidly and having made massive orders for Boeing (EK and EY orders and deliveries) and Airbus (orders and deliveries) aircraft, the issue of which routes these airlines will operate and whether the necessary air services arrangements have been or will be able to be secured is of major importance.

Official news of the UAE's new air services arrangements is published on the UAE Interact web site run on behalf of the UAE Ministry of Information and Culture. Unfortunately whoever is editing the site seems to have limited knowledge of these matters so the news items are scattered across three different news pages. See:
INFRASTRUCTURAL DEVELOPMENT - AIR TRAFFIC AGREEMENTS as well as
INFRASTRUCTURAL DEVELOPMENT - AVIATION AGREEMENTS and
INFRASTRUCTURAL DEVELOPMENT - AVIATION & AIRLINES

US "Open Skies" Agreements available on the web

The US Department of State has now made available from the Open Skies Agreements page of its web site the full texts of most of the bilateral and multilateral "open skies" agreements that the United States of America is a party to.

The Multilateral Agreement on the Liberalization of Air Transportation (MALIAT)(sometimes known as the Kona Agreement), to which the US is a party, also has its own web site maintained by New Zealand in its role as depositary for the Agreement. The MALIAT has been in effect since 21 December 2001.

Recent UK Air Services Agreements available on the web

Air Services Agreements (ASAs) that the United Kingdom (UK) is party to are published as Command Papers. The full texts of ASAs published since January 1992 are available here on the UK Foreign & Commonwealth Office (FCO) web site.

As you might expect, the bilateral agreement that I am most interested in is that between New Zealand and the UK signed in Wellington on 26 July 2005. This "open skies" ASA is very rare (unique?) in that it includes the exchange of all nine freedoms of the air.

The full texts of other ASAs on the FCO web site at the time of writing include those that the UK has recently concluded with: the Dominican Republic, Grenada, Pakistan, the Slovak Republic, Syria, Tanzania and the United Arab Emirates.

The UK Department for Transport includes a web page detailing the UK's Bilateral Programme of Air Services Talks as part of its web site's information on international aviation services.

India's recent bilateral air service arrangements available on the web

On the web site of the Indian Ministry of Civil Aviation the Directorate General of Civil Aviation publishes information on India's bilateral international air service arrangements, including the full texts of memoranda of understandings reached from 2005 onwards and summaries of all India's bilaterals.

Summary of Canada's bilateral air services arrangements available on the web

The Canadian Transportation Agency publishes a report summarising information on Canada's international air services arrangements.

Once they are published, full treaty texts concluded since January 1991 are included in an online catalogue available from the Government of Canada Publications website (search terms: air agreement).

Australia's Air Services Agreements available on the web

The Australian Treaties Database is available on the Department of Foreign Affairs and Trade (DFAT) web site. To find air services agreements (ASAs) one can do a subject search on TRANSPORT. However, it seems that each time a new ASA is presented to the Australian Parliament also included is a reference sheet listing all of Australia's current ASAs. Here is a recent example available from the Australian Treaties Library. One can then use the references to find ASAs that are of interest in the Database.

Remember that an ASA will not give the full story particularly when capacity is predetermined as is generally the case with Australia's air services arrangements.

A valuable summary of Australia's international air services arrangements, albeit now starting to get a little dated appeared in the 1999 Productivity Commission Final Report on International Air Services UPDATED (this is a 1.33MB .pdf file) - see Appendix E, pp281-300.

Also of interest are the International Air Services Commission web site and the Schedule of Unused Capacity for Australian International Airlines published by DoTaRS.

And as might be expected if there is a significant outcome from an air services negotiation there is likely to be a related ministerial media statement or two.

If others have better web sources for this information I would appreciate knowing.

Possible FIRB conditions on Qantas sale?

There has been some speculation as to what conditions the Australian Treasurer, Peter Costello, advised by the Foreign Investment Review Board (FIRB), might impose on the Qantas sale. Reference was made in an article in The Australian yesterday to the Minister of Transport, Mark Vaile, expecting similar conditions to those imposed on Air New Zealand (NZ) when it purchased the final 50% of Ansett (AN). The article also reports Vaile's commitment to protect the proposed launch of services to the USA by Virgin Blue from competition from SQ.

The ministerial media statement detailing the conditions that were imposed on Air New Zealand in 1990 is available here.

UK Airport Slots Allocation

Those interested in the current situation with respect to slots and terminal capacity at LHR and other major UK airports will find the Airport Coordination Limited web site has relevant information. The company is responsible for airport slot allocation in the UK. The web site also has other information like charts of aircraft movements by aircraft type.

"Empty Core" Theory and the Airline Industry

A comment made to me at the Civil Aviation Authority Christmas function in December has had me hunting down academic work on something called "empty core" theory as a possible insight into competition in the airline and shipping industries. Given the appalling record of profitability of the global airline industry over the years and the importance of finding the optimal form of government economic regulation/intervention, this would seem to be a particularly important area of economic theory to get right.

For lay readers an article Why Air Travel Doesn't Work by Timothy Smith that appeared in FORTUNE magazine back in 1995 provides a non-technical introduction to the theory and its application.

Work in this area, which has its basis in game theory, seems to owe much to University of Chicago economist Lester Telser.

With respect to the airline industry, transport economist Kenneth Button of the George Mason School of Public Policy and the Transportation Policy, Operations and Logistics Center has shown an active interest in this area.

With respect to shipping, and in particular the conference system, William Sjostrom from the Centre for Policy Studies at the National University of Ireland, Cork, has taken an active interest. He write AtlanticBlog.

In terms of material available free on the web the following is of interest:

Application of Core Theory to the U.S. Airline Industry (2005) by Vidapuri Raghavan and Jayathi Raghavan
Ocean Shipping Cartels: A Survey (2004) by William Sjostrom
Empty Cores in Airline Markets (2002) by Kenneth Button

I have added links to these papers to the Transport section of my Home Page.

I am very interested to find out more about any criticisms of this theory and thoughts as to the practical application of this thinking for transport policy makers and competition regulators.

Web 2.0 - How much of it is hype?

The "summer" holidays - the weather has been unseasonably cold and wet in Wellington, New Zealand, a good excuse to stay inside - have given me a chance to revamp my Home Page, which now links to around 930 sites on the web, and explore some of the new web sites that are part of so-called Web 2.0 phenomenon. Much of this seems to be about getting individuals to generate and select web content, but having had my own home page on the web since 1998 (or was it 1997?), the concept of making "amateur" contributions to creating new content on the web is not exactly new to me. As noted in a previous posting, I started the New Zealand Aviation Yahoo! Group back in 1998. I have also been posting some of my photographs to Flickr since 2005 while more recently have made some very small contributions to Wikipedia in areas where I have some expertise.

Looking at some of the notable new web sites gives me the impression that, while there is much hype, there is now some useful development occurring and it is helping one to find particularly interesting nuggets of material amongst the mass of information now available on the web. For example, I found the 2007 Web Trend Map from Information Architects Japan to be a brilliant way of summarising the key web sites that are part of Web 2.0. The number of private individuals making a solid contribution to this phenomenon actually seems relatively small but this is clearly changing.

My recent exploration of Web 2.0 has included starting this weblog, contributing factual comments to a small number of other "blogs" that cover some of my interests, revisiting digg, and joining Newsvine and reddit. Newsvine, in particular, impresses me. I have joined its small but active Aviation group and started setting up a Column. As for reddit I have yet to see evidence of any great skill in filtering the stories that would be of particular interest to me, something that Amazon.co.uk does relatively well in terms of making book recommendations if one enters and rates previous book purchases.

In the right-hand side column of this weblog I have also been experimenting with the Eurekster swiki software by creating a search engine for Civil Aviation. My initial impression is that this software needs quite a bit more work but please feel free to contribute to improving my particular swiki.

New Zealand Aviation Yahoo! Group

Back in 1998 I founded a Yahoo! Group covering New Zealand Aviation. It now has 121 members from around the world and has had some 447 messages posted on it but of late activity has dropped off. I have taken a particular interest in ensuring that the Links page has a wide coverage of New Zealand aviation web sites. If you are interested in the New Zealand aviation scene please join and take an active role in livening the Group up again.

Israeli Parliament considering removing Airline Antitrust Exemption

On 24 December 2006 Haaretz reported that a committee of the Israeli Parliament, the Knesset, was considering removing a blanket exemption that airlines enjoy from antitrust scrutiny.

In the United States international airlines seek approval from the Department of Transportation for such practices as code sharing and schedule coordination. New Zealand has similar legislation (Part 9 of the Civil Aviation Act 1990 - available www.legislation.govt.nz - gives the decision making power to the Minister of Transport, and this power can be delegated to Ministry of Transport officials) to the United States with respect to international air services, while in Australia the Australian Competition & Consumer Commission has jurisdiction over such matters.