18 September 2011

UK has air services negotiations scheduled with Japan

The United Kingdom Forward Programme of Possible Bilateral Air Services Talks published by the Department for Transport has negotiations scheduled for September 2011 with Cuba, Egypt and Turkmenistan.

More interestingly it states that the UK has negotiations scheduled with Japan for 17-19 January 2012. With the recent talks with Canada (see previous post), Japan is clearly starting to work through a priority list of countries outside of East Asia (see previous post) as it implements its "open skies" policy.

UK Government responds to Committee on Climate Change Aviation Report

On 25 August 2011 the UK Department for Transport published a government response to the Aviation Report issued by the Committee for Climate Change (CCC) in December 2009 (see previous post).

The response focusses on an estimated marginal abatement cost curve to reduce CO2 emissions from UK aviation.

APEC Transportation Ministers meet in San Francisco

APEC Transportation Ministers met in San Francisco on 14 September 2011. The Ministerial Joint Statement released at the meeting makes specific mention of the Multilateral Agreement on the Liberalization of International Air Transportation (MALIAT).

APEC has long taken an interest in the economic regulation of international air transport. In the late 1990s it developed and prioritised eight options for reform and these were endorsed when APEC Leaders met and issued the Auckland Challenge on 13 September 1999 (see page 4).

Guiding APEC's work in trade have been the Bogor goals set by Leaders in 1994.

NZ Commerce Commission has a win in air cargo pricing court case

On 26 August 2011 the New Zealand Commerce Commission announced that it had won a procedural judgement in the High Court in its case against nine airlines (see previous post).

Australian Productivity Commission releases draft report on airport regulation

On 22 August 2011 the Australian Productivity Commission released a draft report on the Economic Regulation of Airport Services. The final date for submissions is 23 September 2011.

Our Standard Poodles enjoy their 15 minutes of fame

Morgan and Bree, our two Standard Poodles, along with my wife Wendy and I feature in a Rugby World Cup-related article and photograph on the second page of Wellington's main newspaper the Dominion Post on Saturday, 17 September 2011. The dogs had All Blacks and England team logos applied to their fur when they were groomed on Friday.

Morgan does actually watch the television, although he tends to prefer watching quadrupeds rather than bipeds, and Bree is obsessed by balls.

India's Comptroller and Auditor General Examines Air India

The Comptroller and Auditor General of India has recently released a Performance Audit of Civil Aviation in India. The audit commenced in September 2009 and the report was tabled in Parliament on 8 September 2011.

For me the most interesting part of the report was Chapter 5 which looks at India's bilateral air services arrangements during a period of fundamental change in India's international air transport policy. Of particular concern to the auditors was the extent of sixth freedom carriage by many of the foreign airlines serving India, notably from small city states. Sixth freedom carriage in this context involves a foreign international airline is carrying traffic between India and a third country via its home country. Seeking to limit such carriage is a traditional approach to air rights exchanges dating back to the 1946 Bermuda 1 arrangements between the UK and the USA (see previous post).

What I had not expected to see was the extent to which European carriers serving India have as high a proportion of sixth freedom carriage as airlines from the Gulf. An 18 September 2011 article in the Business Standard reports on the data.

The auditors also focus in particular on the failure of the Indian Ministry of Civil Aviation to secure Dubai's agreement to a "change of gauge" provision. If this was considered important surely the Indian negotiators would have made it the price for agreeing to capacity increases for Emirates?

A 10 September 2011 report in the Indian Express covers the reaction to the report from the Ministry of Civil Aviation.

It would seem that India has no intention of seeking to wind back existing air services arrangements but one has to wonder what impact this report will have on future negotiations, particularly as there was a change of Civil Aviation Minister in India from Praful Patel to Vyalar Ravi in January 2011.

Air India recently had its application to join the Star alliance suspended (see 31 July 2011 media release) and there is now some doubt about its large order for new Boeing aircraft, including the B787.

In the 1960s Air India was one of the great airlines of the world with its wonderful Maharaja character. However, past failures to agree to replace older airliners has left the airline with a relatively old fleet.

"Breaking the Surly Bonds of Economic Regulation" by Chris Lyle

Consultant and former senior official at ICAO, Chris Lyle of Air Transport Economics in Canada published an article in August 2011 suggesting a way forward towards liberalising international air transport economic regulation involving a club approach.

Although I would not uncritically accept what he has to say, it is well worth reading.

Japan negotiating "open skies" agreement with Canada

CAPA reported that Japan's Ministry of Land, Infrastructure, Transport and Tourism (MILT) announced on 9 September 2011 that it would be negotiating an open skies agreement with Canada commencing on 13-14 September 2011 in Vancouver.

MILT noted that this would be only the second such agreement outside of East Asia, the first having been with the United States (see previous post).

New Zealand Productivity Commission International Freight Transport Services Inquiry

The new New Zealand Productivity Commission (modelled on its Australian counterpart) is conducting an Inquiry into International Freight Transport Services. The Commission is looking at both aviation and maritime services, including air and sea ports (New Zealand has no land borders).

The Terms of Reference for the Inquiry were released in March 2011 and on 13 July 2011 the Commission released a 78-page Issues Paper with 79 specific questions.

Submissions are now being made available on the Commission's web site. To date those from the aviation industry have included submissions from the Aviation Industry Association, Board of Airline Representatives NZ, New Zealand Air Cargo Council, NZ Airports Association, and Auckland, Wellington and Christchurch airports.

04 September 2011

New Zealand Government releases transport policy direction statement

On 31 August 2011 the New Zealand Minister of Transport, Hon. Steven Joyce, released a new 44-page transport policy direction statement, Connecting New Zealand.

In contrast to the previous coalition government's 2008 New Zealand Transport Strategy (see previous post), Connecting New Zealand includes three pages specifically focussed on civil aviation.

Road safety continues to be a major priority. Also featured are the Roads of National Significance, a programme of investment in the road network around New Zealand's three main centres, and major investment in rail.

Australian draft report on the Regulation of Airport Services

On 22 August 2011 the Australian Productivity Commission released a draft report on the Economic Regulation of Airport Services.

An Issues paper was issued back in January 2011.

The Commission's final report to the government is scheduled to be made in December 2011.

New Zealand domestic air transport trends to June 2011

Since I last looked at the trends in domestic air passenger numbers twelve months ago by charting the numbers through the three main airports (see previous post) there have been some major external shocks.

Christchurch has been hit by three major earthquakes (7.1 magnitude on 4 September 2010, 6.3 on 22 February 2011 with 181 fatalities and 6.3 on 13 June 2011) and thousands of aftershocks. This was followed by disruption caused by the 4 June 2011 eruption of Puyehue volcano in Chile.

In addition, Pacific Blue withdrew from the New Zealand domestic market on 18 October 2010 leaving Jetstar to compete with Air New Zealand. It is not surprising therefore that domestic air transport have seen some large monthly declines in the year to June 2011.

On a more positive note, the progressive replacement of Air New Zealand's domestic B737-300 aircraft (133 seats) with A320 aircraft (171 seats) can be expected to boost domestic passenger numbers. Already this has been causing congestion at the main domestic screening point at Auckland airport. On 9 August 2011 the airport company announced that this was being addressed.

I am now monitoring monthly domestic passenger numbers at Queenstown Airport and may include these in a future update.