30 June 2007

Canada and Kuwait conclude new air services agreement

On 17 May 2007 the Canadian Ministers of Transport and International Trade announced the conclusion of the first bilateral air transport agreement between Canada and Kuwait.

South Korea signs new air services arrangements with the Philippines

New air services arrangements have been signed between the Philippines and South Korea. A story dated 25 June 2007 carried by Yahoo, reports that the negotiations saw a large capacity increase to 19,000 seats per week for the airlines of each side.

A 21 June 2007 column in the Manila Standard Today outlines the Korean negotiating tactics. A opinion column dated 15 June 2007 in the Inquirer, highly critical of the Philippines delegation leader, Undersecretary Edward Pagunsan, suggests that there may have been considerable tensions within the Philippines delegation. A 7 June 2007 article in the Manila Times expands on this.

European Commission still seeking mandate to negotiate new air services agreement with New Zealand

A press release issued on 26 June 2007 ahead of a visit to New Zealand by European Commissioner for External Affairs, Benita Ferrero-Waldner, notes that "The European Commission is seeking a negotiating mandate from EU Member States to open talks on a more ambitious air transport agreement that would fully liberalize air services between the EU and New Zealand." (See previous post.)

Reported concerns about draft Indian civil aviation policy

A 26 June 2007 Times Now story outlines the concerns that some other Indian government agencies have about the draft civil aviation policy (see previous post).

Humans never domesticated cats - they adopted us

In a 29 June 2007 story the Washington Post reports on scientific research by Carlos Driscoll using genetics to determine that the origins of the domestic cat lie in the Near East.

26 June 2007

European Parliament holding public hearing on including aviation in EU ETS

On 27 June 2007 the Committee on Transport and Tourism of the European Parliament is scheduled to hold a public hearing on including aviation in the European Union Emissions Trading Scheme. Papers for the meeting, including a 24 page draft report, are available here.

One of the speakers will be Andrew Steinberg, Assistant Secretary for Aviation & International Affairs from the US Department of Transportation.

Group of Ministers in India to consider draft civil aviation policy

A report dated 16 June 2007 in The Economic Times reports that a Group of Ministers will consider a draft civil aviation policy for India entitled "Vision 2020". A key issue is whether to reduce the five-year period of domestic services required before an airline from India can commence international operations.

China plans to liberalise domestic air transport

In an article dated 31 May 2007 China Daily reports that the Civil Aviation Administration of China (CAAC) intends to liberalise domestic air transport within China by 2010.

23 June 2007

Scandinavian Airlines System licensed to serve New Zealand

The licensing of international airlines to serve New Zealand is done under the Civil Aviation Act 1990. Notification of the issue of new licences and those that have been amended appears in the weekly, official New Zealand Gazette.

Notice of the most recent international airline to be licensed, Star Alliance member Scandinavian Airlines System (SK), appeared on page 1507 of the 31 May 2007 issue of the Gazette. This follows its separate designation by Denmark, Norway and Sweden under their virtually identical bilateral air services agreements with New Zealand. SAS had announced last year its intention to code share on Thai (TG) operations to Auckland (AKL).

On the same page of the Gazette there is also notice that the licence held by Air China (CA) has been amended to permit the airline greater route and capacity flexibility when code sharing on a New Zealand airline.

21 June 2007

Carbon Tax v Cap and Trade

An article dated 14 June 2007 in The Economist entitled "Doffing the cap" advocates for the use of carbon taxes rather than "cap and trade" to reduce CO2 emissions. Although there have been issues with how the European Union Emissions Trading Scheme (ETS) has been operating in practice, I did not think that this view in favour of such taxation was that widely shared by economists.

In any case, with respect to international aviation almost all international air services treaties prohibit the taxation of fuel.

On 8 May 2007 the New Zealand Minister Minister Responsible for Climate Change Issues, David Parker, announced that the New Zealand Government, having previously explored the option of a carbon tax, is now looking to introduce a "cap and trade" emissions trading scheme.

17 June 2007

Canada-UAE air capacity restriction

An 8 June 2007 Aviation Daily article by Adrian Schofield reports that Emirates is to follow Etihad in commencing services to Canada. The article notes that Emirates would like to start daily services but the Canada-United Arab Emirates air services arrangements restrict services to six flights per week and Etihad is already using three of these.

Etihad started operating to Toronto via Brussels in October 2005 and from 2 June 2007 commenced non-stop services between Abu Dhabi and Toronto.

Paris Air Show 2007

This week sees the International Paris Air Show at Le Bourget, an event held every other year. As usual some major aircraft order announcements can be expected and there will be extensive coverage in the aerospace media.

In alternate years the focus of the aviation world is on the Farnborough International Airshow, held near London. I attended on a couple of days of the 1986 event.

More recently air shows in Dubai and Singapore have become more important events in the global aviation industry calendar.

Special Report on Air Travel in The Economist

This week The Economist magazine contains a special report on air travel entitled Fear of Flying with eight articles on the subject.

I have personally subscribed to The Economist for many years and keep all the back issues. For clear and concise writing on many of the subjects that interest me it has few if any equals.

16 June 2007

UK Office of Fair Trading Threatens Action on Air Fare Advertising

On 16 June 2007 the BBC reported on the threat of action by the UK Office of Fair Trading against the advertising of air fares that exclude such items as fuel surcharges and per passenger taxes.

As noted in a 9 June 2007 post, such action has already been taken in New Zealand by the Commerce Commission.

09 June 2007

US DoT gives final approval to Virgin America

On 18 May 2007 the US Department of Transportation gave its final approval for Virgin America to start service.

UK-New Zealand passenger travel by sea - avoiding sin?

Last year the Bishop of London, Richard Chartris, was reported in the Sunday Times on 23 July 2006, as part of the Church of England's "Shrinking the Footprint" campaign, to say that taking a holiday by air was a "symptom of sin". (Subsequently the Bishop was reported to have travelled to Wittenberg in Germany by train, no doubt using nuclear-generated electricity.) The attack on this view by Ryanair Chief Executive, Michael O'Leary, as reported in the Irish Independent on 27 July 2006, was particularly robust.

Concern about the environmental impact of international air transport on the rise, but the only alternative means of international passenger transport for remote countries like New Zealand, Australia and those in the South Pacific would be by sea. It is still possible, but not cheap, to travel between the UK and New Zealand by sea with container ships offering a limited number of berths to paying passengers (see, for example, UK firm The Cruise People), as well as a few cruise ships like the QE2 operating annual round-the-world cruises. Of course, modern ships also have an environmental impact.

It was during the 1960s that air travel effectively replaced travel by ocean passenger liner as the main means of long-distance international travel and with good reason. Few people can now afford the time (what economists would call an opportunity cost) to spend weeks at sea getting to somewhere that would only take hours by aircraft.

In the 1960s, in the pre-containerisation days, I recall in Dunedin with my step-grandfather, Haxton Matthews, going on board a Union Steam Ship Company freighter that took a few passengers and was still serving the New Zealand-India route. He had served in the Royal New Zealand Navy during the Second World War and was taking a short trip by sea up the New Zealand coast. More recently I flew with my late father in a light aircraft over the QE2 as she passed down the East Coast of Northland, New Zealand - she was a truely magnificent sight.

Airline fuel surcharges illegal?

The Times of London has been reporting recently on the use of fuel surcharges by airlines and in particular British Airways:

"Airline drives up price of holidays" 9 June 2007

"BA chiefs face extradition over 'price fixing'" 27 May 2007

"Walsh says sorry for BA’s breach of price-fix standards" 19 May 2007

"BA admits it breached price fixing rules" 18 May 2007

According to a BBC story on 14 February 2006, an Associated Press story on 15 February 2006 and an Asia Times story on 22 February 2006, competition authorities from the European Commission, United Kingdom, the United States and Korea were investigating this issue in relation to cargo rates and searching airline offices.

A large number of class-action law suits targeting airlines followed in the United States, Canada and Australia. The Australian case taken by law firm Maurice Blackburn Cashman was reported in International Herald Tribune on 1 February 2007.

In New Zealand the Commerce Commission took court action on the airline practice of having separate fuel surcharges on top of advertised passenger fares and won its cases. In June 2006 Air New Zealand UPDATED was fined NZ$600,000 and in October 2006 Qantas UPDATED was fined NZ$380,000 over misleading advertising.

The "Food Miles" debate

Libertarian Liberty Scott has posted again on the food miles debate pointing to a 3 June 2007 Sunday Telegraph article that features Lincoln University research by Caroline Saunders, Andrew Barber and Greg Taylor on the carbon footprints of various food products sold in the UK.

The key message is don't assume that because food has been transported half way around the world the environmental impact is much worse than buying local European produce.

Scott is a transport expert and former colleague now based in London. Even if you don't agree with everything he writes, his weblog is well worth reading.

EU Transport Ministers endorse including aviation in emissions trading

Transport Ministers at the European Union (EU) Transport Council meeting on 8 June 2007 have concluded that aviation should be included of in emissions trading. EU member states will adopt a common position on the issue at the ICAO Assembly in September.

In a statement announcing the decisions the German Transport Minister, Wolfgang Tiefensee, who chaired the meeting noted that "aim of the conclusions was to convince the other ICAO countries of the need to include aviation in emissions trading ... there was likely to be a heated debate at the next ICAO Assembly in the autumn on the issue of including third countries with or without their consent."

07 June 2007


The Annual General Meeting of the International Air Transport Association (IATA) was held in Vancouver, Canada this week. A feature of the meeting was the 4 June 2007 State of the Air Transport Industry speech by IATA Director General Giovanni Bisignani.

A key theme of the AGM was responding to concerns about the impact of aviation on climate change. Bisignani made a statement that included setting a very challenging goal - "Air transport must aim to become an industry that does not pollute—zero emissions."

Swissair Trial Verdicts

On 7 June 2007 the BBC reported that all 19 defendants in the Swissair collapse trial have been found not guilty. The court in B├╝lach near Zurich also announced damages of SFr3 million (US$2.45 million) in favour of the defendants.

I previously posted about the trial on 20 and 24 January and 10 March 2007.

Ernst & Young and York Aviation Report on EC ETS proposal

After being commissioned by key players in the European aviation industry, Ernst & Young and York Aviation have completed a report dated 1 June 2007 entitled "Analysis of the EC Proposal to Include Aviation Activities in the Emissions Trading Scheme". The Executive Summary and full report are now available on the Association of European Airlines web site as is a related aviation industry press release.

I previously covered the European Commission's proposal in a post on 11 January 2007.

04 June 2007

"Open skies" being considered in Japan

On 13 May 2007 the Yomiuri Shimbun had an editorial that covered consideration in Japan of the possibility of adopting an "open skies" policy, noting that the two key airports that serve Tokyo, Narita and Haneda, are already operating at capacity.

The editorial noted recent consideration of the issue by the Council for the Promotion of Regulatory Reform, the Council on Economic and Fiscal Policy (see the provisional translation of the Expert Members' Paper Toward the Promotion of Aviation Liberalization (Open Sky) NEW), and the Council for the Asian Gateway Initiative.

On 17 May 2007 Japan Today carried a report on one of the proposals covering Kansai and Nagoya airports.

Qantas currently Australian owned and controlled

In an 8 May 2007 post I touched on the question of whether the Qantas Sale Act had been breached during the recent bid.

On 30 May 2007 Qantas issued a media statement advising that it "believed the level of foreign shareholding in the company was below the regulatory requirement of 49 per cent." It went on to say that Qantas was "working with lawyers and other advisers to investigate alternative methods of monitoring foreign shareholding in line with the requirements of the Qantas Sale Act."