Australia signs first air services arrangements with Belgium

On 10 March 2011 the Australian Minister for Infrastructure and Transport announced that Australia had signed it first Memorandum of Understanding on air services with Belgium.

Australia and China expand route and capacity opportunities for their airlines

On 8 March 2011 the Australian Minister for Infrastructure and Transport announced that Australia had signed a Memorandum of Understanding on air services with China expanding passenger seat capacity and route opportunities for the international airlines of the two countries. Australia continues to seek an "open skies" agreement with China.

UK launches consultation on band structure of Air Passenger Duty

On 23 March 2011 HM Treasury released with the UK's Budget a consultation document on reform of the air passenger duty. The key element of this is presenting options for alternative band structures (see previous post). It was also conceded that a switch to a per plane duty would be contrary to international law.

The Daily Telegraph, the Daily Mail and the Guardian reported some reaction to the news.

Reaction also came from:

• IATA
• ERA
• BATA 
• AirportWatch 

Earlier ABTA had launched a Facebook campaign - A Fair Tax on Flying - while environmental groups launched a Facebook page - Fair Tax on Flying

For a New Zealand industry perspective prior to this announcement see a letter dated 30 November 2010 to the UK Economic Secretary to the Treasury from the Tourism Industry Association (TIANZ), Inbound Tour Operators Council (ITOC) and NZ Airports.

Russia's overflight fees and the EU

On 29 October 2010 Air Transport World reported that the European Commission (EC) had announced that it was initiating court action against European Union (EU) member states France, Germany, Austria and Finland over their air services arrangements with Russia that see their airlines paying overflight fees.

Note that these fees are not for air traffic control services. A 28 October 2010 report in the Journal of Commerce provides an estimate of the total fees paid by EU airlines, mostly to Aeroflot.

On 28 January 2011 Bloomberg reported that the EC was looking to take action against seven additional member states.

On 14 March 2011 the European Commission released a press release that gives background and another press release advising that it was taking action against six further member states.

Qatar concludes new air services arrangements with Ecuador, Georgia, Germany, Sri Lanka, Sudan, Syria and Uruguay

From the Civil Aviation Authority of Qatar and various media, announcements of new air services agreements between Qatar and:

• Ecuador - signed 21 March 2011
• Georgia - signed 15 February 2011
• Sudan - reported in February 2011 to have been signed
• Uruguay - negotiating mandate granted by Qatari Cabinet in February 2011

Qatar has also announced enhanced air services arrangements with:

• Germany - negotiations were held 6-7 July 2010 
• Sri Lanka - negotiations were held 8-10 August 2010 
• Syria - reported in October 2010

ASEAN moves towards a Single Aviation Market

I have been trying to disentangle the progress being made by the 10 member states of the Association of Southeast Asian Nations (ASEAN) towards an ASEAN Single Aviation Market (ASAM) by 2015 and related engagement with dialogue partners. What follows are some key source documents.

On 11 November 2010 in Brunei ASEAN Transport Ministers jointly announced progress towards "open skies".

This included signing the ASEAN Multilateral Agreement on the Full Liberalisation of Passenger Air Services (MAFLPAS). This has a Protocol 1 [link?] and a Protocol 2.

This new agreement extends the 2009 ASEAN Multilateral Agreement on Air Services (MAAS), which does not cover all international airports within ASEAN.

The MAFLPAS also compliments the 2009 ASEAN Multilateral Agreement on the Full Liberalisation of Air Freight Services (MALAFS).

Also signed in Brunei on 12 November 2010 was a Memorandum of Understanding on ASEAN's Air Services Engagement with Dialogue Partners. This is designed to ensure that priority is given to committing to the ASEAN internal air transport market ahead of any air transport agreements with ASEAN's dialogue partners.

Australia has funded two major research projects through the ASEAN-Australia Development Cooperation Program (AADCP) focusing on the ASEAN air transport market that also provide useful background on other regional efforts around the world:

• Developing ASEAN's Single Aviation Market and Regional Arrangements with Dialogue Partners (2008) by Thomas, Stone, Tan, Drysdale and McDermott (Executive Summary and Abstract) (Project No. 07/003)
• Strategic Directions for ASEAN Airlines in a Globalizing World (Project No. 04/008)
  Overview
  Competition and Consumer Protection Policy
  The Emergence of Low Cost Carriers in South East Asia
  Ownership Rules and Investment Issues
  Development of Principles for the Implementation of Subsidies and State Aid 

Earlier research included:

• Preparing ASEAN for Open Skies (2004) by Monash International

As reported by The China Post on 9 May 2010 Indonesia does not seem to have bought into the 2015 deadline for ASAM. This is reflected in its lack of ratifications by some member states to the key ASEAN air transport agreements.

In an earlier post I noted that progress was being made towards an ASEAN agreement with China. The Air Transport Agreement (Protocol 1) was announced in Brunei on 12 November 2010. The Agreement is limited to an exchange of third/fourth freedom rights with officials to pursue an exchange of fifth freedom rights. However, given the size of the two air transport markets and their expected rapid growth in coming decades this may turn out to be the beginnings of one of the major global moves towards air transport liberalisation, akin to the economic deregulation of the air transport markets within the United States and the European Union.

India too has been working towards a closer air services relationship with ASEAN announcing on 7 November 2008 an aviation cooperation framework.

I am still looking for a good write up of what has been happening within ASEAN but see some parallels in the staged approach to the deregulation of the air transport market adopted by the European Union and the Pacific Islands.

Philippines adopts "pocket open skies" policy

The Philippine Daily Inquirer reported on 18 March 2011 that President Aquino of the Philippines had signed two Executive Orders, EO28 and EO29 (both are dated 14 March 2011), changing responsibilities for negotiating new air services agreements and subsequent amendments, and adopting an open skies policy with respect to all international airports except that at Manila (NAIA)(see previous post).

Thailand has "open skies" agreement with Switzerland

On 18 January 2010 the Bangkok Post reported that Thailand had signed an "open skies" agreement with Switzerland replacing an agreement from 1984.

New Zealand Prime Minister looks to sell down government shareholding in Air New Zealand

In a speech on 26 January 2011 the New Zealand Prime Minister announced that the Government was scoping the option of selling down its shareholding in Air New Zealand while still maintaining a majority of the equity.

On 28 January 2011 the Finance and State-Owned Enterprises Ministers released advice from the Treasury on the issue.

EU concludes comprehensive air transport agreement with Brazil

On 18 March 2011 the European Commission announced that the European Union and Brazil have negotiated a comprehensive air transport services agreement.

France agrees to liberalise access for UAE airlines

On 31 January 2011 UAE Interact announced that France and the United Arab Emirates had agreed to an over 60% increases in the frequency of flights permitted between the two countries and the addition of Bordeaux as a destination point in France for airlines from the UAE.

Airlines from the UAE have very large aircraft orders from Airbus.

Brazil concludes "open skies" agreement with the USA

On 6 December 2010 the United States Department of State announced that on 3 December 2010 the United States had initialled an "open skies" Air Transport Agreement with Brazil.

Colombia becomes 100th "open skies" partner for the USA

On 12 November 2010 the United States Department of Transportation announced that its 100th "open skies" relationship had been established with the negotiation of an agreement with Colombia.

The 11 November 2010 Memorandum of Consultations and Air Transport Agreement are available online from the United States Department of State's web site.

Singapore concludes "open skies" agreement with Japan

On 2 February 2011 Airport News Japan reported on the 20 February 2011 announcement by Japan's Ministry of Land, Infrastructure, Transport and Tourism that an "open skies" agreement had been negotiated between Singapore and Japan.

Japan concludes "open skies" agreement with South Korea

On 17 January 2011 Tokyo Tomo carried a report that at negotiations held on 21-22 December 2010 Japan and South Korea had reached an "open skies" agreement. Excluded, however, is access to Haneda where airport slots remain tightly constrained.

Air New Zealand buys stake in Virgin Blue group

On 20 January 2011 Air New Zealand announced that it had acquired a substantial shareholding in Australian airline, Virgin Blue. The following day it announced that it had taken a 14.9% stake.

Air New Zealand was subsequently required to sell down a small proportion of its new shareholding in Virgin Blue to ensure that the 49% cap on foreign owneership was not exceeded.

It is notable that Air New Zealand says that it is not seeking a seat on the Virgin Blue board. Although the two airlines are entering into a trans-Tasman alliance (see previous post) they will still be competing on services to some South Pacific islands.

Japan announces priorities for "open skies"

A 17 December 2011 story from AFP carried by channelnewsasia.com reported that Japan was giving priority to negotiating "open skies" agreements with South Korea, Singapore and Malaysia. Interesting is Japan's new willingness to cover access to Narita (NRT) in these agreements.

South Africa leads initiative to oppose European taxes on aviation

On 11 March 2011 at ITB in Berlin the South African Minister of Tourism released a Communique supported by his country, Australia, Kenya, New Zealand, the Seychelles, Singapore and the Caribbean Tourism Organisation criticising the impact that "unilateral, discriminatory" European aviation taxes are having on long-haul destinations. The Communique received little media coverage but points to concern from a wide range of Commonwealth countries.

This follows taxation changes made by the United Kingdom (see previous post), Germany (see previous post) and Austria (see previous post).

There are very few disputes between the United Kingdom and Australasia but this seems to be one of them. The UK's 2011 Budget due to be released on 23 March 2011 may be worth watching for any movement on this issue.