RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/163/Add.4
15 August 2001
(01-4045)
Council for Trade in Services
DEVELOPMENTS IN THE AIR TRANSPORT SECTOR SINCE THE CONCLUSION OF
THE URUGUAY ROUND
PART FIVE
Background Note by the Secretariat
Addendum
This Note provides information about developm ents in the air transport sector since the
conclusion of the Uruguay Round.  It covers aspects specific (see document S/C/W/163/Add.2,
paragraph 153) to ownership and co-operation among airlines (including alliances and codesharing).
_______________S/C/W/163/Add.4
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TABLE OF CONTENTS
INTRODUCT ION................................................................................................................... ...............4
I. TRANSNATIONAL OWNERSHIP........................................................................................4
A. ECONOMIC ASPECTS ....................................................................................................................4
B. REGULATORY ASPECTS ................................................................................................................5
1. National Regulation of Foreign Ownership and Designation Provisions ............................5
2. Recent Regulatory Developments............................................................................................6
II. BILATERAL COMMERCIAL CO-O PERATION ("ONE TO ONE")..............................7
A. ECONOMIC ASPECTS :  A GROWING PHENOMENON .......................................................................7
B. REGULATORY ASPECTS OF CODESHARING REGIMES ...................................................................9
1. Advantages and Disadvantages ...............................................................................................9
2. Main Aspects of the Regulation of Codesharing..................................................................11
(a) Traffic Rights and Market Acces s Issues..................................................................................11
Underlying Route Authority ..................................................................................................... .............11
Special Codesh aring Ri ghts ..................................................................................................... ..............11
Third Country Codesharing ...................................................................................................... .............12
(b) Competitio n Issues.......................................................................................................... ..........12
III. GLOBAL AL LIANCES .........................................................................................................13
A. ECONOMIC ASPECTS ..................................................................................................................13
B. REGULATORY ASPECTS ..............................................................................................................13
IV. OTHER FORMS OF  CO-OPERATION..............................................................................14
ANNEX ............................................................................................................................... ..................15S/C/W/163/Add.4
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Abbreviations used in this document
AC Associated Carriers
B2B Business to business
BAC Brazilian Aeronautical Code
CAD Civil Aviation Department (Brazil)CRAF US Civil Reserve Air Fleet
CRSs Computer Reservation Systems
DOJ United States Department of Justice
DOT United States Department of Transport
DSTI Directorate of Science, Technology and Industry (OECD)
ECAA European Common Aviation Area
EU European UnionFDI Foreign Direct Investment
GATS General Agreement on Trade in Services
IATA International Air Transport Association
ICAO International Civil Aviation Organization
NATS National Air Traffic ServicesOECD Organization for Economic Cooperation and Development
RPK Revenue Passenger Kilometres
SAM Australia-New Zealand Single Aviation Market
UAE United Arab Emirates
UK United KingdomUS United States
WTO World Trade Organization
Airlines
AA American Airlines
ACES Aerolinea Centrales de Colombia
AOM AOM (formerly Air Outre-Mer)
ASCERCA Aeroservicios Carabobo/ Ae rolineas Regional del Centro
BA British Airways
BWIA West Indies Airways (formerly British West Indian Airways)COPA COPA Airlines (formerly Co mpañia Panameña de Aviacion)
CSA C ĕské Aerolinie (Czech Airlines)
EBA Eurobelgian Airlines
KLM Kononklijke Luchtvaart Maatsapiij (Royal Dutch Airlines)
LAB Lloyd Aero Boliviano (Bolivian Airlines)
LAM Linhas Aéreas de Moçambique (Mozambique Airlines)
LAPSA Lineas Aéreas Paraguayas (Air Paraguay)LIAT Leeward Islands Air Transport
LOT Polskie Linie Lotnicze (Polish Airlines)
LTU Lufttransport Unternehmen
Sabena Société Anonyme Belge d'Exploitation de la Navigation Aérienne
SAFE formerly South American & Far East Air TransportSAS Scandinavian Airlines
TACA Transportes Aéreos Centroamericanos
TAM Transportes Aéreos Marilia
TAP Air Portugal (formerly Transportes Aéreas Portugueses)
TAT Transport Aérien TransrégionalTEA EasyJet Switzerland (formerly Trans European Airways)
TWA Trans World Airlines
VARIG Viaçao Aérea Rio-Grandense
VASP Viaçao Aérea Sao Paoulo
ZAMEX Zambian Express AirwaysS/C/W/163/Add.4
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INTRODUCTION1
1. There are many different forms of airline co-operation.  They may differ for example, in
terms of geographic coverage, the number of airlines involved, and the of intensity financial and
technical linkages.  Most co-operative agreements  are in the form of "one to one" commercial
agreements, essentially through codesharing.  Global alliances, centered on commercial agreementsbut often including additional areas, are another important development.
2. Transnational ownership, although legally distinct from alliance strategies, has similar
features; it relies on a strategic investor, coordinates through codesharing flights, provides common
management and information systems, and develops international hub networks.  Not all cases of
foreign ownership correspond to such a structure.
3. There are additional forms of co-operation, consisting of airline groupings, which work
together for specific purposes.  This often includes carriers which otherwise participate in differentalliances.  A case in point are Computer Reservations Systems (CRSs) such as Amadeus that was
owned by Lufthansa, Iberia and Air France.  This  is also the case for business-to-business (B2B)
buying platforms and multi-airline distribution portals such as Orbitz.
I. TRANSNATIONAL OWNERSHIP
A. 
ECONOMIC ASPECTS
4. Transnational ownership was a marginal phenomenon before the 1990s and largely reflected
the legacy of former colonial or historical ties.  It has since become a relatively common feature of the
air transport sector, following the example of many  other corporate industries.  This development is
principally the result of three factors:  privatization of airlines, emergence of global alliances, and the
creation of regional aviation markets.  Low ceilings on foreign ownership, however, have preventedtransnational mergers and acquisitions and thus the formation of multinational corporations.  In turn,
this has promoted the development of other forms of co-operation such as codesharing and alliances.
5. In early 2001, more than 57 carriers reportedly held shares in foreign airlines, and over 160
airlines have foreign equity ownership (Table 1).  Table A-1 (Annex) provides a more detailed
overview of commercial changes between 1993 and 1994, including not only investment in existingcompanies, but also foreign involvement in new in ternational joint ventures, the formation of fully
owned subsidiaries, and divestitures.
2  While all segments of the air transport industry are affected,
scheduled transport of passengers as well as cargo and charters are strongly represented. Investments
far outpaced divestitures which often involved inter-airline sales.  Annual changes in divestitures
reflect the cyclical nature of the industry, and national privatization initiatives.
6. Many regions are involved.  Not surprisingly, Foreign Direct Investment (FDI) from
developed to developing countries is an important part of the total, complemented by "north-north"investment flows, "south-south" investments, an d even investments from transition or developing
economies in airlines of developed countries.  Many investments are between neighbouring countries,
but transcontinental flows also occur. Banks and private investors are involved in many cases.
                                                     
1 The following observations are in addition to info rmation contained in S/C/W/59, paragraphs 102 to
106, annex 2 on page 53 and in S/C/W/129, paragr aphs 13, 15(a), 19(b), 19(c), 19C(c) and 20(c).
2 Complementary data, based on different methodologies and samples, can be found in various issues
of Airline Business, l June 1998, pages 48-49 ("Airlines with Ownership by other Carriers");  July 1998, page
63-66 ("Lords and Masters"); and September 1999, page 101 ("Major Airlines Acquisition deals 1994-1999").S/C/W/163/Add.4
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TABLE 1
Transnational Ownership by Region
Asia AfricaMiddle
EastEastern
EuropeWestern
EuropeLatin
AmericaUS
CanadaSouthwest
PacificTotal
Number of
operating
carriers135 91 44 143 244 117 149 61 984
Airlines
owned by
foreign
carriers/
investors*15 25 6 17 55 31 8 9 166
Airlines
owning
stakes in
foreign
carriers9 6 4 2 20 9 5 2 57
Note:  *Excludes small individual private shareholders.
Source:  ICAO Air Transport Bureau (data collected as of 31 May 2001).
B. REGULATORY ASPECTS
1. National Regulation of Foreign Ownership and Designation Provisions
7. Airlines have traditionally been subject to strict foreign ownership restrictions aimed at
ensuring ownership and effective control remains in the hands of nationals.  The relevant definitions
in national legislation are normally distinct from the definitions used in designation provisions in
bilateral agreements.3  Similarly, for approving or refusing of foreign investment in a national airline,
domestic legislation is used regardless of the designation provisions contained in the bilateral
agreements.  For example, the US does not appl y the 25% national foreign ownership ceiling as a
benchmark for revocation and withholding in bilateral aviation agreements.4
8. There may be a partial overlap between these two sets of regulations:  national legislation is
used to interpret the provisions of designation for the national airline.  However, this standard is not
absolute, for two reasons.  First, while there is only  one legal provision for ownership and control, the
same country's designation provisions may vary depending on the bilateral agreement involved
(unspecified substantial ownership and effective control in one case, principal place of business inanother, and community of interest in a third).  Second, there are historical cases where foreign-
controlled airlines have been designated in bilateral agreements as if they were flag carriers (e.g.
Canadian-owned Britannia Airways and Liechtenstein controlled Monarch Airlines).  IATA and
                                                     
3 See document S/C/W/163/Add.3, paragraphs 62 to 88 inclusive.
4 For a detailed description of the US approach to third-party ownership see document S/C/W/163.
These two sets of regulations are distinct and applied in  different contexts, they prevent international mergers or
acquisitions from occurring.  For example, the envisioned BA-KLM merger was compatible with British andDutch legislation, which incorporated the EU "Community ownership" rule in the third package, while theNetherlands-US 1992 Open Skies Agreement still contained the traditional substantial ownership and effective
control rule. See also S/C/W/163/Add.3, paragraph 67.S/C/W/163/Add.4
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ICAO both appear to acknowledge this regulatory distinction through the separation of national
regulations and designation provisions in their questionnaires.5
9. This is an important issue since ownership and control are specified in GATS Annex on Air
Transport (paragraph 6, definition of hard rights) only for designation:  "traffic rights mean … criteria
for designation of airlines, including such criteria as number, ownership and control".
2. Recent Regulatory Developments
10. Traditionally, foreign ownership restrictions and effective control requirements are intended
to insure that the flag carrier is: a tool for promotion of national trade and tourism; provides public
service (domestic transportation);  creates employment; promotes high technology development;
contributes to foreign currency earnings; provides military/emergency transportation (domestic and
international);  and symbolizes national sovereignty and prestige.
11. The importance of these considerations has faded over the years.  ICAO lists the following
reasons:  a  the changing global business and trading environment (increasing multinational ownership
in other services industries, and increased competition);  GATS obligations on foreign ownership;
inability or unwillingness of governments to fund the capital needs of national carriers;  better access
to foreign management expertise through co-operative arrangements (e.g. codesharing, joint
operations, etc.);  a broader range of potential investors facilitating privatization of government-owned airlines;  and improved opportunities for small airlines to survive in a competitive
environment.
12. A number of countries have thus adopted new policies and amended rules regarding foreign
investment in national airlines during the period under review (1993-1999).  In many cases, existing
regulations were relaxed. For example, in 1994, China increased its foreign ownership limit to 35%,Mexico to 25%, and Peru also eased its ownership rules.  In 1995, Australia raised the foreign equity
ceiling from 35 % to 49%;  in 1996, New Zealand from 35% to 49%.  In 1997, Brazil raised its ceiling
from 20% to 49.5% and Peru up to 70%.  In 1998, Bangladesh authorized unlimited foreign
ownership for its cargo airlines and joint ventures to operate domestic carriers, while Korea raised the
ceiling from 20 to 49%, and Thailand from 30 to 49%.  In 1999, the Australian government amendedthe rules on foreign investment in its national carriers.
6
13. In a few instances, however, ownership regula tions have actually been tightened:  in 1997
India adopted a new policy limiting foreign ownership at 40% by investors other than airlines and
airports.  To comply with this regulation, Kuwait Airways and Gulf Air reduced their stakes to 40% in
Jet Airways.  The same year, the Russian Federation introduced rules barring foreign majority
ownership in joint venture airlines.  Table A2 (A nnex), gives an overview of foreign ownership
limitations in a selected number of countries from all continents.  The Table focuses on the level ofthe operative thresholds; it is not intended to be an accurate description of the underlying legislation,
which may be very complex.  Relevant parameters include distinctions between members of a
                                                     
5 Peter van Fenema, "Ownership and Control:  Report of the Think Tank World Aviation Regulatory
Monitor 2000" .  IATA, Government and Industry Affairs Department, September 2000; ICAO attachment to
State letter SC 5/2-01/50 June 2001. Both are available from the WTO Secretariat.
6 Before the amendment, limits on foreign ownership in Australia's international carriers, other than
Qantas Airways, were 25% for a single owner and 35% in total, and in domestic carriers 25% for a single owner
and 40% in total.  Under the revised rules, all limits on ownership of national carriers, other than Qantas, werescrapped, except for an overall 49% international carriers.  Qantas is covered by separate legislation underwhich no single foreigner can own more than 25%, total foreign carrier equity holdings are capped at 35% and
total foreign ownership at 49%.  The Australian Government could still block an acquisition falling within theselimits if it was found to be "contrary to the national interest".  Separately, the Government approved Virgin
Atlantic's setting up a domestic carrier in Australia.S/C/W/163/Add.4
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regional agreement and non-members;  between international and domestic traffic;  between
individual and aggregate ownership;  between airl ines, airports, and financial investors.  In some
cases, there are also  nationality requirement for members of the board and/or managers.  There is no
complete inventory of the legislation.  However, in preparation for the 2003 Air Transport Conference
ICAO has prepared a detailed questionnaire which is to be answered by the end of August 2001.
14. IATA has recently made an enquiry into national regulations; Table A3 (Annex) summarizes
the answers.7  The sample used by IATA is largely similar to the one used for Table A2 (Annex) and
was based on the following questions:
"Ownership
What limits/restrictions are imposed on foreign ownership of (shares of) your national airline(s)?
- If foreign ownership is permitted, specify (1) the maximum foreign ownership percent permitted, (2) themaximum foreign airline ownership permitted.  Conditions such as "golden shares" should be specified.
- If the limits/restrictions are different  in case the national airline only operates domestic services (such as in
Australia), please specify.
Control
What limits/restrictions are imposed on foreign control of your national airline(s) (incl. Possible different
criteria for domestic operators, see Question 1)?
Interpretation and application of above ownership and control criteria
How did/do your national authorities interpret/apply the above ownership and control criteria in practice?
Are there any recent developments with  respect to these criteria, includi ng proposals to modify them, which
(may) affect the application thereof?
Availability of "national" fleet for national emergencies
Do your national laws or policies provide for a program comparable to the US Civil Reserve Air Fleet (CRAF)
Program, by virtue of which US air carriers have pledged (part of) their fleet to the US Department of Defense
for use in time of emergency?
Ownership and control of other important national industries
Do your national laws or policies specify any important national industries (e.g. telecommunications, rail-
roads, etc.), that must remain nationally owned and controlled?"
15. Finally, it is worth noting that the relaxation of ownership legislation remains a major policy
goal for ICAO: "in short air carrier ownership and cont rol vested in a single State or its nationals is an
anachronism in the global economy and liberalization of ownership and control provisions a necessary
precursor of widespread liberalization.  At the sa me time there is a need to link liberalization with
safeguards to alleviate safety and other concerns regarding the evolution of flags of convenience and
the sustainability of smaller air carriers".8
II. BILATERAL COMMERCIAL COOPERATION ("ONE TO ONE")
A. ECONOMIC ASPECTS :  A GROWING PHENOMENON
16. There is no specific terminology, statistical information, or regulatory data to assess the
expanding airline commercial cooperation except for codesharing.  ICAO uses the term "alliance" to
                                                     
7 Table A2 includes the following countries that are not covered by the IATA survey:  Argentina,
Czech Republic, Indonesia, Mexico, Poland, Russia and Turkey.  In contrast, the IATA survey includes inaddition to Table A2:  Israel, Colombia and Mauritius .  More detailed information on OECD countries is
contained in the OECD document DSTI/DOT(99)1, 23 June 1999,
 "Regulatory Reform in International Air
Cargo Transportation", pages 50-52.
8 Dr. Assad Kotaite, President of the ICAO Council, at the last IATA Annual General meeting, held in
Madrid on 28 May 2001.S/C/W/163/Add.4
Page 8
cover any kind of commercial cooperation between two or more airlines while other commentators
reserve this term to refer to the five global, or mega Alliances. 9  Similarly, there is no agreed
definition for the various types of cooperation.  ICAO distinguishes between the following types of
cooperation:  codesharing, blocked space, capacity sharing, joint service;  pooling; franchising;
leasing (dry, wet or damp);  ground handling;  flight scheduling;  frequent flyer programs;  in-flightservices and onboard equipment;  maintenance, repair and overhaul services; joint fuel purchasing and
insurance; equity exchange;  joint ventures;  marketin g;  airport facilities;  joint use or interchange of
personnel;  and management contracts.  A more simplified categorization has been used by ICAO in
its first statistical collection (2001) of these agreements:  codesharing, franchising, cargo, intermodal,
and other.
17. Observers have identified 579 agreements among 220 carriers and distinguished between 29
categories of cooperation, sometimes overlapping (Table 2).  These are similar to the ICAO categoriesmentioned above.
TABLE 2
Types of Co-operative Arrangements among Airlines
Total number of commercial  agreements containing
provisions on:1222
Codeshare 911
Frequent flyer programs 114
Cargo 106
Marketing 78
Joint venture on a destination 55
Pool agreement 33
Joint ground handling 32
Franchise/regional connection 31
Shared passenger lounges/one stop check in 30
Schedule coordination 29
Joint flight 28
Commercial agreement 24
Strategic alliance 19
Purchasing cooperation 17
Alliance scheme 11
Maintenance 11
Engineering, spare parts, fleet management 11
Charter 10
Computer Reservation Systems 10
Management contract 9
Operational agreement 9
Catering 8
Joint lease 7
Through fares 4
Revenue sharing 4
Joint terminal 3
Mail, courier, cargo 3
Training 2
Crew exchange 2
Pro-rate agreement 1
Source:  Airline Business , July 2000. Categories recompiled by the WTO Secretariat.
18. The above data should be interpreted with caution.  An agreement between two airlines of the
same pool is counted on either side and thus appe ars twice.  Second, some of these agreements are
                                                     
9 Document RPS-WP/9, 22 February 2000.S/C/W/163/Add.4
Page 9
with smaller airlines that are not part of the 220 airlines' sample.  Third, an agreement may cover
several areas of cooperation in which case it is being counted several times.  Fourth, the scope and
coverage of an individual codesharing agreement may vary enormously.  Systematic and universal
data comparing the number of city-pairs served an d the existing codeshare agreements are presently
not available.  Fifth, as noted above, the categories partly overlap.
19. The expansion of commercial co-operation over the past three decades is reflected in Chart 1.
The data contained in this Chart is comprised of agreements between airlines from all regions.  It also
captures a great diversity of companies: medium and large carriers in global alliances;  regional and
international carriers (e.g. Armenian Airlines and Swissair);  regional airlines with other regional
airlines (e.g. Air Baltic and Estonian Air);  and domestic and international airlines (e.g. US
commuters/feeder services into the majors).  Alliances can be of any size, temporary or permanent,
with different strategic objectives and involve different degrees of cooperation.  The informationcontained in the survey by Airline Business is complemented by a list of commercial agreements
compiled by ICAO, soon to be published (Tables A4(a) and A4(b), Annex).
10
Chart 1
Alliance Survey 2000 (by Date of Signature)
050100150200250
pre
1970'70 '80 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00
 20. Modern alliances differ from traditional cooperations such as pooling which usually involved
agreement on tariffs, costs, capacity and revenue sharing, most often on duopoly routes.  In contrast,
modern alliances seek to develop possible synergies, exploiting complementarity of routes, structures
and services.  ICAO attributes the recent development of alliances to factors such as: globalization of
business practices and attitudes;  existing market access constraints resulting from the bilateral
system;  liberalization trends at domestic and regional levels;  and commercial incentive related to
economies of scope and scale.
B. REGULATORY ASPECTS OF CODESHARING REGIMES11
1. Advantages and Disadvantages
21. Codesharing is defined by ICAO as "the practice whereby one carrier permits a second carrier
to use its airline designator code on a flight, or where two carriers share the same airline designator
code on a flight.12  In its application, passengers often fly on an airline other than the one identified on
                                                     
10 The World of Civil Aviation 2000-2003.
11 The only form of regulatory co-operation for which data exist, is codesharing.  Non-codesharing
forms of co-operation may be provided for in bilateral agreements and may be subject to scrutiny bycompetition authorities.
12Circular 269/AT110.  The Manual on the Regulation of International Air Transport (Doc 9626)
defines codesharing as "the use of the flight designator code of one air carrier on a service performed by aS/C/W/163/Add.4
Page 10
the ticket.  Codesharing thus involves one airline advertising and selling the services of another airline
as its own."  It is the most frequent form of airline cooperation (Table 2).
22. Although the term "codesharing" does not appear in the definition of hard rights in the GATS
Annex on Air Transport, there appears to be little doubt as it exclusion from the GATS (see reference
to "flight" in the above ICAO definition).  However, underlying traffic rights authority is not alwaysrequired for all the carriers concerned or on all the segments (see section 2 below).
23. It has been suggested that, from the carriers' perspective, the main reasons for codesharing
are:
• to achieve better display position in computer reservation systems, in cases where it is treated
as an on-line service with a higher prio rity in listing than interline service;
• in the context of an increasingly competitive environment, to form some kind of co-operative
links with other carriers to maintain, protect and improve market positions;
• to achieve better presence on routes they do not fly, as an inexpensive marketing tool;
• to enable joint operation carriers to operate a viable service where traffic volumes do not
justify individual operations, and to obtain feeder traffic;
• to foster competitiveness by drawing traffic within the orbit of codesharing partners;  and
• to obtain increased market access to points hitherto restricted by capacity provisions in
bilateral air services agreements.
24. From the passengers' perspective, potential advantages are:
• the convenience of co-ordinated schedules, allowing for improved connections;
• possible shorter elapsed journey time;
• shared terminals between partner carriers facilitate transfer;
• the possibility of lower fares or greater choice of special fares;
• single carrier supervision of the through journey; and
• common frequent flyer programmes.
25. Recent studies on codesharing have taken a more positive view than initial surveys.  They
consider that the hub effect of alliances is the main cause for intensification of competition, for the
substantial price benefits that have occurred on these lines over the last five to ten years and for the
increase of destinations served.
13  Unlike an earlier ICAO study, these studies consider that
codeshares and alliances in the wider sense have created an additional demand for air transport.
26. Regarding the specific situation of developing countries, ICAO notes that codesharing may
have advantages insofar as it offers the possibility of serving thin routes at minimal cost and using
previously unused rights.  It may thus facilitate the participation of developing countries' airlines in
international air transport.  However, ICAO also says that the practice has yet to take hold in a
substantive way.  The potential benefits of this form of co-operation could be viewed as a means ofenabling developing countries' airlines to participate more economically and effectively in
international air transport.
                                                                                                                                                                    
second air carrier, which service is usually also identified  (and may be required to be identified) as a service
[operated … ] by the second air carrier". (p. 4.1-7)
13 US DOT 1999 "International Aviation Developments:  Global Deregulation Takes Off" and October
2000 "Transatlantic Deregulation:  The Alliance Network Effect."S/C/W/163/Add.4
Page 11
2. Main Aspects of the Regulation of Codesharing14
(a) Traffic Rights and Market Access Issues
27. This section covers issues of:  underlying r oute authority; special codesharing rights; and
Third country codesharing.
Underlying Route Authority
28. Codesharing in international markets was initia lly considered as an extension of domestic
codesharing, a marketing instrument, and an enhancement of interlining. Only the actual operator of
the aircraft needed regulatory approval, and neither carrier required additional approval.
29. In the mid 1980s, concerns arose that codesharing in the large US domestic market would
enable foreign carriers to market services as their own without any equivalent benefits abroad.  This
led the authorities to introduce an authorization requ irement for foreign carriers.  Points served within
the United States had to be specified and included in the bilateral air services agreements.  Othercountries followed this approach, in some instances  requiring both codesharing partners to have the
underlying authority, even on sectors where a carrier was not carrying any local traffic.  Under an
alternative approach, the operating carriers must have the necessary traffic rights, especially on
"gateway " routes.
Special Codesharing Rights
30. Since 1988, the US Department of Transportation (DOT) requires specific authorization for
all codesharing operations.  This is also the case for  wet leasing, and blocked space arrangements.  A
"public interest" test involves an assessment of the impact of the proposed codeshared service on
competition, the overall balance of bilateral benefits, and the possibility of using the authorization as a
negotiating lever.  The DOT decision did not turn code sharing into a quasi-traffic right; in the absence
of a bilateral provision on codesharing, the Government is free to regulate and approve such
agreements.  This approach prompted some countries to secure codesharing rights by incorporating a
specific provision in their bilateral air services agreements with the United States and others.
31. The next step was to specify traffic rights for the sole purpose of codesharing.  Since 1989,
codeshare provisions have been included in severa l new bilateral air services agreements between the
US and some European and Asia-Pacific countries.  These were essentially based on principles of
comity and reciprocity.  Between 1991 and 1993, specific codeshare rights for the carriers of both
sides were included in agreements between the US and major traffic-generating European countries
(Germany, Netherlands and the United Kingdom). However, this was the outcome of specific
negotiations and did not represent a systematic pattern of treatment.  No major government has openly
declared under which circumstances codesharing may or may not be used.  In the case of the US,
codesharing has become an element to be examined on a case-by-case basis within the framework ofbilateral relationships.
32. A consequence of the ad hoc  approaches are significant differences in the treatment of
codesharing rights.  In the case of the US/Netherlands Open Skies Agreement, the KLM/Northwest
codeshare and broader commercial agreement granted antitrust immunity to the two airlines, enabling
them to operate as one and without restrictions.  In contrast, the agreements between the US and
                                                     
14 The following presentation draws largely from the ICAO study "Implications of airlines
codesharing" (Circular 269/AT110).S/C/W/163/Add.4
Page 12
Germany15 and Austria, respectively, apply quotas on codesharing flights both to and beyond the
concerned countries.
33. Some countries require that the codeshared service should be in a developing market segment
and the routings follow a reasonably straight line.
Third Country Codesharing
34. A complicating factor in international codesh aring is the involvement of a third country.
Outside regional blocks within which intra-regional traffic is liberalized (depending on the air services
agreements), it might be necessary for the codesharin g partners to obtain approval from three separate
governments (or even more in the case of multi- stop flights).  Concerned that codesharing could
undermine bilateral limitations on capacity control,16 some countries have begun treating it as a
specific traffic right, seeking bilateral concessions in exchange.
35. Some experts believe that the "quasi-traffic right" approach risks undermining the functioning
of the bilateral air transport system.  The application of frequency limitations to codeshare services
and potential connecting services could compromise interline practices.
36. ICAO notes that codesharing could be an area "particularly suited to a multilateral
agreement," after it has been demonstrated that all parties would benefit.  "The challenge would be to
ensure that codesharing, which presently exists in a narrow bilateral context for the purpose ofincreasing market access would not in fact be an impediment to any development of a liberalized
multilateral framework."  Furthermore, ICAO argues th at any such multilateral agreement should not
constrain any codesharing practices, except for safety matters, consumer protection and information,
and possibly, competition aspects.
(b) Competition Issues
37. Codesharing raises at least two competition issues:  one the one hand, it may enhance
competition by engendering additional or better services.  One the other hand, it may result in market
concentration.  The outcome will depend on the characteristics of the markets served.
38. The US DOT approves codesharing arrangements only subject to a "public interest" test,
whereby, the public benefits must outweigh the economic costs associated with a loss of competition.International comity and foreign policy considerations, such as reciprocity and the balance of benefits
in a bilateral aviation relationship, may also be considered.  With the current development of
codesharing agreements and alliances, there are incr eased expectations for the US authorities to grant
antitrust immunity on a wider basis.  When immunity has not been granted, US antitrust laws prohibit
further integration of the airlines' operations.  Delta Airlines and Swissair, for example, were allowed
to codeshare on the basis that they maintain sepa rate marketing, sales and pricing for the routes
covered by the agreement.  Both airlines were expl icitly obliged to compete with each other over the
codeshared routes.
39. The European Commission does not examine codeshare cases per se  but rather their impact
on competition, a matter within EU jurisdiction under the Treaty of Rome.
17  The objective of the
relevant competition provisions of the Treaty (Article 85 and 86) is to avoid the abuse of a dominant
                                                     
15 This was the situation in early 1996 before the signing of an Open Skies agreement was considered
by Germany and the US.
16 This may explain the opposition by Germany to codesh ared services by Northwest Airlines as part of
its agreement with KLM.
17 Nevertheless, in 1995, the European Commission initiated a study on four aspects of the codesharing
practice, namely, competition issues, CRS display, consumer aspects and the effect on regional airports.S/C/W/163/Add.4
Page 13
position.  The same is valid for situations in which codesharing between EU carriers would devolve
into pooling arrangements that existed prior to libe ralization.  The EU authorities also closely monitor
the display of codeshared services in computer reservation systems.
III. GLOBAL ALLIANCES
A. ECONOMIC ASPECTS
40. The advent of "global alliances" is one of the major commercial developments of the last five
to ten years.  The main features of the five current global alliances are summarized Table A5;
information on major "unaligned" airlines is provided in Table A6 (Annex).  Traffic figures of
alliances carriers, major unaligned carriers, and remaining carriers, are compared in Table 3 below.
TABLE 3
Traffic by Type of Carriers
Types of Carriers Passengers Transported (%) Revenue Passenger Kilometres (%)
Alliance (core and associates)
[Alliance (core)]59.1%
[49.1%]73%
[57.1%]
Major unaligned 14.6% 13.1%
Other carriers 26.3% 13.9%
Total 100% 100%
Source:  Airline Business , July 2000.
41. As shown above, approximately 50% of traffic is carried by the core members of the five
alliances.  This share increases to 60 and over 70%, if associated carriers are added.  This is not meantto imply, however, that the majority of the world's traffic is conducted within a liberal framework.
First, alliance members sometimes operate under restrictive bilateral agreements where designation,
capacity, tariffs, frequencies and routes are limited.
18  Second, since limitations on routes and
ownership continue, alliance members connect with each others' hubs creating global networks.  This
is sub-optimal from an economic perspective.
B. REGULATORY ASPECTS
42. The regulatory issues involved in alliances are to a large extent similar to those raised by
codesharing.  Airline alliances are often accused of generating anti-competitive effects.  Nevertheless,
a recent study by the University of Illinois found that alliance partners charge on-line fares that are
approximately 25% below those charged by non-allied carriers.19  The main source of this fare
reduction is the internalization of negative externalities arising from the uncoordinated choice of
interline "subfares" in absence of an alliance.  The same study also looks for evidence of anti-
competitive alliance effects in the gateway markets.  It is suggested that an alliance between two
previously competitive carriers would raise fares by about 5%, a margin that is statistically
insignificant.
43. From a regulatory point of view, there seems to be a paradox:  Competition authorities
dealing with alliances have usually focused on two alliance members at a time (e.g. BA and AA or
SAS and Lufthansa) and not the alliance in its entirety (e.g. Star alliance includes more than five
                                                     
18 Members often profit from bilateral restrictions and their impact on competition.  For instance, the
restrictive conditions of the UK-US Bermuda II agreement are a key element of the profitability of thetransatlantic routes for BA and to a lesser extent for American and United.  At the same time, these restrictiveconditions have prevented BA and American from obtaining anti-trust immunity from the US and subsequentlyforming a closer alliance.
19 Jan K. Brueckner and W. Tom Whalen, "The Price Effects of International Airline Alliances", The
Journal of Law & Economics, October, 2000.S/C/W/163/Add.4
Page 14
airlines).  Similarly, global alliances are not mentioned in bilateral agreements.  This may be
attributable inter alia , to the instability of membership, e.g. Austrian moving from Qualiflyer to Star,
Alitalia from Wings to Skyteam.
IV. OTHER FORMS OF CO-OPERATION
44. Ad hoc  groupings is a technical term, not a regulatory category, and refers to more than two
airlines teaming up for a specific purpose.  Such purpose may include co-operation in distribution
through CRS, participation in on-line travel agents, and on-line sales portals as well as co-operation in
maintenance, repair and overhaul.20  Another example is, the bid by eight British airlines for the
tendering of 46% of the UK air traffic control company, the National Air Traffic Services (NATS).21
Co-operation also extends to non-air transport businesses.
45. The airline sector, like many other industries, is developing on-line sales and purchasing
platforms.  Some platforms extend beyond airlines, but are limited to the intra-industry sales.22  I n
addition, at least two specific business to busines s (B2B) platforms are dedicated to the whole range
of procurement.  This includes catering, groundhandling, fuelling and refuelling.  Such platforms are
exclusive to airlines;  one is linked to an alliance, but does not comprise of all members, the other is
independent (Table 4).  The main characteristics of those two platforms are described by the chart
below:
TABLE 4
Main Business to Business (B2B) Buying Platforms
Grouping Aeroexchange.comCordiem.com
(merger of AirNewco and My
Aircraft)
Founding membersAir Canada, Air New Zealand, All
Nippon Airways, America West,Cathay Pacific, Fedex, JapanAirlines, Lufthansa, NorthWestAirlines, SAS, Singapore Airlines,
Air New Zealand, Austrian, and
KLM.British Airways, Air France,
American Airlines, ContinentalAirlines, Delta Airlines, UnitedAirlines,
Additional members 18 unspecified affiliate airlines Iberia, Swissair, UPS
Announcement July 2000 April 2000
Beginning of operations October 2000 February 2001
Purchasing power 15 billion $US/year 32 billion $US/year
Source:  ICAO, The World of Civil Aviation, 2000-2003 .
46. These B2B platforms are subject to the scrutiny of competition authorities without any air
transport specificity.  The first clearance given by  the European Community has been granted to an
aeronautical consortium, myaircraft.com.  Many other B2B cases are pending before the European
Commission, and in the US before the Department of Justice (DOJ).
                                                     
20 See document S/C/W/163, Table 3 and 7 and paragraphs 14, 24, and 82.
21 See document S/C/W/163/Add.2, paragraphs 87 and 88.
22 See document S/C/W/163, paragraph 24, page 7.S/C/W/163/Add.4
Page 15
ANNEX
Table A1
Transnational Investment, Joint Ventures, Wholly Owned Subsidiaries and Divestitures in
Commercial Air Transport 1993-1999
Investments Divestitures
Airlines partially or
totally owned by aforeign carrierForeign airlines
owning stakesNew joint ventures or
newly established fully
owned subsidiaries
abroadAirlines divestedAirlines
divesting/sharedivested
1993
US Air (USA)British Airways
(UK) 25%Euroglobal Aviation
(UK) and TajikistanGovernment inTajikistan Airlines
Aeroperu (Peru)Aeromexico
(Mexico) 49%Myanmar Airways and
Highsonic Enterprise Pte.Ltd. (Singapore) inMyanmar AirwaysInternational
Jet Airways (India)Gulf Air (Arab
multinational)Kuwait Airways(Kuwait)EBA (Italy) established
by Eurobelgian Airlines(Belgium)
Royal Air Cambodge
(Cambodia)Singapore
Airlines(Singapore 40%)
Hajvairi airlines(Pakistan)Aeroflot (Russian
Federation)
Tatra Air (Slovakia)Alpha Lines
(Switzerland)
1994
Business Air (UK)Lufthansa
(Germany) 38%Governments and
airlines of South Africa,Uganda and Tanzania inAlliance - African JointAir ServicesAir New Zealand
(New Zealand)Japan Airlines
(Japan) 5%
Lauda Air (Austria)Lufthansa
(Germany) adds13.3% toprevious 26.4%Five Caribbean
governments and BritishAirways (UK) in CaribExpressLanchile SAS 42%
Star line (Netherlands) El Al (Israel) 48%Companhia de Servicios
De Avaiaçao de Macau(China) Government ofMacau, TAP AirPortugal (Portugal) inAir MacauCSA (Czech
Republic)Air France
(France) 19.1%
Air Afrique
(Multinational:  African)DHL (USA)Myanmar Airways
(Myanmar) andMandalay Holdings(Singapore) in AirMandalayS/C/W/163/Add.4
Page 16
Investments Divestitures
Airlines partially or
totally owned by aforeign carrierForeign airlines
owning stakesNew joint ventures or
newly established fully
owned subsidiaries
abroadAirlines divestedAirlines
divesting/sharedivested
SAS (Denmark, Norway,Sweden)British Midland
(UK) adds 5.1%to previous 34.9%Maldives government
and Malaysia helicopterservices (Malaysia) inAir Maldives
Air Mauritius(Mauritius)British Airways
(UK) adds  0.5%
to previous 12.7%Latvian government and
SAS (Denmark, Norway,
Sweden) in Air Baltic
Air Mauritius
(Mauritius)Air India (India)
adds 3.5% toprevious 8.5%Regional Airlines
(France) and Gestair(Spain) in RegionalLineas Aereas
Northwest Airlines(USA)KLM
(Netherlands)adds 5% toprevious 20%
Aerolineas Argentinas(Argentina)Iberia (Spain)
adds 40% toprevious 45%
1995
Laos Aviation (Laos)Yunnan Airlines
(China) 60%Lufthansa Cargo
(Germany) 40% andHinduja Group (India)60% in Lufthansa CargoIndiaSabena (Belgium)Air France
(France)  25%
Ansett Australia AirlinesAir New Zealand
(New Zealand)25%Uganda Airlines and
(Uganda) and Al-Redwan Holding Co.(Saudi Arabia)
LIAT (multinationalCaribbean)BWIA (Trinidad
and Tobago) 29%South African Express
(South Africa) andZambian private interestin ZAMEX (Zambia)
Ecuatoriana (Ecuador)VASP (Brazil)
50.1%Air Malawi (Malawi)
and Malaysia Airlines
LAB (Bolivia)VASP (Brazil)
49%
Pluna (Uruguay)VARIG (Brazil)
12.75%
Sabena (Belgium)Swissair
(Switzerland)49.5%
Austrian Airlines(Austria)Swissair
(Switzerland)adds 15% toprevious 10%
Jet Airways (UK)KLM
(Netherlands)49%S/C/W/163/Add.4
Page 17
Investments Divestitures
Airlines partially or
totally owned by aforeign carrierForeign airlines
owning stakesNew joint ventures or
newly established fully
owned subsidiaries
abroadAirlines divestedAirlines
divesting/sharedivested
Air UK (UK)KLM
(Netherlands)adds 30.1% toprevious 14.9%
Europe Aero Service(France)Andalusair
(Spain)
Air Pacific (Fiji)Qantas (Australia)
adds 7.5 % toprevious 10%
European Airways (UK)Uzbekistan
Airways(Uzbekistan) 45%
Albania AirwaysMA Kharafi
group (Kuwait)
1996
Air Baltic (Latvia)SAS (Denmark,
Norway, Sweden)adds 13% toprevious 16%Continental
Airlines (US)Air Canada
(Canada) 9.6%
TAT (France)British Airways
adds 50.1% toprevious 49.9 %Aerolineas
Argentinas(Argentina)Iberia (Spain)
25%
Air Liberté (France)British Airways
67%
Tampa (Colombia)Martinair
(Netherlands)
Ukraine InternationalAirlines (Ukraine)Swissair and
Austrian Airlines13.87% throughcommon holdings
Eurobelgian Airlines
(Belgium)Virgin Atlantic
(90%)
Ansett Australia
(Australia)Air New Zealand
25 %
Air Philippines
(Philippines)Japan Air System
(10%)
Community Express
Airline (UK)Mesa Air Group
(US) 44%
Lina Congo (Congo)New England
International (USand Switzerland)67%
LAPSA (Paraguay) TAM (Brazil)
1997
Deutsche BA (Germany)British Airways
adds 16% toprevious 49%US Air (US)British Airways
25%S/C/W/163/Add.4
Page 18
Investments Divestitures
Airlines partially or
totally owned by aforeign carrierForeign airlines
owning stakesNew joint ventures or
newly established fully
owned subsidiaries
abroadAirlines divestedAirlines
divesting/sharedivested
Braathens SAFE(Norway)KLM
(Netherlands)30%Lauda Air
(Austria)Lufthansa
(Germany) 19.7%
Tampa (Colombia)Martinair
(Netherlands)
adds 39% to
previous 40%Ladeco (Chile)Iberia (Spain)
38%
Cargolux (Luxembourg)Swissair Cargo
25%Aereolineas
ArgentinasIberia 10%
Europe Continental
Airways (France)Crossair
(Switzerland)35%Malev (Hungary)Alitalia (Italy)
35%
Air Littoral (France) Lufthansa 13.2% Northwest (USA) KLM 19%
Aeroperu (Peru)Continental
Airlines (US)30%Jet Airways
(India)Gulf Air (Arab
multinational) andKuwait Airways40%
La Costena (Nicaragua)TACA (El
Salvador) 50%Air New Zealand
(New Zealand)Qantas (Australia)
19.4%
Rwanda Airlines(Rwanda)Alliance Air
(South Africa,Tanzania,Uganda) 49%
1998
Air Lanka (Sri Lanka)Emirates (UAE)
40%
Air Pacific (Fiji)Qantas adds
28.5% to previous17.5%
Astro Air International(Philippines)U Land Airlines
(Chinese Taipei)
40%
Air Philippines
(Philippines)U Land Airlines
30%
China Airlines (Chinese
Taipei)Singapore
Airlines 10%
Air One (Italy) Swissair 40%
Volare (Italy) Swissair 34%
Air Europe (Italy) Swissair 45%
Air Littoral (France) Swissair 44%
LTU (Charters -
Germany)Swissair 49%
Air Botnia (Finland)SAS (Denmark,
Norway, Sweden)100%S/C/W/163/Add.4
Page 19
Investments Divestitures
Airlines partially or
totally owned by aforeign carrierForeign airlines
owning stakesNew joint ventures or
newly established fully
owned subsidiaries
abroadAirlines divestedAirlines
divesting/sharedivested
Iberia (Spain)British Airways
(UK) andAmerican Airlines(US) 10% in acommon holding
TEA (charters -
Switzerland)EasyJet (UK)
44%
Malmö Aviation
(Sweden)Braathens ASA
(Norway) 25%
ACES (Colombia)American Airlines
(US) 40%
Aerolineas Argentinas
(Argentina)American Airlines
(US) 8.5%
Aeroperu (Peru)Delta Airlines
(US) 35%
COPA (Panama)Continental
Airlines (US)49%
Islena Airlines(Honduras)TACA (El
Salvador) 20%
Air Aruba (Aruba)ASERCA
(Venezuela)
1999
Virgin Atlantic (UK)Singapore
Airlines 49%
Air Mekong (Cargo -Vietnam)Singapore
Airlines 40%
South African Airways(South Africa)Swissair
20%
TAP Air Portugal
(Portugal)Swissair
34%
Portugalia (Portugal)Swissair
42%
AOM (France) Swissair
Sabena (Belgium)Swissair
adds 13% to
previous 49.5%
LOT Polish Airlines Swissair  37.6%
Air Dolomiti (Italy) Lufthansa 26%
Air Baltic (Latvia)SAS (Denmark,
Norway, Sweden)adds 5% toprevious 29%
Source:  ICAO, "The World of Civil Aviation" [series], 1993-.S/C/W/163/Add.4
Page 20TABLE A2
Foreign Ownership Limitations (1 October 2000)
Country Limit Notes
Argentina 49% In the case of Aerolineas Argentinas, 85% shareholding by Interinvest (Spain, US etc.) was allowed
Australia 49%There are no foreign ownership restrictions for purely domes tic operators.   For Australian international operators, foreign
shareholder participation is limited to 49% "unless this is contra ry to the national interest".  Qantas is regulated under the
provisions of the Qantas Sale Act of 1992.  Aggregate foreign ownership is limited to 49% with up to 35% allowed to beheld by foreign airlines, with a maximum of 25% for any single foreign airline.
Brazil 49.50% Since 1997 (previously 20%).
Canada 25% (voting) Exceptions may be granted by the competent regulatory authorities.
Chile No restriction but airline must have its principal place of business in Chile.
China 35% (25% voting) Since May 1994, intended to change to 49%.
Chinese Taipei 33% Domestic airlines, 50% apply to air-cargo since 1997
Czech Republic 49% At least 51% shares and voting are owned and controlled by nationals.
EU Member States (15) less than 50%Bound by EU Regulation 2407/92 (Community carrier) for investors from non-EU member States, but no restriction on
investments from EU member States.
Japan 33.33% Japanese carriers must be owned, controlled and managed by more than two thirds by Japanese nationals.
India 40% 40% in private domestic airlines, but investments from foreign airlines or airport investors are not allowed since Apri l 1997.
Indonesia Initially 49%, abolished by a Presidential decree in 2000.
Kenya 49%
Korea less than 50% Raised from 20% to 49.99% on 12 February 1998 provided that effective control remains with Korean nationals.
Malaysia 45% Applied to Malaysia Airlines, changed from 30% to 45% in July 2000.
Mexico 25% (voting) Since 1994 allows over 25% limit if investment through firms where foreign investment is less than 50% of vot ing stock.
New Zealand 49%Since 1996, 25% for single foreign airline, and 35% for total foreign airlines.  At least 50% ownership and effective board
control by Australian and/or New Zealand nationals (SAM airline).
Peru 70% Since 1997S/C/W/163/Add.4
Page 21Country Limit Notes
Philippines 40% Airlines are considered to be public utilities.  All executive and managing officers must be nationals.
Poland Air Law of 1962 (Article 65a) requires authorization by the Minister of Transport and Maritime Economy.
Russian Federation In 1997 the Russian Government introduced rules which would bar foreign majority ownership in joint venture a irlines.
Singapore There are no formal restrictions on ownership of Singapore companies..
Switzerland 40% After joining the European Common Aviation Area (ECAA), same rules as for EU member States.
Turkey 49% Turkish airlines must be incorporated in Turkey an d majority-owned, controlled and managed by Turkish nationals.
Thailand 49%Requirement of state ownership in Thai International reduced from 70% to 51%.  Angel Air's foreign equity limitation was
changed from 15% to 30%.
United States 49% (25% voting) 2/3's of the board of directors must be nationals and effective control must be national.  Could b e subject to control test.
Sources:  ICAO, IATA.S/C/W/163/Add.4
Page 22TABLE A3
National Regulations on Ownership and Control in a Selected Number of Countries
Country or
regional
groupsNational legislation on ow nership Emergency provisionsExistence of similar
legislation in other sectors
AustraliaThere are no foreign ownership restrictions fo r purely domestic operators.  For Australian
international operators, foreign shareholder participation is limited to 49% "unless this iscontrary to the national interest".  Aggregate foreign ownership is limited to 49% with up to35% allowed to be held by foreign airlines, with a maximum of 25% for any single foreignairline.  Qantas is covered by the Qantas Sale Act of 1992, containing more restrictiveprovisions but the Government is thinking of aligning the requirements for the carrier with
those of other Australian airlines.
BrazilArticle 181 of the Brazilian Aeronautical Code (BAC) stipulates that only 20% of the voting
shares of Brazilian airlines, international and domestic operators, can be held by foreigninterests, whether airlines or other companies. There is a proposal to increase the permissibleforeign holding limit - possibly even allowing foreigners to control a Brazilian airline.
The Civil Aviation Department (CAD) issues licenses to public air services providers.
Brazilian airlines must file bi-annually with the CAD details of all shareholders and of any
transfer of shares during the preceding six months.  Prior approval for any share transfer is
required:  1) where majority shareholding or company control would be affected;  2) sale ofvoting shares to foreigners is proposed;  and 3) when acquisition of more than 10% of sharesis involved.The Government can
requisition Brazilian registeredaircraft in times of emergency.Mineral resources and hydro-
energy may only be exploitedby Brazilians or companiesincorporated and with headoffices in the country.
CanadaThe maximum foreign ownership in a Canadian airline is currently limited to 25%, the
Government is considering increasing this to 49%.  The maximum single holding in Air
Canada by any investor is limited to 15% (until recently this was 10%);  this restriction does
not apply to other carriers.  Control of a Ca nadian carrier must reside with "national
interests".There are no legal provisions
for requisitioning aircraft in
times of emergency.There are some general foreign
investment laws.  The
Government has a policy of
limiting foreign acquisitionpossibilities for rail ortelecommunications.
ChileDecree Law 2564 of 1979 (also known as the "Open Skies Law") has abolished all
restrictions on the ownership of an airline registered in Chile.
There was some discussion in 1989, at the time of LanChile's privatization, whether some
traffic rights could be lost since SAS had a 35% stake in the company.  However, the law
was not changed.
The essential element is that Chile is the airline's principal place of doing business ("sede
efectiva").  Any carrier with headquarters in the country is treated by the  Civil Aviation
Authority as a Chilean airline.
ChinaNon-mainland Chinese holdings (including Hong Kong SAR, Macau SAR and Chinese
Taipei interests) in Chinese carriers are currently limited to 35% of the shares and 25% ofS/C/W/163/Add.4
Page 23Country or
regional
groupsNational legislation on ow nership Emergency provisionsExistence of similar
legislation in other sectors
the voting rights.  The President/Chairman must be from the mainland.  The Government is
considering raising the shareholding limit to 49%.
ColombiaThe Colombian Commerce Code requires that every company in the country must have 60%
of shares in Colombian ownership, and a maximum of 40% in foreign hands.  However, theCouncil of State (an administrative authority) has ruled that the Code is inoperative, sincelegislation is in place that permits the free entrance of foreign investment in every industryand commercial sector.
The opinion of Aerocivil (the Colombian Civil Aviation Authority) is that the bilateral
agreements signed by Colombia are above any national law, since they are international
treaties.  In practical terms, the requirement for 51 % of a local airline to be in Colombianhands is still in force.  Presently the major airlines meet these conditions (Avianca/Sam andAces).
EuropeanCommunity andEuropean
Economic AreaArticle 4 of Council Regulation 24071/92 states on licensing of air carriers:
1. No undertaking shall be granted an operating licence by a Member State unless:
(a) its principal place of business and, if an y, its registered office are located in that
Member State;  and, (b) its main occupation is air transport…
2. Without prejudice to agreements and conventions to which the Community is a
contracting party, the undertaking shall be owned and continue to be owneddirectly or through majority ownership by Member States and/or nationals ofMember States. It shall at all times, be effectively controlled by such States or such
national …
3. Any undertaking, which directly or indirectly participates in a controlling
shareholding in an air carrier, shall m eet the requirements of paragraph 2.
Hong Kong,
ChinaHong Kong registered airlines ar e required to be established in the territory and should be
their principal place of business.
IndiaIndian carriers are required to be substantially owned and effectively controlled by Indian
nationals, but the rules were recently modified. Regarding Air India, a strategic partner "willbe permitted to take a shareholding of up to 40%, including 26% of foreign equity, with an
airline holding permitted.  For Indian Airlines, up to 26% can be sold to a "strategic
partner".  No foreign airline will be permitted to hold equity and foreign holdings in thestrategic partner and are limited to 40% of its capital.  The rules are being changed forprivately-owned domestic carriers to permit 40% foreign equity or 100% "non-residentIndian" holdings, but no participation is permitted by foreign airlines, either directly orindirectly.The Government reserves the
right to use any civil aviationequipment or installations
(aircraft, airports, etc.) in case
of emergency.The rules relating to foreign
investment in other industrieshave been liberalized in recent
years, including "automatic
approval" in some cases.Automatic approval does notapply to sectors, notablybanking, atomic energy,petroleum, and coal and lignite.
Foreign investment is not
permitted in real estate,S/C/W/163/Add.4
Page 24Country or
regional
groupsNational legislation on ow nership Emergency provisionsExistence of similar
legislation in other sectors
agriculture, print media and
broadcasting, postal services,
and defence and strategicindustries.
IsraelForeign ownership of any Israeli airline is limited to 34% maximum.  The Chairman, 2/3's
of the Directors, and the principal place of business must be in Israel.  No distinction ismade between foreign airlines and foreign n on-airline companies.  If El Al was to be
privatized, certain decisions would require the consent of the golden share holder (aircraft
procurement, etc).  In addition, 2/3's of the board would still have to be Israelis and the
principal place of business to remain in Israel.The government is entitled to
requisition the aircraft of thecountry's airlines in case ofnational emergency.
JapanJapanese Air Law stipulates that an airline with more than 1/3 foreign ownership and/or
control cannot be registered as a Japanese carrier.There are no formal provisions
for the Government torequisition airlines, however, ithas the authority to requestassistance.
KenyaKenya  limits foreign ownership of airlines registered in the country to 49 %.  KLM currently
holds 26% of Kenya Airways and the Kenya Government 23%, the rest being in local hands.
MalaysiaThe ownership criteria are set by the Government through the Ministry of Finance.  Foreign
equity is restricted to 30% for all airlines, except for Malaysia Airlines where the limit is
45%.  However, the maximum holding by any single foreign entity is limited to 20% and theGovernment will retain a "golden share" in Malaysia Airlines.There is no law specifically
empowering the Governmentto take over aircraft in times ofemergency.  However, theGovernment can implement
any programme it sees fit.There is no legislation relating
to the control of specificnational industries, but thepolicy for the foreseeablefuture is that industries
considered to be "essential
services" will remain underMalaysian control.
MauritiusThe national carrier's Articles of Association limit foreign ownership to a maximum of 40%
of the issued share capital, with no distinction between foreign airline and non-airlineownership.  Regarding control, there is no cl ear legal requirement, but the standard clauses
in bilateral agreements would preclude foreign control.  The UN Economic Commission for
Africa insists that any airline for which it prov ides aircraft financing must be controlled by
the national Government.
New ZealandThere are no restrictions on foreign ownership of domestic carriers.  Local law limits foreign
holdings in a New Zealand international carrier to 49%, with a single airline not beingallowed to hold more than 25%, and total airline participation being limited to 35%.
Peru Law No.27.261 (Civil Aeronautical Law) states that the percentage of ownership inS/C/W/163/Add.4
Page 25Country or
regional
groupsNational legislation on ow nership Emergency provisionsExistence of similar
legislation in other sectors
Peruvian hands must be at least 51%.  However, at present there are some airlines in Peru,
which may need to adjust in order to comply with his requirement.
PhilippinesAirlines are considered to be public utilities.  Section 11 of the 1987 Constitution states:
"No franchise, certificate, or any other form of authorization for the operation of a publicutility shall be granted, except to citizens of the Philippines or to corporations orassociations organized under the laws of the Philippines, at least sixty per centum of whosecapital is owned by such citizens";  "Nor shall such franchise, certificate, or authorization beexclusive in character or for a longer period than fifty years."
"Neither shall any such franchise or right be granted except under the condition that it shall
be subject to amendment, alteration, or repeal by the Congress when the common good sorequires.";  "The State shall encourage equity participation in public utilities by the generalpublic.  The participation of foreign investor s in the governing body of any public utility
enterprise shall be limited to their proportionate share in its capital, and all the executive andmanaging officers of such corporation or association must be citizens of the Philippines."
SingaporeThere is no limit on foreign ownership of Singapore Airlines' shares.  The airline's Articles
of Association allow the Directors to set a maximum limit for foreign ownership of shares,
but there is currently none. No single shareholder may hold more than 5% without theapproval of the Directors.  There is a mechan ism for issuing "ASA shares" to the Ministry of
Finance in the event that the level of foreign holding of ordinary shares could threaten an airservices agreement.The Government has the right
to requisition civil aircraft in
certain circumstances.The only national industry
where Singaporean ownership
and control is stipulated is themedia.
Korea, Republic
ofForeign shareholdings in local airlines are limited to less than 50%, as is representation on
the board.
Chinese Taipei Foreign holdings in airlin es are limited to 1/3 of the shares.
USAUnder current US law, only "air carriers" may offer commercial air transportation within the
US.  An air carrier must, among other things, be owned by a "citizen of the United States".The criteria include:  1) an individual who is a citizen of the US; 2) a partnership with eachof the partners being an individual who is a citizen of the US;  3) a corporation or anassociation organized under the laws of the US, or a State, the District of Columbia, or aterritory or possession of the US.  At least 2/3's of the board of directors and other managing
officers must be US citizens, and at least 75% of the voting interest owned or controlled by
persons who are US citizens.
The maximum foreign voting interest permitted is 24.9%.  No distinction is made between
foreign airline and non-airline ownership of US carriers.  The Department of Transportationcan conduct a "fitness investigation" to dete rmine whether a US carrier continues to remain
a US citizen.In the US Civilian Reserve Air
Fleet (CRAF), Americancarriers voluntarily commit toproviding a pre-determinednumber of aircraft and crew tothe US Department of Defense
in times of emergency.There are no formal
requirements for certainindustries to be nationallyowned and controlled, althoughsome national securityprovisions prevent foreign
interests having access to
"sensitive" information.S/C/W/163/Add.4
Page 26Country or
regional
groupsNational legislation on ow nership Emergency provisionsExistence of similar
legislation in other sectors
In addition to the 24.9% cap on voting interests, the US applies a requirement that a non-US
citizen cannot actually control a US airline.  Even where a non-US citizen structures its
holdings to remain below the 25% voting interest level, the DOT may find that de facto
impermissible control can exist.  This occurred in the early days of the KLM-NorthwestAirlines relationship, when the DOT determined that KLM's majority ownership of theholding company, its nominee on the board of directors, and the financial advisory boardwere problematic - forcing the parties to restructure the deal.  Subsequent DOT decisions
have liberalized the control test to allow a total aggregate equity ownership by non-US
citizens of up to 49%.  The voting interest cap remains.
Source: IATA.S/C/W/163/Add.4
Page 27TABLE A4(a)
Airlines' Commercial Agreement s Concluded and Amended in 2000
Aer Lingus-American Airlines  (C, N) Alitalia-Japan Airlines (C, N) British Airways-Deutsche BA (C) Finnair-TAP Air Portugal (C, N)
Aeroflot-AeroSvit Airlines (C, N) Alitalia-KLM (T) British Airways-Finnair (C) Garuda-Malaysian Airlines (C)
Aeroflot-Air France (M) Alitalia-Korean Air (C) British Airways-GB Airways (F) Gulf Air-Philippine Airlines (C, N)
Aeroflot-Air India (M) Alitalia-Meridiana (C, N) British Airways-Iberia (C) Gulfstream-Northwest Airlines (C, N)
Aeroflot-Air Kazakhstan (C, N) Alitalia-Northwest (C*, N) British Airways-LanChile (C, N) Gulfstream-Trans World Airlines (C, N)
Aeroflot-Air Ukraine (C, N) Alitalia-Palestinan Airlines (C, N) British Airways-National Jets Italia (F, N) Hawaiian Airlines-Nort hwest Airlines (C)
Aeroflot-Armenian Airlines (C) Alitalia-Varig (C, N) British Airways-Qantas (C) Iberia-Air France (C, N)
Aeroflot-Georgian Airlines (C, N) All Nippon Airways-Asiana (C, N) British Airways-Zambian Air Services (F, N) Iberia-LanChile (C, N)
Aeroflot-Moldavian Airlines (C, N) All Nippon Airways-Austrian Airlines (C ) British Midland-United Airlines (C) Icelandair-SAS (C)
Aerolineas Argentinas-Alitalia (C, N) All Nippon Airways-Emirates (M) BWIA West Indies Airways-LIAT (M) Japan Air System-Japan Air lines (M)
Aerolineas Argentinas-American Airlines (C*) All Nippon Airways-Japan Air System (M) BWIA West Indies Airways-United Airlines (C,  N) Japan Air System-KLM (C)
Aerolineas Argentinas-TAM (C, N) All Nippon Airways-Thai Airways International (C )Canadian Airlines-Cathay Pacific (T) Japan Air System-Northwest Airlines (C)
AeroMexico-Air France (C) All Nippon Airways-Trans World Airlines (CG, N) Canadian Airlines -Japan Airlines (T) Japan Air System-Northwest Airlines (C)
AeroMexico-Delta Air Lines (C) All Nippon Airways-Virgin Atlantic Airways (C, N) Canadian Airlines-LanChile (T) Japan Airlines-Northwest Airlines (CG, N)
Air Afrique-Air France (C) Alpi Eagles-Olympic Airways (C, N) Canadian Airlines-Qantas (T) Japan Airlines-Singapore Airlines (CG)
Air ALM-City Bird (M, N) America West-Trans World Airlines (C, N) Cathay Pacific-Malaysian Airlines (C, N) Japan Airlines-Vietnam Airlines (C)
Air ALM-KLM (T) American Airlines-Canadian Airlines (T) Cathay Pacific-Qantas New Zealand (C, N) KLM-Lituanian Airlines (C, N)
Air ALM-Surinam Airways (T) American Airlines-Cathay Pacific (C) Cathay Pacific-Turkish Airlines (C, N) KLM-Malaysian Airlines (C)
Air ALM-Winair (M) American Airlines-China Eastern Airlines (C) China Airlines-Vietnam Airlines (C) KLM-Regional Airlines (T)
Air Canada-Air New Zealand (C) American Airlines-EVA Airways (C) China Eastern Airlines-Qantas (C, N) Kuwait Airways-Philippine Airlines (C*)
Air Canada-Canadian Airlines (C, N) American Airlines-Japan Airlines (C) China Southern Airlines-Japan Air System (C, N) Kuwait Ai rways-Trans World Airlines (C*)
Air Canada-Delta Air Lines (C) American Airlines-Ozark Airlines (M) China Southern Airlines-Vietnam Airlines (C, N) LAM-TAP Air Po rtugal (C, N)
Air Canada-Singapore Airlines  (C*) American Airlines-Qantas (C) Cirrus Airlines-Lufthansa (F, N) LTU-Sabena (C, N)
Air Caraibes-LIAT-Winair (C, N) American Airlines-Sabena-Swissair (C) City Bird-Lignes Aériennes Congolaises (T) Lufthansa-Deutsche Bahn (I, N)
Air China-Lufthansa (C, N) American Airlines-Swissair (C) City Bird-Sabena (T) Lufthansa-Philippine Airlines (CG*, N)
Air China-Northwest Airlines (C) American Airlines-TACA (C) CommutAir-US Airways (T) Lufthansa-SAS-Singapore Airlines (CG*)
Air Europa-Alitalia (C, N) American Airlines-TAP Air Portugal (C, N) Continental Airlines-CommutAir (F, N) Lufthansa-Thai Airways International (C)
Air Europa-Trans World Airlines (C, N) American Airlines-Thalys (I, N) Continental Airlines-Emirates (C, N) Lufthansa-Varig (CG)
Air France-Comair (C) American Airlines-Turkish Airlines (C*, N) Continental Airlines-Northwest Airlines (C) Malaysian Airlines-Middle East Airlines (C, N)
Air France-Delta Air Lines (C) American Airlines-US Airways (T) CSA Czech Airlines-Delta Air Lines (C, N) Malaysian Airlines-Northwest Airlines (C)S/C/W/163/Add.4
Page 28Air France-Japan Airlines (C) American Eagle-Northwest Airlines (C) Delta Air Lines-Trans States Airlines (T) Malaysian Airlines-P hilippine Airlines (C*)
Air France-Korean Air  (M) American Eagle-Trans World Airlines (C, N) Delta Air Lines-ACES (C, N) Malaysian Airlines-Swissair (C)
Air France-TACA (C, N) Angel Air-China Northern Airlines (M, N) Delta Air Lines-Aerolitoral (C, N) Mesa Airlines-Midwest Express ( C)
Air France-Thalys (I) Aserca-Avensa (T) Delta Air Lines-El Al (C, N) Mesa Airlines-US Airways (F)
Air India-Emirates (C, N) Asiana-Cargolux (CG, N) Delta Air Lines-Malev (T) Mexicana-United Airlines (C)
Air India-Malaysian Airlines (C) Asiana-China Southern Airlines (C) Delta Air Lines-Royal Air Maroc (C, N) National Airlines-Virgi n Atlantic Airways (M, N)
Air India-Virgin Atlantic Airways (C*, N) Asiana-Turkish Airlines (C, N) Delta Air Lines-Sabena-Swissair (T*) Nationwide Air-Virgin Atlantic Airways (F, N)
Air Jamaica-Cubana (C, N) Asiana-Uzbekistan Airways (C, N) Delta Air Lines-South African Airways (C) Nigeria Airways-South African  Airways (C, N)
Air Jamaica-Delta Air Lines (C) Atlantic Coast Airlines-United Airlines (F) Delta Air Lines-Tunisair (C, N) Qantas-Qantas New Zeal and (F, N)
Air Kazakhstan-Transaero (C, N) Atlantic Coast Jet-Delta Air Lines (F, N) Deutesche BA-Iberia (C*) Qantas-South African Airways (C )
Air Littoral-Finnair (C, N) Austrian Airlines-Delta Air Lines (T*) Ecuatoriana-LanChile (C, N) Roraima Airways-Rutaca Airlinres (C, N)
Air Malta-Trans World Airlines (C, N) Austrian Airlines-El Al (C , N) Egyptair-Middle East Airlines-Royal Air Maroc- Royal Air Maro c-Tunisair (C, N)
Air Moldova International-Transaero (C, N) Austrian Airlines-United Airlines (C, N) Royal Jordanian-Saudi Arabian Airlines (M, N) Sabena-Ukraine International Airlines (C)
Air Namibia-Deutsche BA (C, N) Aviaekspresskruiz-Chelyabinsk Airlines- Egyptair-Philippine Airlines (C*) SATA International-TAP Ai r Portugal (C)
Air Namibia-Uganda Airlines (T) Demodedovo Airlines-Kras Air (M, N) El Al-Swissair (C, N) SNCF-United Airlines (I)
Air New Zealand-Canadian Airlines (C, N, T) Avianca-Mexicana (C, N) El Al-Thai Airways International (C*, N) Swissair-Thai Airways  International (C, N)
Air One-Lufthansa (C, N) Azerbaijan Airlines-Transaero (C, N) Emirates-MNG Cargo Airlines (CG, N) Syrian Arab Airlines-Tarom Roman ian (C, N)
Air Tahiti Nui-American Airlines (M, N) Balkan Bulgarian-Uzbekistan Airlines (C) Emirates-Philippine Airlines (C*, N) TACA-TACA Pe ru (C)
Air Tahiti Nui-Qantas (C, N) Bangkok Airways-Thai Airways International (C, N) EVA Airways-Qantas (C, N) TAM-Transbrasil (T)
Air Zimbabwe-Comair BA (C, N) British Airways-Canadian Airlines (T) Finnair-Iberia (C) Trans States Airlines-Trans World Airlines (T)
Alaska Airlines-Qantas (C) British Airways-Cathay Pacific (C) Finnair-Qantas (C)
C    Denotes codesharing or operational agreements
CG Denotes cargo agreementsF    Denotes franchise agreements
I     Denotes intermodal agreements
M  Denotes agreements not involving codesharingN   Denotes new partnership formed in 2000
T    Denotes agreements were terminated in 2000
*     Denotes agreements were signed in previous years but implemented in 2000
Agreements shown in bold letters are either a part of global alliances, or alliances approved by the Australian Competition and  Consumer Commission, European Commission and/or United States Department
of Transportation.S/C/W/163/Add.4
Page 29TABLE A4(b)
Summary Tabulation of Airlines' Commercial Agreements Concluded and Amended in 2000
Concluded in 1999 but
implemented in 2000Newly concluded in 2000 Amended in 2000 Terminated in 2000
Codeshare agreements 12 75 55 Not Available
Cargo agreements242N / A
Franchise agreements073N / A
Intermodal agreements022N / A
Other agreements not
involving codesharing069N / A
Total14 94 71 22S/C/W/163/Add.4
Page 30TABLE A5
Main Characteristics of the Five Global Alliances
Alliances STAR One World Skyteam Qualiflyer Wings
Foundation dateMay 1997 February 1999 June 2000 March 1998 No date as such.
Regulatoryapproval of theKLM/NorthWest
cooperation in
January 1993
Founding membersAir Canada
United AirlinesLufthansaThai Airways
SASAmerican Airlines
British AirwaysCathay PacificQuantasAir France
AeromexicoDelta AirlinesKorean AirSwissair
Austrian (departed October1999 to join Star)AOM
Crossair
SabenaTurkish AirlinesKLM
North West
Additional membersAir New Zealand (March 99)
All Nippon Airways (October 99)Ansett Australia (March 99)Austrian Airlines (March 00)
British Midland (July 00)
Lauda Air (March 00)Mexicana (July 00)Singapore Airlines (April 00)Tyrolean (March 00)Varig (October 97)Finnair ( Sep. 99)
Iberia (Sep 99)Aer Lingus (June 00)LanChile (June 00)CSA (March 01), and for
the future Aeroflot (2003)Air Europe (Apr 99)
Air Littoral (May 00)LOT (Jan 00)Portugalia (Jan 00)
Volare (Jan 00)
Air Liberté (Sep 00)Alitalia
(withdrew)
Number of aircraft 2,711 1,975 1,283 496 824
Aircraft on order 391 360 330 135 108
Number of employees 296,122 251,965 137,030 58,298 82,735
Main hubsEurope: Copenhagen, Frankfurt,
London- Heathrow, Paris-CDG,
Stockholm, ViennaAmerica: Buenos Aires, Chicago,
Los Angeles, Montreal, Rio deJaneiro, Sao Paulo
Asia: Bangkok, Hong Kong,
Singapore, Tokyo
Oceania: Auckland, SydneyEurope: Dublin, London-
Heathrow, London-Gatwick,Helsinki, Madrid, ManchesterAmerica: Chicago, Dallas, New
York-JFK, Santiago de ChileAsia: Hong Kong
Oceania: SydneyEurope: Paris-CDG, Paris-
OrlyAmerica: Atlanta,
Cincinnati, Salt Lake City,Mexico CityAsia: SeoulEurope:  Brussels, Basel
Istanbul, Lisbon, MilanMalpensa, Nice, Paris -Orly,Warsaw, ZurichEurope:
Amsterdam
America:  Detroit,
Minneapolis
Types of cooperationinvolved:
Codeshare Extensive network of bilateral Codeshare (except so far between
S/C/W/163/Add.4
Page 31Alliances STAR One World Skyteam Qualiflyer Wings
codeshare agreements linking
individual members to each otherAmerican Airlines and British
Airways on the transatlanticmarket by lack of antitrustimmunity by the US DOT and ofindividual exemption by the
European Commission)
Common tariffs-"Round the world " fares for
global travellers-"Oneworld explorer" fares
Lounges Access to 500 common lounges Reciprocal access to airport
loungesReciprocal access to
airport lounges
Frequent flierprogramsReciprocal frequent flier
programsLinking of frequent flier programs Reciprocal frequent flier
programsYes
Check-inThrough check-in Smooth transfers of passengers
between carriersSmooth transfers of
passengers between
carriers, standardized
procedures
Equity links Various equity links Various equity links Various equity links Dissolved
Airport operations Streamlined airport operations Ground handling
baggage handling
Cargo cooperation Yes Yes Yes
Joint purchasing Yes Yes
Marketing Advertising and promotion Yes
Other Common call centers, IT,
sales, training, maintenance
Destinations served 76023559 230 329 400
Countries served 11224134 85 68 75
Revenue passengersKilometres (RPK)1999 (b illion)593.9 +254.7 for associated
carriers (AC)
25456.5 + 12 AC26264.6 + 53.1 AC27100.7 + 16.0 AC28177.4 +107.7AC
29
World share 30
RPK 199921.3% + 4.4% AC 16.4% + 0.4% AC 9.5% + 1.9% AC 3.6% + 0.6% AC 6.4% + 3.9% AC
                                                     
23 Not yet including Austrian, Canadian, Mexicana and Singapore.
24 Idem .
25 Airline Business International defines associated carriers as "those which have equity links or comprehensive marketing agreem ents with at least one major partner, but which are not
closely tied  with other alliance groupings".  In the case of  STAR:  US airways, Canadian, Virgin Atlantic and Spanair.
26 Aerolineas Argentinas via ties with  Iberia and American Airlines.
27 As of 1999 Korean Airlines, Aeroflot.
28 South African Airways.
29 Continental, Transavia, Braathens, Kenya Airways.
30 World shares based on ICAO statistics for total (domestic + national) scheduled traffic in 1999 i.e. 2,788 billion RPK.S/C/W/163/Add.4
Page 32Alliances STAR One World Skyteam Qualiflyer Wings
Passengers carried
(million)292.7 + 73.3 AC 199.3 + 4.5 AC 151.2 + 28.3 AC 52.3 + 5.2 AC 71.6 + 55.9 AC
World share31
passengers carried
199918.8% + 4.7% AC 12.8% + 0.3% AC 9.7% + 1.8% AC 3.4% + 0.3% AC 4.6% +3.6% AC
Group sales($bn) 3269.6 + 12.6AC 50.0 + 1.0 AC 26.1 + 4.0 AC 16.2 + 1.3 AC 16.8 + 9.9 AC
Sources:  http://airlinealliance.tripod.com and Airline Business , July 2000, for the last five rows of the table
.
                                                     
31 World shares based on ICAO statistics for total (domestic + national) scheduled traffic in 1999 i.e. 1,560 milion passengers c arried.
32 Group revenues including non-flying business.S/C/W/163/Add.4
Page 33
TABLE A6
Major Unaligned Groups
Major "unaligned
carriers"RPKs
billionWorld Share
%Passengers
millionWorld Share
%Group Sales
US$ billion
Japan Airlines 84.1 3.0 35.5 2.3 14.4
Southwest Airlines 58.7 2.1 57.5 3.7 4.7
TWA 41.9 1.5 25.8 1.7 3.3
Alitalia 36.9 1.3 24.2 1.5 5.2
Malaysia Airlines 35.0 1.3 16.0 1.0 2.1
America West 28.5 1.0 18.7 1.2 2.2
China Airlines 22.2 0.8 1.9 0.5 1.9
Saudi Arabian Airlines 19.6 0.7 12.3 0.8 -
Alaska Airlines 18.9 0.7 13.6 0.9 2.1
China Southern 18.7 0.7 15.0 1.0 1.6
Total 364.5 13.1 226.5 14.6 37.5
__________
Source:  Airline Business , July 2000.