UAE adds to its fast growing list of air services agreements

In addition to that with France (see previous post), in recent months the United Arab Emirates has announced new or enhanced air services agreements with (dates are when a statement was posted):

Ecuador - 27 March 2011
Albania - 16 February 2011
Djibouti - 15 February 2011
Bosnia and Herzegovina - 19 January 2011
Portugal - 19 January 2011
Mauritania - 16 January 2011
Cambodia - 26 December 2010
Botswana - 24 October 2010
Burkina Faso, Guatemala and Vanuatu - 11 October 2010
Panama - 28 November 2010
Slovak Republic - 18 March 2010.

The UAE has also been negotiating with:

Colombia - 19 December 2010
Venezuela - 28 November 2010

This illustrates an interesting dilemma. How many countries and territories does it make sense for a country to establish air services relationships with? ICAO currently has 188 members known as "contracting states". One wonders how many of these members the UAE is aiming to negotiate air services agreements with and how many of these agreement will eventually be used to provide international air services.

If countries are ranked on the basis of the their true origin/destination (TOD) market size (the traditional basis for exchanging restricted traffic rights), the largest markets that New Zealand currently does not have air services agreements with are Israel and then Saudi Arabia. In terms of TOD traffic, some countries with which New Zealand has air services relationships are smaller than this in terms of market size and we continue to receive approaches from countries where the end-to-end market is tiny (less than 1,000 passengers per year). New Zealand now has around 49 air services relationships.

Even if the home market one might gain access to (and through) in an exchange of air services arrangements is small, how, for example, should one take into account the size of a potential partner's airline industry (see previous post) or traffic through its main international airport measured in terms of passenger numbers when considering whether to exchange air rights? According to Airports Council International in its 2010 ranking released on 15 March 2011 Dubai International Airport (DXB) was 13th in the world in terms of passenger movements and 8th in the world for air cargo.

On 3 January 2010 UAE Interact carried a report that quoted Saif Mohammed Al Suwaidi, Director-General of UAE's General Civil Aviation Authority (GCCA) as telling Khaleej Times, "We have already signed open sky agreements with about 45 countries in the Mena region and with some in Europe, North America and Asia. We are willing to sign open sky agreement with any country which is willing to reciprocate."

Australia and Vanuatu expand air services opportunities

On 14 December 2010 the Australian Minister for Infrastructure and Transport announced that Australia had negotiated new air services arrangements with Vanuatu. As well as a phased increase in passenger seat capacity, the new deal includes open arrangements for freighter services.

Air Vanuatu "rescue"

On 21 June 2010 Radio New Zealand International reported on the "rescue" of Air Vanuatu involving an around US$30m loan to the company.

A 19 June 2010 article and a 25 June 2010 article in the Vanuatu Daily Post provide further background.

There is still a web site seeking proposals for the airline's restructuring.

There can be no doubt that operating a small international airline with a limited network of long, thin routes is very challenging to put it mildly. One might contemplate the governance implications of replacing politicians with civil servants as board directors and where the incentives lie. The company now has only four directors whereas at one point it had 28 directors (see paragraph 68 of this 2005 Pacific Islands Forum paper on Public Enterprises).

Air Vanuatu restructuring?

The Government of Vanuatu still has a web site up for the proposed restructuring of Air Vanuatu. Expressions of Interest were due by 7 March 2008. I have not seen any progress reports.

The same consultants, International Finance Corporation (a member of the World Bank Group), advised the Government of Samoa on the future of Polynesian Airlines which lead to its downsizing and the creation of Polynesian Blue in 2005.

PIASA enters into force following ratification by Niue

The Pacific Islands Forum Secretariat web site indicates that the Pacific Islands Air Services Agreement UPDATED (PIASA) entered into force on 13 October 2007 following ratification by a sixth Pacific Islands country, Niue.

The initial parties to the PIASA are the Cook Islands, Nauru, Niue, Samoa, Tonga and Vanuatu (see also previous posting on 16 May 2007).

Vanuatu ratifies the PIASA

Vanuatu has become the fifth country to ratify the Pacific Islands Air Services Agreement (PIASA) according to a press statement released on 15 May 2007 by the Pacific Islands Forum Secretariat. Only one further ratification is now required to bring the PIASA into force. (See also related posting on 20 March 2007.)

Solomons Airlines cannot operate between Santos and Brisbane

The Solomons Star reported on 19 March 2007 that Solomons Airlines is unable to operate between Santos in Vanuatu and Brisbane in Australia. The rights to operate such a service on a scheduled basis with fifth freedom rights would need to be negotiated by the Solomon Islands with Vanuatu and separately with Australia.