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.

Noted People in New Zealand Aviation History

I have been having a look at the official Dictionary of New Zealand Biography (DNZB) to see how many people who made significant contributions to New Zealand's aviation history have been the subject of biographical notes. These are the 25 names that I have found so far:

Henry van Asch
Jean Batten
George Bolt
Alfred Brandon
Keith Caldwell
Norris Falla
Lawson Field
Oscar Garden
Esmond Gibson
Hilda Hewlett
Leonard Isitt
Cyril Kay
Edward Kidson
Fred Ladd
Fred Lucas
Malcolm McGregor
Bert Mercer
Keith Park
Richard Pearse
Geoffrey Roberts
Leo and Vivian Walsh
Leo White
Harry Wigley
Rodoph Wigley
Henry Wigram

I will add a few more as I find them.

China Airlines recommencing operations to Auckland

On 3 December 2010 China Airlines (CI) announced that it would be recommencing operations to Auckland (AKL) by extending its Taipei-Brisbane (BNE) service three times per week using A330-300 aircraft. The operation is due to restart on 1 January 2011.

Auckland International Airport had commented on the return of China Airlines in a media statement dated 30 November 2010.

A significant change that should boost the chances of success of the new air service is the decision of the New Zealand Government to grant people from the island of Taiwan visa-free access to New Zealand. A similar decsion by the United Kingdom Government has lead to a major boost in travel from Taiwan to the UK (see previous post).

SkyTeam member China Southern Airlines to operate to Auckland

On 12 December 2010 Auckland International Airport issued a media statement welcoming the announcement that China Southern Airlines (CZ) is to commence operating from Guangzhou to Auckland from March 2011, initially via Melbourne three times per week with A330-300 aircraft.

This announcement together with the announcements that China Airlines (CI) and Aerolineas Aerolineas (AR) will be joining the SkyTeam global airline alliance means that this third allinace will be establishing a more substantial presence in the New Zealand market. Currently the only SkyTeam member airline operating to New Zealand is Korean Air (KE).

Canberra and Wellington approve Air New Zealand-Virgin Blue group Alliance

Following a pre-decision conference on 18 October 2010 (see previous post), on 16 December 2010 the Australian Competition & Consumer Commission (ACCC) announced that it had reversed its draft determination (see previous post) and given a conditional authorisation of the application from the Virgin Blue group and Air New Zealand for an Alliance covering their trans-Tasman services. The approval is valid for three years. The ACCC also issued its redacted 120-page final determination.

The Virgin Blue group issued a media statement welcoming the decision. A media statement was also issued by Wellington International Airport.

On 21 December 2010 the New Zealand Minister of Transport, Hon Steven Joyce, announced that he had also given a conditional approval of the application (see previous post). This authorisation is also valid for three years.

The Ministry of Transport made available on its web site a redacted version of its 58-page final report giving advice to the Minister, together with the Alliance Capacity Implementation Agreement and some questions and answers.

Air New Zealand issued a short media statement welcoming the decision.

Air transport and inflation in New Zealand

Small components of the New Zealand consumers price index (CPI) are made up of changes in the price of international (1.68%) and domestic (0.64%) air transport. In October 2009 Statistics New Zealand published details of how it measures price changes in these two components. With thousands of different tariffs available for air travel from and within New Zealand it is interesting to read an explanation of the methodology that the department uses.

Data for quarterly price movements in these components can be found using Infoshare. Go to "Economic indicators" then "Consumers Price Index" then "CPI Level 3 Classes for New Zealand". The numbers are currently indexed so that the base quarter ended June 2006 equals 1000. For the quarter ended September 2010 international air transport stood at 1018 (+1.80%) while domestic air transport dropped to 906 (-9.40%). Over the same four years and three months period the overall CPI had risen to 1111 (+11.10%). Note, however, the regular seasonal peaks in the international air transport price index.

In real terms the cost of air travel has been declining for decades, driven in part by technology change as airliners become more efficient, but also by increased productivity in the airline industry and greater competition following economic deregulation. This has been highlighted by the drive to become "low-cost" airlines. A trend to "no-frills" product, particularly for short-haul routes, has also been reducing the headline price of airfares as passengers now pay separately for extra services. Statistics New Zealand notes that it has made some adjustments for these quality of service changes.

In recent years, as well as jet fuel price increases (see previous post), pushing ticket prices in an upwards direction are the various taxes, levies and surcharges that are being imposed to meet increasing costs for activities such as airport services and security. These items are included in the above calculations.

More on the Philippines "open skies" debate

The President of the Philippines, Benigno Aquino, was reported by the Cebu Daily News on 11 November 2010 as talking about the potential benefits of his country adopting an "open skies" policy (see previous post). Quite what "pocket-sized open skies" would mean though is not clear.

Back on 11 September 2010 GMANews.TV reported on an interesting twist. It quotes a Department of Transportation and Communications (DoTC) official as saying that the Philippines Constitution requires that any such trade deal be reciprocal.

China starting to make available the texts of its air services agreements

In the English language part of its web site, the General Administration of Civil Aviation of China (CAAC) has started to make available the texts of China's air services agreements.

Unfortunately it seems some subsequent amendments, for example with New Zealand where the route schedule has been liberalised (see previous post), have yet to be made available. A work in progress?

More open air services arrangements between Yemen and Bahrain

On 17 October 2010 the Yemen new agency, Saba, reported that Yemen had signed a Memorandum of Understanding on air services with Bahrain. There are now no capacity limits and fifth freedom rights have been exchanged.

Timor Leste completes air services arrangements with Indonesia

On 1 November 2010 Antara News reported that a Memorandum of Understanding on air services had been signed between Timor Leste and Indonesia. Capacity is limited to 14 flights per week and fifth freedom rights are included.

On 2 November 2010 The Jakarta Post carried a short report on what use two Indonesian airlines plan to make of the new air services arrangements.

Australian Senate inquiry into pilot training and standards

On the initiative of independent Senator Xenophon, the Australian Senate has launched an inquiry into pilot training and airline standards. Ben Sandilands, on his Plane Talking blog, is actively following the inquiry.

I must stress that this is a personal view partly based in part on my own experience of flight training and holding a PPL but I remain sceptical that airline pilots can be safe without a much higher number of flying hours in the air as pilot in command than seems to be being advocated by some airlines.

AirAsia X to operate to Christchurch

On 29 October 2010 Christchurch Airport (CHC) announced that it has signed a deal that will see Malaysian airline AirAsia X (D7) commence operations from Kuala Lumpur (KUL) to New Zealand (subject to regulatory approvals). Whether this new direct route will be non stop or via Australia has yet to be announced. The Wings Down Under blog has a post on the story dated 29 October 2010.

New Zealand has a 1998 bilateral 'open skies' air services agreement with Malaysia (see media statement).

There has been speculation that the Malaysia government would not permit AirAsia X to compete directly with the Malaysia Airlines (MH) operations to Auckland (AKL). Singapore Airlines (SQ) already operates from South East Asia to Christchurch and is about to face competition to its Singapore-Auckland non-stop operations from Jetstar Asia (3K)(again subject to regulatory approvals)(see previous post).

Austria follows Germany to introduce flight departure tax

On 28 October 2010 GreenAir Online reported that Austria intends to introduce a tax on air travel.

On 1 November 2010 there is a major increase in the United Kingdom's Air Passenger Duty.

Alliances approved, Japan-USA 'open skies' signed and Haneda open for international flights ...

... in that order.

On 6 October 2010 the US Department for Transportation announced that it proposed to approve alliances between American Airlines and Japan Airlines, and separately between United Airlines, Continental Airlines and All Nippon Airways (DOT-OST-2010-0059 refers).

On 25 October 2010 the US Department of State announced that 'open skies' air services arrangements had just been signed between Japan and the United States (see previous post).

On 31 October 2010 Mainichi Daily News reported that Haneda Airport (HND), close to central Tokyo, opened for international air services. Flightglobal reported that the first international flights by JAL and ANA actually departed on 30 October, just before midnight, and reported that the airport's new, fourth runway and international terminal opened on 21 October. International landing and takeoff slots at Haneda are very limited and have been sought by many countries.

The Airline Route web site currently has a section devoted to the new Haneda international services and links to a Ministry of Land, Infrastructure, Transport and Tourism document on the subject dated 23 October 2010 (in Japanese).

ASEAN-China air transport agreement close?

On 29 October 2010 Channel News Asia reported from Hanoi comments by Singapore's Prime Minister Lee that he expected an ASEAN-China Air Transport Agreement to be concluded next month.

Lee also suggested that ASEAN should be pushing for 'open skies' within the ASEAN region. On 27 April 2010 the Business Mirror reported comments from a Philippines official that only one unnamed country had yet to agree to a Multilateral Agreement for the Full Liberalisation of Passenger Air Services (MAFLPAS).

ASEAN already has a 2009 Multilateral Agreement on Air Services, which allows unlimited flights between capital cities by the airlines of member states, and a 2009 Multilateral Agreement on the Full Liberalisation of Air Freight Services.

New Zealand's recent air services negotiations

The New Zealand Ministry of Transport's Annual Report for the year ended 30 June 2010 has just been tabled in Parliament and published. It includes a brief section on air services arrangements:

Air services: The Ministry continued working through the issues outstanding in air services negotiations with the European Union. However, given the differences between our respective positions on significant issues, it was difficult to reach a mutually acceptable position. Further negotiations were put on hold pending further developments on either side. 

Negotiations were also held with Papua New Guinea in March 2010 where an understanding was reached on liberalising some elements of the air services arrangements.

New Zealand–Japan air services agreement: An agreement was reached with Japan on amendments to the New Zealand–Japan air services agreement to permit the operation of Boeing B777-300 aircraft on the route.

South Africa signs new MoU with Qatar boosting capacity for their airlines

On 28 October 2010 the Qatar News Agency announced that, following negotiations in Pretoria, South Africa and Qatar have signed a new Memorandum of Understanding quadrupling the flights available to the airlines of the two countries to 28 flights per week for each side.

Canada initials an air services agreement with Qatar

On 28 October 2010 the Qatar News Agency announced that, after three days of negotiations in Doha, Canada and Qatar have initialled an air services agreement that will allow Qatar Airways to operate three passenger flights and three cargo flights per week to Canada.

ACCC hold pre-decision conference on Virgin Blue/Air New Zealand alliance application

On 18 October 2010 the Australian Competition and Consumer Commission (ACCC) held a pre-decision hearing in Sydney on the alliance application from Air New Zealand and the Virgin Blue group (see previous post). The hearing was closed to the media so there has been no reporting.

However, submissions (scroll down for submissions made after draft determination) from the applicants and most of the New Zealand interests that have in the past expressed doubts about the merits of the case indicate that differences are narrowing with the applicants offering to give conditional undertakings to maintain capacity on routes that are of concern (see the end of the submission from the applicants). These routes (sectors) are: AKL-BNE; WLG-BNE/SYD/MEL; DUD-BNE; and ZQN-SYD.

"Open skies" policy debated in the Philippines

The possibility of the Philippines adopting an "open skies" policy continues to be discussed with the Manila Standard reporting on 21 October 2010 that an Executive Order has been drafted.

On 23 October 2010 The Manila Bulletin carried a report with comments from the Speaker, Feliciano Belmonte Jr., who emphasised the need to improve air transport infrastructure.

On 24 October 2010 BusinessWorld reported that there was support for adopting an "open skies" policy from key Cabinet members.

Breakthrough for the Gotthard Base Tunnel Project

In a major civil engineering achievement, after 14 years on 15 October 2010 the boring of the 57km Gotthard Base Tunnel through the Swiss Alps was completed. swissinfo.ch carried a report on the breakthrough.

The new rail tunnel, the longest in the world, will not open until 2017 but will become a major transport between Germany and Italy when it does. The cost is expected to be US$10.6bn. The travel time by passenger train between Zurich and Milan will be reduced by one hour.

Australian Department intervenes to support Delta-V Australia alliance proposal

The newly renamed Australian Federal Department of Infrastructure and Transport has intervened in the case before the US Department for Transportation (DoT) seeking anti-trust immunity for an alliance between Delta Air Lines and the Virgin Blue group (see previous post), including V Australia, writing a letter dated 13 October 2010 to DoT supporting the application.

This case leaves one thinking that the Japanese approach of not implementing its new bilateral air transportation arrangements with the United States until various anti-trust immunities were first granted was totally understandable.

Details on German aviation tax

The German Federal Ministry of Finance has published a short article on its web site detailing how in practice the proposed aviation tax is to work (see previous post).