RESTRICTED  WORLD TRADE  
ORGANIZATION  S/C/W/270 
18 July 2006 
 (06-3471) 
Council for Trade in Services  
  
 
SECOND REVIEW OF THE AIR TRANSPORT ANNEX 
 
DEVELOPMENTS IN THE AIR TRANSPORT SECTOR  
(PART ONE) 
 
Note by the Secretariat
1  
 
 
 
TABLE OF CONTENTS 
 
 
LIST OF TABLES, CHARTS, FIGURES AND APPENDIXES......................................................vi  
LIST OF ACRONYMS ............................................................................................................... .........ix  
 
INTRODUCTION................................................................................................................... ...............1  
I. AIRCRAFT REPAIR AND MA INTENANCE (MRO).........................................................4  
A. ECONOMIC DEVELOPMENTS .......................................................................................................4  
B. REGULATORY DEVELOPMENTS .................................................................................................13  
 1. Developments concerning the regulatio n of Maintenance Repair and Overhaul .........13  
 (a) General evolution .............................................................................................................. 13 
 (b) Maintenance Steering Group (MSG) rules........................................................................13  
 (c) WTO developments...........................................................................................................13  
 (d) European Communities .....................................................................................................14  
 2. Developments regarding  safety regulations.....................................................................14  
 (a) ICAO ........................................................................................................................... ......15  
 (b) European Civil Aviation Commission (ECAC) ................................................................16  
 (c) IATA ........................................................................................................................... ......18  
 (d) National developments ......................................................................................................18  
  (i) China...................................................................................................................... .18 
  (ii) European Communities...........................................................................................19  
  (iii) United States ...........................................................................................................2 0 
                                                      
1  This document has been prepared  under the Secretariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO.  S/C/W/270 
Page ii  
 
  II.
 AIRLINE TICKET DISTRIBUTION ..................................................................................20  
A. COMPUTER RESERVATION SYSTEMS SERVICES ........................................................................21  
 1. Business-to-Business Computer Reservation Systems (CRS) .........................................22  
 (a) Classical CRS.................................................................................................................. ..22 
  (i) Economic developments..........................................................................................22  
  • Concentration..........................................................................................................23  
  • Ownership evolutions..............................................................................................24  
  • Erosion of direct market share................................................................................24  
  • Pricing.....................................................................................................................25  
  • Diversification.........................................................................................................26  
  (ii) Regulatory Developments .......................................................................................27  
  • ICAO .......................................................................................................................27  
  • WTO ........................................................................................................................29  
  • European Civil Aviation Commission (ECAC) .......................................................29  
  • Bilateral developments............................................................................................29  
  • National developments............................................................................................30  
United St ates .................................................................................................................. ............. 30  
Canada ........................................................................................................................ ................ 33  
European Co mmunities ........................................................................................................... .... 34 
 (b) Global new entrants...........................................................................................................3 5 
  (i) Economic developments..........................................................................................35  
  (ii) Regulatory developments ........................................................................................36  
 2. Business to cons umer (B-to-C) CRS..................................................................................36  
 (a) Economic developments....................................................................................................37  
 (b) Regulatory developments ..................................................................................................40  
 3. Possible implications for cargo traffic...............................................................................41  
 4. Other service providers linked to CRS activities .............................................................42  
B. SELLING AND MARKETING OF AIR TRANSPORT SERVICES .........................................................42  
 1. Economic De velopments.....................................................................................................42  
 (a) General observations .........................................................................................................42  
(b) Airport counters and city offices .......................................................................................43  
 (c) In-house ca ll centres.......................................................................................................... 44 
 (d) Direct on line sales ............................................................................................................ .44 
 (e) Selling and marketing activities undertaken by alliances, codesharing or simple 
commercial pa rtnerships ........................................................................................................ ...45  S/C/W/270 
 Page iii 
 
 
   (f) General sales agents, third-party call centers and other outsourced sales and 
distribution functions ......................................................................................................... .......46  
  (i) General observations ..............................................................................................46  
  (ii) General sales agents ...............................................................................................47  
  (iii) Third-party call centres...........................................................................................47  
  (iv) Other outsourced sales and distribution functions .................................................48  
 (g) Aspects related to cargo traffic..........................................................................................48  
 2. Regulatory Developments ..................................................................................................48  
 (a) ICAO Developments .........................................................................................................48  
 (b) WTO developments...........................................................................................................50  
 (c) Bilateral regulatory aspects ...............................................................................................50  
 (d) National developments ......................................................................................................51  
C. TICKET EMISSION SERVICES ......................................................................................................52  
 1. Passenger aspects ........................................................................................................... .....52  
 (a) A major technological evolution:  electronic ticketing .....................................................52  
 (b) Self emission of tickets by airlines....................................................................................53  
 (c) Billing Settlement Plans (BSPs)........................................................................................53  
  (i) IATA Billing Settlement Plans.................................................................................54  
  (ii) Airline Reporting Corporation (ARC) – United States ...........................................54  
  (iii) Local providers .......................................................................................................55  
  (iv) Project of alternative BSPs .....................................................................................55  
 2. Cargo aspects............................................................................................................... ........55  
 (a) E-freight ...................................................................................................................... ......55  
 (b) Cargo Account Settlement Systems ..................................................................................56  
  (i) The IATA CASS .......................................................................................................56  
  (ii) Alternative cargo settlement systems ......................................................................56  
ANNEX TO CHAPTER II ........................................................................................................... ......57  
III. FRANCHISING .................................................................................................................... ..75 
IV. SERVICES AUXILIARY TO ALL MODES WHEN DELIVERED IN AN AIR 
TRANSPORT CONTEXT (FREIGHT FORWARDING AND WAREHOUSING)..................................................................................................................7 8
 
V. LEASING ........................................................................................................................ ........80  
A. ECONOMIC DEVELOPMENTS .....................................................................................................80  
B. REGULATORY DEVELOPMENTS .................................................................................................84  
 1. Multilateral developments..................................................................................................8 4 
 (a) ICAO ........................................................................................................................... ......84  
 (b) Cape Town Treaty .............................................................................................................85  S/C/W/270 
Page iv  
 
   2. Bilateral and national developments.................................................................................85
 
ANNEX TO CHAPTER V ............................................................................................................. .....87  
VI. CATERING AND REFUELLING (SEE BELOW VII)......................................................88  
VII. GROUND HANDLING..........................................................................................................88  
A. DEFINITION ............................................................................................................................... .88 
B. MAIN TYPES OF PROVIDERS .......................................................................................................89  
 1. Airlines.................................................................................................................... .............89  
 2. Airports.................................................................................................................... ............90  
 3. Independent ground handling companies.........................................................................90  
 (a) "Global" actors ................................................................................................................ ..91 
 (b) "Global" actors with a regional focus................................................................................92  
 (c) Major regional actors.........................................................................................................9 2 
C. SIZE AND TYPES OF MARKETS ...................................................................................................93  
D. BRIEF DESCRIPTION OF THE MAIN MA RKETS AND THEIR REGULATORY REGIMES ....................94  
 1. General features of ground handling liberalization.........................................................94  
 2. North America............................................................................................................... ......94  
 3. European Communities......................................................................................................95  
 4. Asia and Pacific............................................................................................................ .......98  
 5. Other regions............................................................................................................... ......100  
E. WTO  DEVELOPMENTS .............................................................................................................100  
F. BILATERAL DEVELOPMENTS ....................................................................................................100  
G. REGIONAL / PLURILATERAL DEVELOPMENTS ..........................................................................102  
H. REGULATORY DEVELOPMENTS NOT RELA TED TO MARKET ACCESS ......................................103  
 1. Safety...................................................................................................................... ............103  
 2. Security .................................................................................................................... ..........104 
ANNEX TO CHAP TER VII ........................................................................................................... ..105  
VIII.  AIRPORT MANAGEMENT SERVICES INCLUDING CHARGING 
SYSTEMS........................................................................................................................ ......106  
A. ECONOMIC AND REGULATORY DEVELOPMENTS ....................................................................106  
 1. Traffic ..................................................................................................................... ...........106  
 2. Employment .................................................................................................................. ....109  
 3. Overall financial situation................................................................................................1 10 
 4. Capital expenditure ......................................................................................................... .112 
 5. Ownership and management ...........................................................................................114  
 6. Security .................................................................................................................... ..........116  
 7. Competition policy.......................................................................................................... ..118   S/C/W/270 
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   8. Low cost terminals .......................................................................................................... ..120  
 9. Environment-related considerations...............................................................................121  
 10. Airport design ............................................................................................................. ....123  
B. CHARGING ............................................................................................................................... 123 
ANNEX TO CHAP TER VIII.......................................................................................................... ..127  
IX. AIR TRAFFIC CONTROL SERVICES I NCLUDING CHARGING SYSTEMS .........148  
A. CORPORATISATION .................................................................................................................148  
 1. The move towards commercialisation.............................................................................148  
 2. Performance of commercialised ANS providers ............................................................151  
 3. Safety...................................................................................................................... ............153  
 4. Charges ..................................................................................................................... .........153  
 5. Costs ....................................................................................................................... ............154  
 6. Delays ...................................................................................................................... ...........154  
B. INTERNATIONALISATION .........................................................................................................155  
 1. The Single European Sky initiative.................................................................................155  
 (a) Legislation.................................................................................................................... ...156  
 (b) Working relationships of the Single Euro pean Sky with interested parties ....................157  
  (i) Military..................................................................................................................157  
  (ii) Eurocontrol ...........................................................................................................157  
  (iii) Single European Sky ATM Research (SESAR)......................................................158  
  (iv) ICAO .....................................................................................................................158  
 (c) Recent developments.......................................................................................................158  
 2. Other integration/cooperation Initiatives .......................................................................158  
 (a) Plurilateral agreements ....................................................................................................159  
 (b) Bilateral cooperation .......................................................................................................159  
C. ICAO  CHARGING POLICY ........................................................................................................159  
D. TECHNOLOGICAL DEVELOPEMENTS ........................................................................................161  
E. DELAYS ............................................................................................................................... ....162  
F. ENVIRONMENTAL ASPECTS .....................................................................................................163  
G. NATIONAL  DEVELOPMENTS ....................................................................................................164  
 1. Europe...................................................................................................................... ..........164  
 2. Africa...................................................................................................................... ............164  
 3. Asia and Oceania ............................................................................................................ ..165  
 4. North America............................................................................................................... ....165  
 5. Latin America ............................................................................................................... ....166  
X. ANY OTHER SUPPORTING SERVICES ........................................................................166  S/C/W/270 
Page vi  
 
  LIST OF TABLES, CHARTS, FIGURES AND APPENDIXES 
  
INTRODUCTION 
Table 1:   Employment  and GDP contributions of the aviation sector - 2004 ................................... 3  
I. AIRCRAFT REPAIR AND MAINTENANCE 
Table 2:   Leading civil ma intenance operations - 2001 ..................................................................... 7 
Table 3:   Leading civil ma intenance operations - 2004 ..................................................................... 8 
Table 4:   Stations accredited by the US Federal Aviation Administration (FAA) and  
 by the European Aviation Safety Agency (EASA)............................................................. 9 
Table 5:   Existing and planned Cooperative Development of Operational Safety and  
 Continuing Airworthiness Programme (COSCAP) .......................................................... 15 Table 6:   Results of SAFA  inspections - 2000/2005........................................................................ 17 
Table 7:   Proportion of inspections  carried out on ECAC and non-ECAC 
 operators – 2000/2005....................................................................................................... 17  
 Chart 1:   MRO Work Outsourced................................................................................................. ..... 5 
Chart 2:   Accident rates by region - 2004 ..................................................................................... ... 14 
Chart 3:   Number of SAFA ramp inspections - 2000/2005 ............................................................. 16 
 II. AIRLINE TICKET DISTRIBUTION 
Table 8:   Main economic da ta on global CRS - 2003 ...................................................................... 23 
Table 9:   Annual bookings in Europe th rough alternative distribution channels............................. 38 
Table 10:  Market shares of US travel sites .................................................................................... .... 39 
Table 11:  Online sales and e-tickets in proportion of all ticke ts - 2002/2005 ................................... 44 
Table 12:  Restrictions on selling and marketing - 2006 .................................................................... 52 
 Chart 4:   Percentage of to tal seat sales by source 2001-2005.......................................................... 38 
Chart 5:   Online channels  used to sell seats - 2005.......................................................................... 4 3 
Chart 6:   Existing and planned sh ared functions within alliances ................................................... 45 
Chart 7:   Outsourced airline functions ........................................................................................ ..... 47 
 
Figure 1:   Mapping of the CRS booking process .............................................................................. 22 Figure 2:   Typical GNE structure .............................................................................................. ........ 35 
 ANNEX 
Table A1:  Booking channels.................................................................................................... .......... 57 
Table A2:  Clearing channels................................................................................................... ........... 58 
 Appendix A3:  List of bilateral agreements  posterior to 1 January 1995 containing  
 a clause dealing with computer reservation systems................................................. 59 Appendix A4:  List of bilateral agreements  posterior to 1 January 1995 containing  
 a clause dealing with  currency conversion/ remittance............................................ 60 
Appendix A5:  List of bilateral agreements  posterior to 1 January 1995 containing  
 a clause dealing with local and convertible currency................................................ 63 
Appendix A6:  List of bilateral agreements  posterior to 1 January 1995 containing  
 a clause dealing with offices and/or personnel.......................................................... 66 
 
Table A7:  Distribution clauses in  bilateral agreements signed by WTO-Members   since 1995 and related  MFN exemptions......................................................................... 69 Table A8:  Distribution clauses in bilate ral agreements entered into since 1995  
 by non-WTO Members ..................................................................................................... 72  S/C/W/270 
 Page vii 
 
 
  Chart A9:  Possible legal status of self-emission of tickets/load-shipping manifest  
 under the GATS ................................................................................................................ 73 
Chart A10:  Possible legal status of clearing services under the GATS ............................................. 74 
 
III. FRANCHISING  
Table 13:  Traffic and traffic ranking of  affiliate/franchised airlines - 2005 ...................................... 76 
 
IV SERVICES AUXILIARY TO ALL MODES OF TRANSPORT WHEN DELIVERED 
IN AN AIR TRANSPORT CONTEXT (FREIGHT FORWARDING AND STORAGE AND WAREHOUSING) 
Table 14:  Top 10 global logistics providers' business focus - 2004 .................................................. 79 
 
V. LEASING 
Table 15:  Leading lessors by fleet size and value pre and post 11 September 2001 ......................... 81 
Table 16:  Leading lessors by fleet size and value - 2005 .................................................................. 82 
 
ANNEX:  List of bilateral agreements posterior to 1 January 1995 containing a clause   dealing with leasing ......................................................................................................... 87 
 
VI. CATERING AND REFUELLING 
 
VII. GROUND HANDLING 
Table 17:  IATA (SGHA) classification of ground handling activities - 2003................................... 88 
Table 18:  Major players in ground handling - 2000 .......................................................................... 90 Table 19:  Major players in ground handling - 2004/2005 ................................................................. 91 Table 20:  Global players in ground handling - 2005 ......................................................................... 91 
Table 21:  Global ground handling actor s with regional focus - 2005................................................ 92 
Table 22:  Major ground handling regional actors - 2005 .................................................................. 93 Table 23:  Market shares of airlines, airports and independent ground   handling providers ............................................................................................................ 93 
Table 24:  US Airport with restric tions on number of ground handlers ............................................. 95 
Table 25:  Restricted airports in the EU  with over 10 million passengers per annum........................ 98 
Table 26:  Asia Pacific Airports with  over 10 million passengers per annum.................................... 99 
Table 27:  Other main airports with  over 10 million passengers per annum .................................... 100 
 Chart 8:  Freedoms and possible restrict ions under Council Directive 96/07/EC .............................. 96 
 
ANNEX:  List of bilateral agreements posterior to 1 January 1995 containing a clause   
 dealing with ground handling ......................................................................................... 105  
VIII. AIRPORT MANAGEMENT SERVICES INCLUDING CHARGING SYSTEMS 
Table 28:  Evolution of air traffi c, selected indicators - 2000/2004 ................................................. 107  
Table 29:  Passenger traffic by region, 2000 and 2005..................................................................... 107 
Table 30:  Top 25 airports ranke d by total passengers - 2005 .......................................................... 108 
Table 31:  Top 25 airports ranked by  international passengers - 2005 ............................................. 109 
Table 32:  Employment on airport sites - 2000 and 2004................................................................. 110 Table 33:  Revenue by source - 2000 and 2004................................................................................ 111  
Table 34:  Financial performance of the largest airport groups........................................................ 111 
Table 35:  Capital e xpenditure by region....................................................................................... ... 112 
Table 36:  Domestic and International passenger traffic growth rate by region - 2004/2020........... 112 
Table 37:  Overview of cross-border activities in the airport services sector ................................... 116 
Table 38:  Main Feature of a low-cost airport .................................................................................. 120 
Table 39:  Profitability gap between ai rport and airline groups - 2000/2004 ................................... 125 S/C/W/270 
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  Table 40:  Airport and air navigation charges as a share of airlines' operating costs, 1989-2004 ... 126 
 ANNEX  Table A1:  Commercialization and cross-border activities in the airport sector............................... 127 Table A2:  Origins and destinations of air port investments and management contracts ................. 145 
Table A3:  destinations and origins of airpor ts investments and management contracts.................. 146 
 
X. AIR TRAFFIC CONTROL SERVICES INCLUDING CHARGING SYSTEMS 
Table 41:  Corporatised Air Navigation Services Providers............................................................. 149 
Table 42:  Corporati sation cases since 2001.................................................................................... . 151 
Table 43:  Overview of corporatised ANSPs.................................................................................... 15 2 
 Chart 9:  Air Traffic Control Induced Delays in Minutes per Flight ................................................ 155 Chart 10:  Government responses regardi ng the conformity of charging systems  
 with ICAO principles...................................................................................................... 161 
Chart 11:  Primary Departure Delay causes for 2005 ....................................................................... 163 
 Figure 3:  History of NAV Canada rates ch anges versus Consumer Price Index............................. 154 
 
  
  S/C/W/270 
 Page ix 
 
 
   
LIST OF ACRONYMS 
 
 
AA  
ACAC Arab Civil Aviation Commission  
ACI Aiport Council International 
ANSP Air Navigation Service Provider 
ATAG Air Transport Action Group 
ATC Air Traffic Control 
ATCONF/5 ICAO's Fifth Air Worldwide Air Transport Conference 
ATM Air Traffic Managament  
ATO (US) Air Traffic Organization   
AVSEC ICAO's Aviation Security Programme 
BB 
BSP Billing Settlement Plan 
B-to-B Business to Business  
B-to-C  Business to Consumer 
CC 
CAMO Continuing Airworthiness Maintenance Organization  
CANSO Civil Air Navigation Services Organization  
CASS Cargo Accounto Settlement System 
CAST Commercial Aviation Safety Team 
CCS Cargo Community System 
CFR Code of Federal Regulations 
CNS/ATM Communication, Navigation, Surveillance / Air Traffic Management 
COSCAP Cooperative Development of Operationa l Safety and Continuing Airworthiness 
Programme 
CRS Computer Reservation System  
CUSS Common user self-service (kiosks) 
DD 
DCA Direct Connect Access 
DDA Doha Development Agenda  
DOT US Department of Transport  
EE 
EASA European Aviation Safety Agency 
ECAC European Council Avation Commission  
ERP Enterprise Resource Planning (software) 
FF 
FAA US Federal Aviation Administration  
FAB Functional Air Block  
FL Flight Level 
GG 
GDS Global Distribution System  
GNE Global New Entrants 
HH 
II 
IATA International Air Transport Organization  
ICAO International Civil Aviation Organization   
IOSA IATA Operational Safety Audit S/C/W/270 
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  JJ 
JAA Joint Aviation Authorities  
JAR-145 Joint Aviation (Authorities) Regulati on N° 145 (approval of Maintenance 
facilities) 
KK 
LL 
LACAC Latin American Civil Aviation Commission  
LCC Low Cost Carrier 
MM 
MALIAT Multilateral Agreement on the Libera lization of International Air Transport 
MRO Maintenance Repair and Overhaul  
MSG Maintenance Steering Group 
NN 
OO  
 OEM Original Equipment Manufacturer 
PP  
 PMA Part Manufacturing Approval  
QQ  
RR  
SS  
SAFA Safety Assessment of Foreign Airlines 
SARPs Standards and Recommended Practices  
SARS Severe Acute Respiratory Syndrome 
TT  
 TASA ICAO's Template Air Services Agreement 
UU  
USAP ICAO's Universal Security Audit Programme  
USOAP ICAO's - Universal Safety Operational Audit Programme 
VV  
WW  
 WASA World Air Services Agreement (ICAO database) 
YY  
ZZ  
 
  S/C/W/270 
 Page 1 
 
 
  INTRODUCTION 
 
1. This Note has been produced at the request  of the Council for Trade in Services in the 
framework of the second review of the Air Transpor t Annex.  Paragraph 5 of  this Annex stipulates 
that "the Council for Trade in Services shall revi ew periodically, and at least every five years, 
developments in the air transport sector and the opera tion of this Annex with a view to considering the 
possible further application of the Agreement in this sector". 
2. This Note addresses the economic and regulator y developments in the sector.  Since the 
Annex provides no definition of the sector, the Note tr ies to encompass all aspects of air transport and 
air transport-related services following the model of  the former Secretariat document S/C/W/59 on the 
same subject examined during the Information Exchange Program in 1998, and of document 
S/C/W/163 and its addenda examined during the first re view of the air transport Annex in 2001-2003. 
3. In order to ensure continuity, the descripti on of the developments will start when the 
documentation of the first review stopped.  Hence th is may be as far back as 1998 for statistical data 
and 1999 for regulatory data in spite of the fact  that the first review ended in late 2003.  
4. As the review is placed under the aegis of th e Regular Session of the Council for Trade in 
Services and is procedurally distinct from the D oha Development Agenda ne gotiations under the aegis 
of the Special Session of the Council for Trade in Services, this document will abstain from reporting 
on references to air transport services during the meetings of the Special Session of the Council2, and 
from analysing offers made in the framework of the DDA negotiations. 
5. The documentation prepared for the first review contained the description of structural 
elements that may be still valid for the second review, such as, fo r instance, the definition of the 
freedoms of the air.  In order to avoid repetition, th e Secretariat has reissued in a single booklet, with 
a unified numbering, the seven documents of the S/C/W/163 series, thereafter referred to as "the 
compilation".  Systematic references to this compilation will be made throughout the text. 
6. In order to assist Members in the analysis of the sector, possible issues for discussion are 
italicised and appear in frames.  
7. Due to the comparatively shor ter timeframe, the documentati on for the second review does 
not contain as many elements on non-trade polic ies and does not go into as much detail on issues 
covered by the documentation for the first review, su ch as competition, environment, safety, security, 
consumer protection.  It has, to a large extent, been re-focused on market access issues.  However, 
should Members consider it necessary to have co mplementary information on those issues, the 
Secretariat would be pleased to produce more specific papers on those subjects. 
8. Like for the first review, the Secretariat has u sed many sources:  International Civil Aviation 
Organization (ICAO), regional and na tional civil aviation regulators, academics, professionals, press 
and web.  However, the data collection, which had to  be done in a shorter timeframe than for the first 
review, has also proven more difficult.  For instan ce, ICAO has ceased the annual publication of the 
"World of Civil Aviation", a major source of already compiled and fully reliable information, notably 
on the regulatory developmen ts, and has thereby ceased the collection of a large series of useful data.  
Similarly, the International Air Transport Asso ciation (IATA) has ceased the publication of its 
"Regulatory Affairs Review", another useful and re liable source.  Consequently, the Secretariat has 
had to compensate this lack of data by press in formation, by web researches based on this press 
information, by contacts within the industry on a syst ematic basis, and by ad hoc contacts with civil 
                                                      
2  For an overview of these developments until October 2005, see document JOB(05)/300. S/C/W/270 
Page 2  
 
  aviation regulators, which have proven sometimes difficult as this could not be done with each 
regulator and on every subject.   
9. These difficulties explain the patchy character of  country-specific information (particularly 
for developing countries) and of information on speci fic sectors or issues, such as leasing or ancillary 
services.  This lack of information is felt both on the economic side and on the regulatory side, but is 
particularly compelling on the regulatory side where apart from OECD countries virtually no 
information on national regulato ry regimes is available. 
 
Possible issue for discussion  
 
 In view of these data collection difficulties, Me mbers may wish to consider for this review or 
for the future, a more systematic data collection pr ocess based on a questi onnaire addressed to each 
Member, as was done with great success fo r telecommunications and maritime transport.3 
 
 
10. The structure adopted for this Note is a sectoral  one, sub-divided when necessary by themes.  
In each of the subsectors or themes, economic de velopments are addressed first, followed by 
regulatory developments.  In orde r to facilitate the reading and for ease of cross-reference, Annexes 
have been added most Chapters.  
11. The following statistical elements4 may give an idea of the economic importance of the sector 
under review.   
12. The sector of aviation transports cl ose to 2 billion passengers annually.5  Forty per cent of 
international tourists now travel by air, and 40 pe r cent of intercontinental exports of goods by value 
and 25 per cent of all companies’ sales are dependent on air transport. 
13. The airline and airport industry directly employs 4.3 million people (2.1 million for airlines 
and handling agents;  330,000 for airport operators and 1.9 million jobs onsite at airports).  It creates 
5.8 million indirect jobs through the purchase of goods and services from companies in the supply chain, 2.7 million induced jobs through spending  by industry employees, and 15.5 million direct 
(6.7 million) and indirect (8.3 million) jobs thr ough its impact on tourism, which makes a total of 
28.3 million direct and indirect jobs.  The direct contribution of the sector to world GDP is valued at 
US$330 billion in 2004 and its total direct and indirect  contribution to US$880 billion, that is to say 
2.4 per cent of world GDP. 
14. The geographical distribution of these jobs and of these shares in world GDP is summed up in 
Table 1. 
 
                                                     
 
3  For a comparison, see for maritime transpor t documents S/NGMTS/W/2 and S/NGMTS/W/2/Add.1 
to 37, and for telecommunications S/NGBT/W/3 and S/NGBT/W/3/Add.1 to 39. 
4  This section draws on the brochure "The economic and social benefits of air transport" published by 
the Air Transport Action Group (ATAG), a business coa lition formed by the Airports Council International 
(ACI), International Air Transport Association (I ATA), Boeing, Airbus, Rolls Royce and CFM, which 
summarizes the results of a study done by Oxford Economic Forecasting on the economic impact of air 
transport. 
5  Defined as the collection of the following services:  airlines (passenger carriers, cargo carriers, airline 
ticketing, general aviation), airport and services (civil ai rports, general aviation airports, handling and catering, 
freight services, aircraft maintenance, fuelling-on-site and retail) and air navigation services providers, i.e. a 
scope similar to that of the documentation review produced for the two GATS Air Transport Reviews, with the 
possible exception of retail.  S/C/W/270 
 Page 3 
 
 
  Table 1 
Employment and GDP contributions of the aviation sector - 2004 
 
  Employment GDP (US$ million) 
 REGIONS Direct Total  
(including direct, 
indirect and induced) Direct Total 
(including direct, 
indirect and induced) 
Africa  
Airport operators 21,459 56,331 816 2,141 
Other on-site airport jobs 17,849 46,852 49 129 
Airlines 82,562 216,725 2,851 7,485 
Asia-Pacific 
Airport operators 102,000 267,750 8,477 22,252 
Other on-site airport jobs 443,179 1,163,345 5,052 13,262 
Airlines 498,613 1,308,859 32,440 85,155 
Europe  
Airport operators 120,000 315,000 17,312 45,444 
Other on-site airport jobs 377,119 989,937 12,656 33,223 
Airlines 709,272 1,861,839 44,716 117,380 
Latin America and the Caribbean 
Airport operators 19,380 50,873 1,060 2,782 
Other on-site airport jobs 72,207 189,545 487 1,278 
Airlines 84,250 221,156 5,237 13,748 
Middle East   
Airport operators 28,521 74,867 1,084 2,846 
Other on-site airport jobs 8,395 22,037 93 244 
Airlines 127,764 335,379 3,967 10,413 
North America  
Airport operators 42,840 107,100 10,231 25,577 
Other on-site airport jobs 1,024,099 2,560,248 73,022 182,556 
Airlines 544,778 1,361,944 55,672 139,180 
 
Source :  "The economic and social benefits of air transport", ATAG. 
 
 
15. In spite of its cyclical nature and of external  shocks (post 9/11, SARS, oil shock), the demand 
for air transport has grown steadily over the years.  Passenger numbers have grown by 45 per cent over the last decade (i.e. since th e entry into force of the WTO ag reements), and have more than 
doubled since the mid-1980s.  Freight traffic has incr eased even more rapidly, by over 80 per cent (on 
a tonne-kilometres basis) over the last decade and three-fold since the mid-1980s.  Improvement in 
airline efficiency and increased competition have reduced world airfares by around 40 per cent in real 
terms since the mid-1970s.  It is now largely recogn ized that liberalization, be it internal, regional, 
bilateral, or plurilateral, has contributed signifi cantly to the acceleration of this movement towards 
greater efficiency. S/C/W/270 
Page 4  
 
  I. AIRCRAFT REPAIR AND MAINTENANCE (MRO) 
A. E
CONOMIC DEVELOPMENTS  
16. The maintenance, repair, and overhaul (MRO) sect or has suffered greatly like the rest of the 
air transport industry post 9/11.  After having reach ed a peak of US$42.2 billio n in 2001, its turnover 
fell to US$33.3 billion in 2002 (US$34.2 billion in 2003) and started to rise again only in 2004 by 
2.5 per cent to US$37 billion.  Current estimates show that in 2006, the MRO market reached 
US$39 billion (BACK/SAI and Aerostrategy consultanc ies).  It should be pointed out that this MRO 
market estimate includes only Western built aircraft.  
17. The split of the 2006 MRO turnover figure (US $37 billion) between the various sub-sectors 
of maintenance is the following:  engines 34 per cent, line maintenance (excluded from the scope of 
the GATS) 23 per cent, component overhaul 21, per cent heavy maintenance 14 per cent, 
modifications 8 per cent.  Forecasts in a joint report by the consulting firms BACK/SAI predict very different cumulated growth rates for these segments in  the next ten years:  46.5 per cent for engines, 
30 per cent for line maintenance, 29 per cent for components and 25 per cent for heavy maintenance 
and modification.  For 2014, the predicted total is US$60 billion. 
18. In terms of aircrafts three sub-sectors are expected to provide the bulk of the growth.  The 
first one is narrow body aircrafts which are typically  used by low-cost carriers.  The second one is 
regional jets whose number has increased consider ably in the aftermath of 9/11 and the ensuing 
reductions of capacity.  The third one is the conversion of planes into cargo freighters as the cargo market was much less severely aff ected by the cycle than the passe nger one and is still predicted to 
grow steadily.  However, overcapacity remains at this stage in certain sub-sectors such as heavy 
airframe maintenance.  
19. The Air Transport Annex of the GATS does not limit the sector of aircraft repair maintenance 
to the overhaul of commercial  aircraft only.  The MRO market is not limited to the service of 
commercial aircrafts, but covers also general aviati on and military aircraft.  For these sectors, data are 
however more scarce.  According to the consultant Ae ro Strategy, their inclusion would bring the total 
market to US$100 billion.  According to another estimate, the MRO market for the 39,000 Western-
built military aircraft is US$52 billion.  This value is largely due to the older average age of the 
military aircraft (23 years as opposed to 12 years), a nd to the level of sophistication of maintenance 
required.  Sixty per cent of this market is located in North America and in Europe.  The emergence in 
this sector of contracts bundling leasing and maintena nce may also be noted (e.g. the future aircraft 
tanker market is the US).  In most instances, th e outsourced military MRO is done in the form of 
government procurement and escapes therefore the present disciplines of the GATS.   
20. A number of management tools have become available to the MRO industry and has helped 
in cost reduction and high quality standards;  ne w management processes such as "Six Sigma" and 
"Lean Production" have been widely employed and th eir results can be already seen in elimination of 
non-value added activities, lower turn ti mes and higher productivity gains.  
21. The market share of individual regions, in te rms of customers, is the following:  North 
America 43 per cent, Asia 18 per cent, Europe 25 pe r cent, Latin America 4.8 per cent, rest of the 
world 9.2 per cent.  Forecasts, however, predict hi ghly differentiated evolutions by 2014:  North 
America 34 per cent, Asia 22 per cent, Europe 27 per cent, Latin America 6 per cent, and rest of the world 10.2 per cent.  
22. From the customer point of view, maintenan ce costs represent on average 10 per cent of the 
operating costs.  However, this figure is subject to considerable variation depending on the age of the 
fleet, its structure (the composite fleet of a trad itional carrier has higher maintenance costs than the  S/C/W/270 
 Page 5 
 
 
  single-type fleet of a low-cost carrier) and the main tenance cycle.  Further, when the maintenance is 
undertaken in-house, costs and, in particular, ove rhead costs are not always fully accounted.  High 
labour costs in the EU and US have been the main  factor for outsourcing labour intensive work (e.g. 
heavy airframe maintenance) to other parts of th e world (China/East Asia, Eastern Europe, Latin 
America).  There is however a limit to that evolution.  Airlines always try to keep a minimum of 
know-how in-house as a sort of "insurance policy"  against emergency crises and as a leverage 
element.   
23. Chart 1 indicates the evolution of the proportion of outsourced maintenance in total 
maintenance turnover between 1990 and 2000, and forecasts for 2010. 
Chart 1 
MRO Work Outsourced* 
 
   
 
     
 
    
 
    
* MRO = Maintenance, Repair & Overhaul. 
Source :  BACK/SAI 2004. 
 
 
24. If the estimate for 2010 was met, this would imply a complete reversal of the situation as 
compared to the early 1990s, when only one-third of  maintenance was outsourced.  This increases the 
scope of the maintenance activities covered by th e GATS since it diminishes the share of in-house 
maintenance which is not covered.  The main explanation for this e volution is the difference of cost 
between in-house maintenance and outsourced main tenance which is valued by the consultant 
BACK/SAI at between 28 and 38 per cent. 
25. There are significant regional variation.  In the United States, traditional carriers tended to 
rely strongly on in-house maintena nce facilities because the size of th e fleets was sufficient to produce 
economies of scale and the sector was strongly unioni zed (save for certain exceptions like Delta).  
Low-cost carriers such as Southwest and car go/express companies such as Fed-Ex, whose 
maintenance was completely outsourced were an ex ception.  In the aftermath of 9/11, all "legacy" 
carriers, save one, American Airlines, have starte d to outsource their maintenance on a large scale.  
Delta is the last of the "legacy" carriers to have made this choice in Ma rch 2005, and expects up to 
US$240 million in savings;  however, Delta has kept so far the engine and component maintenance 
capabilities largely in-house and h as entered – successfully for the last 5 years – in the third 33% 50%65%
0%10%20%30%40%50%60%70%
1990 2000 2010S/C/W/270 
Page 6  
 
  party/"insourcing" business.  Air Canada has chosen a different strategy, closer to that of its European 
counterparts, spinning off and investing in its  maintenance arm (ACTS Air Canada Technical 
Services) so as to attract third-party work.  Only recently (2005), American has announced to 
"insource" MRO work, as a complement to its captive activities.  
26. In Europe, outsourcing was traditionally stronger because many small airlines did not have 
fleets that could justify economically fully-fledged in-house facilities.  Subsidiaries of large airlines 
such as Lufthansa Technik, Air Fr ance Industries and SR Technics have been looking for third-party 
work since the 1990s.  Recent years have confirmed th is trend.  Alitalia and KLM have spun off their 
maintenance arms.  SR Technics and SABENA Technics, already trained to market disciplines by third-party work, have become independent provider s with the demise of their parent airlines.   
27. In Asia, in-house maintenance is still a common feat ure, but the advent of low-cost carriers in 
particular is expected by consulting firms to translate into an increased share of outsourced 
maintenance.  In addition, some Asian carriers have  also spun off their maintenance arms, such as Air 
India with its newly created Air India Engineerin g Services subsidiary which has started to look 
actively for third-party work.  Boeing and GE ar e actively pursuing plans to set up maintenance 
facilities in India, where the potential for growth is  described by some observers as "explosive".  In 
Oceania, both Qantas and Air New Zealand have undertaken to reduce drastically their in-house 
maintenance facilities.  
28. In most instances, airlines subsidiaries rema in cost centres using third-party work to 
compensate part of the cost of maintaining their pare nt airlines. Lufthansa Technik, which has a  fully 
profitable third-party business, is an exception in this respect.  
29. Three types of maintenance providers are sharing the market:   
• original equipment manufacturers (OEM) - mainly  engine manufactures, marginally aircraft 
manufacturers but also sub-system manufacturers such as specialists of avionics or of landing gears;  
• airline subsidiaries working on a third-party basis or for their parent ("captive") airline;  and 
• independent providers. 
30. There are no global figures describing the r espective market share of these types of 
maintenance providers, and Airline Business, fo r instance, has stopped collecting data which 
identifies third-party work within  the activity of airline subsidiaries.  The only sector where a 
description of such market share is available, is  the engine sector:  OEM 46 per cent, airlines as 
captive 30 per cent, independents 14 per cent, airlin es subsidiaries as third-parties 10 per cent.  
Tables 2 and 3, which list the 30 leading MRO provi ders in 2001 and 2004, give an idea of the 
different importance of the respective types of actors.  S/C/W/270 
 Page 7 
 
 
  Table 2 
Leading civil maintenance operations – 2001 
 
Revenues Rank Company Country Type $ million 
1 GE Engine Services US Manufacturer 5,500 
2 Lufthansa Technik Germany Airline 3,710 
3 Air France Industries France Airline 1,596 
4 Honeywell US Manufacturer 1,500 
5 Rolls-Royce UK Manufacturer 1,500 
6 Pratt & Whitney US Manufacturer 1,200 
7 British Airways Engineering UK  Airline 1,016 
8 Japan Airlines Japan Airline 980 
9 Air Canada Technical Canada Airline 825 
10 Alitalia Engineering & Maint. Italy Airline 802 
11 SR Technics Switzerland Independent 797 
12 Delta TechOps US Airline 785 
13 KLM Engineering & Maint. Netherland Airline 773 
14 Sequa Chromalloy US Independent 752 
15 SAS Technical Sweden Airline 607 
16 All Nippon Airways Japan Airline 600 
17 United Services US Airline 594 
18 AMR Corp US Airline 582 
19 MTU Maintenance Germany Manufacturer 564 
20 Qantas Engineering & Maint. Australia Airline 500 
21 Iberia Engineering & Maint. Spain Airline 467 
22 SIA Engineering Singapore Independent/Airline 466 
23 ANZ Engineering Services New Zealand Airline 425 
24 Snecma Services France Manufacturer 410 
25 Bedek Aviation Group Israel Independent 388 
26 Standard Aero Canada Independent 380 
27 FLS Aerospace Denmark/UK Independent 366 
28 Northwest Airlines US Airline 355 
29 EADS Sogerma France Manufacturer 325 
30 Korean Air Korea Airline 325 
 
Source :  Airline Business. S/C/W/270 
Page 8  
 
  Table 3 
Leading civil maintenance operations - 2004 
 
Revenues Rank Company Country Type $ million 
1 Lufthansa Technik Germany Airline 5,590 
2 GE Engine Services US Manufacturer 5,000 
3 Air France/KLM Eng France/Netherlands Airline 3,404 
4 Rolls-Royce UK Manufacturer 3,296 
5 Honeywell US Manufacturer 2,100 
6 AMR Corp US Airline 1,894 
7 United Services US Airline 1,600 
8 Pratt & Whitney US Manufacturer 1,600 
9 British Airways Eng UK Airline 1,519 
10 Japan Airlines Japan Airline 1,512 
11 Delta TechOps US Airline 1,386 
12 SR Technics Holdings Switzerland Independent 924 
13 Continental Airlines US Airline 780 
14 Northwest Airlines US Airline 737 
15 MTU Maintenance Germany Manufacturer 716 
16 ST Aero Singapore Independent 680 
17 US Airways US Airline 650 
18 SAS Technical Sweden Airline 615 
19 Thai International Thailand Airline 614 
20 Goodrich US Independent 570 
21 Air Canada Technical Canada Airline 567 
22 All Nippon Airways Japan Airline 536 
23 Snecma Services France Manufacturer 512 
24 Iberia Eng & Maint. Spain Airline 509 
25 EADS Sogerma France Manufacturer 500 
26 SIA Engineering Singapore Airline 493 
27 Korean Air Korea Airline 437 
28 ANZ Engineering New Zealand Airline 367 
29 TIMCO Aviation Services US Independent 323 
30 HAECO Hong Kong Independent/airline 276 
 
Source :  Airline Business.  
 
 31. For airline providers, Table 3 does not dis tinguish activities undertaken in-house as captive 
from third-party activities.  It must therefore be re ad with caution.  Overall, the comparison between 
Table 2 and Table 3 shows a large stability in the companies present and the rankings.  Some 
providers (Bedek Aviation Group, Sequa Chromalloy, Alitalia) have disappeared from this list, others 
been taken over (KLM Engineering by Air France Industries, FLS by SR Technics, AOM industries and Sabena Technics by TAT industries).  Table 3 does not yet fully reflect the on-going evolution in 
the United States nor the likely emergence of new pr oviders in the Middle East (e.g. the US$15 billion 
investment and 30,0000 staff project of Dubai Aerospace Enterprise which will comprise a 
maintenance arm).  It confirms also the relativel y weak share of the inde pendents as compared to 
airline subsidiaries and manufacturers, showing that  increased outsourcing benefited also the latter 
two types of providers.  One of the explanations is the increasingly heavy investments required by 
maintenance facilities (e.g. hangars and tools for Airb us new mega-aircraft the A380) that only large 
and established companies can afford.  S/C/W/270 
 Page 9 
 
 
  32. The providers listed in Table 3 are mostly located in Europe, North America and to a lesser 
extent in Asia.  This gives only a partial idea of the geographical dispersion of the industry, which is 
much wider for two reasons.  First, these provider s have facilities present in many WTO Members, be 
they wholly owned or joint-ventures.  For inst ance, Pratt and Whitney has facilities in Singapore, 
Ireland, Norway, Japan, New Zealand, China and Chin ese Taipei in addition to the US;  Lufthansa 
Technik is present in Malta, China, and the Ph ilippines in addition to  Germany;  Singapore 
Technologies Aerospace operates in the US, Pana ma, Sweden, United Kingdom and China, in 
addition to Singapore.  There are also instances of South-South investments, such as the joint venture 
of the Brazilian manufacturer, Embraer with AVIC, in Harbin, China.  
33. The second reason is that, in addition to the s ubsidiaries and joint-ventures of the major 
providers, significant providers exist in WTO Member s such as China, Brazil, India, United Arab 
Emirates, Morocco, Tunisia and El Salvador, to na me a few.  A better idea of the geographical 
dispersion of the industry might be given by Tabl e 4, which lists the number of "foreign repair 
stations" certified by the US Federal Aviation Ad ministration (FAA) and by the European Safety 
Aviation Agency (EASA). 
Table 4 
Stations accredited by the US Federa l Aviation Administration (FAA) and 
by the European Aviation  Safety Agency (EASA) 
 
Country or territory  Number of foreign stations 
accredited by the US FAA  Number of foreign stations 
accredited by the EASA  
Algeria  0 1 
Antigua & Barbuda  1 0 
Argentina  7 1 
Australia  15 14 
Austria  1 N/A 
Bahrain  1 3 
Belgium  11 N/A 
Bolivia  1 0 
Brazil  15 7 
Brunei    1 
Canada  06 0 
Channel Islands  0 3 
Chile  4 1 
China  23 13 
Colombia  4 1 
Costa Rica  2 1 
Croatia  0 1 
Cuba  0 1 
Czech Rep.  2 N/A 
Denmark  2 N/A 
Dominican Rep.  0 1 
Dubai  0 1 
Egypt  1 1 
El Salvador  1 1 
Ethiopia  1 0 
Falkland Islands  0 1 
Fiji 1 0 
Finland  1 N/A 
                                                      
6  US and Canada have a technical arrangement th rough which they automatically accept each other's 
repair stations, hence there is no need for the FAA to approve any repair stations in Canada. S/C/W/270 
Page 10  
 
  Country or territory  Number of foreign stations 
accredited by the US FAA  Number of foreign stations 
accredited by the EASA  
France  106 N/A 
Georgia  0 1 
Germany  50 N/A 
Greece  1 N/A 
Guatemala  2 0 
Guernsey  0 1 
Hong Kong  8 1 
Hungary  2 N/A 
India  2 1 
Indonesia  2 1 
Iran  0 2 
Ireland  12 N/A 
Israel  13 5 
Italy  17 N/A 
Japan  22 9 
Jordan  2 3 
Kazakhstan  0 2 
Kenya  1 0 
Korea, Rep. of  7 1 
Kuwait  0 1 
Lebanon  0 2 
Luxembourg  1 N/A 
Madagascar  0 1 
Malaysia  9 4 
Malta  1 N/A 
Mauritius  0 1 
Mexico  19 4 
Mongolia  0 1 
Morocco  2 2 
Myanmar  0 2 
Netherlands  20 N/A 
New Zealand  5 4 
Nigeria  0 1 
Norway  6 N/A 
Oman  0 1 
Pakistan  0 1 
Panama  1 0 
Peru  3 1 
Philippines  8 2 
Portugal  2 N/A 
PR China  0 1 
Qatar  1 1 
Romania  2 4 
Russia  1 6 
Saudi Arabia  5 1 
Serbia & Montenegro  0 2 
Singapore  48 38 
South Africa  4 6 
Spain  5 N/A 
Sweden  8 N/A 
Switzerland  8 75 
Taiwan  6 3  S/C/W/270 
 Page 11 
 
 
  Country or territory  Number of foreign stations 
accredited by the US FAA  Number of foreign stations 
accredited by the EASA  
Thailand  6 3 
Trinidad & Tobago  1 0 
Turkey  2 2 
Ukraine  1 2 
United Arab Emirates  4 2 
United Kingdom  164 N/A 
United States  N/A 43007 
Uzbekistan, Rep. of  0 1 
Venezuela  3 0 
 
Note:  The names of the countries/territories have been  drawn directly from the respective websites of FAA and 
EASA, they have no legal implications for WTO purposes.   N/A – Not applicable. 
Source
:  FAA & EASA websites. 
 
34. Joint ventures remain a classical feature of the sector, either because of locally-imposed 
restrictions on commercial presence, or because part ners feel the need to  associate themselves for 
projects dedicated to the maintenance of certain types of aircraft, engine, or equipment.  Additionally, 
JVs usually provide the "captive" customer base need ed to establish the foundation of the partnership.  
For instance, Lufthansa Technik has just prolonged for 25 years its joint venture with Air China in 
AMECO, which was initially signed for 15 years in 1989.  Similarly, SR Technics has just established 
a joint venture in Tianjin with Okay Airways, the first privately owned Chinese airline.  Easy Tech, 
the joint venture between easyJet and SR Technics, is  another example of a commercial joint venture, 
as are "Spairliner", a joint venture between Luftha nsa Technik and Air France Industries designed to 
offer the full spectrum of support services for A380 ope rators in the world, and N3, a joint venture 
between Rolls-Royce Engines and Lufthansa Technik.  
35. The massive use of IT systems, and in particular of ERP (Enterprises Resources Planning) 
softwares, and the increasingly shorter deadlines im posed by customers have forced MRO providers 
to reduce turnaround times.  For instance, the aver age duration of a "D" check performed by the 
independent US provider Goodrich h as fallen from 40-45 days to 30 days.  Providers have also been 
obliged to adapt their working hours to the higher  aircraft utilization rate of low-cost carriers 
(typically over 8 hours a day for a low-cost carrier, versus five and half hours for a legacy carrier).  
Hence, for instance, most line ma intenance done by SR Technics for easyJet is carried out at night.   
36. The main rationale for the exclusion of li ne maintenance from the scope of the GATS8 seems 
to have been the fact that line maintenance was done in-house.  However, the emergence of third-
party line maintenance, in particular for low-cost  carriers, has rendered this rationale partially 
obsolete.  Another evolution blurring the border be tween line maintenance and off-line maintenance is 
the breakdown of heavy checks into smaller packaged service visits so  that work can be accomplished 
overnight.  
 
Possible issue for discussion  
 
 Members may want to re-examine the exclusion of line maintenance from the coverage of the 
GATS in view of the emergence of a third-party line maintenance market.   
                                                      
7  See compilation page 8, paragraph 32:  "... the FAA has the authority to grant JAR-145 approval 
facilities located in the United States".  
8  Paragraph 6(a) of the Annex defines "aircraft re pair and maintenance services mean such activities 
when undertaken on an aircraft or a part thereof while  it is withdrawn from service and do not include so-called 
line maintenance". S/C/W/270 
Page 12  
 
  37. Another new tendency is the appearance of "tot al services packages" and of "one stop shop", 
i.e. of long term contractual relationships where a provider guarantees the availability of a plane or of 
a complete system rather than an ad-hoc MRO servi ce.  The landmark contract in this regard is the 
US$1 billion, ten year, 120 aircrafts deal be tween easyJet and SR Technics through which 
SR Technics has undertaken to ensure full support of the totality of the A319 fleet of easyJet:  this 
will involve the creation of a joint-venture and of facilities at Luton airport ("Easy Tech").  The value 
of the contract is said to be 25-30 per cent belo w usual prices due to quicker turn-around times and 
better engineering planning.  Multi-year contacts ar e not, however, limited to the low-cost carrier 
sector.  Recent examples include Cargolux and Virgin, with KLM Engineering and United with AMECO (an Air China - Lufthansa Technik joint-venture). 
38. In the engine sector, quick turn-around and total service packages have translated into a new 
form of contract known as "power by hours" whereby the carriers pay a fixed price per flight/hour for the maintenance of systems and components.  Th e engine maintenance market, although the largest 
MRO market sector, is becoming less competitive as e ngine manufacturers have the advantage to lock 
their customers in long term "total care" and "power  by the hour" agreements at the "point of sale", 
leaving almost no room for third-parties to compete in the market.  
39. Another emerging trend refects the objective of customers to pass on costs of spare parts 
inventory (valued by some estimations at US$44 bill ion) to their MRO suppliers.  Data gathered by 
electronic network on predictive maintenance help to reduce the cost of the inventory, as only parts 
that are likely be used are stocked.  This explai ns the emergence of companies specialized in third-
party inventory management of spare parts, su ch as the US company UFC Aerospace or wider 
initiatives such as the Boeing programme called "I ntegrated Materiel Management" (IMM), through 
which Boeing and a selected number of its suppliers maintain an airline inventory of maintenance 
supplies, including spare parts and provide them only as needed. 
40. The cost of an inventory is particularly high in the engine sector, where the value of spare 
parts and material represents up to between 60 and 70 per cent of the cost of MRO.  This is due to the 
fact that engine manufacturers sell their engines at what they consider to be discount prices and then 
recoup the costs of their R & D spendings during the life-cycle of the engines through the sale of 
spare parts and associated maintenance services.  Th is explains also the increasing attractiveness of 
Part Manufacturing Approval (PMA) parts, i.e. pa rts manufactured by third-parties according to 
specifications approved by the regulatory authority a nd, in particular, by the US Federal Aviation 
Administration.  The savings vary from 20 per cent to 60 per cent of the price, depending on the part 
concerned.  This market has ceased to be marg inal and now attracts the interest of major MRO 
players.  For instance, Lufthansa Technik took in 2002 a 20 per cent participation in the US firm HEICO, which is one of the main producers of PMA.  Recently (March 2006), Pratt and Whitney 
announced its entrance into the PMA market by pr oviding parts for a competitor's popular engine 
model.  Additionally, a number of companies worl dwide have been focusing on the reparabitlity of 
certain expensive aircraft parts that will provide  further savings opportunities.  Both PMAs and 
Repairs have been the topic of discussion amongst re gulators, operators, service providers, lessors and 
OEMs and their economic impact may strengthen competition in the marketplace.  
41. Aircraft manufacturers are creating networks of  providers in order to reduce maintenance 
costs.  The MRO providers participating in these netw orks will be allowed to share the data gathered 
electronically on the totality of the fleet, so as to improve experience and develop predictive 
maintenance.  This is sometimes seen by provider s as an attempt by manufacturers to intrude on the 
MRO market, an allegation denied by manufacturers.  Airbus, for instance, has created such a network 
in 2005 with 11 partners, including most of the MRO major players, except, so  far, Lufthansa Tecknik 
and Air France Industries.  Similarly, Boeing  has been discussing extensively its GoldCare 
programme for total support of the B787 through a network of dedicated providers worldwide.  
However, both the Airbus venture and the Boeing con cept remain to be tested in the marketplace.   S/C/W/270 
 Page 13 
 
 
  42. Rapid advances in information technology have enabled widesp read use of e-maintenance 
tools.  Airbus, for instance, has created Air n@v, a technical data consultation tools for airlines and 
maintenance providers.  Similarly, Boeing has developed My Boeing Fleet, a secure web portal 
dedicated to airplay owners, opera tors, MRO providers and other thir d-parties interested.  Another 
Boeing system, "Airplane Health Management", monitors  the health of an aircraft in-flight and relays 
that information in real time to the ground.  Rolls Royce Predictive Maintenance System (RRPM), 
developed for the Trent 900 that will power the A 380, is based on similar principles.  Another IT 
application is the system of "computer visibility"  developed by the independent provider Goodrich, 
whereby a customer can follow, step-by-step, the progress of the maintenance work on its aircraft. 
B. REGULATORY DEVELOPMENTS  
43. The Secretariat has been made aware of few developments concerning the regulation of 
maintenance.  Developments have been substantial in the wider area of safety, which is directly 
related to maintenance, or lack thereof. 
1. Developments concerning the regulation of Maintenance Repair and Overhaul 
(a) General evolution 
44. According to operators (IATA) there has been considerable progress over the last five years 
in harmonizing maintenance standards worldwide.  The US FAA has rewritten its quality monitoring 
regulations and rating structures, and harmonized th em with similar EASA regulations.  Conversely, 
EASA has revised its own policies to include accepta nce of the FAA's approval of minor changes to 
OEM (Original Equipment Manufacturer) manuals.  The regulations governing major repairs of 
aircraft parts are currently under review and shoul d be harmonized soon.  Canada is currently re-
writing its own requirements.  Latin American, Japanese and Korean regulators are reported to be 
open to harmonization and awaiting the outcome of  the US-EU discussions.  China's regulator has 
recognized the need to revise its own regulations , and India has recognized both the US and EC 
regulations.   
(b) Maintenance Steering Group (MSG)9 rules 
45. The MSG-3 rules, which are described in the mate rial for first review (compilation, page 3), 
have not changed during the period under review, t hough there are plans to do so in the future.  
Paradoxically, these plans may translate, in certain in stances, to an easing of maintenance obligations:  
based on the experience accumulated, futures guide lines under MSG-3 may, in certain instances, 
allow airlines to develop less restrictive mainte nance plans provided that these are accepted by the 
regulatory authorities. 
(c) WTO developments 
46. Since August 2000, the date of the documen tation for the first review dealing with 
maintenance and repair of aircrafts, 12 countries or territories have acceded to the WTO.  Of these, 11 
have undertaken commitments on maintenance10 and no MFN exemptions have been listed. 
47. Other Members' MFN exemptions covering maintenance were discussed during the second 
review of MFN exemptions held on 30 November 2004 and 23 February 2005. 
                                                      
9  The Maintenance Steering Group consists of experts from National Transportation Departments, 
manufacturers and airline operators.  It  created the standards for the maintena nce cycle (e.g. A, B, C, D checks). 
10  Albania, Armenia, Cambodia, China, Chinese Taipei, Croatia, FYROM, Moldova, Nepal, Oman, 
and Saudi Arabia. S/C/W/270 
Page 14  
 
  (d) European Communities 
48. The institutional aspects of the establishment of the EASA in 2002 and its bilateral 
relationship with the US FAA are dealt with below in the section on the general rules on safety.  With 
regard to maintenance, the EC adopted Regulati on 2042/2003 (20 November 2003) "on the continuing 
airworthiness of aircraft and aeronautical produc ts, parts and appliances, and on the approval of 
organizations and personnel involved in these tasks".
11   
49. The Joint Aviation Authorities lists of foreign- approved/accepted organisations remain valid, 
and have been republished and incorporated into EASA rules.12  The approval certificates of 
maintenance organizations will become permanent, these organizations will be subjected to a two- 
years’ audit cycle to ensure their permanent compliance with the rules. 
2. Developments regarding safety regulations 
50. The two main challenges faced by regulators are, on the one hand, the growth of traffic, 
which affects the number of accidents and casualties ev en if the rate of accidents remains stable, and 
on the other hand, capacity expansion in certain re gions of the world.  For instance, Africa accounts 
for one-third of all accidents, while its represents only 5 per cent of all traffic.  Similarly, the rate of 
accidents is five times higher in Latin America than in North America. 
51. Chart 2 gives an indication of the accident rates among regions. 
Chart 2 
Accident rates by region - 2004 
 
 
 
    
 
     
 
    
 
Source :  IATA.  
                                                      
11  Of particular interest for maintenance are the fo llowing sections of the Regulation:  Annex I, Part M 
"foreign CAMO (Continuing Airworthiness Management Organizations) and foreign subpart F (maintenance 
organisations) approvals"; Annex II, Part 145 "maintenance organisation approvals";  Annex III, Part 66 "certifying staff";  and Annex IV, Part 147 "maintenance training organisation approvals".  The complete text of 
these Annexes can be found at http ://www.easa.eu.int/home/maint_en.html 
12 The Joint Aviation Authorities is the pan-European body through which EC and non-EC Member 
States harmonized, before the institution of the EASA, their safety and certification policies.  For further 
elements on the transition to EASA, see below paragraph 66. By million flights
North AmericaEu r o peAsia/PacificSouth AmericaAfricaMiddle  
Ea s t /C e n t r a l  
Asia5.32 1.96
10.8
4
2.88
1.37
0.60
0.3710 year 
avera ge
5.20
1.31 
0.94 
0.52 
0.29  S/C/W/270 
 Page 15 
 
 
  52. One should not overrate the role of maintence deficiencies in these accidents.  Statistics 
indicate that 70 per cent of accidents are caused by human errors and less than 20 per cent by technical deficiencies which, in turn, may sometime s be linked to structural design problems rather 
than poor maintenance.
13 
(a) ICAO 
53. The ICAO Universal Safety Operational Audit Program (USOAP) described in the material 
for the first review (compilation, page 7) has beco me compulsory for all existing and new Members of 
ICAO in 2004.  In March 2006, ICAO held a Conference of Directors of Civil Aviation on safety issues, which decided to post on the public website  the results of the USOAP by March 2008.  A new 
post-audit procedure now allows ICAO to communicate a State's deficiencies if it fails to correct the 
problems revealed by the audit.  The first round of  131 audits proved disappoint ing in some regions of 
the world (governments have failed to implement cr itical elements of oversight capability in 32.6 per 
cent of cases) even after follow-up audits (17.6 pe r cent of the cases).  Hence, the same conference 
decided that a second round of audits  would be launched.  The scope of these audits, which was until 
now limited to personnel licensing and the operation a nd airworthiness of aircraft, will be extended to 
cover airports, air traffic control and othe r components of the air transport system. 
54. Capacity building is a key-challenge as some developing countries have found it difficult to 
hire and maintain professional staff who have knowledge of the many aeronautical disciplines 
required by a fully-fledged safety oversight office.   ICAO is promoting the development of regional 
approaches and the pooling of resources so that gr oups of nations can reach an acceptable level of 
expertise.  In these groups, individual nations dele gate safety oversight functions, but retain the 
oversight authority.  In recent years, 13 re gional safety groups (Coope rative Development of 
Operational Safety and Continuing Airworthin ess Programme, COSCAP) have been organized by 
various nations or are about to be established, as illustrated by Table 5.  The  World Bank finances 
some of the initiatives undertaken under the aegis of COSCAP. 
Table 5 
Existing and planned Cooperative Development of Operational Safety  
and Continuing Airworthiness Programme (COSCAP) 
 
Implementation 
stage  Name and members 
Fully 
Functional ACSA  (Aeronautical Safety for Central Amer ica Agency):  Belize, Costa Rica, El 
Salvador, Honduras, Gu atemala, Nicaragua. 
COSCAP-SEA  (Southern Asia):  Cambodia;  Hong Kong, China;  Macao;  Indonesia;  
Lao;  Malaysia;  Philippines;  Singapore;  Thailand;  Vietnam. 
COSCAP-NA  (North Asia):  China, North Korea, Mongolia, epublic of  Korea. 
Established Regional Safety Oversight System under Latin America's Latin American Civil 
Aviation Commission (LACAC) organization. 
RASOC  (Regional Aviation Safety Oversight System for the Caribbean):  Barbados, 
Guyana, Haiti, Jamaica, Suriname and Trinidad and Tobago. COSCAP-BAG (Bengal Accord Group):  Cape Verde, Gambia, Ghana, Guinea, Liberia, 
Nigeria, Sierra Leone. 
 
COSCAP-UEMOA (West African Economic and Monetary Union):  Benin, Burkina 
Faso, Cote d'Ivoire, Guinea Bissau, Mali, Mauritania, Niger, Senegal, Togo. 
COSCAP-CIS States  (Commonwealth of Independent St ates):  Armenia, Azerbaijan, 
Belarus, Georgia, Kazakhstan, Kyrgyzst an, Moldova, Tajikistan, Turkmenistan, 
Uzbekistan. (Russia and Ukraine are observers). 
COSCAP :  Albania, Bulgaria, FYROM. 
                                                      
13  BAAA, 2003 (see www.baaa-acro.com). S/C/W/270 
Page 16  
 
  Implementation 
stage  Name and members 
PASO  (Pacific Aviation Safety Office):  Aust ralia, Fiji, Kiribati, Papua New Guinea, 
Solomon Islands, Tonga, Vanuatu. 
To be 
established  COSCAP-North Africa :  Morocco, Algeria, Libya, Tunisia, Egypt. 
COSCAP-CEMAC  (Central African Economic and Monetary Community):  Cameroon, 
Chad, Central Africain Republic, Congo, Gabon, Guinée Equatoriale. 
COSCAP-SADC  (Southern African Development Community). 
COSCAP Gulf States :  Bahrain, Egypt, Oman, Sudan, Saudi Arabia, UAE, Yemen. 
COSCAP-Mediterranean  (East):  Cyprus, Jordan, Lebanon, Syria, Turkey. 
 
Source :  ICAO. 
 
 
(b) European Civil Aviation Commission (ECAC)14 
55. The Safety Assessment of Foreign Airlines (SAF A) of ECAC has been described extensively 
in the documentation for the first review (compilati on, pages 8-9).  This programme has continued to 
develop its activities during the period under review in  all ECAC States.  Foreign aircraft (ECAC and 
non-ECAC ones) can be inspected, and these inspections follow a procedure common to all ECAC 
members.  The results are then reported usi ng a common format.  If an inspection identifies 
significant irregularities, these will be taken up with the operator and the oversight authority;  where 
an irregularity has an immediate impact on safety, inspectors can demand corrective action before they allow the aircraft to leave.  Chart 3 descr ibes the quantitative evolution of these inspections;  
Table 6 describes the results over the last five year s;  and Table 7 describes the ratio of ECAC and 
non-ECAC operators inspected during the same period. 
Chart 3 
Number of SAFA ramp inspections – 2000/2005 
 
     
 
    
 
    
Source :  SAFA report (01 January 2000 to 31 December 2005). 
 
 
                                                      
14  The 42 members of ECAC are:  Albania, Arme nia, Austria, Azerbaijan, Belgium, Bosnia and 
Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, De nmark, Estonia, Finland, France, Germany, Greece, 
Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Moldova, Monaco, Netherlands, Norway, Poland, Portugal, Republic of Georgia, Romania, Serbia and Montenegro, Slovakia, Slovenia, Spain, 
Sweden, Switzerland, the Former Yu goslav Republic of Macedonia, Tu rkey, Ukraine and United Kingdom. 239427063234341445685457
0100020003000400050006000
2000 2001 2002 2003 2004 2005 S/C/W/270 
 Page 17 
 
 
  Table 6 
Results of SAFA inspections – 2000/2005 
 
  2000 2001 2002 2003 2004 2005 Total 
 No. of inspections 2,394 2,706 3,234 3,414 4,568 5,457 21,773 
 No. of findings 2,587 2,868 3,064 3,242 6,799 8,492 27,052 
Information to the authority & operator 150 262 289 360 698 982 2,741 
Restriction on the aircraft operation 0 2 17 23 48 47 137 
Corrective actions before flight authorisation 184 210 225 321 683 708 2,331 
Aircraft grounded 16 28 12 20 17 13 106 Actions taken Entry permit repercussions 9 4 6 7 15 10 51 
 
Source :  SAFA report (1 January  2000 to 31 December 2005). 
 
 
Table 7 
Proportion of inspections carried out on ECAC and non-ECAC operators, 2000-2005 
 
 2000 2001 2002 2003 2004 2005 Average 
ECAC Operators 61% 64% 66% 63% 67% 71% 65% 
Non-ECAC Operators 39% 36% 34% 37% 33% 29% 35% 
 
Source :  SAFA report (01 January 2000 to 31 December 2005). 
 
 56. Following the publication of EC Directive 2004/36/CE, a joint ECAC-JAA-EC taskforce has 
been set up to clarify the mechanisms for the impl ementation of the Directive since ECAC and SAFA 
have a wider membership than EC but will apply th e Directive.  The relationship of SAFA with the 
newly established EASA, a pure EC body, will raise also more complex problems than the 
relationship with the JAA, which ha d virtually the same Members as SAFA.
15 
57. A Task Force for ECAC Safety Oversight I ssues (SOI) was established in 2000 to set out 
options indicating how ECAC could assess the co nsequences of ICAO USOAP audits and what 
collective actions could be taken with regard to ECAC and non-ECAC States. 
58. A Forum on Safety is contemplated to explor e the scope for collective solutions to common 
problems identified by ICAO.  This forum would a llow national aviation authorities of ECAC States 
to confront the results of the ICAO USOAP audits  on the basis of a harmonised analysis of their 
respective audit reports, identifying common pr oblems of compliance with ICAO standards and 
guidance material.  The forum could offer the oppor tunity to develop recommendations for individual 
or collective actions.  
59. An expert group, reporting to the Safety Oversi ght Issues Task Force has so far, analysed the 
USOAP summary reports of some 60 States and will  continue its task until all non-ECAC States are 
covered.  The results of the analyses are made available for safety purposes to ECAC States only, 
which may use them in their bilatera l relations with other States, and are also being integrated within 
the framework of the SAFA Programme in order, inter alia , to target better ramp inspections . 
                                                      
15  On the transition between JAA and EASA, see below paragraph 66. S/C/W/270 
Page 18  
 
  (c) IATA 
60. It may appear incorrect to describe IATA’s  self-imposed rules and auditing activities as 
regulatory developments in the area of safety, sinc e they are a form of self-regulation undertaken 
without a formal mandate from the States concerned.   These activities might not be covered by the 
GATS.  However, their inclusion is justified from an operational a nd economic point of view, as these 
rules and procedures are tightly coordinated with international rules and are an extremely powerful 
instrument to ensure their effective implementation. 
61. Before 2001, there were not any common rules fo r airlines with regard to safety audits.  
Airlines were auditing one another, often through their consulting subsidiaries, on their ability to 
deliver safe operations.  The audits had varying standards and did not fit into any consistent 
framework.  In 2001, IATA brought together airlines  and industry stakeholders to develop a global 
safety audit programme, so as to address the ever-i ncreasing costs of inter-airline audits.  The 
programme, named IOSA (IATA Operational Safety A udit), was launched effectively in 2003.  It is 
based on over 700 safety standards and recommended practices, which are contained in the IOSA 
Standards Manual (ISM).  These IOSA standards are derived from all relevant ICAO standards,  in 
particular Annex 1, 6 and 8, as well as from regula tions of the European Joint Aviation Authorities 
(JAA), US FAA and industry best practices.  IOSA  is not intended to be a substitute for state 
regulatory authority oversight, but is  meant to provide additional data that can assist States in risk-
assessment and in planning their own inspections .  A growing number of governments envisage to 
incorporate IOSA as part of their certification process.  The report of the 35
th ICAO Assembly, held in 
October 2004, underlined these synergies.  
62. The IOSA audit standards are based on eight areas that contribute to airline operational safety, 
namely corporate organization and management system s;  flight operations;  operational control/flight 
dispatch;  aircraft engineering and maintenance  (emphasis added);  cabin operations;  ground 
handling;  cargo operations and operational security.  It is important to note that IOSA is an audit of 
an airline's operational procedures and documentation,  not a physical inspection of the aircraft.  The 
IOSA Standards Manual and the associated guidanc e material are available on the IATA website.16  
They can be used free of charge to all airlines re gardless of their IATA membership.  An IOSA task 
force, comprising IATA representatives and airline operations experts, is mandated to refine and 
improve the IOSA standards. 
63.  Airlines that have undergone su ccessfully an IOSA audit by an accredited audit organization  
enter the IOSA registry which acts both as a quality label and as a data-sharing system.  To maintain 
their status on the IOSA registry, airlines must undergo and complete an audit every two years.  
Leading airlines from all regions have already inco rporated the IOSA standards into their airline 
operations.  The IATA board has just mandated that  all IATA members be IOSA-registered by 2008. 
(d) National developments 
(i) China 
64. On 21 December 2001, China, a key market for MRO providers, issued new "Rules on 
certification of maintenance organizations for civil aircraft" and subsequently notified them to the 
WTO (S/C/N/252, dated 24 November 2003). 
                                                      
16  www.iata.org/ps/services/iosa  S/C/W/270 
 Page 19 
 
 
  (ii) European Communities 
65. Following the formal creation of  the European Aviation Safety Agency in September 2002 by 
Regulation 1592/200217, national authorities' certification and safety responsibilities are being 
transferred progressively to this newly-established ag ency.  The relevant functions include:  rule-
making (i.e. drafting safety legislation and providing technical advice to the European institutions and 
Member States);  inspection training and sta ndardization programmes to ensure uniform 
implementation of European safety aviation legi slation in all Member States;  safety and 
environmental type–certification of aircraft engine s and parts;  approval an d oversight of aircraft 
design and production organisations wo rld-wide;  maintenance organisati ons outside the EC;  and data 
collection analysis and research to improve aviati on safety.  The EC Commission recently proposed to 
extend the agency's responsibility to other important areas of safety regulation, namely rules and 
procedures for civil aviation operation, licensing of crews in the Members States and certification of 
non-EC operators.  The agency established its permanent headquarters in Cologne in November 2004. 
66. EASAs replaces the system established through Regulation 3922/91, whereby Member States 
were responsible for the regulation of civil avia tion safety, and harmonised their requirements and 
practices through the Joint Aviation Authorities (for a more detailed description of this system, see 
compilation, pages 8-9).  Under the new system, na tional aviation authorities remain responsible for 
approving production, maintenance, and maintenance training organizations within their territory as 
well as the airworthiness certification of individual products listed in their registries.  National aviation authorities are expected to use EASA pr ocedures and Community implementing rules.  The 
JAA remain in existence and address operational aspects during EASA certification projects as well 
as other areas, such as personnel licensing for which the EASA is not yet responsible.  The JAA will 
continue to represent the 15 JAA Member States that are non-EC Members on design and maintenance issues (i.e. Azerbaijan,  Georgia, Armenia, Iceland, Albania, Bosnia and Herzegovina, 
Former Yugoslav Republic of Macedonia, Mold ova, Monaco, Norway, Romania, Serbia and 
Montenegro
18, Switzerland, Turkey and Ukraine).  The Joint Aviation Regulation (JAR) now 
incorporates all EC Regulations by reference, and the JAA will accept EASA approvals as a JAA 
recommendation to its non-EC members.  
67. EC Regulation 1592/2002 also sets out a number of common principles and requirements for 
civil aviation safety and environmental sustaina bility.  Regulation 1702/20 03 (24 September 2003) 
determines certification procedures ("part 21") and has served as a basis for EASA to issue airworthiness codes, which are also known as certif ication specifications.  These codes are essentially 
based on the results of the FAA/JAA harmonizati on work programme.  Differences between the 
standards issued by the two regulatory systems ha ve been identified and wi ll be addressed in the 
implementation procedures of futu re bilateral agreements with the EC.  The negotiations of such 
agreements have started.  Until their conclusion,  the EC continues to recognize existing Bilateral 
Safety Air Agreements (BASA) and Bilateral Ai rworthiness Agreements (BAA) between the US and 
certain Member States (France, United Kingdom, Ge rmany, Spain, Italy, Belgium, Netherlands, 
Denmark, Sweden, Finland, Austria, Poland, Czech  Republic).  These Member States have formally 
notified the US that, as of September 2003, the EA SA assumed responsibility as their executive agent 
for the functions outlined in the EC Regulations.  
68. On March 2006, the EC published its first "black  list" of airlines barred form serving the 
Community on safety grounds, following the initiative of several Member States.  This list comprises 
two parts.  The first part lists airlines that are co mpletely barred form serving the EC.  It includes 92 
companies, mostly originating from five African countries, but also from various Asian countries.  
                                                     
 
17  The complete text of the regulation is available at:  
http://europa.eu.int/comm/transport/a ir/legislation/airsafetyen.htm 
18  The webpage from which this informat ion is drawn dates from December 2005. S/C/W/270 
Page 20  
 
  The second part enumerates companies which are perm itted only a limited number of flights.  The list 
is subject to periodic revision.  In March 2006, following a series of accidents and incidents involving 
charter airlines originating from various tourist-d estinations, France issued a decree requiring tour 
operators to indicate to their customers the airline involved. 
(iii) United States 
69. Given the multifaceted activities of the US Federal Aviation Administration in terms of 
safety
19, only a few salient features can be descr ibed in the context of this review.20  The FAA is 
pursuing the goal of 0.010 accident s per 100.000 departures in 2007, fro m a baseline of 0.015 in 2005 
(and of 0.051 in 1996).  Based on current traffi c forecasts, the actual baseline still represents ten 
accidents a year in the US airspace in 2025.  Howeve r, the link with traffic is open to discussion.  For 
instance, a Eurocontrol analysis indicates that safety does not decrease proportionately to the amount 
of traffic, density of traffic or duration of traffic. 
70. To achieve its safety objective, the FAA puts th e emphasis on data-sharing systems to identify 
precursors of accidents.  Currently, air carriers e ngage in data-sharing through the Aviation Safety 
Action Program and Flight Operational Quality Insuran ce.  Clusters of airlines exchange data and an 
airline may also share data with the FAA, but the information is not centralized so as to allow access 
to all interested parties.  The FAA has develope d the Volunteer Aviation Safety Information Sharing 
Program (VASIP) as a first step towards a broa der data-sharing system which could then be 
eventually extended internationally.   This broader data-sharing syst em is currently being developed 
under a government–industry initiative, the Commer cial Aviation Safety Team (CAST), whose 
membership includes the FAA, NASA, the Departme nt of Defence, the European Aviation Safety 
Agency, and the International Civil Aviation Orga nization on the government side, and the Airline 
Pilot Association, the National Air Traffic Controlle r Association, the Flight Safety Foundation and 
the Aerospace Industry Association on the industr y side.  CAST sets up analysis and implementation 
teams that analyse factors contributing to accide nts based on forensic da ta and then identify 
preventive measures and develop safety enhancemen ts.  The group has developed, for instance, 
47 safety enhancements so far, 30 of which have al ready been implemented in the US.  The Terminal 
Awareness Warning System (TAWS), also known as the Enhanced Ground Proximity Warning System, is one example of these enhancements, and its early implementation by airlines has virtually 
eliminated the CFIT (Controlled Flight Into Terrain ) type of accidents.  Another example of these 
enhancements is the im plementation of "Standard Operating Procedures". 
71. The Federal Aviation Administration has also undertaken significant international cooperation 
activities, notably through its network of offices in  Europe, China, India, Latin America and the 
Middle East, and so has the National Sa fety Transportation Board Academy.  
II. AIRLINE TICKET DISTRIBUTION 
72. The GATS captures the universe of airline ticket distribution through three classification 
items, two stemming from the air transport Annex and one from the MTN.GNS/W/120 classification 
system, namely, Computer Reservation Systems Services (CRS), selling and marketing of air 
transport services, and travel agencies services. 
• Computer Reservation Systems Services
 are defined as "services provided by computerised 
systems that contains information about air ca rriers schedule, availability, fares and fares 
rules, through which reservations can be made or tickets may be issued."   
                                                      
19  The FAA devoted in the fiscal year 2005, US$9.4 2 billion, i.e. 71 per cent of its total budget to 
safety matters. 
20  For more information see:  www.faa.gov  S/C/W/270 
 Page 21 
 
 
  • Selling and marketing of air transport services  are defined as "opportunities for the air carrier 
concerned to sell and market freely its air transport services including all aspects of marketing such as market research, advertising and di stribution.  These activities do not include the 
pricing of air transport services nor the applicable conditions".   
• Finally, CPC 74710 defines travel agency services
 as "Services rendered for passenger travel 
by travel agencies tour operators, and simila r services;  travel information, advice and 
planning services; services related to arrangement of tours, accommodation, passenger and 
baggage transportation, ticket issuance services.  These services are provided on a fee or contract basis." 
73. These concepts do not seem to capture, however, the full range of ticket bookings, 
distribution, and emission.  The de facto  situation was already more complex than the GATS 
definitions in 1993 and it has become even more so since, due to factors such as the emergence of 
online booking channels and the growth of outsour cing.  However, the GATS definitions may well be 
flexible enough (absence of reference to travel agen ts in the CRS definition, notion of "opportunities 
for the air carrier concerned" in the selling an d marketing definition, possible usage of the 
technological neutrality concept for online travel agencies) to accommodate some of these new forms 
of ticket distribution.  
74. Tables A1 and A2, contained in the Annex, try to encompass the full range of ticket booking, 
distribution and emission as it exists, and to comp are it with the scope of the GATS definitions.  
These Tables may give an idea of possible uncerta inties regarding, notably, general sales agents, 
third-party call centres and other outsourced sales f unctions for the distribution aspects, as well as 
IATA billing settlement plans (BSP) and other emission and clearing systems on the emission side. 
75. A proper description of the sector needs to encompass all of these aspects.  However, 
evolutions concerning travel agencies will not be d escribed in the context of this Note, but only 
through their relationship with CRS  and BSP since in GATS terms they belong to the tourism sector 
and not to air transport.  Similarly, the non-air tr ansport aspects of CRS, such as hotels, car rentals, 
railways, and cruise bookings, will not be dealt w ith in spite of their economic importance.  
76. There are no global figures regarding the share of the various distribution channels and not 
even a commonly agreed nomenclatu re of these channels.  Furthermore, there are important regional 
disparities due to the so-called digital divide a nd local peculiarities such as the importance of group 
travel, and figures for use of online channels change considerably on a year-by-year basis.  There is, 
however, partial information, by region and by typ es of channels (e.g. online channels), which will be 
referred to below in the detailed analysis of each channel.  
77. From this fragmented data, the following tende ncies seem to emerge: classical CRS continue 
to be the dominant channel in the market (around tw o-thirds of the bookings globally), but their share 
is slowly eroding with the emergence of alternativ e third-parties B-to-B and B-to-C online channels, 
and with the growth of direct sales by the airlin es through online channels or more traditional means 
such as call centres.  The same dispersion of channe ls cannot be observed, so far, at the level of 
emission and clearing of tickets.  Finally, outsourci ng is growing quickly in this market segment. 
A. C
OMPUTER RESERVATION SYSTEMS SERVICES  
78. The documentation provided for the first review  already distinguished between "classical 
CRS" (e.g. Galileo, Amadeus, Worldspan, Sabre) a nd new forms of CRS which, at the time, were 
practically all Business to Consumer (B-to-C) forms.   Recent economic evolutions have led to the use 
of another distinction, that between business to business (B-to-B) providers and business to S/C/W/270 
Page 22  
 
  consumers (B-to-C) providers.  Furt hermore, the definition of the Anne x is so vast that it may well 
encompass certain emerging providers in the cargo area. 
1. Business-to-Business Computer Reservation Systems (CRS) 
79. Business-to-Business CRS comprise two types of providers, the "classical CRS", and a newly 
emerging category, that of "Global New Entran ts" (GNE) such as ITA, G2 Switchworks and 
FACE/ACAP. 
(a) Classical CRS 
80. The only CRS that existed at the time of the drafting of the Annex and of the signing and 
ratification of the GATS were, what can now be term ed, "classical CRS", i.e. B-to-B systems created 
by airlines, based on mainframe technologies and distributing tickets through travel agents as 
described by Figure 1.  They are also often term ed Global Distribution Systems (GDS) since they now 
also distribute hotels rooms, car rentals, cruises and train tickets.  
Figure 1 
Mapping of the CRS booking process  
  
     
 
    
 
  
Source :  Brattle Group. 
 
 
(i) Economic developments 
81. The present structure of "classical CRS" reflect s an economic evolution that has amplified 
trends already identified during the first re view (see compilation, pages 14 to 17).   
82. The concentration underway in the CRS sector over the last fifteen years (see compilation, 
page 14) has left only f our global players, three US-owned and US-based ones, i.e. Sabre, Worldspan 
and Galileo, and a European one, Amadeus.  The ma in economic data available on these four global 
CRS contained in Table 8.  
Airline  
CRS 
  
Travel  
Agent  
Consumer 
 
Bookin g Fee "Signing Bonus" & 
Incentive Payment Subscri ption Fee Service Fee Commission
Total cost of 
the ticket  S/C/W/270 
 Page 23 
 
 
  Table 8 
Main economic data on global CRS - 2003 
 
 Amadeus  Galileo  Sabre  Worldspan  
Employees  5300 2000 1600 2000
Number of 
travel agents  67,000 43,000 53,000 NA
Number of countries 
or territories covered 210 115 452170
Turnover 2003 
(US$)  3072 million 2429 million222707 million 995 million
Air bookings (million) 
and market share 403 
(35%)265 
(23%)293 
(25%)193 
(17%)
Total bookings 
(million and 
repartition thereof)  NA288 
traditional:  68% 
online:  32% 
air:  92% 
non-air:  8% 
US 39% 
non-US:  61%343 
traditional:  87% 
online:  13% 
air:  85% 
non-air:  15% 
US:  63% 
non-US:  37%214 
traditional:  48% 
online:  52% 
air:  90% 
non-air:  10% 
US:  79% 
non-US:  20%
 
Source :  Airline Business. 
 
 83. These figures, drawn from the Websites of the supplie rs above, have to be read with caution.  
It is unclear, for instance, if the number of employ ees or turnover relate to pure CRS activities, or also 
to other activities such as IT subcontracting for airlin es.  Similarly, it is unclear whether Sabre takes 
into account the activities of its joint-ve ntures such as Abacus, Infini and Axess. 
84. CRS are present in a high number of countries/territories.  Their availabity does not 
necessarily require a commercial presence.  Techni cally speaking, a CRS can operate without the 
need to establish a company:  fixed lines and terminal s can be installed and connected by a third party, 
training can be done online or by agents travelling to neighbouring countries, and the provision of the 
service can be adapted to local legal and comme rcial requirements without establishing a separate 
legal entity in the country/territory concerned. 
85. Together, the four global CRS have processed 1 billion airline bookings in 2004 and an 
additional 250 million bookings for hotels, cruises and car  rentals.  Their total revenue is about US$6 
billion.  Five elements can be singled out:  increasi ng concentration, evoluti on of ownership, erosion 
of the direct market share of CRS, evolution of the pricing model, and diversification.  
• Concentration  
86. In addition, there are at least five regional player s:  Topas in Korea, Axess and Infini in Japan, 
Abacus in South-East Asia
23 and Travel Sky in China.  Southern Cross, another regional player in 
Oceania, has now become Sabre Pacific Ltd.  Their si ze is considerably smaller than that of the four 
                                                      
21  The geographical coverage of Sabre is wider if one takes into account its joint ventures Sabre 
Pacific, Abacus, Axess and Infini. 
22  In fact the turnover of Cendant Travel Distri bution (which has a wider perimeter than Galilieo) as 
Galileo accounts are no longer individualized. 
23  Axess, Infini and Abacus are now linked to Sabre,  which holds, directly or indirectly, substantial 
shares in these companies (25 per cent in Axess, 35 pe r cent in Abacus, Abacus itsel f holding 40 per cent of 
Infini).  Those companies simply distribute Sabre products tailored to local needs. S/C/W/270 
Page 24  
 
  global players (turnover of US$100 million for Axess and of US$40 million for Infini, to be compared 
with turnovers of US$1 to 2.5 billion for the majo r players).  It has not been possible to gather 
information on Topas.  Travel Sky (12 million b ookings, 32,000 terminals, 5000 travel agencies 
connected) seems so far to lim it itself to the Chinese market. 
87. According to analysts, concentration is likel y to proceed, leaving only three or even two 
global CRS in a not too distant future. 
• Ownership evolutions 
88. Divestment by airlines, already observed during th e previous review, has continued.  Airlines 
no longer own the majority of the shares of any global CRS.  
89. Sabre was spun-off from AMR holdings, the owner of American Airlines in March 2000. 
90. Worldspan was sold by its airline owners (De lta, Northwest, and American) in March 2003 to 
private equity funds led by Citygroup Ventures Capital. 
91. Galileo was acquired in totality in June 2004 fo r the price of US$2.7 billion by Cendant, a 
travel conglomerate, from its remaining airlines owners (United, Swiss, Olympic, Air Canada, 
Alitalia, AerLingus, Austrian) and from the public af ter a first Initial Public Offering in May 1999. 
92. Amadeus was the last CRS, in July 2005, to be so ld to non-airline interests.  Investment funds 
Cinven and BC Partners now owns 52 per cent of the shares WAM Acquisition S.A, the holding of 
Amadeus, with Air France maintaining 22.9 per cen t, and Iberia and Lufthansa 11.4 per cent each. 
• Erosion of direct market share  
93. There are no comprehensive statistics on the r espective market shares of the various booking 
channels.  Available data show a progressive decl ine of the market share of CRS as compared to 
online travel agencies, and to direct selling by airlines (mainly through Internet but also through call centres).  The appearance of Global New Entrants could accelerate this tendency. 
94. However, one should not over-rate  these developments.  Direct  channels and on-line B-to-C 
channels have been successful essentially on the do mestic/low-cost-leisure/point-to-point/low-yield 
segments.  A large part of those B-to-C bookings are still made through CRS  used as booking engines 
by online providers, though, allege dly at different prices.  CRS continue to dominate the business 
market, the hub-and-spoke market and the internati onal flights market, although alternative channels 
are now trying to enter the corporate market (e.g. Travelocity Business, Expedia – which has recorded 
triple digit growth rates for this market segment and Orbitz) and are developing specific products to 
that effect such as self-booking tools.   
95. In the US, where alternative booking channels have so far been most succ essful, travel agency 
off-line bookings (made in 95 per cent of the cases through a classical CRS) still represented 58 per 
cent of the bookings in 2002.
24  In Asia, including Japan, 80 per cent of the bookings are still made 
through physical travel agents and, therefore, through classical CRS. 
96. What could be a challenge for classical CRS, is the threat by Star Alliance, which alone is 
said to represent 35 per cent of the GDS revenue, to  move to alternative channels.  Alliances are 
already discussing the possibility of obtaining bulk re bates, and Star Alliance and other carriers are 
                                                      
24  According to Galileo quoted by the US final rules on CRS Federal Register, 14 CFR 255, 
7 January 2004.  S/C/W/270 
 Page 25 
 
 
  thinking of giving direct access to their inventory to travel agents so as to bypass CRS.  The support 
given by airlines to "Global New Entrants" projects (a new form of competitors offering low-cost 
booking channels and described below) has the same rationale.  At least one major travel agency, 
Carlson Wagon Lits Travel, has developed, with the software company Navitaire, its own GDS by-
pass/direct connect system, but this initiative has not yet been emulated.  
97. What may prolong the current model is the financial dependence of physical travel agents on 
CRS.  Travel agents have lost or are losing, at least  in the US and Europe, one of their major source of 
revenue, i.e. booking commissions paid by airlines.  They are trying to replace them by service fees, which are unpopular among their clients.  In the meantime, financial incentives, which are given on a selective basis to travel agents by  CRS in exchange for long-term exclusive commitments, have been 
extended to virtually all travel agencies.  Some  commentators even claim that 70 per cent of the 
booking fees returns, in the end, to travel agen ts.  While this figure might seem exaggerated, the 
proposal by United Airlines to retrocede US$5 by ticke ts to travel agents that switch to alternative 
channels may give an idea of the size of these incen tives.  Commentators consider, however, that this 
discount is not attractive enough to lure travel agents away from traditional CRS. 
98. CRS also underline that the overall effects of  internet bookings may be neutral and even 
negative for airlines:  while the Internet and other alternative booking channels  have reduced the cost 
of distribution for airlines, they have also consid erably reduced the average yield by empowering the 
consumer with more sophisticated information. 
• Pricing 
99. Under pressure from competition of alternative book ing channels, CRS have started to change 
their pricing model, which consists of charging the airline a fixed price for each segment booked 
(approximately US$4 per segment booked, i.e. about US$11 per ticket as the average ticket has 
2.5 segments).
25 
100. This change started in 2002, when the thr ee US-based CRS signed full webfare agreements 
("Direct Connect Availability" for Sabre) with air lines, exchanging a rebate of between 10 and 15 per 
cent against the guarantee that airlines would put all th eir fares, including the best fares they had kept 
until then for their own websites ("webfares"), on the CRS.  These agreements, concluded for three 
years, are about to expire and airlines have alre ady indicated that they want to renegotiate the 
structure and the level of the fees with the CRS. 
101. Amadeus adopted flexible pricing in 2003, replacing a single rate of € 3.12 per segment by 
four different tariffs ranging from € 3.10 to € 4.90 with four different level of service and an 
additional rebate of 17 per cent if the airline was pr oviding it with the full content of its inventory, 
including its webfares.26  Sabre also adopted flexible pricing in 2005.  
102. The expiry of several GDS contracts in 2005 led to new pricing policies.  For instance, Sabre 
concluded an agreement with low-cost airline Ai rTran and with US Airways at special conditions 
(US$5 per ticket for AirTran).  Galileo devel oped a special "application programming interface" 
(API) allowing travel agents to connect through Galile o to the website of low-cost carriers at a lower 
                                                      
25  This figure of US$11 has been questionned.  The CRS find it exaggerated (see, for instance, the 
"frequently asked questions" section of the website of Interactive Travel Services  Association (ITSA) which 
groups the CRS operating in North America), while alternative providers find it underestimated (see, for 
instance, the submission by Orbitz to the DOT on the Supplemental Advance Notice of Proposed Rulemaking 
on CRS dated 22 September 2000), but is very commonly referred to in specialised literature. 
26  Only in those markets where such a selective rebate to one airline is allowed, e.g. not in the EC 
market so far. S/C/W/270 
Page 26  
 
  price, a system that will be used for instance by th e largest Asian low-cost carrier Malaysia AirAsia.  
Northwest Airlines, which was one of the staunch est supporters of the Gl obal New Entrants (GNE) 
alternative (see below), neverthel ess concluded in 2005 a five-year c ontract with Sabre with full 
inventory content, the terms of which are undisclosed .  In Europe, SAS threatened to pull out from all 
four GDSs because its costs per ticket had raised from 1-2 per cent to 5-6 per cent.  It came to an 
agreement with each of the GDS on rebates in exchange of a downgraded service.  Amadeus 
discounts for full inventory including webfares, now reach € 0.45, and additional rebates have been 
added which take into account ge ographical zones.  However, it is difficult to draw definitive 
conclusions from these few examples. 
• Diversification 
103. The diversification of CRS downstream (virtual travel agencies) and upstream (IT services 
provision) identified during the first review (see compilation, pages 16-17) has asselerated since. 
104. There are, however, variations in the diversifi cation strategies followed by the various CRS.  
Worldspan, for instance, has not tried to diversify downstream and has remained to a large extent an 
IT supplier.  This "neutrality" has helped it obtain contracts with various major virtual travel agencies 
such as Expedia
27, Orbitz, Hotwire and Priceline, which use Worldspan as a booking engine for their 
sites. 
105. In the case of Galileo, diversification downs tream has happened thr ough its new (June 2004) 
parent company Cendant.  Cendant now owns Galileo but also Orbitz, Gulliver Travels, 
Octopustravel.com Ebookers, Priceline.com, Cheap tickets.com, RCJ (a firm specialized in time-
share), Ramada Inns and Days Inns, Travelodge hotels,  Avis and Budget car rental companies.  It is 
worth noting that Galileo is not used by its sister company Orbitz.28 
106. Sabre has acquired signXis, a software company providing B-to-B IT services to hotels, 
bought back the minority shares of Travelocity it did not own, and has bought Lastminute.com, a major European virtual agent which already owned Degriftour, Travelprice and Holiday Autos.  In 
March 2006, Sabre also bought the totality of Zuji,  which like Orbitz and Opodo, was originally a 
portal collectively owned by airlines (Air New Zeal and, Cathay Pacific, China Airlines, EVA Air, 
Garuda MAS, Quantas, Royal Air Brunei, Silk Air and Singapore Airlines).  
107. Amadeus has acquired former airline-owned portal Opodo, which itself had previously 
bought the virtual travel agency Karavel.  It al so owns Travel.com.au (A ustralia), Rumbo (Spain, 
Portugal and Latin America) and E-viaggi (Italy).  Amadeus also bought shares in ITA Software, the company promoting one of the Global New Entran ts, and in Airline Automation Incorporated 
(AAI
29), an IT company specialized in software and services to optimize occupancy rates.  Amadeus 
is used as a booking engine by Lastminute.com, one of the major virtual travel agencies in the 
European market.  Amadeus is also a major provide r of IT outsourced services for airlines such as 
booking inventory management and frequent flyer pr ogramme services, and has contracts to that 
effect with British Airways, Quantas and South Afri can Airways.  Amadeus is in discussions with Air 
France-KLM on the one hand, and Star Alliance, on th e other, to provide a complete IT platform.  
                                                      
27  In 2004, Expedia switched part of its business to Sabre. 
28  They share the parent company Cendant. 
29  Now renamed Amadeus Revenue Integrated Incorporated.   S/C/W/270 
 Page 27 
 
 
  (ii) Regulatory Developments 
• ICAO 
108. The ICAO Code of Conduct for the Regulati on and Operation of Computer Reservation 
Systems (CRS) has not been revised during the period under review.  CRS were, however, discussed during the Fifth Worldwide Air Transport Conference (ATConf/5) held in Montreal on 24-29 March 
2003, based on a document produced by the ICAO Secretariat describing recent economic and 
regulatory evolutions.
 30 
109. During the Conference, one regional grouping regulating CRS on the basis of the ICAO code, 
the Arab Civil Aviation Commission (ACAC) tabled a working paper.  This working paper expresses 
concerns that the ongoing deregulation of CRS would allow "bigger airlines" interests to prevail over 
those of "smaller airlines" which, with free negotiation. of fees, would no longer have the financial 
means to participate in all four systems.31  It also suggests a definition of  a "group" of airlines, so as to 
allow the collective purchasing of Market Informati on Data Tapes (MIDT, a valuable but expensive 
source of commercial information collected by CRS on the basis of their bookings) from CRS by 
smaller airlines that cannot afford them on an individual basis. 
110. The Conference concluded its discussion on product distribution by the following 
recommendation: 
"a) the principles of ICAO Code of C onduct for the Regulation and Operation of 
Computer Reservation System (CRS) should be considered as the reference framework for the regulation of CRS in C ontracting States or any other code of 
conduct of a regional nature.  States should bear in mind that amendments of such 
regulations or codes of conduct do not undermine the principles of transparency, 
accessibility and non-discrimination; 
b) while there exist several instances wh ere the ICAO CRS Code has no applicable 
provisions as a result of industry or regulatory changes, the scope of application of the ICAO CRS code already potentially app lies to the Internet, and States may take 
this up at their discretion according to their particular circumstances; 
c) States should consider the need to en sure that internet based systems provide 
consumers with comprehensive and non-deceptive information and airlines with a comparable opportunity to use these new syst ems as they have with the conventional 
global CRS where necessary; and 
d) although it is not yet clear whether new regulations covering airline product 
distribution through the internet should be adopted, some States have been actively 
examining this issue under the existing CRS  rules/regulations, consumer protection 
laws and competition laws.  ICAO should continue monitoring developments closely 
and disseminating information on this issue, and keep the effectiveness of the ICAO CRS Code under review." 
111. By September 2002, the date of the last ICAO survey, 31 States, which generated 60 per cent 
of all international air transport passengers, ha d adopted the ICAO CRS code or had a national 
regulation which conformed to the ICAO code, name ly:  Antigua and Barbuda, Austria, Belgium, 
Botswana, Cameroon, Canada, Cuba , Denmark, Ecuador, Eritrea, Fiji, Finland, France, Germany, 
                                                     
 
30  ATConf/5-WP/14. 
31  Traditional codes regulating CRS impose identical fees on all customers. S/C/W/270 
Page 28  
 
  Greece, Guatemala, Ireland, Ital y, Jordan, Kuwait, Luxembourg, Netherlands, Portugal, Romania, 
Russia, Slovak Republic, Spain, Sweden, Th ailand, United Kingdom, and United States. 
112. The ICAO Template Air Services Agreements (TASA) submitted to ICAO Members by the 
ICAO Secretariat during ATConf/5 contains a draf t Article (Article 28) on Computer Reservation 
Services offering three options:  application of the ICAO code, application of the ICAO code in 
conjunction with existing regulations  on CRS and statement of general competition policy principles 
on CRS.  These options are not linked to any of the three overall approaches of liberalization offered 
by the TASA (traditional, transitional and full liberalization).
32  They do not address market access or 
national treatment questions, but rather competition issues. 
113. The three options are as follows: 
Option 1  
"Each Party shall apply the ICAO Code of  Conduct for the Regulation and Operation 
of Computer Reservation Systems within its territory."   
114. This option is an ICAO proposal for use, in particular, by Parties which may not have CRS 
regulations but are willing to apply the ICAO Code of Conduct for the Regulation and Operation of 
Computer Reservation Systems. 
Option 2  
"Each Party shall apply the ICAO Code of  Conduct for the Regulation and Operation 
of Computer Reservation Systems within its te rritory consistent with other applicable 
regulations and obligations concerning computer reservations systems."   
115. This option applies the ICAO Code, and is consis tent with any other applicable regulations.  
These regulations could include the European Union,  the European Civil Aviation Conference and the 
Arab Civil Aviation Commission CRS Codes, or nationa l regulations.  The reference to "obligations" 
recognizes that many States will apply the provisions of the GATS.  
Option 3  
"The Parties agree that: 
a) one of the most important aspects of th e ability of an airline to compete is its 
ability to inform the public of  its services in a fair and impartial manner, and that, 
therefore, the quality of information about ai rline services availabl e to travel agents 
who directly distribute such information to the travelling public and the ability of an airline to offer those agents competi tive computer reservations systems (CRS) 
represent the foundation for an airline's competitive opportunities; and 
b) it is equally necessary to ensure that the interests of the consumers of air 
transport products are protected from any misuse of such information and its misleading presentation and that airlines and travel agents have to effectively competitive computer reservations systems." 
                                                     
 
32  The "traditional" approach contains relatively conservative/protectionist provisions while the 
"transitional" approach embraces elements of the first an d the third approach ("full liberalization").  The latter, 
in turn, contains "open sky" type provisions.  For more information on the TASA, see ICAO document 
ATConf/5-WP/17, dated 27 January 2003.  S/C/W/270 
 Page 29 
 
 
  116. This option recognizes that some bilateral agr eements set out in considerable detail the 
principles applicable to the regulation and opera tion of CRS, usually because only one of the parties 
has extensive CRS regulations.  This option takes in to consideration that, given the rapidly evolving 
nature of airline product distribution, a less compre hensive approach may be more flexible and more 
easily applicable to current conditions.  
 
• WTO 
 
117. Between August 2000, the cut-off date of the firs t review for CRS and July 2006, 12 countries 
or territories have acceded to the WTO.  Of  these, 10 have undertaken commitments on CRS33 and 
one listed an MFN exemption covering CRS.34 
118. MFN exemptions covering CRS have been discussed during the second review of MFN 
exemptions held on 30 November 2004 and 23 February 2005.35 
119. CRS were mentioned twice in the context of  the China Transitional Review Mechanism36, 
namely in the context of the draft regulation on Ra tifying Agents of Foreign Aviation Enterprises to 
Foreign Computer Reservation Systems and the draft Code of Conduct for Computerized Reservation 
Systems.  These legislations foresee the institution of a licensing system for direct access to foreign 
computer reservation systems.  The Chinese gove rnment has undertaken consultations with the 
foreign operators on the criteria of this licensing re gime.  CRS regulations have also been the object 
of one notification by a Member.37 
• European Civil Aviation Commission (ECAC) 
 
120. There are no regulatory developments to repor t for the 2000 ECAC code of conduct for CRS.  
This code has not been modified or been the object of further discussions within that forum. 
 
• Bilateral developments 
 
121. The Annex on Air Transport Services takes full a ccount of bilateral Air Services Agreements 
concluded prior to the entry into force of the WTO Agreement.  It confirms that "any specific 
commitment or obligation assumed under this Agre ement shall not reduce or affect a Member's 
obligations under bilateral or multi la teral agreements that are in effect  on the date of entry into force 
of the WTO Agreement".  However, many bilatera l agreements, containing provisions that extend 
preferential treatment between its parties on CRS, have  been concluded subsequent to the entry into 
force of the WTO Agreement.  In the absen ce of MFN exemptions listed under the GATS by 
Members concerned to cover such situations, it c ould be argued that such provisions in bilateral 
agreements need to be extended in accord ance with Article II of the GATS (MFN). 
  
                                                     
 
33  Armenia, Cambodia, China, Chinese Taipei, Croatia, FYROM, Moldova, Nepal, Oman and Saudi 
Arabia. 
34  Albania. 
35  See documents S/C/M/76, dated 4 February 2005 and S/C/M/78, dated 17 May 2005. 
36  Questions by the European Communities in 2004 (S/C/W/242, paragraph 23) and 2005 (S/C/W/259, 
paragraph 27), answers by China in 2004 (S/C/M/75, paragraph 32) and in 2005 (S/C/M/80, paragraph 35). 
37  S/C/N/238, dated 23 November 2003, Communication by China. S/C/W/270 
Page 30  
 
  122. The ICAO World Air Services Agreement (WASA)  database which contains all agreements 
notified by ICAO Members, indicates in its 2004 ed ition that 19 bilateral agreements containing a 
clause dealing with CRS have taken effect since 1 January 1995.
38  The complete list of these 
agreements can be found in the Annex (Appe ndix A-3).  For WASA purposes, CRS clauses are 
defined by ICAO as covering "access, availability and requirements of computer reservation systems."  
These agreements involve 18 WTO Members, of whic h five have listed an MFN exemption covering 
CRS39 (out of 31 MFN exemptions listed for CRS)40, and four non-WTO Members.  In the absence of 
direct access to the text of these agreements, it is impossible to dwell further on the potential MFN 
obligations.  It is worth noting though that th e ICAO WASA database probably underestimates their 
scope as its sample is largely incomplete:  many St ates do not notify to ICAO or do it with substantial 
delays.  Memoranda of understanding and si de letters are not generally notified. 
• National developments 
123. Overall, the regulatory landscape for CRS appears re latively liberal in terms of market access.  
According to the operators in general, there are no legal/administrative limitations specific to the CRS 
business in most countries/territories.  However, it is not unsusual in State trading or former State 
trading countries that the local CRS or the CRS linked to the local carrier finds  it easier to get local 
lines than foreigners.  Another typical restriction provides that content from a local national carrier is 
only available on the government-favoured CRS.  The number of CRS authorized to operate in a country is, in general, not limited de jure  but may be so de facto  due to such obstacles.  
124. No limitations on the number of travel agents  that CRS can serve have been identified.  
However, in at least three WTO Members, board me mbers of the local company must include at least 
one national, and there is one instance where distri bution can only be done through a local agent.  
Problems associated with currency remittances exist in very few countries:  the repatriation of 
earnings is not seen a major issue as most fees are paid by the travel providers (e.g. airlines, hotels) to 
the central company of the CRS outside the local territory.  There are no CRS-specific restrictions 
identified for land ownership, assets, number of pe rsons employed, legal forms, and number, volume 
and value of bookings. 
125. Most of the national regulatory developments to be reported thus relate to competition issues 
rather than to market access strictly speaking.   
  United States 
 126. The most significant regulatory event during the period under review is without doubt the 
complete deregulation of the US rules on CRS by th e final rule issued by the US Department of 
Transport (DOT) on 7 January 2004 (CFR part 25 5, Federal register volume 69, n.4, pages 975-
1033).
41 
127. The former rules, dating 1984, and modified several times: 
- barred each CRS system from using carrier identity as a factor for editing and ranking services; 
                                                      
38  To establish this list (and similarly constructed lists drawn from the WASA database, see below) the 
WTO Secretariat has used the two dates contained in the WASA data base "date of th e agreement" and "date of 
entry to force" and retained whichever date was posterior to 1 January 1995.  The case of amendments posterior 
to 1995 to a bilateral agreement anterior to 1995 has not been taken into consideration. 
39  Netherlands and via EC, Singapore, Switzerland, United States and Iceland. 
40  Counting EC 12 as 13 entities. 
41  Information for this section has been contributed by the US Department of Transport.   S/C/W/270 
 Page 31 
 
 
  - required each system to offer at least one disp lay that did not give on-line connections a 
preference over interline connections; 
- required each system to either list one-stop and ot her direct flights before connecting services or 
use elapsed time as a significant factor in  selecting flights options from the database; 
- prohibited systems from charging ai rlines discriminatory booking fees; 
- required each system to make available to an y participating airline the booking and marketing 
data generated by the system from bookings fo r domestic travel made through the system; 
- prohibited types of restrictive contract provisi ons that unreasonably limited the travel agencies' 
ability to switch systems or to use more than one system; 
- required each system to provide non-owner airlin es with information and bookings capabilities as 
accurate and as reliable as those provided to the owner airline; 
- gave the right to each travel agency to use its own equipment in conjunction with a system and to 
access other systems and databases from the same terminals used to access its primary system 
unless the agency uses equipment provided by that system; 
- required each airline with a significant CRS ownershi p to participate in other systems at as high a 
level of functionality as it does in its own system, if the terms for participation are commercially 
reasonable ("mandatory participation rules");  and 
- prohibited systems from enforcing "parity clauses" against airlines that did not own or market a 
competing system, i.e. from requiring each airline to buy at least as high a level of services from 
the system as it did from any other system. 
 128. The deregulation of these rules is the result of  a long process.  The DOT first issued an 
Advance Notice of Proposed Rule Making on 10 September 1997 (62FR47606), then a supplemental 
Advance Notice of Proposed Rule Making on 24 July 2000, and issued a Proposed Rule Making on 
15 November 2002.  This Proposed Rule Making did not suggest complete deregulation.  Rather, it 
proposed the re-adoption of the existing rules with two exceptions:  the mandatory participation rule 
and the prohibition against discrim inatory booking fees, which woul d be allowed to expire.  The 
proposed rule making also tentatively concluded th at the CRS rules should not be extended to cover 
the distribution of airlines ticket through the Inte rnet.  The DOT then provided a lengthy comment 
period, that it extended twice, until December  2002, and held a public hearing in May 2003. 
129. The final rule issued on 7 January 2004, for esaw the sunset of all the provisions as of 
31 January 2004.  A six-month transitional exception was provided for the rules prohibiting display bias and two rules barring unreasonably restrictive re quirements in the contracts between systems and 
their airline customers, namely parity clauses a nd clauses requiring airlines to provide access to all 
webfares as a condition to any participation in a syst em, rules that eventually lapsed on 31 July 2004. 
130. The DOT has invoked four main reasons for the reform: 
• All of the US airlines that controlled a system had divested their CRS ownership interest.  
Hence they had lost the incentive and ability to  use CRS to prejudice the competitive position 
of non-owner airlines, and to provide information on airline services through the systems to travel agents that gave undue preference to the services operated by the owner airlines.  These 
ownership links and their anti-competitive impli cations had been the main rationale for the 
CRS rules. 
 
• Airlines were selling an increasingly large shar e of their tickets through their Internet 
websites and a diminishing share through travel agencies using a system.  
 
• The airlines’ control over access to their webfares,  i.e. the discounted fares originally offered 
only through individual airlines websites, had enabled them to obtain lower fees from the 
systems. S/C/W/270 
Page 32  
 
   
• Travel agencies were increasingly demanding and winning contracts from the systems that 
gave them more freedom to use alternativ e booking channels and to switch systems 
periodically. 
 
131. In sum, while CRS retained some market power, it was diminishing and the DOT was of the 
view that there was no likelihood that the systems would distort airline competition. 
132. To the contrary, the DOT considered that endi ng the broad regulation of CRS practices would 
enable each system and each airline to negotiate the terms by which CRS servi ces should be provided.  
The systems would have the same ability to bargain with their other customer s, the travel agencies. 
133. The DOT indicated that it would actively monitor developments during the transition period 
and beyond, and take appropriate i nvestigative, enforcement or regul atory action if it saw evidence 
that systems or airlines were engaging in an ti-competitive conduct in connection with airline 
distribution through the systems or other channels.  The DOT also retained the power to re-examine 
the sunset of CRS provisions if the systems' conduct or other developments made such a re-
examination necessary. 
134. One and half years after this reform, there has been  no official assessment of its effects.  It is 
difficult to evaluate these effects based only on anec dotal information given by the specialized press.  
To date, it seems there have been no major changes in the number of airlines participating in CRS, nor 
of the level of airline participation in CRS.  Howe ver, the various actors are adjusting their policies.  
Airlines have made use of their newly-gained ba rgaining power to obtain lower fees.  CRS have 
adapted and sophisticated their pricing policies.  Ai rlines have in certain instances threatened to pull 
out from all four systems (SAS) or from at least one of them (American) and CRS have reacted in 
various ways to these threats:  by granting rebates in exchange of a downgraded service in the case of 
SAS and by a "Back-up Agreement" (between Sabre and Amadeus in the case of American), i.e. an 
agreement through which two CRS give each other access to an airline's content they would not 
otherwise have so as to be able to complete bookings.  Sabre has also introduced recently a new 
scheme that would result in reduced ince ntive payments for travel agents.  
135. With regard to the international implications of the US deregulation, the DOT will retain its 
authority to impose counter-measures when a foreign airline or other firm engages in discriminatory 
conduct against a US airline.  This authority is based on the Air Transportation Fair Competitive Practices Act (49USC 41310).  It has been broa dened to cases where a US system, and not only an 
airline, is subject to discriminatory conduct by a foreign firm by section 741 of the Wendell H. Ford 
Aviation Investment and Reform Act for the 21
st Century.42  
136. Finally, the DOT acknowledges that the Unite d States has signed bilateral air service 
agreement obliging them to keep systems operating in  the United States, not to engage in conduct that 
discriminates against foreign airlines such as char ging discriminatory booking fees to foreign airlines, 
and biasing displays against foreign airlines and that the final rules no longer include the prohibition 
of these discriminatory treatments.  However, DOT notes that, since US airlines no longer control any 
system operating in the United States, the CRS systems should have no incentive to discriminate against foreign airlines.  It also notes that, in their comments to the Proposed Rule Making, several 
foreign airlines had argued in favour of the elimin ation of the prohibition of discriminatory booking 
fees.  Furthermore, DOT and other government agencies would take such action as is necessary and 
appropriate to ensure that foreign airlines have a fair opportunity to compete for travellers in the 
                                                     
 
42  Public Law 106-181, April 5, 2000.  S/C/W/270 
 Page 33 
 
 
  United States.  Finally, the access provisions fo r CRS contained in the bilateral agreements43 do not 
seem to be affected by the deregulation. 
  Canada 
 137. On 7 May 2004, Canada published amendments to its 1995 regulations on Computer 
Reservations Systems.
44  While moving towards a more deregulated system, the amended Canadian 
CRS regulations retain certain safeguards.  The rationa le for this reform are similar to those of the US 
reform.   
138. Three main provisions have been eliminated: 
• The "obligated carrier" provision, which required an  airline that has an ownership interest in a 
CRS, or has a domestic market share that exceeds 10 percent and participates in one CRS, to participate in all CRS operating in Canada at the same level.  With the advent of the Internet 
providing new distribution options for airlines, the obligated carrier requirement limited the 
flexibility of these airlines to choose the most e fficient means to distribute their air services.  
The obligated carrier provision was repealed to  allow airlines to have the freedom to select 
the channels of distribution and level of par ticipation that best serve their operations.  
 
• The prohibition for a CRS vendor to discriminate in the price it charges to participating 
airlines.  In effect, the obligation prevented airlines and CRS vendors from freely negotiating CRS fees on strictly commercial terms, leading to a situation where CRS fees were higher than would be the case in the absence of this regulatory requirement.  The intention is to 
allow CRS and airlines to freely negotiate CRS fe es in the context of lower cost alternative 
distribution channels. 
 
• Section 36 of the 1995 regulation, which allowed th e Minister of Transport to make an order 
prohibiting airline participation in a CRS when the CRS vendor's contract with the travel agent contained certain elements (e.g. terms of more than three years, impeding a travel agent 
from using another system or requiring the use of a CRS for a minimum volume of bookings).  These regulatory provisions resulted in restrictive subscriber contracts that limited the ability 
of the CRS vendors to tailor agreements to travel  agents’ needs and the ability of travel agents 
to adapt to changing market conditions and other new, low-cost sales technology.  The 
emergence of competitive alternative distributi on channels now also provides an option for 
the travel agent to access the inventory of an airline as well as other travel suppliers outside 
the CRS distribution channel.  The repeal of  this provision and the presence of alternative 
competitive distribution channels provide equa l, if not better market discipline to the 
substance of the CRS vendor 's contract with the travel agent. 
139. Some major provisions have been retained.  For example, the rules stipulating that 
information contained in CRS displays should be  comprehensive, neutral and non-discriminatory 
continue to apply.  In this regard , the amended regulations continue to  ensure that travel agents have 
                                                     
 
43  E.g. the Canada-US Agreement states in Article 11.3, "recognizing that, consistent with Article 4 
(fair competition), all computer reservation systems owned in whole or in part by airlines of each Party have 
achieved effective access in the territory of the other Part y, each Party accepts that computer reservation systems 
offering services in the territory of the other Party are subject to the national laws and regulations of that Party regarding such systems and their services and subject to compliance with such laws and regulations";  the 
Netherlands-US Agreement notes in att achment C, paragraph 6 that "CRS in use in the territory of one party, 
which comply with these principles shall be entitled to effective and unim paired access on the territory of the 
other party". 
44  Information for this section has been contributed by Transport Canada.  S/C/W/270 
Page 34  
 
  access to neutral and non-discriminatory information on behalf of consumers and that no carrier is 
disadvantaged in that computer reservation display. 
  European Communities 
 140. The European Communities is also in the process of revising its CRS rules.
45  In 2002, the 
European Commission started a consultation process with the industry.  In several meetings, the 
possibilities for a relaxation of the present rules were  assessed.  All those cons ulted agreed that the 
present CRS rules are not adapted to conditions and th at they stand in the way of a more efficient 
working of the distribution market. 
141. Industry’ views were sought, amongst others, on the following topics:  the obligation for 
parent carriers to participate in all CRS (man datory participation rule), the prohibition of 
discriminatory booking fees (charging principles), ma rketing information data tapes (MIDT), neutral 
display, and relations between CRS and subscribers. 
142. In December 2002, the services of the Commissi on tentatively proposed changes to the 
existing Regulation on the basis of the consulta tions and commissioned an impact study of these 
proposals to a consultant (The Brattle Group).  That resulted in a further prol ongation of the bilateral 
consultations during which the consu ltant held a series of interviews and meetings with the industry. 
143. The study was completed in October 2003.46  It looks at three options:  complete deregulation, 
partial deregulation (mainly keeping neutral displa y obligations and rules regulating the contractual 
relationship between CRS and travel agents) and a nother option of partial deregulation, where the 
mandatory participation rule would be maintained in the markets where the airline-held CRS has a 
dominant position. 
144. The most contentious issue proved to be the mandatory participation rule because of the 
particular position of Amadeus in Europe.  Indeed, while all other CRS are independent of airlines, 
Amadeus remains partly owned by three airlines, rais ing concerns with other market participants of 
potential competitive abuse. 
145. After the publication of the Brattle report, th e Commission decided to continue monitoring 
the market and to analyse its most recent devel opments before making a proposal for revising the 
CRS rules.  These developments concern mainly: 
- the deregulation of the US market in July 2 004 and its consequences on competition in the US 
distribution market and the lessons to be learnt for Europe; 
- the rapid development of alternative distribution channels, in particular of Internet sales, and 
theirs impact on the market shares of CRS in the distribution market;  and 
- the change of control in Amadeus by the inv estment of venture capitalists BC Partner and 
Cinven (sale completed in July 2005). 
 146. The Commission aims to make a new proposal to the Council and the Parliament in 2006. 
                                                     
 
45  Information for this section has been contributed by the European Commision.  
46  The full report of the consultant has been published on the Internet at the following address:  
http://europa.eu.int/comm/tran sport/air/rules/index_en.htm   S/C/W/270 
 Page 35 
 
 
  
(b) Global new entrants 
147. The emergence of global new entrants ("GNE")  may be the next major development with 
regard to B-to-B CRS.  However, none of the po ssibilities indicated below, while deemed likely by 
industry experts, have yet materialized.  
(i) Economic developments 
148. Global new entrants are companies that intend to  deliver the same service that CRS provide to 
airlines and to travel agents for only a fraction of the price47 (with an average of 20 to 30 per cent for 
the company FACE-ACAP and up to 80 or 90 per cen t for the companies Farelogix and G2 Switch 
Works).  Traditional CRS deny that the service unde r consideration is of the same nature and call 
them "Limited Travel Distributors". 
149. Technically speaking, GNE add a new layer of soft ware that allows the travel agent to search 
fares and make bookings on all Global Distribution Systems (GDS)48, on the Internet, directly in the 
inventory of airlines with whom the GNE has signe d a direct connect access (DCA) agreement and on 
the websites of low-cost carriers.  This is illustra ted by Figure 2, drawn from the website of one GNE. 
Figure 2 
Typical GNE structure 
 
    
 
    
 
     
 
  
Source :  FLX website.  
  150. A number of questions have remained open, howev er.  In spite of graphs  similar to the above 
on all GNE websites, it seems that GNE do not ge t access as such to GDS, since they have not 
subscribed to GDS services and therefore do not "reorganize" CRS displays.  According to GDS, 
which calls them "Limited Travel Distributors" fo r this reason, the GNE bookings are handled either 
through direct connection (in the vast majority of cases) or via the Internet through "screen scrapping" 
data from providers site.   
                                                     
 
47  The service may even be better.  According to Farelogix, "GDS deregulation means that total 
content in a single CRS is no longer assured". 
48  See definition paragraph 79. S/C/W/270 
Page 36  
 
  151. As for direct connect agreements, the compan y G2 Switch Works, for instance, has signed 
such agreements with seven US domestic airlin es (American, America West, Continental, Delta, 
Northwest, United and US Airways) which togeth er account for 80 per cent of the volume of the 
bookings handled by travel agents.  Five of th ese airlines (American, America West, Continental, 
Delta and Northwest) have bought in advance 8 million "prepaid – segment fees program" i.e. future 
bookings, in order to help finance the deployment of the G2 system. 
152. In March 2006, Star Alliance selected Lufthansa Systems as a preferred supplier of an 
Alternative Content Access Platform (ACAP), a ne w name for Global New Entrants, for Asia and 
Europe.  In December 2005, Star Alliance had al ready signed deals with G2 Switchworks and ITA 
Software for the North-American market.  Star A lliance estimates its distribution costs at US$2 billion 
annually.  
153. The deployment of GNE depends largely on the financial advantages they will offer to travel 
agents.  So far they have not achieved the breakth rough expected by the industry.  Major US travel 
agents have rejected as insufficient the proposal by United of a rebate of US$5 per ticket on the 
savings made through GNE.  In addition, classica l CRS have reacted by changing their pricing 
practices and have managed to re-sign multi-year deals with major airlines. 
(ii) Regulatory developments 
154. There have been no regulatory interventions targ eted at GNE in the US or in Europe.  In 
addition, GNE have not been the subject of any comp laints under CRS rules in Europe so far.  The 
Commission is closely monitoring their emergence as  they constitute one of the parameters of the 
possible deregulation of CRS.  
155. To a large extent, the advent of GNE creates th e same concerns among ac tors and triggers the 
same type of preventive judicial actions that Orb itz had done a few years ago.  G2 has reacted by 
capping the share of each domestic airline in its capital to 5 per cent and the overall share of domestic airlines to 16 per cent (the rest of the capital was provided by investment funds:  Northwest Ventures 
Capital and Texas Pacific Group).
 49 
2. Business to consumer (B-to-C) CRS 
156. It may seem counter-intuitive to deal with onlin e travel providers in the context of CRS.  
Indeed, online travel providers are not consider ed as "CRS" by professionals.  The GATS definition 
("services provided by computerised systems that contain information about air carriers’ schedule, availability, fares and fares rules, through which reserv ations can be made or tickets may be issued") 
is much broader than what is commonly understood by CRS:  B-to-B legacy systems used by travel 
agents. The GATS definition does not contain a referen ce to travel agents and it does not require that 
the inventory should be exhaustive.  Hence a B-to-C booking service provider may well fall within 
this definition. 
157. More specifically there is a fundamental diffe rence between the definition of CRS contained 
in the GATS and the ICAO Code of Conduct on the one hand, and the definition used in various 
national codes on the other.  
158. The national codes or regulations define "CRS vendors" in terms of their relationship with 
travel agents and therefore clearly exclude business to  consumer (B-to-C) types of relations from their 
                                                     
 
49  G2 was founded by former employees of Orbitz.  S/C/W/270 
 Page 37 
 
 
  scope. 50  The ICAO Code in its successive versions does not  contain a reference to travel agents.  In 
1991, it referred "to a computer system that provides information on air carrier schedules, space availability and tariffs and through which reservatio ns on air transport services can be made".  The 
1996 version reads:  "a computer system that pr ovides displays of schedules, space availability and 
tariffs of air carriers and through which reserva tions on air transport services can be made". 
159. From this, ICAO infers that Internet providers are potentially covered by the ICAO Codes.  It 
considers that the definition of the Code is "an accurate description of websites on the internet, which 
sell air transport services".  ICAO adds that "from a definitional standpoint, therefore, the ICAO CRS Code applies to the Internet marketing of air transport."
51 
160. The GATS definition does not contain a reference to travel agents either.  Its wording is 
virtually identical to that of the first ICAO code.  The question therefore arises whether it is applicable 
to Internet providers, with the possible exception of airline websites that could be covered by "selling 
and marketing." 
161. The following sections will therefore describe economic and regulatory developments 
affecting Internet travel providers, as was done dur ing the last review (compilation, pages 18-25). 
(a) Economic developments 
162. There is an abundance of statistics and forecasts available for B-to-C travel providers, notably 
from consulting companies.  However, the methodol ogy and exact coverage are often unclear, and 
they are not always consistent.  Figures evolve ve ry quickly and vary considerably between world 
regions. 
163. The total turnover of online travel agenci es was estimated by Airline Business at 
US$55 billion in 2004, up from US$35 billion in 2002.   
164. The report commissioned by the EU from the Brattle Group on the possible consequences of 
CRS deregulation in 2003 attributes only a very marginal  share to online travel agents, as can be seen 
from Table 9.  Unfortunately, these data have not been updated. 
 
 
 
                                                      
50  E.g. EC Regulation 2289/89, as amended by 3089/93 and by 323/99, in Article1(f) and (l) states that 
"computerized reservation system ( CRS) shall mean a computerized sy stem containing information about, inter 
alia, air carriers' schedules, availability , fares, and related services with  or without facilities through which 
reservations can be made or tickets may be issued to the extent that some or all of these services are made 
available to subscribers" , with the subscriber being defined as "a person  other than a consumer, or an 
undertaking other than a participating carrier using a CRS which is under contract or other financial arrangement with a system vendor". Alternatively, Canadian regulation  P.C. 1995-887 of 6 June, 1995, states in 
Article 2 that  "system means a computer reservation system that is offered  by a system vendor to subscribers , 
that contains information about the schedules, fares, ru les or availability of more than one carrier and that 
provides subscribers with the capability to make reserva tions or to issue tickets for air services", with the 
subscriber being defined as "a travel agent or other en tity that holds itself out to the public as a source of 
information about the air service indust ry, that makes reservations or issues tickets for air services and that 
contracts with a system vendor to use a system". 
51  ICAO document ATConf/5-WP/14 paragraph 4.2. S/C/W/270 
Page 38  
 
  Table 9 
Annual bookings in Europe through alternative distribution channels 
 
   2003 Average Annual 
 2001 2002 Projections Change 
Brick-and-mortar travel agen cies 60.7% 59.1 % 57.6% -1.0% 
Online travel agents 2.3% 2.6% 3.9% 0.5% 
Supplier direct* 37.0% 38.2% 38.3% 0.4% 
Total 100.0% 99.9% 99.8%  
 
* Note:  Includes bookings made through airline websites, call centres, and reservation offices. 
Source :  Sabre. 
 
165. A more recent enquiry, dated July 2005, by  Airline Business with a wider geographical 
coverage52, gives a higher, but still relatively modest share to online travel  agencies (5 per cent 
worldwide in 2005).53  Chart 4 indicates that the rate of growth is erratic, unlike for direct sales.  In 
2003, online travel agencies accounted for nearly half of the direct sales, whereas in 2005 their 
contribution was equivalent to only about one quarter.  
Chart 4 
Percentage of total seat sales by source 2001 - 2005 
 
0%5%10%15%20%25%30%35%
2001 2002 2003 2004 2005e-tickets
All online
Own website
 
 
Source :  Airline Business. 
 
166. According to the consultant PhocusWright, in  the United States, Internet sales represented 
42 per cent of a US$224 billion travel market in 20 05 (including non-airline travel and airline direct 
                                                      
52  The representative sample covers 200 airlines.  Some operate on markets that may be considered 
more mature than Europe, i.e. the US and Canada.  Some others operate on less mature markets, Asia and 
Africa, where nearly all bookings are still made by travel agents. 
53  As extrapolated from the difference between th e "online sales" and the "own website sales".   S/C/W/270 
 Page 39 
 
 
  sales).  According to another consultant, Jupiter R esearch, the market for air, hotel, car rentals and 
other US travel will reach US$104 billion by 2010, 56 per cent of which will be sold online. 
167. In the first review, online travel providers we re categorized by type of owner (collective 
airline portal, website of physical travel agencies,  pure online players, etc., see compilation, pages 18-
25), but market developments have made  these distinctions largely irrelevant. 
168. There has been considerable evolution in term s of ownership during the period under review.  
Many online travel agencies have merged or have  been acquired by classical CRS (Orbitz by Cendant, 
Opodo by Amadeus, Zuji by Sabre via Travelocity) or even media companies such as Barry Diller's 
Interactive Corporation (Expedia).  Other actors have simply disappeared, such as airlines acting 
collectively (Zuji, Opodo, Orbitz) or IT comp anies (Microsoft, former owner of Expedia). 
169. A more relevant distinction may now need to be based on the type  of services offered.  Again, 
the borderlines appear somewhat blurred.  There is a sort of continuum between travel websites.  At 
one extreme are "webcrawlers"54 such as the very successful Kayak. com (also founded by Orbitz's 
veterans) or Mobissimo, which simply search for tic kets, but do not allow for bookings and are paid 
by referral fees (i.e. a commission paid by the final provider to the travel website if the click 
transforms itself into a sale).  At the other extr eme are full-fledged online travel agencies such as 
Expedia or Travelocity.  The travel sections of ma jor generalist portals such as Yahoo ("farechase") or 
AOL contain features that belong to those two types.  AOL is a good example in this respect as, in addition to travel search powered by Travelocity/S abre, it has just added a new functionality "pinpoint 
by AOL" which works in conjunction with Kayak.co m.  The growth of online travel agencies is 
extremely rapid, as shown in Table 10, and they start targeting the coporate market.  They are 
increasingly considered as full online travel providers  by professionals, and have become an integral 
part of the "distribution mix" of airlines. 
Table 10 
Market share of US travel sites 
 
Site Dec-04 May-05 
Expedia 24.8% 21.7% 
Travelocity 15.8% 16.2% 
Orbitz 11.6% 8.4% 
SideStep 0.0% 1.3% 
Mobissimo 0.2% 0.1% 
Kayak 0.1% 0.7% 
Yahoo/Farechase 0.1% 0.3% 
Other 47.5% 51.3% 
 
Note:  Based on monthly visits. 
Source :  Airline Business, June 2005. 
 
170. Most of these sites use a classical CRS as an "engi ne" to search and book fares.  There is no 
publicly available documentation of the contractua l relationship between CRS-GDS on the one hand 
and online travel agencies on the other, but it is clear that first-line online providers do not pay CRS 
the cost of a full booking like airlines (around US$1 1 per ticket on average).  Some of these B-to-C 
providers have also developed "direct connect acce ss" (DCA) software, giving them a direct access to 
the inventories of the airlines.  This is for in stance the case for Orbitz, wh ich has agreements with 
                                                      
54  Some of them are even nicknamed "screen scrapers" by the travel or airlines sites they search and by 
whom they are faulted of slowing down those sites by ov erloading them with requests.  Some airlines and hotel 
chains have attempted to sue "screen scrapers", but, so far, in vain. S/C/W/270 
Page 40  
 
  nearly all US major airlines for these DCA, in a ddition to its traditional use of the classical CRS 
Worldspan.  Orbitz charges US$3 per booking made  through these DCA, and in 2004, it was already 
making 40 per cent of its transactions through these DCA with seven airlines, whereas its inventory 
offers 455 airlines. 
171. Orbitz has been the target of several judicial or quasi-judicial complaints from its competitors.  
The case in point were contractual clauses that require  airlines to give the best fares they are offering 
on their own website ("webfares") as a precondition to appear in Orbitz display.  These claims have 
been dismissed, and the practice of giving access to the full inventory, including webfares, has become common among airlines in the US, including in their relation with classical CRS, provided that airlines obtain in exchange a rebate on fees (see above the section on B-to-B CRS). 
172. In terms of concentration, the online travel market appears as a mature market, which is 
somewhat paradoxical in a sector in constant evolutio n.  In the US, for instance, the top three groups 
(IAC/Expedia, Sabre/Travelocity and Cendant) represen ted no less than 93 per cent of the market in 
2004, while in Europe the top five companies (Expedia, Last Minute, Ebookers, Opodo and Travelocity) accounted for 60 per cent. 
173. Online agencies do not need to establish a commercia l presence in order to be able to operate 
abroad.  However, already established players ar e now seeking to expand geographically and acquire 
brands and expand in promising markets.   
174. For instance, in 2004, Cendant acquired the UK company Ebookers and the Australian 
company Flairview Travel.  In 2005, Travelocity /Sabre acquired Lastminute.com, the European 
market leader, for US$994 million.  It also took  full control of Zuji, a travel portal formerly 
collectively owned by Asian airlines and whos e activities extend to Australia, New Zealand, 
Singapore, Hong Kong and Korea.  Not all of these acquisitions have been success stories, however, 
as cross-border synergies largely depend on the integr ation of the IT systems and on the capacity of 
these sites to absorb two-digit annual growth of traffic. 
175. In China, only 5 per cent of tickets are sold online and there are 11,000 "brick and mortar" 
travel agencies.  The perspectives are, however, extremely bright given rapid growth of domestic 
tourism.  That explains why the two market-leaders of online travel;  Ctrip (1.2 million users in 2004, 
double the previous year), and E-Long (0.5 million users in 2004) are both majority-owned by Expedia (itself controlled by the media conglomerate Interactive corporation, IAC).  Cendant, for its 
part, has created a joint venture with the state-owne d China Youth Hostel Services.  However, most of 
the revenues of these online travel agencies come from hotel bookings as air booking fees are capped. 
176. In Japan, Rakuten and the biggest "brick and mo rtar" agency JTB have started online services, 
but mostly for domestic flights and hotels as the international segment is still dominated by group 
trips organized by physical travel agents.  Howeve r, Tabini, an online travel agency, had to cease its 
activities at the end of 2005 due to lack of customers. 
(b) Regulatory developments  
177. There are virtually no developments to report in this regard.  In the US, the Internet travel 
providers had provisionally been exempt from regulation pending the final decision on CRS regulations.  The final rule issued by the US Depa rtment of Transport (DOT) on 7 January 2004 (CFR 
part 255, Federal Register volume 69, n°4, pages 975- 1033) definitively confirmed that Internet travel 
providers are not specifically regulated.  They are not specifically regulated in Europe either, since 
they do not fall under the definition of the CRS regul ation which implies the intervention of a travel 
agent. S/C/W/270 
 Page 41 
 
 
   
Possible issues for discussion  
 
In view of the openness of the GATS definition of  CRS (no reference to travel agents, no requirement 
of exhaustivity of the inventory) and of the emerg ence of Business-to-Consumer travel providers, 
Members may want to discuss the possibility of  a collective interpretation which either: 
 
 - explicitly includes these new online providers in the CRS definition of the Annex or 
 
 - considers them as an electronic form of travel agencies (using the concept of 
"technological neutrality" and taking into account recent WTO jurisprudence).  By 
the same token, this option could limit the scope of CRS to B-to-B providers by 
making a reference to their use by travel agent s, as is the case in national codes or 
regulations on CRS. 
 
These two interpretations would have different legal implications as commitments and MFN 
exemptions differ widely between sectors. 
 
Members may therefore want to consider the possib ility of technical rectifications, not involving 
compensation, to allow for the adjustment of schedules and MFN exemption lists to the newly 
clarified legal situation.  Otherwise, in view of the complex legal ramifications, a solution could be 
left to a possible future dispute settlement case.  
 
In this context, Members may also want to discuss th e status of direct online sales channels operated 
by the airlines, which could fall within the definition of CRS or of selling and marketing, and decide 
in favour of one of option, possibly by using the concept of technological neutrality. 
 
 
3. Possible implications for cargo traffic  
178. The definition of CRS in the Air Transport Anne x does not contain a reference to passengers 
("services provided by computerised systems that contain information about air carriers schedule, 
availability, fares and fares rules, through which reservations can be ma de or tickets may be issued"). 
 
Possible issue for discussion  
 
Is a computerized system that contains relevant in formation (schedules, ava ilability, fares) for cargo 
transport and that allows reservations  to be made covered by the Annex definition and, hence, by 
commitments on CRS?  
 
 
179. This is not a moot point.  Recent years have seen the development of providers offering cargo 
types of services, such as GF-X55 and Cargo Portal Services.56  For instance, GF-X is operational 
since October 2000 and has some major players of the air cargo and logistics industry among its 
members, such as American Airlines Cargo, Air France Cargo, British Airways World Cargo, 
Cargolux, Continental Airline Cargo, Delta Air L ogistics, Emirates Sky Cargo, Cargo Iberia, KLM 
Cargo, Lan Cargo, Lufthansa Cargo, Swiss World Cargo, Bax Global, DHL, EGL, Exel, Kuehne and 
Naegel, Panalpina and Schenker.  Cargo Portal Serv ices, which has been created by the IT provider 
Unisys, offers similar services.  
                                                      
55  http://www.gf-x.com 
56  http://www.unisys.com/transportation/ solutions/logistics/cargo_portal_services S/C/W/270 
Page 42  
 
  4. Other service providers linked to CRS activities 
180. The CRS picture would not be complete without mentioning at lest two other types of service 
providers that play a key role upstream in the provi sion of CRS services.  The first type consists of 
companies that provide or publish airlines fares and rules, which are then fe d into CRS.  There are 
two major players in that field.  ATPCO (Airline Tariff Publishing Company) is a company based in 
Washington and owned by 19 majo r US and non-US airlines which obtains fares and its associated 
purchasing rules and conditions from over 500 US and non-US airlines.  This information is then provided to the four major GDS as well as to othe r airlines and agencies which subscribe to its 
services.  ATPCO does not charge airlines for the pr ovision of the fare information but the entities, 
including the GDS, that subscribe to its various data  services.  The second main player on this market 
is the information technology and telecommunica tion services provider SITA, which is collectively 
owned by air transport industry companies (mostly airlines). 
181. The second category of providers is made up of companies that collect and publish schedules 
of airlines.  The dominant player is OAG Worlwide, a company resulting from the merger in 1993 of the US based Official Airlines Guide Inc. a nd the UK-based ABC International.  OAG has 400 
employees and nine offices in North America, Europe and Asia. 
 
Possible issue for discussion  
 
Members may want to consider if such data services a re directly related to exercice of traffic rights. 
Otherwise, what would be the proper classification? 
 
 
B. SELLING AND MARKETING OF AIR TRANSPORT SERVICES  
1. Economic Developments  
(a) General observations 
182. The increasing share of direct sales by the airlin es in their "distribution mix", a trend already 
identified during the first review, has been confir med and amplified during the period under review.  
This makes commitments on selling and marketing ev en more valuable than they were during the 
Uruguay Round negotiations, where forms of direct sal es were limited to airport counters, city offices 
and, marginally, call centres.  The development of call centres and the advent of direct online sales, 
combined with the renewed attention paid by ai rlines to their distribution costs, are major new 
features.   
183. There are, however, no global figures to assess the economic importance of direct sales as 
compared to other channels of distribution in gl obal sales.  However, specialized surveys as well as 
data from individual airlines concur in confirming th is evolution, although ample variations can be 
observed by type of traffic, region and individual carriers. 
184. As an example, the total sales of the US ca rrier Northwest Airlines in 2005 were through the 
following channels:  60 per cent sales through thir d parties; 22 per cent call centres; 16 per cent 
NWA’s own website;  2 per cent airport ticke t counters;  and 0 per cent city offices.57 
185. A July 2005 survey conducted by Airline Busin ess asked airlines which distribution channels 
they were using and which they considered to be the most important in future.  The replies of the 
survey are summarized in Chart 5. 
                                                      
57  Northwest closed all its city offices in 2004.  S/C/W/270 
 Page 43 
 
 
  Chart 5 
Online channels used to sell seats-2005 
 
66%44%30%19%18%13%12%
64%6%5%6%0%2%3%
0% 20% 40% 60% 80%Most important
Currently used
Own websiteOnline travel agencies
 (e.g. Expedia)Joint airline site
(e.g. Opodo, Orbitz, Zuji)Do not use w eb/online salesAuct ion/bid sit es
(e.g. priceline.com)Other websites (e.g. media sites)Joint alliance website
 
 
Source :  Airline Business. 
 
 
186. Since the channels for direct sales are of a very different nature, they will be described 
separately. 
(b) Airport counters and city offices 
187. There are no comprehensive data for these outle ts.  However, anecdotal evidence suggests 
that this form of selling and marketing is dimini shing in importance.  For instance, in March 2005, 
British Airways closed down 17 city travel shops a nd one major in-house travel agency at Heathrow 
airport as these outlets were making losses compared  to the much cheaper online channels whose 
relative share of total sales was growing in para llel (15 per cent in 2002, 32 per cent in 2006, 50 per 
cent in 2008). 
188. A point worth noting is that airport counters, except at the carrier's hub, are frequently staffed 
by personnel from ground-handling companies or, in certain instances, alliance partners.  
 
Possible issue for discussion  
 
Would an airport counter of a carrier staffed by th ird-party personnel still be considered as falling 
within the definition of selling and marketing in the sense of the GATS Air Transport Annex 
("opportunities for the air carrier concerned ...")?  
 
 S/C/W/270 
Page 44  
 
  (c) In-house call centres 
189. No comparable data exist for this form of  selling and marketing either.  The anecdotal 
elements available are unconclusive.  For instance, in the last two years, British Airways has closed 
three of its five call centres located in the UK (whose traffic had gone down from 15 million phone 
calls to 6 million in four years) while keeping its eleven locations abroad.  In the meantime, 
Southwest continues to rely for a notable proportion of its bookings (27 per cent) on in-house call 
centres.  There is even a case in  the United States where a call centr e has been repatriated in-house 
from overseas as the quality of service of the third part y provider had not been deemed satisfactory.   
(d) Direct online sales 
190. Direct sales, like more generally online sales, are easier to handle in the case of point-to-
point/domestic/leisure-low-cost segments.  This explains why direct online sales are the quasi-
exclusive selling channel of certain low-cost carriers such as easyJet and Ryanair.  However, there are 
variations even among low-cost carriers.  For exam ple, online direct sales represent 75 per cent of Jet 
Blue sales and 60 per cent of Southwest sales.  Tw elve per cent of Southwest's bookings come from 
the CRS Sabre and the remainder from a more traditional form of direct sale i.e. call centres. 
191. There are considerable variations between carri ers and between regions in the use of on line 
direct sales.  This is illustrated, for instance, by  Table 10 drawn from a July 2005 survey conducted by 
Airline Business   on a representative sample of over 200 airlines worldwide.   
Table 11 
Online sales and e-tickets in proportion of all tickets – 2002/2005 
 
 Own 
airline 
website All online 
channels E-tickets 
issued 
2005 16.4% 20.1% 29.6% 
2004 11.0% 14.5% 19.1% 
2003 9.7% 15.8% 14.7% 
2002 5.1% 10.1% 11.1% 
 
Source :  Airline Business, July 2005. 
 
 
192. Even in the mature US market, a traditional network carrier such as Continental Airlines 
recorded only 25 per cent of its bookings through its own website in 2004, even though it aims to 
achieve a 50 per cent share.  All major US carrier s report double digit growth for their websites and 
have started segmenting them by types of market, targeting in particular the lucrative corporate 
segment.  This evolution also affects low-cost carriers (e.g. SWAbiz for Southwest, Company Blue 
for Jetblue) alongside traditional carriers (American,  Delta, Northwest).  The same evolution can be 
observed outside the US though with a time lag.  Ho wever, in certain instances, the "direct" brand 
may be misleading.  For instance, American's an d United's corporate booking portals are in fact 
relying on Orbitz, a third-party online travel provider.   
193. The IT/telecom company SITA has estimated that direct sales resulted in airlines saving up to 
US$1.2 billion in 2005.  In order to accelerate this  trend, in August 2004, Northwest Airlines (NWA), 
another traditional network carrier, imposed an add itional fee on bookings made elsewhere.  This fee 
applied not only to external channels such as CRS,  but also to Northwest’s own channels other than 
its website (call centres, airport ticket counters and downtown offices) be cause these sales are more 
costly on a per-ticket basis than the use of the airlin e's own website.  GDS reacted to the surcharge by  S/C/W/270 
 Page 45 
 
 
  downgrading NWA in their displays, forcing the airlin e to abandon the practise.  It has, however, been 
maintained for other modes of bookings and subse quently been followed by American, Continental, 
United and US Airways. 
194. Other carriers have tried to attract customers on their own websites by offering a refund if the 
customer finds a lower fare on another site.  Anot her new tendency is that of "dynamic packaging" 
through which airlines websites try to sell non-airline elements, such as car rentals, hotels and travel 
insurance provided either by their subsidiaries or by commercial partners.  British Airways's website 
is a good example. 
(e) Selling and marketing activities undertaken by alliances, codesharing or simple commercial 
partnerships 
195. As explained during the first review (compila tion pages 23 and 26), alliances cooperate in the 
area of selling and marketing through joint ma rketing teams, common advertising campaigns, 
common frequent flyer programmes and cross-selling of tickets.  
196. This point is well illustrated by the result of a July 2004 survey on IT by Airline Business, 
based on a representative sample of airlines member s of alliances, which is summed up in Chart 6. 
Chart 6 
Existing and planned shared functions within alliances 
 
16%8%8%12%16%24%10%1%
76%72%68%32%20%16%12%12%
0% 10% 20% 30% 40% 50% 60% 70% 80%Frequent flyer programsCheck-in systemsBooking records Revenue managementAircraft scheduling/network
planningMaintenance, repair and overhaulCustomer relationship
managementFinancial systems
shared access
plan to share
 
Source :  Airline Business, July 2004. 
 
 
197. The fact that alliance members tend to cluster in the same terminals at major airports and 
share personnel and facilities will further contribute to these cross-selling activities. 
198. At a more ad hoc  level of cooperation, codesharing is to a very large extent a selling and 
marketing arrangement.  The US Department of  Transportation "Code-s hare safety program S/C/W/270 
Page 46  
 
  guidelines", dated 19 February 2000, define code-s haring as "a marketing arrangement in which an 
airline places its designation code on a flight operate d by another airline and sells and issues tickets 
for that flight".  Through the code-sharing arrangement, the flight becomes the flight of both the operating and the marketing carrier.  Hence, the ma rketing carrier is selling what has effectively 
become its own flight;  it could thus be consid ered as falling within the Annex definition of selling 
and marketing ("opportunities for the air carrier
 concerned to sell and market freely its  air transport 
services"). 
199. Finally, at an even lower level of cooperation, there are cases of cross- selling that do not even 
entail a code share arrangement.  This is the c ase, for instance, for the agreement concluded in 
December 2005 by two German airlines, DBA, a low-cost, mostly domestic carrier, and Air Berlin, a 
mostly leisure travel airline.  The two companies are to link their websites and offer each other’s 
flights on these websites.  
 
Possible issue for discussion  
 
Members may wish to consider whether joint sellin g and marketing activities fall within the coverage 
of the GATS definition of selling and marketing, i.e. "opportunities for the air carrier concerned  to 
sell and market freely its air transport services, incl uding all aspects of marketing such as market 
research, advertising and distribution... ", whether they are covered under ot her sectors, such as 
computer services or market research  and advertising, or whether they are excluded in full or in part 
from the scope of the GATS. 
 
 
(f) General sales agents, third-party call centers  and other outsourced sales and distribution 
functions 
(i) General observations 
200. Outsourcing of airline management functions is on an increasing trend.  Chart 7 draws upon 
an enquiry made by Airline Business in July 2004 , based on a representative sample of over 200 
airlines worldwide.  Selling and marke ting is no exception in this context.  S/C/W/270 
 Page 47 
 
 
  Chart 7 
Outsourced airline functions 
Source :  Airline Business, July 2004. 
  
 
Possible issue for discussion  
 
Can "selling and marketing" activities that are outso urced by a carrier still be considered as falling 
within the selling and marketing definition of the Air Transport Annex ("opportunities for the carrier 
concerned "...) 
 
 
(ii) General sales agents 
201. Subcontracting for selling and marketing to thir d parties, so-called General Sales Agents 
(GSA), has expended as well.  Examples include th e US company "Discover the World Marketing" 
(75 offices in 52 countries) and the German company Aviareps (40 offices).  Some of the airlines that 
responded to the IATA WTO enquiry on legal re gimes covering selling a nd marketing (see the 
regulatory section below) were present in some count ries/territories through GSA.  This is generally 
the case when the low frequency of f lights does not justify the setting up  of a wholly-owned structure. 
(iii) Third-party call centres 
202. This form of selling and marketing is likely to follow the general trend towards business 
process outsourcing.  Its possible classification has been discussed at length in the context of the 
discussion on e-trade and on cross-border supply. 44%43%45%32%29%28%28%21%11%
15%12%19%18%19%14%23%19%12%
35%40%26%42%36%48%37%46%50%
60%5%10%85%16%10%12%14%27%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%supply of airline specific
applications (front office)network managementwebhostingapplication maintenancedesk top managementdatacentre operationssupply of general business
application(back office)security and electronic
detection systemsmajority of IT functions
already outsourced
plan to outsource by 2006
keep in-house
no answerS/C/W/270 
Page 48  
 
  (iv) Other outsourced sales and distribution functions 
203. Air France has engaged in outsourced selling a nd marketing by utilising the Czech company 
Teamtrackers, itself owned by the insurance comp any Europe Assistance, to process overloads of 
post-purchase claims and of luggage claims.   
(g) Aspects related to cargo traffic 
204. Nothing in the definition of selling and marke ting contained in the Annex excludes cargo.  
However, information is scarcer in this area and there is very little to report except for the increasing 
importance of online direct sales/booking channels, where the classical cargo industry (be it combi–
carriers carrying cargo in the belly of a passenger plane,  or all-cargo) is trying to catch up with the 
technological advances that express carriers have introduced over the years.  However, mode 3 
commitments for the selling and marketing of air cargo services may prove commercially relevant.  
Like for freight-forwarding or liner maritime tran sport, a physical presence is key for attracting 
potential customers and for subsequently collecting the freight.  This explains why express carriers 
have very extensive physical ne tworks and why selling and market ing commitments may prove more 
valuable for cargo than for passengers, where the situa tion is to a large extent already very liberal.  
2. Regulatory Developments 
205. Although, generally speaking, selling and marke ting activities are not regulated as such, at 
least at a national level, some aspects are affected  by the air service agreements.  It is somewhat 
difficult to gather data and to give a complete picture of the regulatory evolution for this sector. 
(a) ICAO Developments 
206. The ICAO TASA contains a specific Article (Ar ticle 21) dealing with selling and marketing.  
It is common to all three alternative approaches s uggested by the TASA (i.e. traditional, transitional 
and full liberalization) and includes sales through in termediaries, except for CRS.  The Article reads: 
"1. Each Party shall accord airlines of the other Party the right to sell and market 
international air services and related products  in its territory (directly or through 
agents or other intermediaries of the airlin e's choice), including the right to establish 
offices, both on-line and off-line."   
207. ICAO considers that this clause provides a simple, but fair standard for authorizing airlines to 
sell and market their services.  The clause does not apply to the sale and marketing of air service products through computer reservation systems (CRS),  which is dealt with by a separate provision.  
The term "on-line office" describes a situation where an office is located in a city or country directly 
served by the airline;  an "off-line office" is located  in a city/country not served by the airline.  
208. The same Article stipulates the right to sell in freely convertible currencies of other countries:   
"2. Each airline shall have the right to sell transportation in the currency of that 
territory or, at its discretion, in freely convertible currencies of other countries, and any person shall be free to purchase such tr ansportation in currenc ies accepted by that 
airline."   
209. The ICAO TASA contains also a draft Article on currency conversion, remittances, and 
earnings.  Again, this Article is common to all th ree alternative approaches suggested by the TASA.  
It reads:  S/C/W/270 
 Page 49 
 
 
  "Each Party shall permit airlines(s) of the other Party to convert and transmit abroad 
to the airline(s) choice of State, on demand, all local revenues from the sale of air transport services and associated activities direc tly linked to air transport in excess of 
sums locally disbursed, with conversion a nd remittance permitted promptly without 
restrictions, discrimination or taxation in r espect there of at the rate of exchange 
applicable as of the date of the re quest for conversion and remittance." 
210. This provision is a more comprehensive version of a provision found in al most all bilateral air 
service agreements.  ICAO also specifies that the term "associated activities directly linked to air 
transport" would normally include activities closely related to the provision of air services, such as a bus service between the airport and hotels and, where permitted, the provision of ground-handling 
services to other airlines.  The term would not include activities such as revenue from hotels, car 
rentals, investments in local real  estate, or stocks and bonds, which would presumably be subject to a 
different conversion and remittance regime.  The term "without taxation" refers to taxation on 
conversion and remittances, not to national income  tax, which is dealt with by the Article on 
"taxation". 
211. Finally, the ICAO TASA contains a provision on "non-national personnel and access to local 
services".  This provision seems to correspond to a larg e extent to mode 4 for selling and marketing in 
the GATS sense, although with a wider scope, as it concerns not only commercial staff but also 
operational and technical staff.  The provisions of this Article differ depending on the liberalization 
approach chosen.   
212. For "traditional and transitional" approaches, it reads as follows: 
"1. The designated airline or airlines of one Party shall be allowed, on the basis 
of reciprocity, to bring into and to maintain  in the territory of the other Party their 
representatives and commercial, operational and technical staff as required in 
connection with the operation of the agreed services.  
2. These staff requirements may, at the option of the designated airline or 
airlines of one Party, be satisfied by its own personnel or by using the services of any 
other organization, company or airline operating in the territory of the other Party and authorized to perform such  services for other airlines. 
3. The representatives and staff shall be subject to the laws and regulations in 
force of the other Party, and consiste nt with such laws and regulations:  
a) each Party shall, on the basis of reciprocity and with the minimum of delay, 
grant the necessary employment authorizations, visitor visas or other similar 
documents to the representatives and staff refe rred to in paragraph 1 of this Article; 
and 
b) both Parties shall facilitate and expe dite the requirement of employment 
authorizations for personnel performing certain temporary duties not exceeding 
ninety (90) days." 
213. It may be noted that the traditional and transiti onal approaches rely on reciprocity, which - if 
interpreted in a quantitative manner - would result in  a numerical limitation on the number of airline 
employees that could be posted in the other Party's territory.
58  
                                                      
58  This might also raise MFN compatibility issues. S/C/W/270 
Page 50  
 
  214. For the "full liberalization" approach, the Article provides that: 
"Each Party shall permit designated airlines of the other Party to:  a) bring in to its territory and maintain non-national employees who perform 
managerial, commercial, technical, operati onal and other specialist duties which are 
required for the provision of air transpor t services, consistent with the laws and 
regulations of the receiving State concerni ng entry, residence and employment; and 
b) use the services and personnel of any other organization, company or airline 
operating in its territory and authorized to provide such services."  
215. Paragraph b) responds to the need to accomm odate the increasingly frequent use of personnel 
from third countries by air carriers as a result of th e growing number of alliances and the globalization 
of airline commercial activities.  Consequently, it  provides for the possibility to use personnel and 
services of an airline, which is a partner in an alliance or codeshare arrangement, as well as any local 
company or organization authorized to provide such services. 
(b) WTO developments 
216. Of the twelve countries or territories that ha ve acceded to the WTO since August 2000, seven 
have undertaken commitments on selling and marketing
59, and two have listed relevant MFN 
exemptions.60 
217. MFN exemptions covering selling and marketi ng were discussed during the second review of 
MFN exemptions held on 30 Nove mber 2004 and 23 February 2005.61 
(c) Bilateral regulatory aspects 
218. One of the obligations conditional on the sche duling of commitments is the prohibition on 
operating restrictions on international transfer s and payments for current transactions.   
219. Since such tranfer restrictions have been  a longstanding problem for airlines, numerous 
bilateral air service agreements since World Wa r II contain clauses guaranteeing the free remittance 
of earnings.  For reasons explained above in relation to CRS provisions in bilateral agreements, in the 
absence of MFN exemptions listed under the GATS by  Members concerned to cover such situations, 
it could be argued that such provisions may need to  be extended in accordance with Article II of the 
GATS (MFN).  Otherwise, an MFN exemption should have been listed by the Member concerned.  
220. The 2004 edition of the WASA ICAO datab ase lists 329 agreements containing currency 
conversion/remittance clauses concluded after 1 Ja nuary 1995, which invo lve at least one WTO 
Member.  ICAO defines currency conversion/remittance clauses as "provisions aimed at facilitating or 
ensuring currency conversion and/or remittance of funds by the designated airlines, usually without 
restrictions.  Alternatively, it may refer to separat e arrangements in place between the parties and will 
be coded as existing so long as the objective of the tran sfer of funds can be construed form the text."  
The agreements concern 94 WTO Members, of wh ich 25 filed an MFN exemption covering selling 
and marketing (out of a total of 32 MFN ex emptions listed for selling and marketing).62  The complete 
                                                      
59  Armenia, Cambodia, Chinese Taipei, Croatia, FYROM, Moldova and Oman. 
60  Albania and Moldova. 
61  See documents S/C/M/76, dated 4 February 2005, and S/C/M/78, dated 17 May 2005. 
62  Counting EC 12 as 13 entities.  S/C/W/270 
 Page 51 
 
 
  list of these agreements and MFN exemptions  can be found in the Annex (Appendix A-4 and 
Table A-7). 
221. A second feature of bilateral agreements, which has an impact on selling and marketing is the 
granting to the designated airline(s) of the other pa rty the right to sell air services in the currency of 
that other party or in a freely convertible currenc y ("local and convertible currency" clause).  The 
2004 edition of the ICAO WASA database lists 351 ag reements concluded with such a clause since 
1 January 1995 and involving at least one WTO Member s.  In total, 93 WTO Members are concerned, 
of which 26 have filed an MFN exemption covering selling and marketing (Appendix A-5 and 
Table A-7). 
222. A third element of bilateral agre ements relevant to selling and marketing is, as defined by the 
ICAO WASA database, "the right to establish offi ces and or commercial technical and operational 
personnel in the territory of the other party".  In GA TS terms, this would involve mode 3 and mode 4.  
The database indicates further that "the right of establishment may be implicit, for example where a 
designated airline is granted the right to sell air tr ansportation directly in the territory of the other 
party."  The 2004 edition lists 331 agreements contai ning an "office clause" concluded after 1 January 
1995 and involving at least one WTO Member.  93 WTO Members concerned, 25 have filed a 
relevant MFN exemption63 (Appendix A-6 and Table A-7). 
(d) National developments 
223. For the purpose of gathering data for the revi ew, the Secretariat established a questionnaire, 
IATA then helped to distribute it to its member ai rlines through its local offices and contacts with the 
Board of Airlines Representatives (BAR).64  The questions were largely inspired by the structure of 
Articles XVI and XVII of the GATS, but adjusted  to an audience unfamiliar with GATS.  IATA 
received answers from 26 countries, approximately one sixth of the sample.  This constitutes a reasonable rate of return for this type of enquiry , and covers a fairly representative geographic sample 
of WTO Members (Austria, Bahrain, Chile, Czech  Republic, Dominican Republic, Egypt, Germany, 
Italy, Jordan, Kuwait, Mali, Portugal, Qatar, Saudi Arabia, Senegal, Slovak Republic, Slovenia, Spain, 
Switzerland, Trinidad and Tobago, Tunisia, Turk ey, United Arab Emirates, and United Kingdom) and 
non-Members (Lebanon and Yemen).   
224. The regulatory landscape which emerges from this enquiry is surprisingly liberal (Table 12).
                                                     
 
63  Idem .  
64  BAR is the collective body representing the airlines serving a given country. S/C/W/270 
Page 52  
 
  Table 12 
Restrictions on selling and marketing - 2006 
 
Questions No restrictions Restrictions 
Are your outlets (e.g. city offices, airp orts counters) limited in number or 
size (e.g. number of employees)? 2665 0 
Are you subject to mandatory requirements (e.g. local employment, joint 
venture, prohibition to sell directly, obligation to sell through an intermediary)? 23 3 local 
employment 
requirements
66  
Are your market research and advertising activities limited in any 
manner?  26 0 
Are you subject to land ownership restrictions (e.g. relating to whether 
you can own or rent your premises, relating to the land supporting your premises or obliging you to go through an intermediary)? 25 1 
Are you (a) prohibited from using or (b) forced to use certain legal forms 
when establishing a presence (e.g. branches, subsidiaries, representative 
offices)? 24 2 
Are you forced to have a certain number of nationals on the managing 
board of companies, regardless of their legal form ?  26 0 
 
Source :  WTO/ IATA Inquiry. 
 
 225. As a complement to this ad hoc  enquiry, IATA regularly collects information on the countries 
where its member airlines face repatriation problem s.  This may result in collective initiatives aimed 
at obtaining the relaxation of such restrictions.  Th e last version of the relevant survey, dated January 
2006, contains 17 countries, eight of which are not WTO Members.  None of the nine WTO Members 
concerned has commitments on selling and marketing (pursuant to Article XI of the GATS, payment 
restrictions would be inconsistent with such commitments). 
226. The number of countries restricting payments and transfers could be higher, however, as some 
airlines may have preferred not to report such pr actices for fear of retaliation.  The difficulties 
reported by operators  in this respect include:  long and cumbersome approval processes by Central 
Banks and/or Civil Aviation Authorities, lack of fo reign currencies, and obligations to pay certain 
expenses (such as air navigation charges, costs of ground handling and fuel) in hard currencies while 
being forced to receive payments in local cu rrencies at administered exchange rates.  
C. T
ICKET EMISSION SERVICES  
1. Passenger aspects 
(a) A major technological evolution:  electronic ticketing 
227. Electronic ticketing, which was mentioned in the first review as an emerging feature of 
certain carriers (see compilation, page 26), has during the period under review become a collective 
priority of airlines.  At their Annual General Mee ting, held in Singapore in 2004, IATA Members set 
the objective of 100 per cent e-ticketing by the end of 2007.  This objective is inspired by the 
considerable savings involved.  They are conser vatively estimated at US$3 billion annually or US$9 
per ticket, some estimates go as far as US$15-24 per ticket. 
                                                      
65  In one instance, limitations linked to physical capacity within the airport have been mentioned. 
66  Of these, 2 apply on a de facto  basis  S/C/W/270 
 Page 53 
 
 
  228. E-ticketing was adopted first in the leisure travel market as it is easier to use for point-to-point 
traffic, which constitutes the bulk of leisure travel .  It is now becoming universal in view of its 
advantages for corporate travel in allowing better tracking and easier refunds.  Growht rates are impressive.  For instance, American Airlines’ rate of e-ticketing rose from 55 per cent in April 2001 to 91 per cent in April 2004. 
229. Problems have remained in the case of inter-lin ing between airlines, particularly between 
airlines which are not members of the same alli ance.  However, the industry and various IT 
companies such as Amadeus, Sabre, SITA and IB M are working on solutions.  One of the main 
obstacles faced by developing and least-developed count ries’ carriers is the cost of the hardware and 
the associated training.  Small carriers draw up to 20 to  40 per cent of their revenues form inter-lining;  
they risk losing these revenues if they do not switch to electronic ticketing as adopted by their partners 
from developed countries.  This is a powerful incen tive for the adoption of the new system.  Another 
advantage of early adoption is the possibility to link e-ticketing systems to market research and 
marketing tools, such as customer relation management (CRM) software and frequent flyer 
programmes, thereby optimizing yields.  Nevertheless, rather than technology per se , it is traditional 
business practices and powercuts that have hampered  the adoption of e-ticketing in least-developed 
countries.   
(b) Self emission of tickets by airlines 
230. In the case of direct sale, the ticket is emitted by the airline itself.  Initially, airlines emitted 
paper tickets in IATA format.  They are now switchi ng to e-tickets in accordance with the IATA plan 
to generalise e-ticketing by 2007.  This has al ready been accomplished for tickets booked online, 
whereby the customer only receives a printable receip t which is then exchanged at the airport counter 
for a boarding pass.  The same applies to call- centre bookings;  in this case, the customer only 
receives a booking reference over the telephone.  The switch to e-ticketing is not yet fully achieved 
for tickets sold at city offices, in partic ular in developing and least-developed countries. 
 
Possible issue for consideration  
 
Is the activity of ticket emission simply part of the supply of selling and marketing services as GATS 
Article XXVIII(b) stipulates that "the supply of a service includes the production, distribution , 
marketing, sale  and delivery of a service" ? 
 
Or, alternatively, is it a service in itself?  If so, which service?  And what are the implications in terms 
of commitments and MFN exemptions ? 
 
Members may also wish to consider a similar qu estion for Billing Settlement Plans (see below).  
 
 
(c) Billing Settlement Plans (BSPs) 
231. A Billing Settlement Plan acts as sort of a cleari ng house between travel agents and airlines.  
It apportions the tickets emitted by each travel agen t to the various airlines concerned, collects the 
corresponding payment from the travel agent (after a variable period of credit) and dispatches it to the 
relevant airline.  It also transmits any reimbursement  from airlines to travel ag ents, notably in the case 
of cancelled tickets.  
232. In practice, there are at least three types of BSPs in operation, with the IATA BSP being by 
far the most common type.  Theoretically, there could be more players, as for instance, any bank, financial intermediary or in formation technology company could set up similar services.  S/C/W/270 
Page 54  
 
  (i) IATA Billing Settlement Plans 
233. IATA runs 76 BSPs covering 130 countries.
67  These plans are based on relatively light 
structures (employing between 1 to 20 persons), sel f-funded, and managed on a not-for-profit basis. 
234. To benefit from the clearing services of the BSP, travel agents have to be accredited IATA 
agents.  The accreditation procedure run by IATA  involves criteria such as financial soundness and 
security (to avoid the smuggling of blank tickets) and includes training programmes.  Agencies pay a 
fee to obtain and maintain their accreditation st atus with IATA.  Some non-IATA airlines may 
become members of the BSP on an ad hoc  basis. 
235. The duration of the credit granted to travel ag encies by BSPs varies from one week to two 
months depending on local ec onomic conditions and on the financial soundness of the agent 
concerned.  There is no global estimate available of  the value of this credit, but its granting is 
certainly significant for travel agents, as is their ability to emit tickets, which, from an airlines' 
viewpoint, represents a financial as set likened to a "blank cheque". 
236. Originally planned for paper procedures, the BSP system is quickly turning to electronic 
processing:  by end 2005, 40 per cent of the transac tions were carried out electronically, and forecasts 
are for 70 per cent in 2006 and 100 per cent in 2007 - in line with the general e-ticketing objectives of 
IATA. 
237. The tendency towards the multiplication of booki ng channels has not yet been matched on the 
emission/distribution side.  New online booking channe ls also have recourse to BSPs:  for instance, 
Expedia and Opodo have accredited one of their physical locations in order to be able to issue tickets 
and benefit from the clearing system (the positio n of GNEs with regard to BSP is, however, still 
unclear).  In China, where an IATA BSP opera tes, CRS must obtain an approval from the Civil 
Aviation Authority of China (CAAC) for BSP certificati on in order to be able to issue tickets through 
a travel agency.  So far, only th e local CRS, Travelsky, has obtained  this approval, a situation which 
constrains local travel agencies to book either with  Travelsky or with a foreign CRS with the tickets 
being issued manually, in turn resulting in increased costs.  
238. IATA BSPs processed US$158 billion worth of tic kets in 2004, and figures are rising year-
on-year.  The evolution of the number of IATA  accredited agents (58,000 in 2004) depends on 
exogenous factors such as the ongoing consolidation of  physical travel agencies, itself linked to the 
emergence of online providers, and the ongoing su ppression of booking commissions by airlines. 
(ii) Airline Reporting Corporation (ARC) – United States 
239. The US was initially covered by classical IATA BSPs.  However, in 1976, antitrust 
considerations led to the creation of a different or ganization, the Airline Reporting Corporation.  The 
four main differences from classical IATA BSPs are:   first, IATA does not manage the structure;  
second, airlines and agents are both represented on the board of ARC;  third, membership of ARC is 
not compulsory for travel agents;  and fourth, the corporation is run as a for-profit business.  
Otherwise, ARC functions exactly like IATA BSPs;  it still processes 76 per cent of tickets in the US, 
the rest being emitted by the carriers themselves.  
                                                      
67  For instance, one office serves the Nordic countries and another one North Africa.  Details on the 
geographic coverage of IATA BSPs can be fo und at:  http://www.iata.org/worldwide/index.  S/C/W/270 
 Page 55 
 
 
  (iii) Local providers 
240. In certain countries, local providers perform the same clearing functions as BSPs.  The 
privileges enjoyed de jure  or de facto  by these providers in certain non-WTO Member countries 
(Russia and  Ukraine) have been raised by  some WTO Members during accession negotiations.   
(iv) Project of alternative BSPs 
241. In Europe, travel agents had been complaini ng for some time of anti-competitive practices on 
the part of IATA, notably about accreditation mechan isms, and lodged a formal complaint in 2002.  
The complaint was amicably settled at the end of 2005.   During the dispute, two associations of travel 
agents, ECTAA (European Community Travel Agents  Association) and GEBTA (Guild of European 
Business Travel Agents), representing respectively sm all and medium sized agencies and large ones, 
seriously envisaged creating an alternative clearing structure to IATA BSPs.  This project now seems 
to have been abandoned. 
2. Cargo aspects 
242. To a large extent, the structures and evolu tions described for passenger ticket emission 
services are echoed in the cargo sector.  Here too, IATA and its members have plans for a general 
switch to online trade and documentation (the "e-fre ight" initiative), and IATA runs a clearing house 
structure named Cargo Accounts Settlements System s (CASS), which operates between the various 
stakeholders:  carriers, forwarders, and shippers.  
(a) E-freight 
243. With regard to the application of e-ticketing,  IATA has similar plans for cargo than for the 
passenger sector, though with a different timeframe.  When fully implemented, IATA e-freight will 
save the industry an estimated US$1.2 billion annually (based on current cargo volumes), and reduce 
shipping times by up to 25 per cent.  The goal is  to reduce the number of documents, with which 
every cargo shipment travels from 38 to 19, and to increase the number of airw ays bills for which the 
data is transmitted electronically.  Currently, electr onic airway bill information is only transmitted 15 
per cent of the cases.  The main reason for this is that the messaging system developed by the airlines 
in conjunction with IATA "cargo imp" computer st andard has to be converted in the computer 
languages used by freight forwarders XML or EDIFAC T.  This is done in practice through a "Cargo 
Community System"(CCS).  Traxon in Northern Europe, managed by Lufthansa Systems, and Descartes in Canada and Asia are examples of su ch CCS, but there are also  local CCS such as the 
three operating in Spain. 
244. The main idea of IATA e-freight is to make use of the "single window " concept developed by 
the World Customs Organization and also discussed in  the trade facilitation negotiations of the WTO.  
IATA e-freight will also incorporate the "authori zed economic operator" concept set forth in the 
World Customs Organization (WCO) Framework of Sta ndards to Secure and Facilitate Global Trade.  
Similar "known shipper" concepts have emerged in the post 9/11 cont ext both in national legislations 
(e.g. US, EU) and in other interna tional organizations dealing with tr ansport (IMO, ICAO).  IATA has 
therefore created a steering committee comprising representatives of the WCO, one of the 
professional associations of freight forwarders (Fre ight Forward International) and IATA Members 
with a view to encouraging commercial vendors to  develop common technical solutions for users 
(harmonize data and data compilation to reduce erro rs and facilitate clearing etc.), to ensure the 
compatibility of the project with the timeframe set  and to preserve the multimodal character of the 
system.  Based on these requirements, IATA will wo rk with several vendors on a preferred partner 
basis. S/C/W/270 
Page 56  
 
  (b) Cargo Account Settlement Systems 
245. The market position of the IATA Cargo Account s Settlement System (CASS) is comparable 
to IATA's BSPs.  However, there is some marginal  competition, which has the potential to intensify.  
Furthermore, the IATA system is not universal.  
(i) The IATA CASS 
246. The IATA CASS is based on the same principle as the BSP system;  it is run on a not-for-
profit basis with light structures.  IATA airlines are de jure  members of it, other airlines may 
participate on an ad hoc  basis.  Freight forwarders wishing to participate must undergo a procedure of 
accreditation based on qualifications and financial so undness to benefit from the credit facilities given 
by the settlement system.  Other actors (shippe rs, manufacturers, governmental bodies, charities, 
express carriers when acting as freight forwarders) may use the CASS system on an ad hoc  basis, but 
without the advantage of credit.   
247. There are 40 CASS offices covering 47 countries, and 22 more offices are planned to open in 
the near future.  In 2004, settlement amounted to US$16.8 billion, and the of computerized 
transactions US$14.8 million.  The CASS office centralizes the airway bills, which are the cargo 
equivalent of passenger tickets emitted by the fre ight forwarders on the various airlines, and 
dispatches the payments and possible reimbursement s between airlines and freight forwarders.  The 
system only covers part of the cargo traffic;  express carriers do not use it when they are in direct contact with the client.  Big shipments involving the wet lease of a complete aircraft do not travel under an airway bill either, and the geographical cove rage of the IATA CASS offices is not universal.  
However, the market share of IATA's CASS offices  in the countries they cover varies between 55 per 
cent in Singapore (see (ii) below) and 95 per cent.  The system may be extended in the future to other 
modes of transport. 
(ii) Alternative cargo settlement systems 
248. The IATA CASS system currently faces one serious competitor, EPIC, a company located in 
Singapore.  There is scope for more competition given that any company managing an invoicing 
system (banks, factoring companies, IT companies) could technically provide the same service.  Yet, 
the costs of market entry are relatively high.  A ma rket entrant would have to compete with a not-for-
profit organization which already has a critical mass of  transactions, and would have to match at least 
the credit facilities offered by the IATA system.  
 
Possible issues for consideration regarding ticket emission services  
 
Members may want to give some thought to Charst A9 and A10 contained in the Annex (possible legal status of BSPs/CASS under the GATS), which try to identify various scenarios for the coverage and 
classification of ticket/airway bill emission services.   S/C/W/270 
 Page 57 
 
 
  ANNEX TO CHAPTER II 
 
Table A1 
Booking channels 
 Form Sub-form 
(if any) Examples Possible classification under the 
GATS 
City offices  Air France office in 
downtown Geneva Selling and marketing 
Airports counters  Lufthansa counter in Los 
Angeles airport Selling and marketing  
Own call centres  BA call centre in India Selling and marketing ? / 
telephone answering services 
(CPC87903)? Sales by the 
airlines itself 
Own website  United.com CRS ? / selling and marketing ?/ 
other e-trade related sectors ? 
Alliance website  www.staralliance.com CRS ? / selling and marketing ?/ 
other e-trade related sectors 
Alliance city office   selling and marketing ? / none ? 
Alliance airport counter  One world counter in 
Geneva airport Selling and marketing /none ? Sales by the 
alliance 
Alliance call centre   Selling and marketing ? / 
telephone answering services 
(CPC87903)?/ none ? 
City offices   Selling and marketing ? / none ? 
Airports counters   Selling and marketing ? / none ? 
Call centres   Selling and marketing ? / 
telephone answering services 
(CPC87903)?/ none ? Cross sales by an 
alliance or code 
share airline 
partner 
Website  United.com selling 
Lufthansa tickets,  
Air Berlin selling DBA 
tickets even without a code 
share   CRS ? / selling and marketing ?/ 
other e-trade related sectors 
 
 
Outsourced call 
centres    
General sales agent    
Using 
classical CRS Carlson booking through 
Galileo  Travel agencies 
Using the web Carlson booking  through 
easyJet.com Travel agencies 
Using other 
online 
providers  Travel agencies Physical travel 
agencies  
Using CRS 
bypass Carlson using Navitaire Travel agencies 
Webcrawlers  Kayak.com, yahoo.travel ? 
Using CRS as 
an engine  CRS ? / travel agencies ? Online travel 
agencies Using direct 
connect links  CRS ?/ travel agencies ? 
Auction/bid sites  Priceline.com CRS ?/ travel agencies? 
Using CRS  CRS ?/ travel agencies? 
Using the web  CRS ?/ travel agencies? Sales by non-
airlines third 
parties 
Global New 
Entrants Using direct 
connect access  CRS ?/ travel agencies? 
 
Source :  Compiled by the WTO Secretariat. S/C/W/270 
Page 58  
 
  Table A2 
Clearing Channels 
 
Channels Examples 
Self emission of tickets  A ticket booked on the easyJet site 
IATA billing settlement plan  BSP office in London 
Airline Reporting Corporation   
Local BSP providers  Russian and Ukrainian BSPs Passenger Potential alternative BSP set up 
by travel agents   
IATA CASS  
Self emission of load/shipping 
manifest 
 - Shipments on a plane wet 
leased for that purpose  
- Shipments directly booked by 
the shipper with an express carrier (e.g. Fedex or an 
airline (e.g. Cargolux) 
EPIC (Singapore)68   Cargo 
Potential alternative cargo settlement systems set up by 
banks, factoring companies, IT 
companies etc  
 
 
Source :  Compiled by WTO Secretariat. 
                                                      
68  See:  
www.dbgcm.db.com/pdf/EBPP%20for%20the%20Air%20Cargo%20Community%20in%20Singapore.pdf  S/C/W/270 
 Page 59 
 
 
  APPENDIX  A3 
 
 
List of bilateral agreements  posterior to 1 January 1995 containing a clause  
dealing with computer reservation systems  
(as registered and numbered by ICAO) 
 
 
Jamaica-Netherlands (n°4056), Singapore-Brunei Darussalam (n°4101), Lao Democratic Republic-
Singapore (n°4104), United States-Singapore (n°4111) , Switzerland-Czech Republic (n°4116), United 
States-Czech-Republic (n°4117), Costa-Rica-United States (n°4162), Iceland-Unites States (n°4369), 
United States-Brunei-Darussalam (n°4371), United States-China Macau SAR (n°4388), Jamaica-
Panama (n°4390), Uzbekistan-Indonesia (n°4427) , United States-Uzbekistan (n°4433), FYROM-
Netherlands (n°4456), Bahrain-India (n°4477), Ba hrain-Lebanon (n°4478), Kyrgyzstan-Indonesia 
(n°4511), Kyrgyzstan-China (n°4518), Costa Rica- Paraguay (n°4573) and Syrian Arab Republic-
Netherlands (n°4646). 
 
 
Source :  ICAO WASA database. S/C/W/270 
Page 60  
 
  APPENDIX
 A4 
  
List of bilateral agreements
 posterior to 1 January 1995 containing a clause  
dealing with currency conversion/remittance  
(as registered and numbered by ICAO) 
  Croatia-Austria (n°3948), Austria-Viet Nam (n °3949), Indonesia-Singapore (n°3950), South Africa-
Austria (n°3954), South Africa-Australia (n°3955), Rep. of Korea-South Africa (n°3956), India-
Brunei Darussalam (n°3957), Iran (Islamic Rep. of)-Oman (n°3962), Rep. of Moldova-Turkey 
(n°3964), Poland-Rep. of Moldova (n°3965), Croa tia-TFYR Macedonia (n°3970), Croatia-Slovenia 
(n°3971), Austria-Brazil (n°3973), Bahrain-Austra lia (n°3978), China, Hong Kong SAR-Germany 
(n°3981), Singapore-China, Macao SAR (n°3985), China, Macao SAR-Austria (n°3986), Bahrain-
Seychelles (n°3987), India-Norway (n°3988), I ndia-Sweden (n°3989), India-Denmark (n°3990), 
Myanmar-Brunei Darussalam (n°3991), India-Finland (n°3992), Austria-Mexico (n°3993), Fiji-Papua 
New Guinea (n°3994),United Kingdom-Sloveni a (n°3995), Bahrain-Malta (n°3998), Turkey-
Czechoslovakia (n°3999), Myanmar-Singapore (n°4 006), Suriname-Grenada (n°4007), Kenya-India 
(n°4008), Turkey-Cuba (n°4010), Oman-Philippines (n °4011), Ukraine-Finla nd (n°4012), Barbados-
Suriname (n°4013), Myanmar-Viet Nam (n°4014), China, Hong Kong SAR-Rep of Korea (n°4015), 
Uzbekistan-Viet Nam (n°4016), Uzbekistan-Netherl ands (n°4017), Georgia-Uzbekistan (n°4018), 
Germany-Uzbekistan (n°4019), Maldives-Un ited Kingdom (n°4060), China, Hong Kong SAR-
Singapore (n°4061), Finland-China, Macao SAR (n°4062), South Afri ca-Senegal (n°4063), 
Philippines-Jordan (n°4065), Cambodia-Viet  Nam (n°4067), Cambodia-Myanmar (n°4068), 
Cambodia-Singapore (n°4069), China, Hong Kong SAR-India (n°4070), South Africa-Brazil 
(n°4071), Rep. of Korea-Finland (n°4073), Latvia -Lithuania (n°4076), India-Egypt (n°4077), Japan-
China, Hong Kong SAR (n°4079), China, Hong Kong SAR-Myanmar (n°4080), China, Hong Kong 
SAR-Thailand (n°4081), China, Hong Kong SAR-Philippines (n°4082), China, Hong Kong SAR-
Indonesia (n°4083), Denmark-Belarus (n°4084), De nmark-Croatia (n°4085), Austria-Lithuania 
(n°4089), Myanmar-Nepal (n°4090), Malta-Australia  (n°4091), Switzerland-Latvia (n°4093), South 
Africa-Portugal (n°4096), Brunei Da russalam-Austria (n°4097), Finl and-Israel (n°4098), Singapore-
Brunei Darussalam (n°4101), Lao P. Democratic Rep.-Singapore (n°4104), United States-Singapore 
(n°4111), United Kingdom-Romania (n°4113), South Africa-Ethiopia (n°4114), Tunisia-South Africa 
(n°4115), Switzerland-Czech Rep. (n°4116), United States-Czech Rep. (n°4117), South Africa-New 
Zealand (n°4120), South Africa-Egypt (n°4121) , Austria-TFYR Macedonia (n°4122), Brunei 
Darussalam-Netherlands (n°4123), New Zealand -India (n°4126), United Kingdom-Latvia (n°4127), 
Bahrain-Uzbekistan (n°4128), India-Czech Rep. (n°4129), Spain-Ukraine (n°4131), India-Belarus 
(n°4133), Latvia-India (n°4134), China, Macao SAR-Philippines (n°4135), New Zealand-Singapore 
(n°4136), Uzbekistan-Finland (n°4137), Syrian Arab  Rep.-Belarus (n°4138), Uzbekistan-Belgium 
(n°4139), Uzbekistan-Latvia (n°4140), Uzbekist an-Lithuania (n°4141), Uzbekistan-Slovakia 
(n°4142), Bahrain-Sri Lanka (n°4143), United Ki ngdom-Bahrain (n°4144), China, Hong Kong SAR-
Bahrain (n°4145), Russian Federation-Mongolia (n°4146), Italy-United Arab Emirates (n°4147), 
China, Hong Kong SAR-Italy (n°4148), South A frica-Germany (n°4149), Costa Rica-Netherlands 
(n°4161), Costa Rica-United States (n°4162), Spain-El  Salvador (n°4164), Cyprus-Israel (n°4173), 
Cyprus-Kenya (n°4174), Slovenia-Ukraine (n° 4176), Slovakia-Poland (n°4177), Slovakia-Israel 
(n°4178), Trinidad and Tobago-Belgium (n°4179), Bahrain-Romania (n°4180), Bahrain-Bulgaria 
(n°4181), Philippines-Bangladesh (n°4182), India- Portugal (n°4184), South Africa-China, Macao 
SAR (n°4185), Bahrain-China (n°4186), Uruguay- Romania (n°4188), New Zealand-Untd Arab 
Emirates (n°4189), Syrian Arab Rep-Armenia (n°4190), Argentina-Singapore (n°4193), Belgium-
Comoros (n°4195), Germany-Malta (n°4196), German y-Untd Arab Emirates (n°4197), Spain-TFYR 
Macedonia (n°4233), United Kingdom-Czech Rep. (n°4235), United Kingdom-China, Hong Kong 
SAR (n°4241), United Kingdom-Sri Lanka (n°4 242), United Kingdom-Qatar (n°4243), Spain-
Slovenia (n°4246), India-Malta (n°4247), India-Ru ssian Federation (n°4248), South Africa-India  S/C/W/270 
 Page 61 
 
 
  (n°4250), United Kingdom-Croatia (n°4251), Boli via-Costa Rica (n°4263), Switzerland-Bolivia 
(n°4264), New Zealand-Brunei Darussalam (n° 4265), Czech Rep.-Sweden (n°4266), Kazakhstan-
Finland (n°4278), Denmark-Czech Rep. (n°4281), Belarus-Swed en (n°4288), Sweden-Croatia 
(n°4289), Sweden-Mongolia (n°4290), China-South A frica (n°4291), China, Hong Kong SAR-Austria 
(n°4292), China, Hong Kong SAR-Is rael (n°4294), China, Hong Kong SAR-Oman (n°4296), China, 
Hong Kong SAR-Untd Arab Emirates (n°4297), Spain-Iran (Islamic Rep. of) (n°4298), 
Turkmenistan-Iran (Islamic Rep. of) (n°4303), Belg ium-New Zealand (n°4304), Rep. of Moldova-
Hungary (n°4305), Rep. of Moldova-Lithuania (n°4306) , Bulgaria-Rep. of Moldova (n°4307), Rep. of 
Moldova-Israel (n°4308), South Africa-India (n°4 250), United Kingdom-Croatia (n°4251), Bolivia-
Costa Rica (n°4263), Switzerland-Bolivia (n°4264), New Zealand-Brunei Darussalam (n°4265), 
Czech Rep.-Sweden (n°4266), Kazakhstan-Finlan d (n°4278), Denmark-Czech Rep. (n°4281), 
Belarus-Sweden (n°4288), Sw eden-Croatia (n°4289), Sweden-Mongolia (n°4290), China-South 
Africa (n°4291), China, Hong Kong SAR-Austria (n°4292), China, Hong Kong SAR-Israel (n°4294), 
China, Hong Kong SAR-Oman (n°4296), China, Hong Kong SAR-Untd Arab Emirates (n°4297), 
Spain-Iran (Islamic Rep. of ) (n°4298), Turkmenist an-Iran (Islamic Rep. of ) (n°4303), Belgium-New 
Zealand (n°4304), Rep. of Moldova-Hungary (n °4305), Rep. of Moldova-Lithuania (n°4306), 
Bulgaria-Rep. of Moldova (n°4307), Rep. of Mo ldova-Israel (n°4308), Rep. of Moldova-Italy 
(n°4309), Georgia-Rep. of Moldova (n°4310), Germ any-Rep. of Moldova (n°4311), Cyprus-Georgia 
(n°4312), Cyprus-Belarus (n°4313), Japan-Ethiopi a (n°4333), Japan-Hungary (n°4338), Japan-Papua 
New Guinea (n°4347), Japan-Poland (n°4348), Indi a-Yemen (n°4364), Lebanon -Australia (n°4365), 
Germany-Georgia (n°4366), Nepal-Austria (n°4367),  Spain-Croatia (n°4368), Iceland-United States 
(n°4369), Russian Federation-Iceland (n°4370), Unit ed States-Brunei Darussalam (n°4371), China, 
Macao SAR-Belgium (n°4372), China, Macao SA R-Brazil (n°4373), China, Macao SAR-Brunei 
Darussalam (n°4374), China, Macao  SAR-Democratic P. Rep. of Korea (n°4375), Denmark-China, 
Macao SAR (n°4376), Germany-China, Macao SAR (n°4377), China, Macao SAR-Luxembourg (n°4378), China, Macao SAR-Myanmar (n°4379), Ch ina, Macao SAR-Nepal (n°4380), Netherlands-
China, Macao SAR (n°4381), China, Macao SA R-New Zealand (n°4382), Norway-China, Macao 
SAR (n°4383), China, Macao SAR-Rep. of Ko rea (n°4384), Sweden-China, Macao SAR (n°4385), 
China, Macao SAR-Switzerland (n°4386), China,  Macao SAR-Thailand (n°4387), United States-
China, Macao SAR (n°4388), Viet Nam-China, Macao SAR (n°4389), Jamaica-Panama (n°4390), 
Brunei Darussalam-Lao P. Democratic Rep. (n° 4391), Bahrain-Viet Nam (n°4392), Cyprus-Estonia 
(n°4393), Cyprus-Slovakia (n°4394), Georgia-Ky rgyzstan (n°4395), New Zealand-Switzerland 
(n°4398), China, Hong Kong SAR-Mauritius (n°4 399), China, Hong K ong SAR-Nepal (n°4400), 
United Kingdom-TFYR Macedonia (n°4405), Cyprus -Untd Arab Emirates (n°4408), United 
Kingdom-Netherlands (n°4411), China, Hong Kong  SAR-Mongolia (n°4412), China, Hong Kong 
SAR-South Africa (n°4413), China, Hong Kong SAR-Fi nland (n°4414), Iran (Islamic Rep. of )-Saudi 
Arabia (n°4417), China, Hong Kong SAR-Viet Nam (n°4419), China, Hong Kong SAR-Cambodia 
(n°4420), China, Hong Kong SAR-Denmark (n°4421) , China, Hong Kong SAR-Sweden (n°4422), 
China, Hong Kong SAR-Norway (n°4423), Pakist an-Uzbekistan (n°4424), Switzerland-Uzbekistan 
(n°4425), Poland-Uzbekistan (n°4426), Uzbeki stan-Indonesia (n°4427), Romania-Uzbekistan 
(n°4429), Uzbekistan-Kyrgyzstan (n°4430), Uzbeki stan-Maldives (n°4431), Uzbekistan-Jordan 
(n°4432), United States-Uzbekistan (n°4433), Bulgar ia-Uzbekistan (n°4434), Croatia-India (n°4435), 
India-Lithuania (n°4436), India-Armenia (n° 4437), India-Cyprus (n°4438), India-Luxembourg 
(n°4439), India-Switzerland (n°4440), India-Uga nda (n°4442), United Kingdom-Mongolia (n°4443), 
United Kingdom-Fiji (n°4444), Finland-Mongolia (n° 4450), Qatar-Finland (n°44 51), Malaysia-China, 
Macao SAR (n°4452), China, Macao SAR-Portuga l (n°4453), TFYR Macedonia-Bulgaria (n°4454), 
TFYR Macedonia-Italy (n°4455), TFYR Mace donia-Netherlands (n°4456), TFYR Macedonia-
Switzerland (n°4457), TFYR Macedonia-Turkey (n°4458), TFYR Macedonia-Ukraine (n°4459), 
TFYR Macedonia-Yugoslavia (n°4460), Luxembourg- Slovenia (n°4461), Slovenia-Poland (n°4462), 
Israel-Slovenia (n°4463), Switzerland-Sloveni a (n°4464), Slovenia-Italy (n°4465), Slovenia-
Netherlands (n°4466), Slovenia-Malta (n°4467) , Slovenia-Slovakia (n°4468), Cyprus-Latvia 
(n°4469), Cyprus-Lithuania (n°4470), South Africa- Greece (n°4472), South Africa-Yemen (n°4473), 
South Africa-Belgium (n°4474), Austria-Uzbekistan (n°4475), Italy-Malaysia (n°4476), Bahrain-India S/C/W/270 
Page 62  
 
  (n°4477), Bahrain-Lebanon (n°4478), South A frica-Saudi Arabia (n°4479), Cyprus-Thailand 
(n°4480), China, Hong Kong SAR-Bangladesh (n°4485), China, Hong Kong SAR-Turkey (n°4486), South Africa-Iran (Islamic Rep. of) (n°4487), Un ited Kingdom-Barbados (n°4491), United Kingdom-
Panama (n°4492), South Africa-United Arab Emirates (n°4493), South Africa-Cuba (n°4494), 
Russian Federation-Slovakia (n°4495), Slovakia- Bulgaria (n°4496), Slovakia-Croatia (n°4497), 
Slovakia-Switzerland (n°4498), Bahrain-Jordan (n°4499), Thailand-Cambodia (n°4502), Germany-
Viet Nam (n°4503), Germany-Czech Rep. (n°4 505), Austria-Azerbaijan (n°4506), Germany-
Zimbabwe (n°4507), Austria-Kyrgyzstan (n°4508), Kyrgyzstan-Germany (n°4510), Kyrgyzstan-Indonesia (n°4511), Kyrgyzstan-China (n°4518), Kyrgyzstan-Malaysia (n°4519), Mexico-New Zealand (n°4525), Belgium-Mexico (n°4526), Germ any-Mongolia (n°4532), South Africa-Norway 
(n°4541), South Africa-Sweden (n°4542), Sout h Africa-Denmark (n°4543), Ecuador-Paraguay 
(n°4546), Costa Rica-Chile (n°4548), Uzbekistan-G reece (n°4566), Germany-Bosnia & Herzegovina 
(n°4567), United Kingdom-Pakistan (n°4569), Syri an Arab Rep.-Bahrain (n°4570), Germany-
Armenia (n°4571), Costa Rica-Paraguay (n°457 3), Germany-Estonia (n°4579), Spain-Panama 
(n°4603), China, Hong Kong SAR-Hungary (n°4606), Iran (Islamic Rep. of)-U ganda (n°4609), South 
Africa-Mozambique (n°4610), Germany-Lithuania (n °4611), Germany-Ukraine (n°4613), Ukraine-
Iran (Islamic Rep. of) (n°4614), Iran (Islamic Rep.  of)-Bulgaria (n°4615), Iran (Islamic Rep. of)-
Yemen (n°4616), Iran (Islamic Rep. of)-Viet Na m (n°4617), China, Hong Kong SAR-Czech Rep. 
(n°4618), Latvia-China (n°4620), Latvia-Bulgaria (n °4622), Latvia-Slovakia (n °4623), Latvia-Croatia 
(n°4624), Latvia-Turkey (n°4625), Latvia-Singapore (n°4626), Latv ia-Ukraine (n°4627), South 
Africa-Mali (n°4628), Cyprus-Iran (Islamic Rep. of) (n°4630), Cambodia-China, Macao SAR 
(n°4632), Cambodia-Brunei Darussalam (n°4634) , Cambodia-Rep of Korea (n°4635), Cambodia-
India (n°4636), United Kingdom-Syrian Arab Rep. (n °4643), Iran (Islamic Rep. of)-Syrian Arab Rep. 
(n°4645), Syrian Arab Rep.-Netherlands (n°4646), Syrian Arab Rep.-Slovakia (n°4647), Czech Rep.-
Ukraine (n°4655), United Kingdom-Gre nada (n°4656), Iran (Islamic Re p. of)-Croatia (n°4686), Iran 
(Islamic Rep. of)-Bosnia & Herzegovina (n°4687), Iran (Islamic Rep. of)-Uzbekistan (n°4688), Iran 
(Islamic Rep. of)-Belarus (n°4689), Iran (Islamic Re p. of)-Jordan (n°4690), Iran (Islamic Rep. of)-
Lebanon (n°4692), Czech Rep.-Lithuani a (n°4694), Czech Rep.-Slovenia. 
  
Source :  ICAO WASA database.  S/C/W/270 
 Page 63 
 
 
  APPENDIX  A5 
  
List of bilateral agreements
 posterior to 1 January 1995 containing a clause  
dealing with local and convertible currency  
(as registered and numbered by ICAO) 
  South Africa-Austria (n°3954), South Africa-Aust ralia (n°3955), Rep. of Korea-South Africa 
(n°3956), India-Brunei Darussalam (n°3957), Rep. of Moldova-Turkey (n°3964), Poland-Rep. of 
Moldova (n°3965), Rep. of Moldova-Uzbekist an (n°3966), Croatia-Tfyr Macedonia (n°3970), 
Croatia-Slovenia (n°3971), Austria-Brazil (n°3973), Bahrain-Australia (n°3978), China, Hong Kong 
SAR-Germany (n°3981), Singapore-China, Maca o SAR (n°3985), China, Macao SAR-Austria 
(n°3986), Bahrain-Seychelles (n°3987), Myanmar-Brunei Darussalam (n°3991), India-Finland (n°3992), Austria-Mexico (n°3993), Fiji-Papua  New Guinea (n°3994),United Kingdom-Slovenia 
(n°3995), Turkey-Czechoslovakia (n°3999), Turkey-Cuba (n°4010), Ukraine-Finland (n°4012), 
Barbados-Suriname (n°4013), Myanmar-Viet Nam (n°4014), China, Hong Kong SAR-Rep of Korea 
(n°4015), Uzbekistan-Viet Nam (n°4016), Uzbekist an-Netherlands (n°4017), Georgia-Uzbekistan 
(n°4018), Germany-Uzbekistan (n°4019), Azerba ijan-Uzbekistan (n°4020), Mauritius-Australia 
(n°4040), United Kingdom-Turkmenistan (n°4059) , Maldives-United Kingdom (n°4060), China, 
Hong Kong SAR-Singapore (n°4061), Finland-Chin a, Macao SAR (n°4062), Cambodia-Viet Nam 
(n°4067), Cambodia-Myanmar (n°4068), Cambodi a-Singapore (n°4069), China, Hong Kong SAR-
India (n°4070), South Africa-Brazil (n°4071), Rep.  of Korea-Finland (n°4073), Latvia-Lithuania 
(n°4076), Japan- China, Hong Kong SAR (n°4079), China, Hong Kong SAR-Myanmar (n°4080), China, Hong Kong SAR-Thailand (n°4081), China,  Hong Kong SAR-Philippines (n°4082), China, 
Hong Kong SAR-Indonesia (n°4083), Denmark-Be larus (n°4084), Denmark-Croatia (n°4085), 
Austria-Lithuania (n°4089), Myanmar-Nepal (n°4090) , Malta-Australia (n° 4091), Switzerland-Latvia 
(n°4093), South Africa-Portugal (n°4096), Brunei Darussalam-Austria (n°4097), Finland-Israel 
(n°4098), Singapore-Brunei Darussalam (n°4101), La o P. Democratic Rep.-Singapore (n°4104), 
United States-Singapore (n°4111), United Kingdom -Romania (n°4113), South Africa-Ethiopia 
(n°4114), Tunisia-South Africa (n°4115), Switzer land-Czech Rep. (n°4116), United States-Czech 
Rep. (n°4117), South Africa-New Zealand (n °4120), South Africa-Egypt (n°4121), Brunei 
Darussalam-Netherlands (n°4123), New Zealand -India (n°4126), United Kingdom-Latvia (n°4127), 
Bahrain-Uzbekistan (n°4128), India-Czech Rep. (n°4129), Spain-Ukraine (n°4131), India-Belarus 
(n°4133), Latvia-India (n°4134), New Zealand-Si ngapore (n°4136), Uzbekistan-Finland (n°4137), 
Uzbekistan-Belgium (n°4139), Uzbekistan-Lithuani a (n°4141), Uzbekistan-Slovakia (n°4142), United 
Kingdom-Bahrain (n°4144), China, Hong Kong SAR- Bahrain (n°4145), Italy-United Arab Emirates 
(n°4147), China, Hong Kong SAR-Italy (n°4148), South Africa-Germany (n°4149), Costa Rica-
United States (n°4162), Spain-El Salvador (n°4164), Cyprus-Israel (n°4173), Cyprus-Kenya (n°4174), 
Slovenia-Ukraine (n°4176), Slovakia-Poland (n°417 7), Bahrain-Bulgaria (n°4181), India-Portugal 
(n°4184), South Africa-China, Macao SAR (n °4185), Uruguay-Romania (n°4188), New Zealand-
Untd Arab Emirates (n°4189), Syrian Arab Re p-Armenia (n°4190), Argentina-Singapore (n°4193), 
Germany-Untd Arab Emirates (n°4197), Spai n-TFYR Macedonia (n°4233), United Kingdom-
Lithuania (n°4234), United Kingdom-Czech Rep.  (n°4235), United Kingdom-China, Hong Kong SAR 
(n°4241), United Kingdom-Sri Lanka (n°4242), United Kingdom-Qatar (n°4243), United Kingdom-
Uganda (n°4244), India-Malta (n°4247), India-Ru ssian Federation (n°4248), South Africa-India 
(n°4250), United Kingdom-Croatia (n°4251), Swit zerland-Bolivia (n°4264), New Zealand-Brunei 
Darussalam (n°4265), Czech Rep.-Sweden (n°42 66), Kazakhstan-Finland (n°4278), Denmark-Czech 
Rep. (n°4281), Belarus-Sweden (n°4288), Swed en-Croatia (n°4289), Sweden-Mongolia (n°4290), 
China-South Africa (n°4291), China, Hong Kong SAR-Austria (n°4292), China, Hong Kong SAR-Pakistan (n°4293), China, Hong Kong SAR-Israel  (n°4294), China, Hong Kong SAR-Oman (n°4296), 
China, Hong Kong SAR-Untd Arab Emirates (n°4297), Spain-Iran (Islamic Rep. of) (n°4298), 
Turkmenistan-Iran (Islamic Rep. of) (n°4303), Belg ium-New Zealand (n°4304), Rep. of Moldova-S/C/W/270 
Page 64  
 
  Hungary (n°4305), Rep. of Moldova-Lithuania (n°4306) , Bulgaria-Rep. of Moldova (n°4307), Rep. of 
Moldova-Israel (n°4308), Rep. of Moldova-Italy (n°4309), Georgia-Rep. of Moldova (n°4310), 
Germany- Rep. of Moldova (n°4311), Cyprus-Geo rgia (n°4312), Cyprus-Belarus (n°4313), Japan-
Papua New Guinea (n°4347), Lebanon-Australia (n°4365), Nepal-Austria (n°4367), Spain-Croatia 
(n°4368), Iceland-United States (n°4369), Russian Fe deration-Iceland (n°4370), United States-Brunei 
Darussalam (n°4371), China, Macao SAR-Belgiu m (n°4372), China, Macao SAR-Brazil (n°4373), 
China, Macao SAR-Brunei Darussalam (n°4374), Chin a, Macao SAR-Democratic P. Rep. of Korea 
(n°4375), Denmark- China, Macao SAR (n°4376), Germany-China, Macao SAR (n°4377), China, 
Macao SAR-Luxembourg (n°4378), China, Macao  SAR-Myanmar (n°4379), China, Macao SAR-
Nepal (n°4380), Netherlands-China, Macao SA R (n°4381), China, Macao SAR-New Zealand 
(n°4382), Norway-China, Macao SAR (n°4383), Ch ina, Macao SAR-Rep. of Korea (n°4384), 
Sweden-China, Macao SAR (n°4385), China, Macao  SAR-Switzerland (n°4386), China, Macao SAR-
Thailand (n°4387), United States-China, Macao SAR (n°4388), Viet Nam-China, Macao SAR 
(n°4389), Brunei Darussalam-Lao P. Democratic Rep. (n°4391), Bahrain-Viet Nam (n°4392), Cyprus-
Estonia (n°4393), Cyprus-Slovakia (n°4394), Georgia-Kyrgyzstan (n°4395), New Zealand-
Switzerland (n°4398), China, Hong Kong SAR-Maur itius (n°4399), China, Hong Kong SAR-Nepal 
(n°4400), United Kingdom-TFYR Macedonia (n° 4405), United Kingdom-Netherlands (n°4411), 
China, Hong Kong SAR-Mongolia (n°4412), China, Hong Kong SAR-South Africa (n°4413), China, 
Hong Kong SAR-Finland (n°4414), Iran (Islamic Rep. of  )-Saudi Arabia (n°4417), China, Hong Kong 
SAR-Viet Nam (n°4419), China, Hong Kong SAR-Cambodia (n°4420), China, Hong Kong SAR-
Denmark (n°4421), China, Hong Kong SAR-Sweden  (n°4422), China, Hong Kong SAR-Norway 
(n°4423), Switzerland-Uzbekistan (n°4425), Pola nd-Uzbekistan (n°4426), Uzbekistan-Indonesia 
(n°4427), Romania-Uzbekistan (n°4429), Uzbeki stan-Kyrgyzstan (n°4430), Uzbekistan-Maldives 
(n°4431), Uzbekistan-Jordan (n°4432), United St ates-Uzbekistan (n°4433), Bulgaria-Uzbekistan 
(n°4434), Croatia-India (n°4435), India-Lithuania (n°4436), India-Armenia (n°4437), India-Cyprus 
(n°4438), India-Luxembourg (n°4439), India-Swit zerland (n°4440), India-Uganda (n°4442), United 
Kingdom-Mongolia (n°4443), United Kingdom-Fiji (n °4444), Finland-Mongolia (n°4450), Qatar-
Finland (n°4451), Malaysia-Chi na, Macao SAR (n°4452), China, Macao SAR-Portugal (n°4453), 
TFYR Macedonia-Bulgaria (n°4454), TFYR Macedonia-Italy (n°4455), TFYR Macedonia- Netherlands (n°4456), TFYR Macedonia-Switzer land (n°4457), TFYR Macedonia-Turkey (n°4458), 
TFYR Macedonia-Ukraine (n°4459), TFYR Macedoni a-Yugoslavia (n°4460), Luxembourg-Slovenia 
(n°4461), Slovenia-Poland (n°4462), Israel-Sl ovenia (n°4463), Switzerland-Slovenia (n°4464), 
Slovenia-Italy (n°4465), Slovenia-Netherlands (n °4466), Slovenia-Slovakia (n°4468), Cyprus-Latvia 
(n°4469), Cyprus-Lithuania (n°4470), South Africa- Greece (n°4472), South Africa-Yemen (n°4473), 
South Africa-Belgium (n°4474), Italy-Malaysia (n °4476), Bahrain-India (n°4477), Bahrain-Lebanon 
(n°4478), South Africa-Saudi Arabia (n°4479), Cyprus-Thailand (n°4480), China, Hong Kong SAR-
Bangladesh (n°4485), China, Hong Kong SAR-Turkey (n°4486), South Africa-Iran (Islamic Rep. of) 
(n°4487), United Kingdom-Barbados (n°4491), Un ited Kingdom-Panama (n°4492), South Africa-
Untd Arab Emirates (n°4493), South Africa-Cuba  (n°4494), Slovakia-Bulgaria (n°4496), Slovakia-
Croatia (n°4497), Slovakia-Switzerland (n°4498), Thailand-Cambodia (n°4502), Germany-Viet Nam 
(n°4503), Germany-Czech Rep. (n°4505), Austri a-Azerbaijan (n°4506), Germany-Zimbabwe 
(n°4507), Kyrgyzstan-Germany (n°4510), Kyrgyzstan-Indonesia (n°4511), Kyrgyzstan-Malaysia (n°4519), Mexico-New Zealand (n°4525), Belgiu m-Mexico (n°4526), Germany-Mongolia (n°4532), 
South Africa-Norway (n°4541), South Africa-S weden (n°4542), South Africa-Denmark (n°4543), 
Ecuador-Paraguay (n°4546), Costa Rica-Chile (n°4548), Uzbekistan-Gre ece (n°4566), Germany-
Bosnia & Herzegovina (n°4567), United Kingdom -Pakistan (n°4569), Germany-Armenia (n°4571), 
Costa Rica-Paraguay (n°4573), Rep. of Moldova-C hina (n°4578), Germany-Estonia (n°4579), United 
States-Ukraine (n°4592), Spain-Panama (n°4603) , China, Hong Kong SAR-Hungary (n°4606), 
Germany-Lithuania (n°4611), Germany-Ukraine (n °4613), Ukraine-Iran (Islamic Rep. of) (n°4614), 
Iran (Islamic Rep. of)-Bulgaria (n°4615), China,  Hong Kong SAR-Czech Rep. (n°4618), Latvia-
Bulgaria (n°4622), Latvia-Slovakia (n°4623), La tvia-Croatia (n°4624), Latvia-Turkey (n°4625), 
Latvia-Singapore (n°4626), Latvia-Ukraine (n°4627), Cambodia-China, Macao SAR (n°4632), 
Cambodia-Brunei Darussalam (n°4634), Cambodia- India (n°4636), United Kingdom-Syrian Arab  S/C/W/270 
 Page 65 
 
 
  Rep. (n°4643), Syrian Arab Rep.-Netherlands (n °4646), Syrian Arab Rep.-Slovakia (n°4647), Czech 
Rep.-Ukraine (n°4655), United Kingdom-Grenada (n °4656), Iran (Islamic Rep. of)-Croatia (n°4686), 
Czech Rep.-Lithuania (n°4694), Czech Rep.-Slovenia (n°4695).   
Source :  ICAO WASA database. S/C/W/270 
Page 66  
 
  APPENDIX
 A6 
 
 
List of bilateral agreements  posterior to 1 January 1995 containing a clause  
dealing with offices and/or personnel  
(as registered and numbered by ICAO) 
  Croatia-Austria (n°3948), Austria-Viet Nam (n °3949), Indonesia-Singapore (n°3950), South Africa-
Austria (n°3954), South Africa-Australia (n°3955), Rep. of Korea-South Africa (n°3956), India-
Brunei Darussalam (n°3957), Iran (Islamic Rep. of)-Oman (n°3962), Rep. of Moldova-Turkey 
(n°3964), Poland-Rep. of Moldova (n°3965), Rep. of  Moldova-Uzbekistan (n°3966), Belarus-Rep. of 
Moldova (n°3967), Croatia-TFYR Macedonia (n°39 70), Croatia-Slovenia (n°3971), Austria-Brazil 
(n°3973), Bahrain-Australia (n°3978), China, H ong Kong SAR-Germany (n°3981), China, Macao 
SAR-Austria (n°3986), Bahrain-Seychelles (n °3987), India-Norway (n°3988), India-Sweden 
(n°3989), India-Denmark (n°3990), Myanmar-Brunei Darussalam (n°3991), India-Finland (n°3992), 
Austria-Mexico (n°3993), Fiji-Papua New Guin ea (n°3994),United Kingdom-Slovenia (n°3995), 
Bahrain-Malta (n°3998), Turkey-Czechoslovakia (n°3999), Turkey-Cuba (n°4010), Oman-Philippines (n°4011), Ukraine-Finland (n°4012), Barbados-S uriname (n°4013), Myanmar-Viet Nam (n°4014), 
China, Hong Kong SAR-Rep of Korea (n°4015) , Uzbekistan-Viet Nam (n°4016), Uzbekistan-
Netherlands (n°4017), Georgia-Uzbe kistan (n°4018), Azerbaijan-Uzbe kistan (n°4020), Latvia-Estonia 
(n°4023), Mauritius-Australia (n°4040), Russian Fed.-Australia (n°4047), Jamaica-Netherlands 
(n°4056), United Kingdom-Turkmenistan (n°4059) , Maldives-United Kingdom (n°4060), China, 
Hong Kong SAR-Singapore (n°4061), Finland-China, Macao SAR (n°4062), South Africa-Senegal 
(n°4063), Philippines-Jordan (n°4065), Cambodia- Viet Nam (n°4067), Cambodia-Myanmar (n°4068), 
China, Hong Kong SAR-India (n°4070), South Africa-Brazil (n°4071), Rep. of Korea-Finland 
(n°4073), Latvia-Lithuania (n°4076), Japan-China, Hong Kong SAR (n°4079), China, Hong Kong 
SAR-Myanmar (n°4080), China, Hong Kong SA R-Thailand (n°4081), China, Hong Kong SAR-
Indonesia (n°4083), Denmark-Belarus (n°4084), De nmark-Croatia (n°4085), Austria-Lithuania 
(n°4089), Myanmar-Nepal (n°4090), Malta-Australia  (n°4091), Switzerland-Latvia (n°4093), South 
Africa-Portugal (n°4096), Brunei Da russalam-Austria (n°4097), Finl and-Israel (n°4098), Singapore-
Brunei Darussalam (n°4101), United States-Singa pore (n°4111), United Kingdom-Romania (n°4113), 
South Africa-Ethiopia (n°4114), Tunisia-South Africa (n°4115), Switzerland-Czech Rep. (n°4116), 
United States-Czech Rep. (n°4117), South A frica-New Zealand (n°4120), South Africa-Egypt 
(n°4121), Austria-TFYR Macedonia (n°4122), Brune i Darussalam-Netherlands (n°4123), New 
Zealand-India (n°4126), United Kingdom-Latvia (n°4127), Bahrain-Uzbekistan (n°4128), India-Czech Rep. (n°4129), Spain-Ukraine (n°4131), India- Belarus (n°4133), Latvia-India (n°4134), China, 
Macao SAR-Philippines (n°4135), New Zealand-Si ngapore (n°4136), Uzbekistan-Finland (n°4137), 
Syrian Arab Rep.-Belarus (n°4138), Uzbekistan -Belgium (n°4139), Uzbekistan-Latvia (n°4140), 
Uzbekistan-Slovakia (n°4142), United Kingdom-Bah rain (n°4144), China, Hong Kong SAR-Bahrain 
(n°4145), Russian Federation-Mongolia (n°4146), Ital y-United Arab Emirates (n°4147), China, Hong 
Kong SAR-Italy (n°4148), South Africa-Germany (n°4149), Costa Rica-United States (n°4162), Spain-El Salvador (n°4164), Cyprus-Israel (n° 4173), Cyprus-Kenya (n°4174), Slovenia-Ukraine 
(n°4176), Slovakia-Poland (n°4177), Slovakia-Isr ael (n°4178), Bahrain-Romania (n°4180), Bahrain-
Bulgaria (n°4181), Philippines-Bangladesh (n°4182), India-Portugal (n°4184), South Africa-China, 
Macao SAR (n°4185), Bahrain-China (n°4186), Uruguay-Romania (n°4188), New Zealand-Untd 
Arab Emirates (n°4189), Syrian Arab Rep-Ar menia (n°4190), Argentina-Singapore (n°4193), 
Germany-Malta (n°4196), Germany-Untd Arab Emirates (n°4197), Spain-TFYR Macedonia 
(n°4233), United Kingdom-Czech Rep. (n°4235), United Kingdom-China, Hong Kong SAR (n°4241), 
United Kingdom-Sri Lanka (n°4242), United Ki ngdom-Qatar (n°4243), Spain-Slovenia (n°4246), 
India-Malta (n°4247), India-Russian Federation (n°4248), South Africa-India (n°4250), United 
Kingdom-Croatia (n°4251), Bolivia-Mexico (n° 4260), Bolivia-Chile (n°4261), Bolivia-Cuba 
(n°4262), Bolivia-Costa Rica (n°4263), Swit zerland-Bolivia (n°4264), New Zealand-Brunei  S/C/W/270 
 Page 67 
 
 
  Darussalam (n°4265), Czech Rep.-Sweden (n°426 6), Kazakhstan-Finland (n°4278), Cuba-Germany 
(n°4279), Denmark-Czech Rep. (n°4281), Sweden -Lithuania (n°4287), Belarus-Sweden (n°4288), 
Sweden-Croatia (n°4289), Sweden-Mongolia (n°42 90), China-South Africa (n°4291), China, Hong 
Kong SAR-Austria (n°4292), China, Hong Kong SAR-Pakistan (n°4293), China, Hong Kong SAR-
Israel (n°4294), China, Hong Kong SAR-Oman (n°4296), China, Hong Kong SAR-Untd Arab 
Emirates (n°4297), Spain-Iran (Islamic Rep. o f) (n°4298), Turkmenistan-Iran (Islamic Rep. of) 
(n°4303), Belgium-New Zealand (n°4304), Rep. of Moldova-Hungary (n°4305), Rep. of Moldova-
Lithuania (n°4306), Bulgaria-Rep. of Moldova (n° 4307), Rep. of Moldova-Israel (n°4308), Rep. of 
Moldova-Italy (n°4309), Georgia-Rep. of Moldov a (n°4310), Germany-Rep. of Moldova (n°4311), 
Cyprus-Georgia (n°4312), Cyprus-Belarus (n °4313), Japan-Ethiopia (n°4333), Japan-Hungary 
(n°4338), Japan-Papua New Guinea (n°4347), Ja pan-Poland (n°4348), India-Yemen (n°4364), 
Lebanon-Australia (n°4365), Nepal-Austria (n°4367),  Spain-Croatia (n°4368), Iceland-United States 
(n°4369), Russian Federation-Iceland (n°4370), Unit ed States-Brunei Darussalam (n°4371), China, 
Macao SAR-Belgium (n°4372), Chin a, Macao SAR-Brazil (n°4373), Ch ina, Macao SAR-Democratic 
P. Rep. of Korea (n°4375), Denmark-China, Macao SAR (n°4376), Germany-China, Macao SAR 
(n°4377), China, Macao SAR-Luxembourg (n°4378) , China, Macao SAR-Myanmar (n°4379), China, 
Macao SAR-Nepal (n°4380), Netherlands-China , Macao SAR (n°4381), China, Macao SAR-New 
Zealand (n°4382), Norway-China, Macao SAR (n°4383), China, Macao SAR-Rep. of Korea (n°4384), Sweden-China, Macao SAR (n°4385), Chin a, Macao SAR-Switzerland (n°4386), China, 
Macao SAR-Thailand (n°4387), United States-China,  Macao SAR (n°4388), Viet Nam-China, Macao 
SAR (n°4389), Brunei Darussalam-Lao P. Democrat ic Rep. (n°4391), Bahrain-Viet Nam (n°4392), 
Cyprus-Estonia (n°4393), Cyprus-Slovakia (n° 4394), Georgia-Kyrgyzstan (n°4395), New Zealand-
Switzerland (n°4398), China, Hong Kong SAR-Maur itius (n°4399), China, Hong Kong SAR-Nepal 
(n°4400), United Kingdom-TFYR Macedonia (n° 4405), United Kingdom-Netherlands (n°4411), 
China, Hong Kong SAR-Mongolia (n°4412), China, Hong Kong SAR-South Africa (n°4413), China, 
Hong Kong SAR-Finland (n°4414), Iran (Islamic Rep. of  )-Saudi Arabia (n°4417), China, Hong Kong 
SAR-Viet Nam (n°4419), China, Hong Kong SAR-Cambodia (n°4420), China, Hong Kong SAR-
Denmark (n°4421), China, Hong Kong SAR-Sweden  (n°4422), China, Hong Kong SAR-Norway 
(n°4423), Poland-Uzbekistan (n°4426), Uzbekist an-Indonesia (n°4427), Uzbekistan-Turkmenistan 
(n°4428), Romania-Uzbekistan (n°4429), Uzbeki stan-Kyrgyzstan (n°4430), Uzbekistan-Maldives 
(n°4431), Uzbekistan-Jordan (n°4432), United St ates-Uzbekistan (n°4433), Bulgaria-Uzbekistan 
(n°4434), Croatia-India (n°4435), India-Lithuania (n°4436), India-Armenia (n°4437), India-Cyprus 
(n°4438), India-Luxembourg (n°4439), India-Swit zerland (n°4440), India-Uganda (n°4442), United 
Kingdom-Mongolia (n°4443), United Kingdom-Fiji (n °4444), Finland-Mongolia (n°4450), Qatar-
Finland (n°4451), Malaysia-Chi na, Macao SAR (n°4452), China, Macao SAR-Portugal (n°4453), 
TFYR Macedonia-Bulgaria (n°4454), TFYR Macedonia-Italy (n°4455), TFYR Macedonia-Netherlands (n°4456), TFYR Macedonia-Switzer land (n°4457), TFYR Macedonia-Turkey (n°4458), 
TFYR Macedonia-Ukraine (n°4459), TFYR Macedoni a-Yugoslavia (n°4460), Luxembourg-Slovenia 
(n°4461), Slovenia-Poland (n°4462), Israel-Sl ovenia (n°4463), Switzerland-Slovenia (n°4464), 
Slovenia-Italy (n°4465), Slovenia-Malta (n°4467 ), Slovenia-Slovakia (n°4468), Cyprus-Latvia 
(n°4469), Cyprus-Lithuania (n°4470), South Africa- Greece (n°4472), South Africa-Yemen (n°4473), 
South Africa-Belgium (n°4474), Austria-Uzbekistan (n°4475), Italy-Malaysia (n°4476), Bahrain-India 
(n°4477), Bahrain-Lebanon (n°4478), South A frica-Saudi Arabia (n°4479), Cyprus-Thailand 
(n°4480), China, Hong Kong SAR-Bangladesh (n°4485), China, Hong Kong SAR-Turkey (n°4486), 
South Africa-Iran (Islamic Rep. of) (n°4487), Un ited Kingdom-Barbados (n°4491), United Kingdom-
Panama (n°4492), South Africa-Untd Arab Emirates  (n°4493), South Africa-Cuba (n°4494), Russian 
Federation-Slovakia (n°4495), Slovakia-Bulgaria (n°4496), Slovakia-Croatia (n°4497), Slovakia-
Switzerland (n°4498), Thailand-Cambodia (n°4502), Germany-Viet Nam (n°4503), Germany-Czech 
Rep. (n°4505), Austria-Azerba ijan (n°4506), Germany-Zimbabwe (n°4507), Austria-Kyrgyzstan 
(n°4508), Kyrgyzstan-Germany (n°4510), Kyrgyzstan-Indonesia (n°4511), United Kingdom-
Kyrgyzstan (n°4517), Kyrgyzstan-China (n°4518), Kyrgyzstan-Malaysia (n°4519), Mexico-New Zealand (n°4525), Belgium-Mexico (n°4526), Germ any-Mongolia (n°4532), South Africa-Norway 
(n°4541), South Africa-Sweden (n°4542), Sout h Africa-Denmark (n°4543), Ecuador-Paraguay S/C/W/270 
Page 68  
 
  (n°4546), Costa Rica-Chile (n°4548), Uzbekistan-G reece (n°4566), Germany-Bosnia & Herzegovina 
(n°4567), United Kingdom-Pakistan (n°4569), Ge rmany-Armenia (n°4571), Costa Rica-Paraguay 
(n°4573), Rep. of Moldova-Romania (n°4577), Rep.  of Moldova-China (n° 4578), Germany-Estonia 
(n°4579), United States-Ukraine (n°4592), Spain- Panama (n°4603), China,  Hong Kong SAR-Hungary 
(n°4606), Iran (Islamic Rep. of)-Uganda (n°4609) , South Africa-Mozambique (n°4610), Germany-
Lithuania (n°4611), Germany-Ukraine (n°4613), Ukraine-Iran (Islamic Rep. of) (n°4614), Iran 
(Islamic Rep. of)-Bulgaria (n°4615), Iran (Islamic Rep. of)-Yemen (n°4616), Iran (Islamic Rep. of)-
Viet Nam (n°4617), China, Hong Kong SAR-Czech Re p. (n°4618), Latvia-China (n°4620), Latvia-
Bulgaria (n°4622), Latvia-Slovakia (n°4623), La tvia-Croatia (n°4624), Latvia-Turkey (n°4625), 
Latvia-Singapore (n°4626), Latvia-Ukraine (n°4627), South Africa-Mali (n°4628), Cyprus-Iran 
(Islamic Rep. of) (n°4630), Cambodia-China, M acao SAR (n°4632), Cambodia-Brunei Darussalam 
(n°4634), Cambodia-Rep of Korea (n°4635), Cambodi a-India (n°4636), United Kingdom-Syrian Arab 
Rep. (n°4643), Iran (Islamic Rep. of)-Syrian Arab  Rep. (n°4645), Syrian Arab Rep.-Netherlands 
(n°4646), Syrian Arab Rep.-Slovakia (n°4647) , Czech Rep.-Ukraine (n°4655), United Kingdom-
Grenada (n°4656), Iran (Islamic Rep. of)-Croa tia (n°4686), Iran (Islamic Rep. of)-Bosnia & 
Herzegovina (n°4687), Iran (Islamic Rep. of)-Uzbek istan (n°4688), Iran (Islamic Rep. of)-Belarus 
(n°4689), Iran (Islamic Rep. of)-Jordan (n°4690), Iran (Islamic Rep. of)-Lebanon (n°4692), Czech 
Rep.-Lithuania (n°4694), Czech Rep.-Slovenia (n°4695).   
Source :  ICAO WASA database.  S/C/W/270 
 Page 69 
 
 
  Table  A7 
 
Distribution clauses in bilateral ag reements signed by WTO-Members  
since 1995 and related MFN exemptions 
 
 
MEMBERS  
Computer 
reservation 
services 
(CRS) 
CRS  
(MFN 
exemption) 
Currency 
conversion 
(C) 
Office 
(O) 
Local 
Convertible 
Currency 
(LCC) 
Selling and 
marketing 
MFN 
exemption 
Albania  ³    ³ 
Angola       
Antigua and Barbuda       
Argentina   ³ ³ ³  
Armenia   ³ ³ ³  
Australia    ³ ³ ³  
Austria  ³ ³ ³ ³ ³ 
Bahrain, Kingdom of ³  ³ ³ ³  
Bangladesh    ³ ³ ³  
Barbados    ³ ³ ³  
Belgium   ³ ³ ³ ³ ³ 
Belize        
Benin        
Bolivia    ³ ³ ³  
Botswana        
Brazil    ³ ³ ³  
Brunei Darussalam  ³  ³ ³ ³  
Bulgaria   ³ ³ ³ ³ ³ 
Burkina Faso       
Burundi        
Cambodia   ³ ³ ³  
Cameroon        
Canada      ³ ³ 
Central African Republic        
Chad        
Chile    ³ ³ ³  
China  ³  ³ ³ ³  
Colombia       
Congo       
Costa Rica ³  ³ ³ ³  
Côte d'Ivoire       
Croatia   ³ ³ ³  
Cuba   ³ ³ ³  
Cyprus   ³ ³ ³  
Czech Republic ³  ³ ³ ³  
Dem. Republic of the 
Congo       
Denmark  ³ ³ ³ ³ ³ 
Djibouti       
Dominica       
Dominican Republic       
Ecuador   ³ ³   
Egypt   ³ ³ ³  
El Salvador   ³ ³ ³  S/C/W/270 
Page 70  
 
  MEMBERS  
Computer 
reservation 
services 
(CRS) 
CRS  
(MFN 
exemption) 
Currency 
conversion 
(C) 
Office 
(O) 
Local 
Convertible 
Currency 
(LCC) 
Selling and 
marketing 
MFN 
exemption 
Estonia   ³ ³ ³  
European Communities  ³    ³ 
Fiji    ³ ³ ³  
Finland   ³ ³ ³ ³ ³ 
Former Yugoslav Rep. of 
Macedonia (FYROM) ³  ³ ³ ³  
France  ³    ³ 
Gabon       
The Gambia       
Georgia    ³ ³ ³  
Germany  ³ ³ ³ ³ ³ 
Ghana       
Greece  ³ ³ ³ ³ ³ 
Grenada    ³ ³ ³  
Guatemala       
Guinea       
Guinea Bissau       
Guyana       
Haiti        
Honduras        
Hong Kong, China   ³ ³ ³  
Hungary    ³ ³ ³  
Iceland ³ ³ ³ ³ ³ ³ 
India ³  ³ ³ ³  
Indonesia  ³  ³ ³ ³  
Ireland  ³    ³ 
Israel   ³ ³ ³  
Italy  ³ ³ ³ ³ ³ 
Jamaica ³  ³ ³ ³  
Japan    ³ ³ ³  
Jordan   ³ ³ ³  
Kenya   ³ ³ ³  
Korea, Republic of  ³ ³ ³ ³  
Kuwait  ³    ³ 
Kyrgyz Republic ³  ³ ³ ³  
Latvia   ³ ³ ³ ³ ³ 
Lesotho       
Liechtenstein  ³    ³ 
Lithuania  ³ ³ ³ ³ ³ 
Luxembourg  ³ ³ ³ ³ ³ 
Macao, China ³  ³ ³ ³  
Madagascar       
Malawi        
Malaysia   ³ ³ ³  
Maldives    ³ ³ ³  
Mali    ³ ³   
Malta    ³ ³ ³  
Mauritania        
Mauritius    ³ ³ ³  
Mexico   ³ ³ ³   S/C/W/270 
 Page 71 
 
 
  MEMBERS  
Computer 
reservation 
services 
(CRS) 
CRS  
(MFN 
exemption) 
Currency 
conversion 
(C) 
Office 
(O) 
Local 
Convertible 
Currency 
(LCC) 
Selling and 
marketing 
MFN 
exemption 
Moldova   ³ ³ ³ ³ 
Mongolia    ³ ³ ³  
Morocco     ³  
Mozambique   ³ ³   
Myanmar   ³ ³ ³  
Namibia       
Nepal   ³ ³ ³  
Netherlands ³ ³ ³ ³ ³ ³ 
New Zealand   ³ ³ ³  
Nicaragua       
Niger       
Nigeria     ³  
Norway  ³ ³ ³ ³  
Oman   ³ ³ ³ ³ 
Pakistan   ³ ³ ³  
Panama ³  ³ ³ ³  
Papua New Guinea   ³ ³ ³  
Paraguay ³  ³ ³ ³  
Peru       
Philippines   ³ ³ ³  
Poland  ³ ³ ³ ³ ³ 
Portugal  ³ ³ ³ ³ ³ 
Qatar   ³ ³ ³  
Romania   ³ ³ ³ ³ 
Rwanda       
Saint Kitts and Nevis       
Saint Lucia       
Saint Vincent & the 
Grenadines       
Saudi Arabia   ³ ³ ³  
Senegal   ³ ³   
Sierra Leone       
Singapore ³ ³ ³ ³ ³  
Slovak Republic   ³ ³ ³  
Slovenia  ³ ³ ³ ³ ³ 
Solomon Islands       
South Africa   ³ ³ ³  
Spain  ³ ³ ³ ³ ³ 
Sri Lanka   ³ ³ ³  
Suriname   ³ ³ ³  
Swaziland       
Sweden  ³ ³ ³ ³ ³ 
Switzerland ³ ³ ³ ³ ³ ³ 
Chinese Taipei       
Tanzania       
Thailand  ³ ³ ³ ³ ³ 
Togo       
Trinidad and Tobago   ³    
Tunisia   ³ ³ ³  
Turkey   ³ ³ ³  S/C/W/270 
Page 72  
 
  MEMBERS  
Computer 
reservation 
services 
(CRS) 
CRS  
(MFN 
exemption) 
Currency 
conversion 
(C) 
Office 
(O) 
Local 
Convertible 
Currency 
(LCC) 
Selling and 
marketing 
MFN 
exemption 
Uganda   ³ ³ ³  
United Arab Emirates   ³ ³ ³  
United Kingdom  ³ ³ ³ ³ ³ 
United States of America ³ ³ ³ ³ ³ ³ 
Uruguay   ³ ³ ³  
Venezuela (Bolivarian 
Republic of)       
Zambia       
Zimbabwe   ³ ³ ³  
Total 18 31 94 93 92 32 
 
Source :  Compiled by WTO Secretariat from ICAO WASA database and from WTO EL documents series.  
 
  
Table A8 
 
Distribution clauses in bilateral agreements entered 
into since 1995 by non-WTO Members  
 
NON-MEMBERS  
Computer 
reservation 
services 
(CRS) 
Currency 
conversion 
(C) 
Office  
(O) 
Local 
Convertible 
Currency 
(LCC) 
Azerbaijan  ³ ³ ³ 
Belarus  ³ ³ ³ 
Bosnia & Herzegovina  ³ ³ ³ 
Comoros  ³   
Demo. P. Rep. of Korea   ³  
Ethiopia  ³ ³ ³ 
Iran (Rep. Islamic of)  ³ ³ ³ 
Kazakhstan   ³ ³ 
Lao Rep. Dem. ³ ³ ³ ³ 
Lebanon ³ ³ ³ ³ 
Russia Fed.  ³ ³  
Seychelles  ³ ³ ³ 
Syrian Arab Rep. ³ ³ ³ ³ 
Turkmenistan  ³ ³ ³ 
Ukraine  ³ ³ ³ 
Uzbekistan ³ ³ ³ ³ 
Viet Nam  ³ ³ ³ 
Yemen  ³ ³ ³ 
Yugoslavia  ³ ³ ³ 
 
Source :  Compiled by WTO Secretariat from ICAO WASA database.  
   S/C/W/270
 Page 73Chart A9 
Possible legal status of self -emission of tickets/load- 
shipping manifests under the GATS 
 
 
  
 
  
 
  
 
  
 
  
 
 
 
   
 
  
 
  
 
  
 
 
 Self emission 
of tickets Covered by GATS 
Not covered by GATS As a service 
As part of the 
supply of a service 
As a measure 
affecting trade in 
services PRO  
Definition of selling and 
marketing "for the air carrier 
itself" ..."including 
...distribution". 
PRO 
Not a service in itself but part of 
the supply of a service: GATS 
Article XXVIII (b):  "includes the 
production, distribution , 
marketing, sale  and delivery of a 
service". CON 
The definition of selling 
and marketing in the Air 
Transport Annex explicitly 
includes distribution. 
PRO 
Self emission of tickets involves 
"measures affecting trade in 
services" as they affect "the 
purchase,  payment  or use of a 
service" according to Article 
XXVIII(c)(i) of the GATS. 
PRO 
GATS only covers services 
delivered to third-parties ("on a 
fee or contract bases") and not 
services provided to oneself. 
Source :  Compiled by WTO Secretariat.   
  S/C/W/270 
Page 74 Chart A10 
Possible legal status of clearing services 
under the GATS 
 
 
 
  
 
 
 
  
 
  
 
  
 
  
 
  
 
  
 
 
 
  
 
  
 
  
Source
:  Compiled by WTO Secretariat . Clearing 
services Covered by 
GATS 
Not covered by GATS Not one of three 
services listed in the 
Air Transport Annex  
Directly related to 
traffic rights As a service 
As a measure 
affecting trade on 
services As a financial service 
("settlement and clearing 
services for financial 
assets, including securities, derivative products and 
other negotiable 
instruments"). 
As travel agent (BSP) 
or freight forwarding 
agent (CASS) PRO 
Airline consider the right to emit 
tickets and the credit given as a 
blank cheque and a financial 
asset.  CON 
Considering these services 
as financial services would 
imply that IATA is considered as a "financial 
service supplier" in the 
sense of para. 5 of the Annex on Financial 
Services
 PRO 
While agents remain free to clear 
themselves their bills with each 
individual carrier, in practice no real emission of tickets takes 
place without a BSP being 
involved.  Hence BSP is part of travel agent services as the supply 
of travel agent services "includes 
the production, distribution, marketing, sale and delivery of a 
service.  The same goes mutatis 
mutandis  for cargo
 CON 
The service provider is not 
the travel agent  
PRO 
Measures affecting BSP clearing 
services are "measures affecting 
trade in [CRS] services" and in 
travel agents services because no booking can be fully completed in 
practice (i.e. transformed into a 
ticket) without the use of BSP 
clearing services
 
CON 
- Clearing services are a 
sine qua non  condition for 
the distribution of the ticket. 
- For selling and 
marketing, distribution is considered not to be related 
to traffic rights.
  S/C/W/270 
 Page 75 
 
 
  III. FRANCHISING 
249. There is no internationally agreed definition of  franchising.  The definition given by a report 
mandated by the European Civil Aviation Commi ssion (ECAC) in 1999 (Report on Airline 
Franchising, see compilation, pages 27 and 28) is co nsidered by professionals as an acceptable proxy 
of the commercial reality of the sector.  It reads: 
"Airline franchising is a commercial practice under which one airline (the 
"franchisee") purchases the right to assume th e public face or brand of another ("the 
franchisor") together with the brand's asso ciated services, intellectual property  and 
know how.  Elements of the brand include aircraft livery and interior, crew uniforms 
and flight designator code.  Services incl ude the sales and reservation operations of 
the franchisor, access to its frequent flye r programme and reve nue accounting.  The 
franchisee airline abandons its own public id entity for all services operated under the 
franchise but continues to operate under its own AOC (Aircraft Operating Certificate) 
and to maintain its operational identity and independence.  In most cases the 
franchisee continues to make its own d ecisions on routes, schedules and pricing 
although there is normally an agreement not  to compete head-to-head on the same 
routes as the franchisors." 
250. As explained in the documentation of the first review, franchised airlines can be found so far 
only among regional airlines.  Franchised airlines or  affiliates constitute one of three segments of 
regional airlines together with wholly or substa ntially owned foreign subsidiaries (or captive) and 
fully independent regional airlines. 
251. In turn, there is no internationally agreed de finition of regional airlines although these are a 
clearly identifiable segment of the market with , for instance, own professional associations.  As 
indicated in the documentation of the first review  (compilation page 27, pa ragraph 125) definitions 
generally refer to the capacity of the aircrafts used (between 19 and 100-150 places) and the types of 
airports served (between a secondary airport and a hub or between two secondary airports).  A more 
detailed analysis of regional airlines will be provi ded in the second part of the documentation related 
to hard rights. 
252. Table 13 provides an overview of  affiliate/franc hised airlines, fully independent airlines and 
airlines substantially or majority owned by a major carrier for the year 2005. S/C/W/270 
Page 76  
 
  Table 13 
Traffic and traffic ranking of affiliate/franchised airlines - 2005 
 
Major carrier  Affiliate/franchised  
partners  Traffic ranking 
within regional 
airlines  Traffic 
(thousand 
passengers)  
Atlantic Southeast 5 12,031 
SkyWest 2 16,600 
Chautauqua 8 7,800 
American Eagle 1 17,534 
Shuttle America 47 1,250 Delta Connection  
Freedom Air - - 
SkyWest (US) 2 16,600 
Mesa Airlines (US) 4 13,088 
Shuttle America (US) 47 1,250 
Trans States Airlines (US) 16 4,159 
Chautauqua (US) 8 7,800 
GoJet (US) - - 
Colgan Air (US) 53 1,024 United Express (US) 
Air Wisconsin 9 6,859 
Trans States Airlines (US) 16 4,159 
Chautauqua (US) 8 7,800 America Eagle/  
AmericanConnection (US) RegionsAir (US) - - 
Colgan Air (US) 53 1,024 
Mesa Airlines (US) 4 13,088 
Chautauqua (US) 8 7800 
air Wisconsin (US) 9 6,859 
Air Midwest (US) 90 340 US Airways Express (US) 
Tran States Airlines (US) 16 4,159 
Continental Airlines (US) ExpressJet (US) 3 15,987 
Mesaba Airlines (US) 13 5,047 Northwest Airlink (US) Pinnacle (US) 7 8,107 
Augsburg Airways (GER) 63 776 Lufthansa (GER) Contact Air (GER) 83 429 
Air France (F) CCM Airlines (F) 41 1,551 
Alaska Airline (US) Horizon Air (US) 10 6,481 
America West Express (US) Mesa Airlines (US) 4 13,088 
SAS (DK, SW, NOR) Skyways (SW) 58 904 
Iberia (SP) Air Nostrum (SP)  14 4,689  
Japan Airlines (JPN) Japan Air Commuter (JPN) - - 
 
Source :  Airline Business, May 2006, recompiled by the WTO Secretariat. 
 
 253. Unfortunately, comparable data do not exist fo r the beginning of the period under review.  
However, a comparison of Table 13 with the Char t on page 31 of the compilation (global alliances 
and regional franchised airlines) and Table 12, page  30 of the compilation (franchised airlines in the 
top 100 regional airline count), suggests a consider able expansion of the franchise concept both in 
term of airlines concerned and traffic covered:  20 franchised airlines, mostly from US and Europe, in 
the top 100 regional airlines in 2005 versus onl y nine, all European, in 1999.  However, this 
comparison must be read with some caution as it ma y be affected by insufficient information on the 
US situation back in 1999. 
254. Even before 9/11, in the United States, one of reasons for the development of franchised 
airlines were the difficulties met by major carriers to develop wholly-owned activities on the booming  S/C/W/270 
 Page 77 
 
 
  regional segment.  "Scope clauses" in airlines' p ilot contracts, intended to prevent competition from 
lower paid pilots (on average US$100 versus US$175 per hour in 2000), regulated and limited the size 
and capacity of the wholly-owned regional fleet.  In certain instances, scope clauses even specified the 
type of routes on which regional jets may be used  and included complex formulae linking regional jet 
growth to the size of the mainline fleet.  For exam ple, Delta faced this type of difficulty when it 
bought its two main feeders in 1999, Atlantic South East  and Comair. 
255. The post 9/11 crisis and the resulting massive cap acity reductions of the main fleets rendered 
these clauses even more constraining at a time when  the majors tried to have recourse to smaller 
planes in order to improve their load factor.69  That is why the scope clause has been a key element of 
the Chapter 11 negotiations with pilot unions.  By contrast, recourse to an affiliate/franchisee entailed 
much more flexibility and lower overhead costs.  This has triggered a movement by the major US 
carriers to spin off their regional subsidiaries (e.g. Northwest with Pinnacle, Continental with Express 
Jet through an IPO, Delta with Atlantic South East). 
256. Major airlines have tended to spread their bus iness on several feeders as illustrated by Table 
13 so as to avoid excessive dependence.  In ce rtain instances, majors have even privileged 
franchised/affiliate airlines against their own subs idiaries, as Delta did in 2003 when it selected 
Chautauqua Airlines to set up a regional hub in Colom bus rather than its then  subsidiaries, Comair 
and Atlantic Southeast. 
257. Chapter 11 negotiations have had an impact not only on the relaxation of the scope clauses, 
but also put into question in certain instances (Unite d) the typical fee per departure contract.  Under 
such contracts, the major pays a flat fee (typically US$3500 per departure in 2003 according to 
Airline Business) regardless of how full the flight is or what fares are paid. 
258. At least one regional carrier, Atlantic Coast Air lines, which was then the principal affiliate of 
United (with 7.1 million passengers carried), decided in  2004 to transform itself into a low-cost carrier 
and severed its links with United.  United stuck to  its model of having recourse only to affiliates and 
switched to Shuttle America, Chautauqua Republic  Airlines, Air Wisconsin, TransStates, Mesa and 
SkyWest Airlines.  Renamed Independence Air an d based in Washington Dulles, Atlantic Coast 
Airlines never managed to break even and went bankrupt in early 2006.  Northwest then bought the air operator certificate of Independence to create a new regional subsidiary, Compass, after renegotiating its scope clause under Chapter 11.  No rthwest used the new acquisition to force its 
franchised airlines, Pinnacle and Mesaba Airlines, to re-bid for their businesses.
70 
259. The "multibrands approach", whereby a franchisee has several franchisors in order to spread 
risks, seems to be an emerging trend.  Mesa Air Group, Republic Air Holdings and SkyWest are 
examples of companies having adopted this strate gy which is also well illustrated in Table 13. 
260. The European situation looked somewhat diffe rent during the period under review.  In 
Europe, scope clauses have not been a problem.  W ith regard to the relati onship between franchised 
and major airlines, the trend is to a large extent the opposite of the US one.  Instead of spinning off 
their subsidiaries, some European airlines have take n majority interests in or full control of their 
regional affiliates in order to optimize their feeder networks.  
261. This is the case of Lufthansa, which in 2002 ra ised its stake in Eurowings to 49 per cent.  
Lufthansa also took full control of Air Dolom iti in 2004, and has grouped its captives under the 
                                                      
69  E.g., in the fourth quarter of 2001, US regional jet flights increased by more than 36% while flights 
of narrow bodies were down by 21% and wide body flights by more than 10%.  This trend continued in 2002:  +34% for regional jets;  -3% for narrow bodies;  +3% for wide bodies;  and +22% for turboprops. 
70  Airline Business, Annual Regional Airlines Outlook, July 2005. S/C/W/270 
Page 78  
 
  generic name of Lufthansa Regional in 2005.  Sim ilary, Air France took over, and then merged into 
one single entity its affiliates Regional Airlines, Fl andre Air and Proteus Airlines in 2000, in addition 
to taking control of BritAir and Ire land's Cityjet.  Air France sees this movement as "the sixth arm" of 
a strategy in reaction to the European deregulati on process, after direct distribution, frequent flyer 
programmes, yield control, hub development, and alliances.  The move is  intended to develop 
connecting traffic, use regional airlines to replace Air France aircraft on routes with little traffic and 
react quickly to changing market conditions.  Britis h Airways had developed earlier, before the period 
under review, a similar strategy.
71  As a consequence of these developments, captive airlines now hold 
60 per cent of the European market, leaving the remainder to fully independent and franchised airlines, as compared to a 50:50 ratio in the US. 
262. The major difficulty faced by franchised and, more generally, regional airlines in Europe 
seems to be the competition from low-cost carriers.  Certain regional airlines have reinvented themselves as low-cost carriers, e.g. Norwegian Ai r Shuttle into Norwegian and British European into 
Flybe.  While new generation turboprops have a co st advantage over the 737s  or A320s operated by 
low-cost carriers, regional airlines cannot get appare ntly the same conditions for airport taxes as low-
cost carriers. 
IV. SERVICES AUXILIARY TO ALL MODES WHEN DELIVERED IN AN AIR 
TRANSPORT CONTEXT (FREIGHT FORWARDING AND WAREHOUSING) 
263. The legal and economic situation described by the documentation for the first review has not 
substantially changed since.  Freight forwarding and warehousing have remained activities that are 
not specifically linked to a mode of transport.  To the contrary, recent years have seen widespread 
outsourcing of logistics functions to  third party firms, where the suppl y chain is seen as an integrated 
process that is coordinated by one actor.  Covered are not only transport and storage, but value-added 
services such as tracking, inventory management, an d in certain instances, packing, insurance, bill 
collection, trade financing, etc.  The underlying vi sion is that of "one stop shopping" for door-to-door 
logistics services that are provided either by postal  carriers (e.g. Deutsche Post owning the express 
carrier DHL, the freight forwarder Danzas and the ai r carrier Airborne International), express carriers 
(UPS taking over the freight forwarders Menlo and Sinotrans), freight forwarders, rail carriers 
(Deutsche Bahn owning the freight forwarder Schenker, SNCB owning ABX, SNCF owning until 
recently Geodis, Indian Railways revamping their freight depot through PPP) or ship-owners (Maersk, OOCLL, APL logistics).  By the same token, the traditional borderlines between transport, postal, 
express and freight forwarding services have largely vanished. 
264. There are, therefore, no data available for th ese activities delivered only in an air transport 
context.  For instance, the most extensive recent study of the subject , by the US International Trade 
Commission (USITC) is based on a global definition of the logistics sector.  The global outsourced market for logistics was estimated at US$130 billion in 2002.  Unfortunately, no geographic 
breakdown is provided.  Other sources indicate that  the US third party (3PL) market in 2003 
amounted to US$77 billion.  The value of outsourced  European logistics in 2004 was estimated at € 
36.5 billion, which is said to be less than 10 per cen t of the total market.  For the US, the share of 
outsourced logistics reportedly exceeds 40 per cent.  The discrepancies may attributable in part, 
however, to data problems and definitional incertainties.
72  Data for other regions are scarcely 
available, except for China.  Howe ver, there are wide differences between sources;  one study values 
the market at US$3.8 billion in 2003 and another at  US$8.5 billion.  Predicted annual growth exceeds 
10 per cent, possibly in expectation of a deliberate po licy to reduce logistics costs to US or European 
                                                      
71  There are some exceptions, howeve r.  For instance, Iberia has sold its two regional subsidiaries, 
Binter Malaga and Binter Mediterraneo, to the independent regional group Air Nostrum. 
72  Some sources include express delivery services in logistics, others limit it to freight forwarding in 
the traditional sense, or use some half-way, but unsubstantiated definitions.  S/C/W/270 
 Page 79 
 
 
  levels (transport, inventory and ad ministrative costs add up to some 10 per cent of GDP in the US, 12-
13 per cent in Europe, and over 20 per cent in China). 
265. The total international market for freight forwarding was estimated by the magazine 
Containerization International at US$165 billion in  2002, with the share of the top 20 providers 
amounting to about 20 per cent.  Among them ar e nine European firms (DHL-Danzas, Kühne & 
Nagel, Panalpina, Exel, Schenker, etc.), four are based in Asia, and seven in the US.  A USITC report 
for 2003 provides a similar picture.  The seven lead ing companies are of EC origin or ownership, 
except for one Swiss firm (Panalpina), the first US company ranks eighth (UPS), and the first Japanese firm ninth (Nippon Express).  The top 25 firms are estimated to account for US$80 billion in revenue. 
Table 14 
Top 10 global logistics providers' business focus - 2004 
 
  Forwarding 
  Year 
Seafreight  Airfreight Logistics services 1 Figures as percentage of 
2004 10.3%;  
628 000TEU 4 15.7%; 
660 000 tonnes Warehousing 4.8%; in-factory work and 
other 15.2%; rail forwarding 7.7%; motor transportation 43.3% = 71% Non-consolidated revenue:   
US$11 690.6 million 
Nippon Express 
2003 10.1% 15.4% Warehousing 4.9%; in-factory work and 
other 14.9%; rail forwarding 7.5%; motor transportation 43.9% = 71.2% Non-consolidated revenue:   
US$11 461.7 million 
2004 Freight management 
38.3%;   
515 000TEU 4 - Contract logistics 59.6% Turnover from continuing operations 
and acquisitions:   
US$11 425.6 million Exel Group 
2003 Freight management 
44.1% - 53.7% Turnover:  US$9 211.5 million 
2004 810 000TEU 
(estimated) 525 000 tonnes 
(estimated) 61.1% 3 - 
Schenker 2 
2003 Unavailable Unavailable 60.5% 3 - 
2004 DHL Danzas Air & 
Ocean 73.5%;   
1.2 million TEU 2 200 000 
tonnes DHL Solutions 26.5% Revenue:  US$8 168.2 million Deutsche 
Post 
Logistics 
2003 DHL Danzas Air & 
Ocean 72.2% - DHL Solutions 27.9% Revenue:  US$7 118.2 million 
2004 52.9%; 
1.6 million TEU 22.5%; 
600 000 tonnes Rail and road logistics 13.7%; contract 
logistics 10.1% Invoiced (gross) turnover:   
US$9 049.2 million Kuehne + Nagel 
2003 54.1%; 1.25 million 
TEU 21.9%; 
500 000 tonnes Rail and road logistics 10.8%; contract 
logistics 12.2% Invoiced (gross) turnover:   
US$7 674 million 
UPS SCS   343 000TEU 4 9 000 000 
tonnes 4 unavailable unavailable 
TNT 
Logisitics 2004 Wilson Logistics; 
154 000TEU 4 - 100% of revenue without Wilson Logistics 
3 - 
2004 40.5%; 824 200TEU 59.5%; 
750 000 tonnes 15.2% 3 unavailable 
Panalpina 3 
2003 680 000TEU 620 000 tonnes 14.1% 3 unavaibable 
2004 3.6% 1.5% Truck 75.9%; intermodal 4.5% Transportation gross profits:  
US$575.7 million CH Robinson 
2003 4.1% 1.1% Truck 86.4%; intermodal 6.0% Transportation gross profits:  
US$464.7 million 
Geodis   Figures by mode 
unavailable - Primary business area - 
 S/C/W/270 
Page 80  
 
  Notes:  1 Including supply chain management, contracts logistics (including warehousing and distribution) and 
value-added services;  2 Business areas vary by subsidiary - Geodis reports on four operating divisions:  Geodis 
France, Geodis Europe, Geodis FarE ast/Latin America and Geodis BM;  3 Information from analytiqa;  4 
MergeGlobal estimates and company reports. 
Source :  Annual reports and company info rmation except where stated;  Containerisation International, 
September 2005. 
 
 266. It is obvious that the sector represents a larg e workforce.  For inst ance, the nine largest 
European freight forwarding companies, grouped in  the association Freight Forwarding International, 
claim to employ over 445,000 persons (possibly counting all employees of DHL, including those 
working in express activities).  In most instances, the jobs are qualified since IT systems are key to 
modern logistics (e.g. Fedex reportedly has 2.5 computers per employee).  What these data do not 
cover is the web of small local companies, ge nerally family businesses, around airports and ports, 
which deal with customs clearance, freight forwarding and agency activities. 
267. Of the 12 countries or territories that have acceded to WTO since August 2000, ten have 
undertaken commitments on freight forwarding
73 and nine on storage and warehousing.74.  None of 
these Members has listed an MFN exemption covering those two sectors. 
268. MFN exemptions covering freight forwardi ng, and storage and warehousing have been 
discussed during the second review of MFN exemptions held on 30 November 2004 and 23 February 2005.
75 
269. The coverage by the GATS of freight forwardi ng services in an air transport context was 
discussed at the occasion of the Trans itional Review Mechanism of China.76 
V. LEASING 
A. ECONOMIC DEVELOPMENTS  
270. The material gathered for the first review w as largely based on a May 1999 ICAO study.  
This study has not been updated, and recent data ar e therefore scarcer than they were for the first 
review, in particular regarding leasing between carriers (dry and wet leasing). 
271. During the fifth Worldwide Air Transport Conference, held in Montreal from 24 to 29 
March 2003, the ICAO Secretariat submitted a doc ument on "Aircraft leasing in international 
transport".77  It states that during the preceding five y ears, the number of international scheduled 
airlines using leased aircraft had increased by 20 per cent.  In 2001, 84 per cent of the 
532 international scheduled airlines in operation wo rldwide used leased aircraft, and over 45 per cent 
of all aircraft in service with such airlines were le ased.  The number of the aircraft leased from other 
airlines increased by 33 per cent between 1996 and 2001 , the aircraft leased from leasing companies 
by 43 per cent and the aircraft leased from other sources (including, in particular, banks) by 44 per 
cent.  The relative importance of inter-carrier le asing has therefore decreased. while the global share 
of leasing as compared to direct ownership of planes has clearly increased.  
                                                      
73  Albania, Armenia, China, Chinese Taipei, Cr oatia, Former Yugoslav Republic of Macedonia, 
Kyrgyz Republic, Moldova, Nepal and Oman. 
74  Albania, Armenia, China, Chinese Taipei, Cr oatia, Former Yugoslav Republic of Macedonia, 
Kyrgyz Republic, Moldova and Oman. 
75  See documents S/C/M/76, dated 4 February 2005, and S/C/M/78, dated 17 May 2005. 
76  See document S/C/W/261, paragraphs 9 &10 and S/C/M/80 paragraph 32. 
77  ATConf/5-WP/9, dated 27 September 2002.  S/C/W/270 
 Page 81 
 
 
  272. The main rationale for the increasing use of leasing is its economic flexibility as compared 
with purchasing.  Furthermore, leasing is often u sed by new entrants lacking the economic strength 
necessary to purchase an aircraft.  Hence, liberalizat ion and the advent of low-cost carriers tended to 
increase the use of leasing. 
273. The relative advantages of leasing, as compar ed to purchasing, depend on the prevailing 
economic conditions (inflation, interest rates, tax treatment of the leasing regimes) as well as the cycle 
of the air transport industry (over-or under-capacity in the market, residual value of the various types 
of planes, leasing rates etc.).  This is evidenced by the recent evolution of the operating lease sector (i.e. lease by specialized leasing companies excluding carriers, and by non-specialized entities such as 
banks and export credit agencies, see Tables 15 and 16).   
274. There are virtually no data available on the inter-carrier market since 2001, but it is likely to 
have been less affected by the trends noted above th an the operating lease sector.  It is a niche market 
essentially used by carriers in r esponse to exceptional circumstances (non-availability of a plane for 
technical reason, strikes etc.).  Still, the inter-ca rrier market has seen at least one major bankruptcy, 
Atlas Air, a cargo company operating wet leases unde r an Aircraft Crew Maintenance and Insurance 
(ACMI) regime.  However, other companies based on the same business model, such as Iceland's Air 
Atlanta, have since emerged as major players in this market. 
275. Table 15 and 16 list the 39 leading leasing companies, and the value of their fleet in 2001 and 
2005.  
Table 15 
Leading lessors by fleet size and value pre and post 11 September 2001 
 
Total fleet value 
US$ million Fleet 
size Average aircraft value  
US$ million Rank Company 
Sept. 01 Sept. 01 Jan. 02 
1 GECAS (US) 28,094 1,232 22.8 18.9 
2 ILFC (US) 20,854 507 41.1 34.2 
3 Ansett Worldwide (Australia)  4,161 171 24.3 19.4 
4 debis AirFinance (Netherlands)  3,704 184 20.1 16.8 
5 Flightlease/GATX Flightlease  (Switzerland)  3,493 79 44.2 37.1 
6 Babcock & Brown  (US)  2,935 108 27.2 22.1 
7 GATX Air (US) 2,826 109 25.9 21.4 
8 Pegasus Capital  (US)  2,659 221 12.0 9.4 
9 Tyco Capital Aerospace (US) 2,618 129 20.3 16.2 
10 Boullioun Aviation  (US)  1,632 63 25.9 21.8 
11 SALE [Singapore Aircraft Leasing] (Singapore)  1,596 37 43.1 37.5 
12 BAE Systemx Regional  (UK) 1,561 357 4.4 3.5 
13 Pembroke Group/Air Finance (Ireland)  1,390 98 14.2 11.4 
14 Airbus Asset Management (France)  1,357 40 33.9 29.9 
15 ORIX Aviation Sys. (Ireland)  1,327 52 25.5 20.6 
16 Aviation Capital Group  (US)  1,036 68 15.2 12.0 
17 Tombo Aviation Inc (US) 1,025 36 28.5 24.2 
18 SAAB Aircraft Leasing  (US)  998 285 3.5 3.1 
19 Finova Capital  (US)  917 103 8.9 6.9 
20 Sunrock Aircraft (Ireland)  686 24 28.6 23.5 
21 Bavaria Int'l Aircraft Leasing (Germany)  553 28 19.8 17.0 
22 Deutsche Structured Finance  (Germany)  545 26 21.0 17.8 
23 IEM Airfinance (Netherlands)  498 20 24.9 20.9 
24 Dornier Aviation (US) 494 69 7.2 6.3 
25 Triton Aviation (US) 448 49 9.1 7.0 
26 Oasis International Leasing (UAE)  404 12 33.6 28.7 
27 C-S Aviation Services (US) 354 26 13.6 11.4 
28 ITOCHU AirLease Corp  (Japan)  335 10 33.5 25.6 S/C/W/270 
Page 82  
 
  Total fleet value 
US$ million Fleet 
size Average aircraft value  
US$ million Rank Company 
Sept. 01 Sept. 01 Jan. 02 
29 ATR Leasing (France)  318 62 5.1 4.4 
30 Raytheon Aircraft  (US)  275 170 1.6 1.5 
31 International Aircraft Investors  (US)  208 12 17.3 14.2 
32 Fleet Capital Leasing  (US)  112 11 10.2 7.3 
33 Potomac Capital (US) 108 11 9.8 7.3 
34 Arkia Leasing  (Israel)  106 18 5.9 4.7 
35 US Airways Leasing (US) 105 30 3.5 2.6 
36 International Air Leases  (US)  42 22 1.9 1.6 
37 AeroCentury (US) 37 16 2.3 2.1 
38 Lynrise  (US)  29 24 1.2 1.2 
39 MCC Financial Corp  (US)  24 16 1.5 1.3 
Total survey 89,864 4,535 17.8 14.7 
 
Source :  Airline Business.  
 
Table 16 
Leading lessors by fleet size and value – 2005 
 
Rank Company Total fleet value 
US$ million Fleet size Average aircraft 
value US$ million 
1 ILFC (US) 28,395 824 34.5 
2 GECAS (US) 23,617 1,276 18.5 
3 CIT Group  (US)  5,145 297 17.3 
4 Boeing Capital Corp  (US)  4,836 358 13.5 
5 RBS Aviation Capital (Ireland)  3,681 117 31.5 
6 debis AirFinance  (Netherlands)  3,392 267 12.7 
7 Boulioun Aviation (US) 3,139 123 25.5 
8 GATX Capital Corp  (US)  3,101 146 21.2 
9 AWAS (US) 2,675 170 15.7 
10 SALE (Singapore)  2,594 64 40.5 
11 Babcock & Brown (US) 2,237 128 17.5 
12 ORIX Aviation Systems  (Ireland)  1,646 70 23.5 
13 Pegasus Aviation (US) 1,336 230 5.8 
14 Aviation Capital Group  (US)  1,283 87 14.7 
15 Airbus Asset Mgt (France)  1,087 99 11.0 
16 Boeing Aicraft Holding (US) 1,062 31 34.3 
17 Pembroke Group (Ireland)  943 80 11.8 
18 Tombo Aviation  (US)  934 27 34.6 
19 BAE Systems Asset Mgt (UK) 777 292 2.7 
20 ITOCHU Airlease (US) 744 25 29.8 
21 Finova Capital (US) 717 122 5.9 
22 Bombardier Capital (US) 600 100 6.0 
23 ATR Asset Mangement (France)  519 120 4.3 
24 Oasis Int'l Leasing  (UAE)  416 17 24.4 
25 Raytheon Aircraft Credit (US) 398 207 1.9 
26 Bavaria Int'l A/c Leasing (Germany)  391 26 15.0 
27 Triton Aviation Services (US) 379 89 4.3 
28 Jetscape (US) 336 25 13.5 
29 GOAL  (Germany)  334 22 15.2 
30 Deutsche Structured Finance (Germany)  321 22 14.6 
31 Sunrock Aircraft (Ireland)  315 16 19.7 
32 BCI Aircraft Leasing (US) 279 35 8.0 
33 Saab Aircraft Leasing (Sweden)  277 149 1.9 
34 Aircorp (US) 239 25 9.6 
35 Safair Lease Finance  (South Africa)  234 9 26.0 
36 Guggenheim Aviation (US) 219 6 36.5 
37 ALAFCO  (Kuwait)  199 9 22.1 
38 Center-Capital (Russia)  163 12 13.6  S/C/W/270 
 Page 83 
 
 
  Rank Company Total fleet value 
US$ million Fleet size Average aircraft 
value US$ million 
39 Central Air Leasing (UK) 153 4 38.4 
Total Survey 99,113 5,726 17.9 
Source :  Airline Business. 
 
 276. Several observations can be made from these Tables.  In both 2001 and 2005, GECAS and 
ILFC accounted for half of the market.  While most of the lessors are either US or EC-based, 
operators from Oceania, Africa, the Middle East, Russi a, and the Far-East are also present.  This 
geographical dispersion is even more pronounced if one looks at the shareholders in particular of 
smaller companies.  It is also interesting to note th e presence of different types of actors:  pure leasing 
companies (ILFC, Boullioun);  leasing companies linke d to an engine manufacturer (GECAS) or to 
aircraft manufacturing companies (BCC and Boeing  Aircraft Holding for Boeing, Airbus Asset 
Management for Airbus);  and regional airc raft manufacturers such as ATR and BAE.  
277. There has been a notable evolution, both in terms of ranking and of the companies listed, over 
just four years.  This can be explained by merger s and acquisitions, but also by the fact that certain 
actors have deliberately chosen to support the sector counter-cyclically in view of their wider interests 
(Boeing, GECAS), while others have adopted a mo re cautious approach (e.g. Airbus) or a purely 
financial strategy of limiting risks (ILFC).  For inst ance, certain banks have sold off their leasing arms 
(e.g. Abbey National with IEM). 
278. Table 15 also shows that immediately after 9/ 11, lessors’ fleets immediately lost on average 
around 20 per cent of their value.  They lost a furt her 8.2 per cent in 2003 against a "normal"average 
rate of 4.6 per cent.  This is further illustrated by  the evolution of the monthly lease rate of a Boeing 
767:  US$400,000 in 2000, US$200,000 in 2001 (post 9/11), US$300,000 in 2005.  After a deep crisis, the leasing sector, boosted by the rebound of th e air transport industry and a frenzy of orders, 
has regained its attractiveness.  The prices obtaine d for the recent sales of two midsized aircraft 
leasing companies, Bouilloun and Debis Air Finance, is testament to this. 
279. US legacy carriers, which pre 9/11 preferred to  finance their acquisitions through cheap debt, 
may have increasing recourse to leasing.  The same  goes for low-cost carriers both in the US and 
elsewhere, which cannot finance their massive orders, or at least not all of them, through traditional 
financing channels (equity, capital market, export credit agency).  E xport credit agencies, for instance, 
have recently become more cautious  since they now face private clie nts instead of publicly-owned 
airlines with a State guarantee.  Banks too are lending less-and-less to the airline industry, especially in the US, and this affects not only Chapter 11 air lines, but also some low-cost carriers whose debts 
have grown considerably.  "Sale and lease-back " schemes, against a discount from the aircraft 
manufacturer, are an increasingly popular formula used  to finance massive orders (e.g. Ryanair and 
easyJet).  It is interesting to note that SALE, a Singapore-based company, has specialised in the low-
cost sector and in only a few years has built a por tfolio of customers comprising AirAsia, easyJet, 
Frontier Airlines, Jet Blue, Valuair, and Jetstar.
78 
280. Some major airlines, such as Air France, are al so increasingly using leasing as a way to adjust 
and renew their fleet.  Others, such as Lufthansa and BA, are more cautious and consider that 
flexibility comes at too high a price.  An interes ting, though still marginal tendency is the appearance 
of intra-alliance leases, for instan ce within Oneworld the leasing by  BA and American to Quantas, 
after the disappearance of Ansett had created a ser ious under-capacity situation in Australia.  
However, such deals are hampered by lack of sta ndardization among planes, an issue that alliances are 
starting to tackle.  It is also worth noting that th e leasing of engines has grown as a market of its own. 
                                                      
78  Airline Business, Annual Leasing Review. S/C/W/270 
Page 84  
 
  B. R
EGULATORY DEVELOPMENTS  
1. Multilateral developments 
(a) ICAO 
281. ICAO-related developments have been centred on safety and security aspects, rather than on 
market access issues strictly speaking. 
282. Article 83 bis of the Chicago Convention, which pr ovides for certain responsibilities of the 
State of registry to be transferred to the State of  the operator for leased aircraft, has been covered by 
the documentation of the first review (see compila tion, page 41).  As of March 2006, 148 States had 
ratified it and 37 States had conclude d 38 agreements under this Article.79  These agreements were 
predominantly for dry leases of aircraft, involving leasing companies or financial entities as lessors.  
ICAO revised its guidance material fo r the implementation of Article 83 bis in early 2003.80 
283. Based on a study on leasing produced by ICAO in 1999 (see compilation, page 36), the fifth 
ICAO Worldwide Air Transport Conference addressed the issue of leasing in March 2003.  It concluded, inter alia,  that, while leasing offers considerable benefits, it also raises economic and 
safety regulatory issues that must be addressed.  In pa rticular, States should ensure clear responsibility 
for safety oversight and compliance with minimum safety standards. 
284. The ICAO TASA contains a specific provision on leasing which is common to all three 
approaches of liberalization offered by the TASA (tra ditional, transitional and full liberalization).  It 
reads as follow: 
"1. Either Party may prevent the use of  leased aircraft for services under this 
agreement which does not comply with Articles........ (Safety) and ........(Security). 
2a. Subject to paragraph 1 above, the d esignated airlines of each Party may use 
aircraft leased from other airlines, provided all participants in such arrangements hold 
the appropriate authority and meet the requi rements applied to such arrangements.  
2b. Subject to paragraph 1 above, the d esignated airlines of each Party may use 
aircraft (or aircraft and crew) leased fro m any company, including other airlines, 
provided that this would not result in a lessor airline exercising traffic rights it does 
not have." 
285. Paragraph 2 provides a choice between two op tions for dealing with a primary economic 
concern, i.e. that a lessor airline might seek to exercise traffic rights to  which it is not entitled.  Both 
options also recognize (by omission or explicitly) th at from an economic perspective, States generally 
permit, or do not regulate, the leasing of aircraft leased from non-airline entities.  
286. The fifth ICAO Worldwide Air Transport Conf erence also requested that ICAO produce a 
study on the safety and security aspects of economic liberalisation.  This study, issued on 1 June 2005
81, covers aircraft leasing and notab ly operations of foreign register ed aircraft and foreign flight 
crews where the aircraft might be leased and ope rated outside the State of registry.  The study 
concluded that such situations may raise potentia l problems for identifying the State responsible for 
                                                      
79  The complete list of ratifications is available at:  
http://www.icao.int/ogi/goto_m_leb.pl?/icao/en/leb/treaty.htm  
80  Circular 295 "Guidance on the implementation of article 83 bis of the Convention on International 
Civil Aviation". 
81  Available at:  www.icao.int/icao/en/atb/ecp/SafetySecurity.htm  S/C/W/270 
 Page 85 
 
 
  safety oversight.  As a result, ICAO has taken action to improve its guidance material.  On 17 January 
2006, the ICAO Air Navigation Commission recognized  the difficulties for States to identify which 
State has responsibility for regulatory oversight under the various commercial arrangements or 
practices.  The Commission proposed to the Council the adoption of an amendment to Annex 6 of the 
Chicago Convention part I and II relating to the carriage of documents in  the aircraft.  This 
amendment, which requires the carriage of a certified true copy of the Airline Operating Certificate 
(AOC), and specific related authorizations, cond itions, and limitations, will enable each State to 
determine which State has the responsibility for regula tory oversight of the ope ration of the aircraft.  
This amendment was adopted by the Coun cil and became effective on 17 July 2006.82 
(b) Cape Town Treaty 
287. The Cape Town Treaty, which dates from 1994, w as ultimately signed in 2001.  It establishes 
an international legal framework designed to ensure the rights of creditors in the event of default, 
including recovery of assets.  Transactions will be reco rded in Dublin at the International Registry of 
Mobile Assets, a depository set up by Aviareto, a joint venture between the company SITA and the 
Irish government.  ICAO will act as the supervisory au thority.  It is hoped that the additional legal 
certainty, that an asset can be repossessed without encountering local obstacles, will be beneficial not 
only to creditors, but also to airlines, notably fro m developing countries, in the form of better access 
to capital markets and lower rates.  The US Exim Ba nk, for instance, offers to signatory nations a one-
third reduction on fees related to loan guarantees.  By November 2005, the Treaty had been ratified by 
eight countries (US, Ethiopia, Nigeria, Oman, Pakist an, Panama, Ireland and Malaysia).  Due to these 
ratifications, it became fully  operational on 1 March 2006. 
2. Bilateral and national developments 
288. The material prepared for the first revi ew, quoting the 1999 ICAO study on leasing, 
mentioned that 41 bilateral air service agreements, involving 38 States, contained an aircraft leasing 
clause.  It also comprised a specific document, requested by Members, listing these agreements and 
their content (S/C/W/182, dated 30 November 2000).  The 2005 ICAO WASA database of air service 
agreements records 42 agreements that have b een concluded since 1 January 1995 containing a 
leasing clause.  The complete list of these agreements can be found in the Annex.  
289. The first leasing provision, other than in b ilateral agreements, was found in the Multilateral 
Agreement on the Liberalization of International Air Transport (MALIAT), in fact, a plurilateral 
agreement, which was signed by several APEC members:  Brunei Darussalam, Chile, New Zealand, Singapore, Samoa, Tonga, and the United States (see compilation, page 180).  The leasing provision 
of this agreement broadens the potential number of States whose airlines could provide leased aircraft 
to airlines of any other signatory States, including  other APEC members not parties to the MALIAT. 
290. The WTO Secretariat has not been made awar e of any significant change in national 
regulations regarding leasing as compared to what w as described in the material for the first review 
(compilation, pages 40-41).  The general situati on has remained as described  by ICAO in its WP 9 
paper.  From an economic perspective, States eith er approve, or do not regulate, leases where the 
lessor neither is an air carrier nor is it controlled by an air carrier.  In other words, financial and long-
term operating leases, where the lessor is a leasing comp any, bank or entity, ar e generally permitted in 
international air transport.  From a bilateral pe rspective, States generally permit aircraft leases 
                                                     
 
82  The full text of the amendment reads:  "An aeroplane shall carry a certified true copy of the air 
operator certificate and a copy of the authorizations, conditions and limitations relevant to the aeroplane type, 
issued in conjunction with the certifi cate.  When the certificate and the asso ciated authorizations, conditions and 
limitations are issued by the State of the Operator in a language other than English, an English translation shall 
be included". S/C/W/270 
Page 86  
 
  between airlines of the two parties concerned, while restricting or not allowing leases, especially wet 
leases, from airlines of third countries.  For leases in volving airlines of States not party to a relevant 
agreement or arrangement, States either require that  such airlines have the necessary traffic rights or 
otherwise prohibit such leases. Again, only a de tailed questionnaire addressed to WTO Members 
could provide more detailed info rmation for future reviews.  S/C/W/270 
 Page 87 
 
 
  ANNEX TO CHAPTER V 
 
 
List of bilateral agreements  posterior to 1 January 1995 containing a  
clause dealing with leasing  
(as registered and numbered by ICAO) 
  Indonesia-Singapore (n°3950), China, Hong K ong SAR-Germany (n°3981), Myanmar-Viet Nam 
(n°4014), Uzbekistan-Viet Nam (n°4016), Cam bodia-Viet Nam (n°4067), Cambodia-Myanmar 
(n°4068), Cambodia-Singapore (n°4069), South Africa-Brazil (n°4071), Singapore-Brunei 
Darussalam (n°4101), Lao P. Democratic Re p.-Singapore (n°4104), United States-Singapore 
(n°4111), United States-Czech Rep. (n°4117), New Zealand-Singapore (n°4136), Bahrain-China (n°4186), New Zealand-Brunei Darussalam (n°4265),  Iceland-United States (n°4369), United States-
Brunei Darussalam (n°4371), United States-China, Macao SAR (n°4388), Viet Nam-China, Macao 
SAR (n°4389), Bahrain-Viet Nam (n°4392), New Zealand-Switzerland (n°4398), China, Hong Kong 
SAR-Viet Nam (n°4419), China, Hong Kong SAR- Norway (n°4423), United States-Uzbekistan 
(n°4433), TFYR Macedonia-Netherlands (n°4456), South Africa-Greece (n°4472), South Africa-Yemen (n°4473), South Africa-Belgium (n°4474), It aly-Malaysia (n°4476), South Africa-Saudi 
Arabia (n°4479), South Africa-Iran (Islamic Rep.  of) (n°4487), South Africa-Untd Arab Emirates 
(n°4493), Germany-Viet Nam (n°4503), South A frica-Norway (n°4541), South Africa-Sweden 
(n°4542), South Africa-Denmark (n°4543), Spain-Pa nama (n°4603), China, Hong Kong SAR-Ukraine 
(n°4605), Latvia-China (n°4620), Latvia-Sin gapore (n°4626), South Africa-Mali (n°4628), 
Cambodia-China, Macao SAR (n°4632), Syri an Arab Rep.-Netherlands (n°4646). 
  
Source :  ICAO WASA database. S/C/W/270 
Page 88  
 
  VI. CATERING AND REFUELLING (SEE BELOW VII) 
VII. GROUND HANDLING 
291. Ground handling and two of its sub-sectors, fue lling and catering, have been extensively 
described in the documentation prepar ed by the Secretariat for the first review (compilation, pages 50-
73, 49, 44-45).  The sector has al so been discussed by Members since the first review, and a report of 
these discussions, in particular on classification qu estions, can be found in document Job (05)/300, 
dated 18 November 2005.   
292. The following observations are largely based on a contribution by the International Aviation 
Handlers Association prepared especially for the second air transport review.
 83  Traditional sources of 
information available to the Secretariat (ICAO, IATA, Airlines Business, Aviation Week  and 
Interavia) have also been used. 
293. As ground handling progressively evolves fro m a monopoly market to a competitive one, 
economic developments in the sector and regulat ory developments are closely linked, and are 
therefore considered together.  Regulatory developm ents linked purely to safety considerations, which 
have little impact on market access, will be dealt with separately. 
A. DEFINITION  
294. From an operational point of view, ground ha ndling can be described as the services provided 
to aircraft, passengers and cargo at an airport.  It is an essential service, without which aircraft could 
not depart, and includes all the activities that take  place around the aircraft and in the terminal 
building and/or cargo warehouse with regard to the lo ad being carried on the aircraft (for the various 
regulatory definitions and the possible GATS cl assifications, see the compilation, pages 53-54,  and 
Job (05)/300, pages 4-6). 
295. IATA produced a Standard Ground Handling Agr eement (SGHA), which is widely used.  The 
SGHA lists the key elements of ground handling.  It  originally contained 14 types of activities (see 
compilation, pages 53-54), but was amended in 2003 in order to re-group and re-allocate them into 8 types of activities, as listed in Table 17.
 84 
Table 17 
IATA (SGHA) classification of ground handling activities - 2003 
 
1 Representation, Administration & Supervision 
 2 Passenger Services 
 3 Ramp Services 
Section  4 Load Control, Communication & Flight Operations 
 5 Cargo & Mail Services 
 6 Support Services 
 7 Security  
 8 Aircraft Maintenance 
 
Source :  IATA. 
 
 
                                                      
83  www.iaha.info 
84  Tables of correspondence between the two classifi cations are available from the WTO Secretariat.   S/C/W/270 
 Page 89 
 
 
  296. Although fuelling, catering, loading, security and maintenance are included in the list of 
services in the SGHA, it is quite common for these ser vices to be provided by specialist companies, 
i.e. fuel companies providing fuelling, catering comp anies provide catering loading, etc.  They are, 
therefore, not regarded as core ground handling services as they are not necessarily provided by a 
ground handling agent.  More details on the operati ons abroad of foreign providers of fuelling, 
catering and loading are contained in the IA TA Interactive Ground Handling Council (IGHC) 
Directory database:  www.iata.org/ighcpublic/search.aspx.85  It is interesting to note that, while most 
of the specialized operators are not global and have limited international activities, this is not true for 
all segments or for all companies.  Examples of  global operators include the leading catering 
providers (LSG Skychiefs which is present in 45 countries, Gate Gourmet which operates in 31 
countries, and Servair which has a presence in 18 countries)86, and the trolley operator Smarte Carte, 
which was recently acquired by the Australian i nvestment bank Macquarie, and is present in 175 
airports. 
B. MAIN TYPES OF PROVIDERS  
297. The majority of other ground handling services are provided by the airline itself, the airport 
operator, or a specialist ground handling organisat ion.  These services are sometimes split between 
more than one supplier, e.g. an airline may handl e its own passengers, but contract a ground handling 
company to undertake required ramp services. 
1. Airlines 
298. Historically, airlines handled themselves - par ticularly in the US - and catered to other 
airlines’ needs on a reciprocal basis.  Alternatively, airports handled all aircraft, usually on a 
monopoly basis.  This was a common scenario in Europe. 
299. Airlines continue to be the largest provider of ground handling services, usually self-handling 
in their own country, and particularly at their home base.  In addition, they continue to handle for 
other carriers, i.e. mutual handling.  This was ge nerally delivered on a reciprocal basis amongst IATA 
Members as many of the routes were pooled and re venue-shared.  The progressive disappearance of 
this pool and the emergence of competition among ai rlines serving the same city-pairs have gradually 
changed this situation, and airlines now tend to handl e other airlines in the same alliance, primarily to 
bring the passenger services together, but also to defray costs. 
300. Another recent trend has been for airlines to either separate their self-handling in their home 
country into stand-alone businesses, sometimes with an external partner, either as a prelude to the 
selling off of the activity or to establishing a separate ground handling company within their overall 
group. 
301. Passenger service is often seen as part of an air line’s core services.  However, this can vary 
both geographically and by airline.  In North Am erica, most airlines handle their own passengers 
domestically, whereas in Europe most low-cost ai rlines contract an independent ground handler even 
at their hub;  legacy carriers also tend to do this outside of their home country. 
302. In instances where conditions of operations are difficult, and where services delivered by 
local monopoly providers are of poor quality, airlines prefer to self-handle in spite of the higher costs 
                                                      
85  Both the consumers of ground handling services (IATA members), and providers of such services 
(IAHA members) have advised the Secretariat not to update Table 8 of the compilation (pages 62-68) on the 
types of providers present at main airports, because specialis ed providers might give a misleading picture of 
liberalization, while core services may still be severely restricted.  
86  Airline Business, January 2003. S/C/W/270 
Page 90  
 
  involved.  This ensures compliance with the saf ety rules imposed by the US Federal Aviation 
Administration or the European Joint Aviation Auth orities.  However, the possibility of self-handling 
(or, for that matter, mutual-handling) is not always  granted.  This explains why airlines often request 
their originating States to negotiate clauses in thei r bilateral air service agreements which allow self 
and mutual-handling.  Airlines generally consider  that self-handling should be a right globally, 
however, they have not found a multilateral legal vehicle to codify such a right. 
303. Work around the aircraft is increasingly viewed  by airlines as a commodity service they do 
not have to provide themselves.  Few airlines pe rform ground handling, other than passenger services, 
outside their home countries.  Such relatively rare  examples include Air Canada, Alitalia, American 
Airlines, KLM and United Airlines at London Heat hrow for historical reasons, and Finnair in 
Stockholm.  However, a few ‘indepe ndent’ handlers do have  a consortium of airlines as shareholders, 
e.g. EAS in Egypt and NAHCO in Nigeria. 
2. Airports 
304. Airports are still significant providers of ground handling services in certain parts of the 
world, for example China, Germany and Italy.  However, under pressure from airlines to open up the 
ground handling market, many airports  have chosen to divest the relevant activities rather than to 
operate in a competitive market.  This may creat e a difficult scenario for ground handling providers 
when one of the competitors, i.e. the airport, controls all of the infrastructure. 
3. Independent ground handling companies  
305. Over the past five decades, independent gr ound handling companies have emerged, i.e., 
companies not owned or controlled by either an air line or an airport.  All major international and 
larger national independent ground-handling compan ies are members of the International Aviation 
Handlers Association (IAHA).  There is at least one such company operating in most airports in North America and Europe. 
306. Tables 18 and 19 list the leading seven companies in 2000 and the leading eight in 2004/2005, 
respectively. 
Table 18 
Major players in ground handling - 2000 
 
Rank Supplier Revenues
(US$ million) Parent group Stations Countries Main regions
served 
1 GlobeGround-Servisair 830 Penauille Polyservices 199 39 Worldwide 
2 Swissport 600 Candover 130 24 Worldwide 
3 Frankfurt AGS 538 Fraport 25 9 Europe, Africa 
4 Worldwide Flight Services 353 Vinci 100 20 Euro, Am, Asia 
5 SATS 232 Singapore Airlines 6 6 Asia 
6 Menzies 226 John Menzies plc 72 22 Euro, Am, Asia 
7 AviaPartner 190 Verougstraete family (75%) 32 7 Europe  
Total 2969     
 
Notes:  UK venture capitalist Candover was finalising the purchase of Swissport.  GlobeGround and Servisair 
are combined even though they were still operating as separate brands. 
Source :  Airline Business.  
 
   S/C/W/270 
 Page 91 
 
 
  Table 19 
Major players in ground handling - 2004/2005 
 
Revenues Rank Supplier (US$ million) Parent group Stations Countries Base 
1 Swissport 1,045.4 Ferrovial 170 39 Switzerland 
2 Servisair/GlobeGround 976.7 Penauille Polyservices 175 31 France 
3 Fraport Ground Services 785.7 Fraport 25 9 Germany 
4 Worldwide Flight Services 582.1 Vinci 100 20 France 
5 Menzies 475.7 John Menzies  92 23 UK 
6 Aviance UK 438.3 Go Ahead Group 17 2 UK 
7 AviaPartner 333.0 Verougstraete family (75%) 32 6 Belgium 
8 SATS 261.9 Singapore Airlines 7 5 Singapore 
Total 4 898.8     
 
Note:  Revenues for 2004 are calcula ted using average exchange rates.  Servisair and Globe Ground are 
combined in the airport services division of Penauille Polyservices although they operate as separate market 
brands.  SATS financial year ending in March 2005.  Aviance UK year ending in July 2005. 
Source :  Airline Business. 
 
 
307. Hidden behind theses global figures are three main types of independent actors, which will be 
discussed below.  
(a) "Global" actors 
308. Of the independent handlers, none are fully  global, while five do operate worldwide 
(Table 20). 
Table 20 
Global players in ground handling - 2005  
 
 Ownership HQ Turnover 
2005 No. of 
Stations 
Swissport Ferrovial (Spain) Zurich €970m 175 
Penauille Servisair Penauille (France) Manchester €843m 143 
Worldwide Flight Services Vinci (France) Paris €550m 98 
Menzies Aviation John Menzies (UK) London GPB286m 93 
ASIG BBA Group (UK) Orlando US$350m 70 
 
Source :  IAHA. 
 
 309. Minor, but interesting discrepancies can be noted between Table 19 and Table 20, with regard 
to the number of stations and also to the rankings.  ASIG does not appear among the top eight 
companies according to Airline Business. 
310. The consolidation within the industry has continued unabatedly during the period under 
review: Servisair/Globe Ground/Penauille bought the US company Hudson General, Swissport 
absorbed KLM's Cargo Service Center;  Worlwi de Flight Services took over France Handling and 
AMR services (the former groun d handling arm of American Airl ines);  and Menzies bought a major 
US operator, Ogden and Jardine Airport Services, an d entered into a joint venture with China's Great 
Wall. S/C/W/270 
Page 92  
 
  311. It should be noted that, particularly in the case of worldwide handlers, ‘core’ ground handling 
is not undertaken at all the locations.  For exampl e, Penauille, Servisair and ASIG have a significant 
number of stations where they undertake inter-plane  fuelling but not core handling.  Neither of the 
two largest independent providers offers both passenge r and aircraft ramp handling at more than 70 
locations worldwide.  Part of the international expansion was fuelled by the expectation that the 
contracts for ground handling would become global, i.e., that one airline would select one single 
provider for all of its operations worldwide.  This  expectation has not yet materialised.  Apart from 
two examples (KLM–Swissport with 60 stations and Swiss–Swissport worldwide), only regional 
multi-country deals, covering on average three to six countries, have been concluded.  The density of 
stations belonging to one provider in a given region seems to be a key parameter to reap synergies in 
joint-marketing and training.  There have even b een some withdrawals from international expansion 
in 2005:  minority holdings and loss-making operations  or subsidiaries have been sold or closed.  
312. Another interesting trend is the preference of  alliances to select one ground handler at each 
airport for all their members.  This is linked to the "move under one roof" concept that can also be observed with regard to the allocation of terminals (see airports section). 
(b) "Global" actors with a regional focus 
313. A further three companies, while operating on a stand-alone basis, are owned by airports or 
airlines. 
Table 21 
Global ground handling actors with regional focus - 2005 
 
 
Ownership Headquarter Turnover 
2005 (US$ 
million) No. of 
Stations 
Fraport  Fraport (Germany) Frankfurt 786 9 
SATS  Singapore Airlines (Singapore) Singapore 932 20 
DNATA  Emirates Group (Dubai) Dubai 320 9 
 
Source :  IAHA. 
 
 314. Interestingly, two of the a bove ground handlers, Fraport and DNATA, are wholly owned.  
SATS is a listed company, but has Singapore Airlines as a major shareholder. 
(c) Major regional actors 
315. A number of significant regional companies, select ed on the basis of turnover, are listed in 
Table 22. 
    
 
  S/C/W/270 
 Page 93 
 
 
  Table 22 
Major ground handling regional actors - 2005 
 
 Ownership Headquarters Turnover 
2005 No. of 
Stations 
Acciona Airport Services  Acciona (Spain) Madrid €150 m 12 
Airport Terminal Services  Private (USA) Saint Louis N/A 35 
Aviance  The Go Ahead Group (UK) London GPB160m 17 
Aviapartner  3i (UK) Brussels €300m 32 
Celebi  not available Istanbul YTL215m 18 
Equity Aviation  JV (South Africa) Johannesburg N/A 7 
Flightcare  FCC/ Globalia (Spain) Madrid €200m 9 
Jardine Aviation Services  JM/CNAC (China) Hong Kong N/A 1 
 
Source :  IAHA internal inquiry. 
 
 316. An interesting development is the emergence of alliances of local providers promoting a 
common brand and common standards as a way to undertake international activities and become 
global (e.g. "the other" Aviance, a brand distinct from Aviance UK listed in Table 19, or Pantares, a 
brand which is common to Fraport and Schipol Airport). 
C. 
SIZE AND TYPES OF MARKETS  
317. The ground handling market is generally  estimated at between US$30 billion and 
US$40 billion in annual turnover, depending on wh ether inter-plane fuelling, catering loading, 
security, and line (ramp) maintenance are included. 
318.  The market in Europe alone is estimated to  be worth approximately US$10 billion.  Given 
Europe’s higher handling rates compared to North Am erica, this would suggest that the global figure 
is closer to US$30 billion than US$40 billion. 
319. Based on an estimate of US$30 billion, the shares of various providers have evolved as 
described in Table 23. 
Table 23 
Market shares of airlines, airports and independent  
ground handling providers 
 
 2000 2005 
 US$ % US$ % 
Airline 14.8 58.9 15.0 50 
Airport 4.3 17.2 3.0 10 
"Available" 6.0 23.9 12.0 40 
Total 25.1 billion 30 billion  
 
Source :  IAHA estimates. 
 
 320. "Available" or contestable markets are open to competition, i.e., they are not self-handled, or 
handled by another alliance partner or by the ai rport under a long-term c ontract.  Although this 
segment has doubled, over the past 5 years, from US$6 billion to US$12 billion, it still represents only 
40 per cent of the overall market.  However th ere are significant sub-sectoral variations: S/C/W/270 
Page 94  
 
  • Passenger handling is open to competition, with  the service providers being the airlines 
themselves or independent ground handling compan ies.  Given the low capital investment and 
customer interface, airlines tend to provide th is service or have handling agents do so in 
airline uniform and/or with dedicated staff. 
• Cargo handling is often restricted by the availability of cargo warehouses rather than by 
governmental restrictions.  Even at airports where front-line warehouses (i.e. with direct 
airside access) are limited, quite often second- level facilities (i.e. with indirect access) are 
available.  Given that much of the air cargo travels in part by lorry, these second-line facilities offer a degree of competition. 
• Aircraft handling on the ramp tends to be the most restrictive, and often non-competitive, 
segment. 
D. B
RIEF DESCRIPTION OF THE MAIN MA RKETS AND THEIR REGULATORY REGIMES  
1. General features of ground handling liberalization 
321. The sector has evolved differently in different parts of the world.  North American markets 
and, subsequently, European markets were the first to  be liberalised.  Generally speaking, over the last 
ten years, liberalisation has also taken hold in other pa rts of the world but with significant variations.   
322. Frequently, the initial step is the passage from one ground handler to a duopoly, as can be 
observed, for instance, in Asia and, residually, in  the European Communities.  The problem with such 
regimes is that, if an airline and, particularly, if an alliance member is involved, any airline in 
competition has effectively no choice but to use the other ground handler.  Du opolies therefore tend to 
have only a limited impact on prices.  Still, cust umers prefer them to a monopoly situation, in 
particular for reasons of liability.  Monopol y suppliers do not generally assume any legal 
responsibility in case of damage to the planes;  the initial working assumption linked to mutual 
handling was that possible damages would, ultimately,  compensate each other.  The introduction of a 
second handler allowed for the implementation of  a liability regime and of Services Level 
Agreements (SLA). 
323. According to users and independent ground handler s, there is no optimal number of providers 
for a given airport, even in proportion to the tr affic.  The historical maximum was reached at 
Heathrow airport, where, at one stage, 11 provide rs were operating on the tarm ac.  This may have had 
repercussions on safety and quality.  It is comm only admitted that 2 or 3 million passengers are 
required for two providers to operate profitably, but beyond this threshold the number of possible 
competitors varies depending on the type of traffi c (wide-bodied versus regional aircrafts), its 
seasonal character, distribution during the day, the number of flights, and the number of airlines 
serving the airport, etc.  In practice, however, the number of competitors is determined by the number 
of licences granted and, therefore, on the policy regime.   
324. As detailed below, in the case of the European  Communities, liberalisation has had a clear 
impact on the price of ground handling services.  The exact amount of the savings achieved varies according to circumstances (pre-existence of a monopoly, size of the contestable market, number and specialisation of the providers).  However, the gain s from liberalisation are valued by users at between 
10 and 20 per cent on average.  
2. North America 
325. The US and Canadian markets differ, even if in both countries no significant airport acts as a 
handling agent.  In virtually all major US airpor ts, US airlines completely self-handle, and handle  S/C/W/270 
 Page 95 
 
 
  other carriers, including foreign alliance partners, with independent suppliers providing services to 
other foreign airlines.  US carriers have started outsourcing their small outstations, but few carriers outsource major stations.  Many new low-cost airlines purely self-handle, although some have 
outsourced ramp handling.   
326. The US regulatory regime has been described ex tensively in the documentation prepared for 
the first review (see compilation, page 56) and h as not undergone any significant changes since.  Most 
airports in the US are open to new entrants, with ju st a few major airports restricting the number of 
handling agents.  Airports that have permit restric tions are Boston, Las Vegas, Los Angeles, Miami, 
New York (JFK) and San Francisco.  These represen t 6 of the top 22 airports that have over 25 
million passengers per annum (mppa).  However, the ma jor airports can have very high rates of self-
handling due to being the home-bases or hubs of major airlines.  The top three ai rports in the US are: 
Atlanta (overall total 85.9 mppa) where Delta a nd Air Tran operate 86% of the total passenger 
scheduled flights;  Chicago (76.8 mppa) with Amer ican and United operating 64% of flights;  and 
Dallas Fort Worth (59.1 mppa) with American operati ng 85% of flights.  Thus, the available market 
share for independent providers can be relatively sma ll.  The restricted airports in North America are 
listed in Table 24. 
Table 24 
US Airports with restrictions on number of ground handlers 
(million passengers per annum) 
 
Los Angeles  61.5 
Las Vegas  44.3 
New York (JFK ) 40.6 
San Francisco  33.6 
Miami  31.0 
Boston 27.1 
 
Source :  IAHA. 
 
 327. In Canada, airports are open, and independent ground handlers have a greater presence.  The 
Canadian market is similar to Europe, primarily b ecause of its traffic mix – scheduled and charter (the 
US has little regional charter traffic) with the ma in airline (Air Canada) and independent agents 
operating at most airports. 
328. In total, North America has 26 airports with  over 20 mppa whereas there are 14 in Europe 
(including Turkey), 14 in Asia Pacific, and only 2 in other regions of the world (Dubai and Mexico 
City). 
3. European Communities 
329. EC Directive 96/07, effective from January 1997, sought to open up the ground handling 
market in Europe.  The Directive imposes a minimum of two ground handlers able to provide ramp handling if certain criteria are met, such as the avaib ility of facilities, etc.  Chart 8 sums up the main 
provisions of this Directive. S/C/W/270 
Page 96  
 
  Chart 8 
Freedoms and possible restrictions under Council Directive 96/07/EC 
   
 
    
   
    
 
  
    
 
    
 
    
 
Source :  Study on the quality and efficiency of ground hand ling services at EU air ports as a result of the 
implementation of Council Directive 96/07/EC prepared by SH and E Ltd, October 2002. 
 
 330. A more extensive description of the provisions of the Directive can be found in the 
compilation (pages 56-58 and 73).  A detailed asse ssment was commissioned by the Commission 
Directorate of Transport and Energy in December 2001, and issued in October 2002.
87  It is based on 
an extensive enquiry among interested parties at EC  airports.  External aspects of the Directive, 
including its reciprocity provisions, are barely men tioned and do not seem to have raised particular 
problems for users.88  The report is therefore centred on qu estions of balance between different 
interests and implementation issues.  
331. There seems to be consensus on the positive impa ct of the Directive on prices, notably in 
Members States that were formerly under a monop oly regime (e.g. Greece and Italy), although the 
                                                      
87  "Study on the quality and efficiency of ground hand ling services at EU airports as a result of the 
implementation of Council Directive 96/67/EC prepared by SH and E Ltd", or "SH and E report" available at 
http://www.europa.eu.int/comm /transport/air/index_en.htm 
88  The only reference is contained in paragraph 6.29, on page 110:  "None of the respondents 
encountered any problems with Article 20 of the Directive with regard to  access to the handling market and the 
principle of reciprocity for non-Community countries". Airports with >2 million 
passengers All airports 
Third Party Handling Self Handling 
 
Baggage 
Ramp 
Fuel and Oil 
Freight and Mail  
 
Other services  
Baggage 
Ramp 
Fuel and Oil 
Freight and Mail  
 
Other services 
 
Minimum of two 
handlers, of which one 
is independent  
 
Open Minimum of two 
handlers at airports 
with > 1m passenger movements or 25,000 
tonnes of cargo  
 
Open 
 
If restricted, there 
should be a 
minimum of one 
handler If restricted, there 
should be a 
minimum of two 
handlers, of which 
one is independent  
Total restriction 
possible  
Restriction to a 
limited number of 
handlers possible  S/C/W/270 
 Page 97 
 
 
  extent of the price decrease is subject to considerable variations of opinion.89  Similarly, a detailed 
assessment shows an increase of co mpetition in virtually all airports, where the contestable market 
was big enough to accommodate seve ral suppliers for all segments, but particularly for ramp 
handling.90  Views remain divided on the effects of the Directive on the quality of service.91 
332. The main remaining issues identified by the re port relate to market opening, the tender 
process and selection criteria, the involvement of  the airport operator in ground handling, the 
insufficient role of Airport Users' Committees, and the degree of competition.  
333. More specifically, there have been general concerns, expressed by users and independent 
handlers, about the market opening process, and the different rates of adoption of legislation by 
Member States.  National administrations have been  criticised for not being sufficiently diligent and 
active in implementing the Directive.  Opposing vi ews have been expressed on the thresholds and the 
minimum or maximum number of handlers;  while airpor t operators feel that they have lost control of 
quality levels, airlines believe that market forces should determine these issues . 
334. There are weaknesses in the tender process and selection criteria, particularly where conflicts 
of interest between selecting bodies arise.  In tw o Member States, only one of several required tender 
processes has taken place.  In general, when tenders have been held, there have been difficulties in the 
selection phase. 
335. Handlers have had problems with the relative shortness of licence period.  Airport operators 
expressed concerns about the possible lack of c ontinuity and insurance coverage;  bundling and 
cherry-picking of handling servi ces have also been raised.   
336. Independent handlers believe that the involveme nt of the airport operator in ground handling 
has given rise to various forms of abuse of domin ant position.  Reportedly, the airport combines 
ground handling services with products a third part y handler cannot offer or charges non-transparent 
and excessive access fees for the core infrastructure.   
337. On the other hand, airports consider that i ndependent handlers have an advantage because of 
their multi-airport presence, providing them with th e ability either to cross-subsidise operations 
between different countries or to offer a wider ge ographic and, hence, more attractive service to 
international airlines. 
338. Airport Users' Committees appear to have varying degrees of involvement in the selection 
process, and even where their views are sought, they are not always respected.  
339. The size of the available market, and the degree of competition are of concern to the 
independent ground handlers.  The definition of sel f-handling is relevant here, with airlines and 
independent handlers taking opposing views on whet her it should be widened to include franchise 
operations, alliance partners and wet- lease operations.  The integrated cargo carriers also consider that 
their efficiency is greatly hampered by the inability to handle what they consider to be their own 
operations at their overnight hubs. 
340. The European Commission is currently consider ing an amendment to the Directive to force 
more competition on major airports, i.e., those handling over 10 million passengers per annum which 
are still restricted. 
                                                      
89  See SH and E report paragraph 3.13 and table 3.1 page 21-22. 
90  See SH and E report paragraph 3.1 to 3.12 page 14-20. 
91  See SH and E report paragraph 3.14 and table 3.2 pages 23-24. S/C/W/270 
Page 98  
 
  Table 25 
Restricted airports in the EU with over 10 mppa 
 
 Paris CDG   51.3 mppa  Brussels   15.6 mppa 
 Frankfurt   51.1 "  Düsseldorf   15.3 " 
 Madrid   38.7 "  Vienna    14.7 " 
 Rome FCO   28.1  "  Athens    13.6 " 
 Barcelona   24.6 "  Malaga    12.0 " 
 Paris Orly   24.1 "  Berlin TXL   11.0 " 
 Palma    20.4 " 
 
Source :  IAHA 
 
 341. Rome and Athens are restricted to three agents, while all other restricted airports are 
effectively limited to just two agents, although Ma drid, Barcelona and Malaga are currently tendering 
for a third agent.  Both Paris airports are unusua l in so far as although each airport has several ground 
handling agents, the airport operator company, Aéroport de  Paris, restricts each terminal to just two.  
Brussels and Berlin are restricted to two agents by national law. 
342. It is a matter of debate within the industry wh ether all airports should be totally open, with 
market forces determining the number of compe titors providing ground handling services.  The issue 
is complex since the size of the available market ma y be limited if an airport is used by carriers as a 
primary hub.  An example is Madrid, where Iberia , together with its Oneworld partners, has its 
primary hub and where Air Europa and Spanair self-ha ndle;  this leaves an available market of less 
than 9 mppa.  By comparison, Palma de Mallorca ai rport, in spite of Air Europa and Spainair self-
handling, has an available market of over 15 mppa, i.e., 66 per cent more than Madrid despite having 
just over half of its total traffic volume. 
343. Similarly it is interesting to note that London Heathrow, the busiest airport in Europe, has a 
relatively limited available market.  The same goes fo r Oslo at the lower end of the scale of airports 
exceeding 10 mppa.  There are many airports in No rthern Europe with much smaller volumes, e.g. 
Cork with 2.3 mppa, which are also completely open. 
4. Asia and Pacific 
344. The Asia/Pacific market has been experiencing significant growth, with Japan being the major 
market, and China and India growing rapidly.  S/C/W/270 
 Page 99 
 
 
  Table 26 
Asia Pacific airports with over 10 mppa 
 
 Tokyo (HND)  63.3 mppa  Osaka (ITM)  18.9 mppa 
 Beijing (PEK)  41.0 "  Fukuoka   18.7 " 
 Hong Kong   40.3  "  Sapporo   17.8 " 
 Bangkok   39.0 "  Shanghai (SHA) 17.8 " 
 Singapore   32.4 "  Mumbai   17.4 " 
 Tokyo  (NRT)  31.5 "  Brisbane   16.2 " 
 Sydney    29.0 "  Manila   16.2 " 
 Jakarta   27.9 "  Osaka  (KIX)  16.2 " 
 Seoul  (ICN)  26.2 "  Shenzen   15.8 " 
 Shanghai  (PVG) 23.7 "  New Delhi   15.1 " 
 Guangzhou   23.6 "  Chengdu   13.9 " 
 Kuala Lumpur   23.2 "  Naha    13.5 " 
 Taipei   21.7 "  Seoul  (GMP)  13.4 " 
 Melbourne   21.2 "  Jeju    11.4 " 
 
Source :  IAHA 
 
 
345. Of the above airports with over 20 mppa, Japan  has five representing a total of 144.8 mppa.  
The ground handling market is dominated by the major airlines (JAL and ANA) handling themselves 
and other airlines, either on a reciprocal basis or  commercially.  There is only one small independent 
handling agent known to be in Japan, which is consider ed by the industry to be a very difficult market 
for a foreign company to enter. 
346. China has five airports with over 20 mppa, totalling 94.8 mppa.  Handling in China is 
primarily provided by the airport operator at all ai rports with the network carrier also providing self 
and third-party handling at its hub.  There is a tre nd for airport operators to form joint-ventures with 
external providers, e.g., Beijing with Singapore Ai rport Terminal Services (SATS), which is majority-
owned by Singapore Airlines, and Guangzhou with CIAS, which is owned by DNATA, a subsidiary 
of the Emirates Group of Dubai.  Air China has recently announced the transfer of its handling 
business in Beijing into a joint-venture with Jardin es (Hong Kong, China).  A similar situation exists 
at second-tier airports, with all ot hers being airport monopolies.  
347. Hong Kong has three handling agents, including one partly-owned by Cathay Pacific and an 
independent provider, Jardine.  
348. In Thailand, Bangkok has two agents:  Thai Airways and TAGS, with the latter due to 
become an independent joint-venture between Wo rld Flight Services and Bangkok Airways in the 
new airport.  Singapore has three agents, including an independent which has just been appointed (Swissport).  Australian airports are primarily airline-handled, but with one network provider 
(Menzies) and some small independent providers.  De dicated terminals can, however, be a restriction.  
The Republic of Korea has its two airlines (Kor ean and Asiana) providing the majority of the 
handling service, with an independent competitor at  Seoul (ICN).  Chinese Taipei's airports are 
dominated by the two home carriers (China Airlin es and Eva Airways), with independent handlers 
only operating in the small secondary airports. 
349. India has two main providers which are subsidiari es of its public airlines, Air India and Indian 
Airlines, and a certain number of minor actors such as the independent company Cambatta.  New low-S/C/W/270 
Page 100  
 
  cost carriers do not feel comfortable with this situation, which forces them to contract with 
subsidiaries of competitors, and are militating in favour of more third-party competition.
92 
5. Other regions 
350. The remaining regions represent just 11.2 per cent of world passengers.  Key airports with 
over 10 mppa are listed in Table 27. 
Table 27 
Other main airports with over 10 mppa 
 
 Dubai   24.8 mppa  Johannesburg   15.8 mppa 
 Mexico City   24.1  "  Moscow  (DME) 14.0 " 
 Sao Paulo  (CGH) 17.2 "  Jeddah    13.3 " 
 Sao Paulo  (GRU) 16.8 "  Moscow  (SVO)  12.2 " 
 
Source :  IAHA 
 
 
351. In the United Arab Emirates, Dubai is similar to other Gulf States in that each operator is a 
State monopoly.  Ownership may be in the hands of the government, the airport, or the national airline or, as is the case in Dubai, an associate of an airline.  Due to the proliferation of airports in the region, 
there is some competition between the airports themse lves, which forces them to price competitively.   
352. In Mexico, Mexico City follows the open US pattern, with airlines self-handling or handling 
with a dedicated handler, plus third-party independent handlers. 
353. The market in Brazil is open.  The main handl er is the local provider SATA, which is owned 
by the same foundation as Varig.  Other handlers are present, including Swissport.  
354. In South Africa, Johannesburg has tw o independent handling providers.  
355. The market in Russia is very restricted.  At a ll main airports, ground handling is performed by 
the airport operator as a monopoly provider.  
E. WTO
 DEVELOPMENTS  
356. Since the date of the first review (docum ent S/C/W/163/add/1, dated 25 October 2000), one 
new WTO Member, Chinese Taipei, took two MFN exemptions regarding ground handling.93 
F. BILATERAL DEVELOPMENTS  
357. The 2005 ICAO WASA database of bilateral ai r service agreements records 310 agreements 
containing a ground handling clause, of which 54 have been concluded since 1 January 1995 
(Annex).94 
                                                      
92  Source:  IAHA. 
93  See document EL/136, page 2. 
94  ICAO defines a ground handling clause as "an element allowing a designated airline to perform its 
own ground handling or, at its option, to select its own gr ound handling agent in the territory of the other Party.  
Alternatively, the provision might anticipate an agr eement on ground handling betw een the airlines or the 
parties themselves".  
  S/C/W/270 
 Page 101 
 
 
  358. The inclusion of ground handling in bilatera l agreements has helped to advance the 
liberalization of ground handling and, notably, self-h andling.  However, the negotiation of traffic 
rights has also been used with an opposite aim;  there are instances where ground handling is provided 
by the national airline, which seeks to control the market by linking ground handling with traffic 
rights.  This practice is particularly prevalent in  Africa and with airlines that are based in holiday 
destinations, where governments intend to cross-s ubsidise the national airline with third-party 
handling revenues.  
359. These variations of possible ground handling policies are reflected in various clauses of the 
ICAO Template Air Services Agreement (TASA).  Article 24 of the TASA offers three different options for inclusion in air service agreements corresponding to the three alternative approaches 
suggested for liberalisation (traditional, transitional,  full liberalisation).  The text for the traditional 
approach reads: 
"Subject to applicable safety provisions, including ICAO Standards and 
Recommended Practices (SARPs) contained in Annex 6, the designated airline may , on the basis of reciprocity, use the services of a designated airline of the other Party 
for ground handling services in that Party's territory." 
360. With regard to this provision, ICAO notes that, "the reciprocal nature of the traditional 
approach generally results in satisfactory grou nd handling services being provided where designated 
airlines of both Parties serve the same airports in bot h Parties.  However, where there is no reciprocity 
(for example, if no designated airline of the other Party serves an airport where the designated airlines 
of the first Party have ground handling services) airlines sometimes find the services unsatisfactory 
and prices non-competitive". 
361. The text for the transitional approach offers two options.  The first option reads: 
"Subject to applicable safety provisions, including ICAO Standards and 
Recommended Practises (SARPs) contained in  Annex 6, the designated airline may 
choose from among competing providers of ground handling services".   
362. This approach allows a designated airline to choose from competing providers of ground 
handling services.  Depending on the degree of competition among the providers, this can provide 
some improvement in services and cost.  This approa ch is commonly found at airports with a large 
number of airlines and physical limitations on the number of ground handlers that can be accommodated.  The second option reads: 
"1. Subject to applicable safety provisions, including ICAO Standards and 
Recommended Practices (SARPs) contained in Annex 6, the designated airline or 
airlines of one Party shall be permitted, on th e basis of reciprocity, to perform its own 
ground handling in the territory of the ot her Party and at its option to have ground 
handling services provided in whole or in part by any agent authorized by the competent authorities of the other party to provide such services.   
2. The designated airline or airlines of one Party shall also have the right to 
provide ground handling services for other airlines operating at the same airport in the 
territory of the other Party.  
3. The exercise of the rights set forth in paragraphs 1 and 2 of  this Article shall 
be subject only to physical or operationa l constraints resulting from considerations of 
airport safety or security.  Any constraints shall be applied uniformly and on terms no S/C/W/270 
Page 102  
 
  less favourable than the most favourable te rms available to any airline engaged in 
similar international air services at the time the constraints are imposed. " 
363. On the basis of reciprocity, an airline is thus  allowed to perform its own ground handling, or 
choose to have these services provided by any agent authorized by the competent authority of the 
other Party to provide ground handling services.  ICAO notes that "paragraph 3 recognizes that 
ground handling rights may have to  be constrained but only due to airport safety or security 
considerations.  It also accords most favoured na tion and national treatment to the application of any 
such constraints ." (emphasis added) 
364. Finally, the text for the full liberalization approach reads:  
"1. Subject to applicable safety prov isions, including ICAO Standards and 
Recommended Practices (SARPs) contained in Annex 6, each Party shall authorize 
airline(s) of the other Party, at each airline's choice, to: 
a) perform its own ground handling services; b) handle another or other air carrier(s);  c) join with others in forming a service-providing entity; and/or 
d) select among competing service providers. 
2. An air carrier is permitted to choose freely from among the alternatives 
available and to combine or change its op tion, except where this  is demonstrably 
impractical and also where constrained by re levant safety and security considerations, 
and (with the exception of self-handling in a) above) by the scale of airport operations being too small to sustain competitive providers.  
3. Parties would always be required to  take the necessary measures to ensure 
reasonable cost-based pricing and fair and equal treatment for air carrier(s) of the other Party/Parties." 
365. Under the full liberalization approach developed by ICAO, the designated airline has a wider 
choice:  it can perform its own ground handling, us e services offered by another airline, provide the 
services to other airlines, join with other airlines in providing the services collectively, or choose from 
among competing providers.  ICAO considers that  "depending on their particular circumstances, 
States should consider the gradual, phased introducti on of self-handling and multiple suppliers based, 
where appropriate, on the size of the airport."  It also notes that at certain airports the number of air carriers and limited physical facilities may not permit all carriers to perform their own airside ground 
handling;  in such cases, carriers a llowed to do so should be selected  by objective, transparent and 
non-discriminatory procedures and competitive, a lternative suppliers should be available. 
G. R
EGIONAL / PLURILATERAL DEVELOPMENTS  
366. The MALIAT (Multilateral Agreement on the Libe ralization of International Air Transport) 
or "Kone agreement" to which the US, New Zeal and, Chile, Brunei Darussalam, Singapore, Samoa 
and Tonga are signatories,  contains the first plurilateral clause on ground handling.  It reads: 
"The designated airlines of each Party shall have the right...to perform their own 
ground handling in the territory of the other Parties ("self-Handling") or at their option, select among competing agents for su ch services in whole or in part.  The  S/C/W/270 
 Page 103 
 
 
  rights shall be subject only to physical constraints resulting from considerations of 
airport safety.  Where such considerations preclude self -handling, ground services shall be available on an equal basis to all airlines; charges shall be based on the costs 
of services provided; and such services sha ll be comparable to the kind and quality of 
services as if self-handling was possible." 
367. Strong similarities can be noted between the pr ovisions of the last sentence and the access to 
use of port services provisions of the GATS Maritime Model Schedule. 
H. R
EGULATORY DEVELOPMENTS NOT RELA TED TO MARKET ACCESS  
1. Safety 
368. In September 1998, the 32nd Session of the ICAO Assembly requested that a study be 
conducted on the safety aspects of ground handling a rrangements.  This request was based on the 
premise that liberalising these arrangements could result in the entry of new operators lacking experience.  
369. The results of the study and of a questionnaire, focussed on the practice and procedures of 
States, were presented to the ICAO Air Navigati on Commission and the ICAO Council in November 
and December 2000.  Pursuant to a request by the Air Navigation Commission, an additional study 
was undertaken in order to provide further info rmation on the scope, cost and nature of ground 
handling-related accidents and incidents.  This addi tional study was carried out on the basis of data 
obtained from the ICAO Accident/Incident Data Re porting System, the annual surveys conducted by 
Airports Council International (AC I) and other material contained in industry reports and documents.  
It was presented to both the Air Navigation Co mmission and the ICAO Council in November and 
December 2001.  
370. The study could not confirm the premise upon whic h it was based, i.e., that the liberalisation 
of ground handling arrangements would result in an influx of new companies with little or no 
knowledge of the aviation safety culture.  However, th e levels of injury to personnel and damage to 
aircraft caused by ground-handling occurrences reveal ed by the study have been sufficiently high so 
as to attract the continued attention. 
371. The findings of the study indicate that the wo rking environment of ground-handling personnel 
can be particularly hazardous, with the potential of serious injury.  In addition, surveys have shown 
that ground handling-related accidents can result in substantial and costly damage to aircraft.  
Outstanding problems that continue to contribute to  unsafe ground-handling operations include a lack 
of statutory and regulatory safety requirements, inadequate surveillance regimes and inadequate 
reporting and investigation of ground hand ling-related accidents and incidents.   
372. A review of existing Standards And Recommende d Practices (SARPs) has led to amendments 
to Annex 6, to ensure that States give adequate c onsideration to the safety aspects of ground-handling 
arrangements in the certification and surveillance of aircraft and aerodrome operators and ground 
handling companies.   
373. Existing guidance material, as contained in the ICAO Manual of Procedures for Operations 
Inspection, Certification and Continued Surveillance  (Doc 8335) and Manual on Certification of 
Aerodromes  (Doc 9774) is to be reviewed and, wherever  necessary, further developed with the aim of 
clarifying the functions which that may be delegate d by States to aircraft and aerodrome operators.  
Prior to publication, the draft Manual on Certification of Aerodromes  was amended in order to make 
more explicit reference to aerodrome operators' r esponsibilities for the oversight of ground handling 
operations. S/C/W/270 
Page 104  
 
  374. When reviewing the results of the 2002 study,  the Air Navigation Commission encouraged 
Contracting States to report and investigate occu rrences related to ground handling activities and to 
ensure participation by aerodrome and aircraft ope rators in worldwide reporting programmes such as 
the one conducted by Airport Council Internat ional.  In addition, the Commission reminded 
Contracting States of their responsibilities, as stated under Chapter 8 of Annex 13, on the reporting of 
accidents and incidents irrespec tive of where they occur.  
2. Security  
375. The accreditation procedures and security check s on ground handling personnel with access 
to the tarmac are part of the various new regulations  and audits on airport security instituted post 9/11 
notably by ICAO, the US and the EU.  They  are dealt with in section VIII. 6 below.  S/C/W/270 
 Page 105 
 
 
  ANNEX TO CHAPTER VII 
 
 
List of bilateral agreements  posterior to 1 January 1995 containing a clause 
dealing with ground handling 
(as registered and numbered by ICAO) 
  Bahrain-Australia (n°3978), Myanmar-Brunei Darussalam (n°3991), Fiji-Papua New Guinea 
(n°3994), Mauritius-Australia (n°4040), Finland- China, Macao SAR (n°4062), Singapore-Brunei 
Darussalam (n°4101), United States-Singapor e (n°4111), South Africa-Ethiopia (n°4114), 
Switzerland-Czech Rep. (n°4116), United States- Czech Rep. (n°4117), New Zealand-Singapore 
(n°4136), Uzbekistan-Finland (n°4137), South Afri ca-Germany (n°4149), Costa Rica-United States 
(n°4162), Cyprus-Israel (n°4173), Germany-Untd Arab Emirates (n°4197), Spain-TFYR Macedonia 
(n°4233), India-Russian Federation (n°4248), Bo livia-Costa Rica (n°4263), New Zealand-Brunei 
Darussalam (n°4265), China-South Africa (n°4291) , Germany-Rep. of Moldova (n°4311), Cyprus-
Georgia (n°4312), Japan-Ethiopia (n°4333), Japan-P apua New Guinea (n°4347), Lebanon-Australia 
(n°4365), Iceland-United States (n°4369), Unite d States-Brunei Darussalam (n°4371), Germany-
China, Macao SAR (n°4377), United States-China,  Macao SAR (n°4388), New Zealand-Switzerland 
(n°4398), Iran (Islamic Rep. of )-Saudi Arabia (n °4417), United States-Uzbekistan (n°4433), Cyprus-
Lithuania (n°4470), South Africa-Belgium (n° 4474), Germany-Viet Nam (n°4503), Germany-Czech 
Rep. (n°4505), Germany-Zimbabwe (n°4507), Kyrg yzstan-Germany (n°4510), Kyrgyzstan-China 
(n°4518), Mexico-New Zealand (n°4525), German y-Mongolia (n°4532), Costa Rica-Chile (n°4548), 
Germany-Bosnia & Herzegovina (n°4567), Germ any-Armenia (n°4571), Germany-Estonia (n°4579), 
Spain-Panama (n°4603), Germany-Lithuania (n°46 11), Germany-Ukraine (n°4613), Latvia-Slovakia 
(n°4623), Latvia-Croatia (n°4624), Latvia-Ukraine (n°4627), Syrian Arab Rep.-Netherlands (n°4646), 
Czech Rep.-Ukraine (n°4655). 
  
Source :  ICAO WASA database. S/C/W/270 
Page 106  
 
  VIII.  AIRPORT MANAGEMENT SERVICES INCLUDING CHARGING SYSTEMS 
376. Issues regarding definition and classification of airport services are addressed in the 
compilation (see pages 74-82). 
A. E
CONOMIC AND REGULATORY DEVELOPMENTS  
377. Economic and regulatory developments in airport services are closely related and, hence, will 
not be dealt with separately.  This sub-section will d eal with the following areas:  traffic, employment, 
financial situation, capital expe nditure, ownership and management, security, competition policy, 
low-cost terminals, environmental considerations, and airport design.  A following sub-section will 
address developments in the area of charging. 
378. As far as the GATS is concerned, a notable de velopment to report in the period under review 
has been the undertaking of comm itments by the Kyrgyz Republic, in its accession schedule, on 
"Supporting services for air transport" (CPC 746), which includes "Airport operation services" in sub-
section CPC 7461.95   
1. Traffic 
379. The number of international airports has been quite stable over the period under review, as 
has the share of airport charges in total airline opera ting expenses.  Traffic flows have continued to be 
heavily concentrated.  Around 2 per cent of air ports handle between 30 a nd 32 per cent of total 
passengers and between 48 and 52 per cent of inte rnational traffic.  However, the level of 
concentration, particularly with regard to interna tional traffic, has decreased slightly during the period 
under review.  This is a reflection of the increasi ng use of point-to-point connections, which often 
involve secondary airports, particularly in the case of low-cost carriers, even if the hub-and-spoke 
model remains highly relevant. 
380. With regard to aggregate traffic at the top 25 airports, a decline in total passenger numbers in 
2001 and stagnation in 2002 is notable (especially if compared with Table 16 in the compilation, page 
84) and can be accounted for by the events of 11 September 2001 and, in particular, by the dramatic 
fall in domestic traffic in the United States (Table  28).  International passenger traffic held up 
comparatively well in 2001, with a 0.7 per cent d ecline.  On the other hand, the sharper fall in 
international traffic, as compared with total tra ffic in 2003 reflects the impact of the Severe Acute 
Respiratory Syndrome (SARS) epidemic in Asia a nd the wars in Afghanistan and Iraq which had a 
more severe bearing on international traffic than on domestic traffic.  2004 recorded high growth 
rates, with passenger traffic growing faster than GDP for the first time since 11 September 2001.   
                                                      
95  For a list of all other Members having undertaken commitments in this sub-sector, please refer to the 
Secretariat Note contained in document S/C/W/59, dated 5 November 1998, and in particular to Table 6 on 
pages 48-49.  S/C/W/270 
 Page 107 
 
 
  Table 28 
Evolution of air traffic, selected indicators – 2000/2004 
 
 2000 2001 2002 2003 2004
Number of international airports 1195 1195 1195 1195 1196
Landing and associated airport charges  
(US$ million) 13 490 12 660 12 440 12 930 14 830
Share of airport charges in airline operating 
expenses  (%) 4.2 4.0 4.0 4.0 4.0
Scheduled and non-scheduled traffic at the top 
25 airports ranked by total passengers   
millions of passengers 1 079 1  022 1 021 1 023 1 124
growth rate 3.8 -5.3 -0.1 0.2 9.9
percentage of world total passengers 32 31 31 30 30
Scheduled and not scheduled traffic at the top 25 
airports ranked by international passengers   
millions of passengers 559 555 560 549 618
growth rate 5.5 -0.7 0.9 -2.0 12.6
percentage of world total passengers 52 52 51 49 48
 
Source :  ICAO Secretariat. 
 
 381. In 2005, in the midst of the oil price crisis, tra ffic growth is reported to have slowed from the 
high point of 2004, but ne vertheless remained solid.
96  The overall volume remained significantly 
above the levels of five years earlier (Table 29). 
Table 29 
Passenger traffic by region, 2000 and 2005 
 
2000 2005 
Region Passengers
(millions) Relative 
share Passengers 
(millions) Relative 
share 2000-2005 
Percentage 
change 
Africa/Middle East 94 2.9% 201 5.0% 113.8% 
Asia/Pacific 580 17.9% 845 21.1% 45.7% 
Europe 997 30.7% 1,232 30.7% 23.6% 
Latin America/Caribbean 140 4.3% 252 6.3% 80% 
North America 1,435 44.2% 1,478 36.9% 3.0% 
Total 3,246 100% 4,009 100% 23.5% 
 
Note:  ACI counts passengers once on arrival, once on departure and once in direct transit; 2005 data are 
provisional. 
Source :  Adapted from ACI Airport Economics Survey, 2000 and Airline Business, June 2006. 
 
 382. Africa and the Middle East experienced a substan tial increase in traffic, with their share of 
total traffic almost doubling between 2000 and 2005, although from low levels.  The market share of 
the Asia/Pacific and Latin America/Caribbean region s also improved over the same period.  This 
                                                     
 
96  Airline Business, June 2006. S/C/W/270 
Page 108  
 
  came mainly at the expense of North America, wh ose share in total traffic declined from 44.2 to 
36.9 per cent between 2000 and 2005.  
383. Table 30 offers details of traffic at the world' s top 25 airports, ranked by total traffic.  The 
spectacular growth recorded by Beijing Capital which has jumped fifteen places in only one year is 
noteworthy. 
Table 30 
Top 25 airports ranked by total passengers - 2005 
 
Passengers embarked and disembarked 
Rank 
No Airport 2005 
(thousands)  2004  
(thousands)  Change 
2004/2005 
(%) 
1 ATLANTA -HARTSFIELD  (1) 85,508 83,189 2.8 
2 CHICAGO –O'HARE INTL  (2) 76,581 75,507 1.4 
3 LONDON -HEATHROW  (16) 67,683 67,109 0.9 
4 TOKYO -HANEDA  (33) 63,271 62,109 1.9 
5 LOS ANGELES INTL  (4) 61,489 60,698 1.3 
6 DALLAS-FT.WORTH INTL  (3) 59,176 59,412 -0.4 
7 PARIS - CHARLES DE GAULLE  (8) 53,447 50,965 4.9 
8 FRANKFURT INTL  (15) 51,861 50,768 2.2 
9 LAS VEGAS -MACCARRAN INTL  (7) 44,267 41,442 6.8 
10 AMSTERDAM - SCHIPHOL  (20) 44,078 42,425 3.9 
11 DENVER INTL  (5) 43,307 42,394 2.2 
12 NEW YORK - JOHN F. KENNEDY INTL  (28) 41,885 38,469 8.9 
13 MADRID - BARAJAS  (19) 41,561 38,121 9.0 
14 PHOENIX - SKY HARBOR INTL  (11) 41,204 39,505 4.3 
15 BEIJING - CAPITAL  (30) 41,004 32,987 24.3 
16 HONG KONG INTL  (43) 39,821 36,287 9.7 
17 HOUSTON - GEORGE BUSH INTERCONTL  (6) 39,703 36,506 8.8 
18 MINNEAPOLIS  (12) 37,604 36,698 2.5 
19 BANGKOK INTL  (41) 37,162 36,222 2.6 
20 DETROIT - WAYNE COUNTY  (9) 36,375 35,188 3.4 
21 ORLANDO INTL  (32) 34,128 31,147 9.6 
22 NEW YORK - NEWARK INTL  (18) 34,000 32,925 3.3 
23 SAN FRANCISCO INTL  (31) 32,794 32,248 1.7 
24 LONDON - GATWICK  (44) 32,693 31,378 4.2 
25 PHILADELPHIA INTL  (10) 31,503 28,565 10.3 
Total 1,172,105 1,122,264 4.4 
 
Note:  The 2004 ranking is indicated in parenthesis.  Passenger movement data for 2005 are estimated for 
Tokyo-Haneda and Paris-Charles De Gaulle.   
Source :  ICAO Secretariat. 
 
  S/C/W/270 
 Page 109 
 
 
  384. Table 31 provides the individual traffic at the world's top 25 airports, this time ranked by 
international traffic.  The high growth rate of Dubai (+14,6% between 2004 and 2005) is testimony to 
the Emirates' success at transporting sixth freedom traffic97. 
Table 31 
Top 25 airports ranked by international passengers - 2005 
 
Passengers embarked and disembarked 
Rank Airport 2005 
(thousands)  2004 
(thousands)  Change 
2005/2004 (%) 
1 LONDON - HEATHROW  (2) 61,010 60,184 1.4 
2 PARIS - CHARLES DE GAULLE  (1) 48,828 46,300 5.5 
3 FRANKFURT INTL  (3) 44,837 43,478 3.1 
4 AMSTERDAM - SCHIPHOL  (4) 43,999 42,321 4.0 
5 HONG KONG - INTL  (6) 39,821 36,287 9.7 
6 SINGAPORE - CHANGI  (14) 30,291 28,606 5.9 
7 LONDON - GATWICK  (13) 28,752 27,460 4.7 
8 TOKYO - NARITA  (18) 26,969 26,514 1.7 
9 BANGKOK - INTL  (17) 26,821 25,825 3.9 
10 SEOUL - INCHEON INTL  (21) 25,591 23,621 8.3 
11 DUBAI  (15) 23,922 20,869 14.6 
12 MADRID - BARAJAS  (12) 21,993 19,953 10.2 
13 MUNICH - FRANZ JOSEF STRAUSS  (5) 19,525 17,880 9.2 
14 LONDON - STANSTED  (27) 19,326 18,173 6.3 
15 TAIPEI  (25) 19,213 17,722 8.4 
16 NEW YORK - JOHN F KENNEDY  (33) 18,789 17,429 7.8 
17 MANCHESTER - INTL  (26) 18,695 17,700 5.6 
18 COPENHAGEN - KASTRUP  (9) 18,259 17,371 5.1 
19 DUBLIN  (24) 17,697 16,372 8.1 
20 LOS ANGELES - INTL  (37) 17,486 16,473 6.1 
21 ZURICH  (10) 17,084 16,550 3.2 
22 TORONTO - LESTER B. PEARSON  (7) 17,008 15,979 6.4 
23 MILAN - MALPENSA  (16) 16,368 14,984 9.2 
24 ROME - FIUMICINO  (22) 16,128 15,501 4.0 
25 BRUSSELS - NATIONAL  (8) 16,061 15,578 3.1 
Total 654,473 619,130 5.7 
 
Note:  The 2004 ranking is indicated.in parenthesis. Passenger movement data for 2005 are estimated for Paris-
Charles De Gaulle.  Source
:  ICAO Secretariat. 
 
 
2. Employment 
385. Employment at airports has grown substan tially over the 2000-2005 period (Table 32).  For 
every person employed directly by an airport on aver age, another thirteen were working on the airport 
site (2004).  This ratio varies considerably, howe ver, as direct employment by airports differs 
                                                      
97  So-called "sixth freedom" traffic is traffic carri ed between two countries by an airline of a third 
country on two routes connecting in its home country.  For a fuller description, see compilation, pages 184 and 195-6. 
 S/C/W/270 
Page 110  
 
  depending on the share of functions that are outsour ced or subcontracted by ai rport authorities.  This 
is evidenced, at one extreme, by Frankfurt Airport,  which is the airport with the highest number of 
employees (over 15,000) and Chicago Midway, which has the lowest number (about 200 in 2005).  
Indeed, in North America, there is one direct em ployee for every 50 total workers on the airport site 
as many airport activities are outsourced, whereas in  Europe there is a one-in-eight ratio.  In 
Africa/Middle East and Latin America, the ratio of di rect employees is even higher, one in every five 
workers.  This is partly due to the fact that ma ny airport systems are publicly operated, with limited 
outsourcing of services.  
386. Airports also tend to create jobs in their vicinity, including freight-forwarders and other 
complementary businesses. 
Table 32 
Employment on airport sites - 2000 and 2004 
 
2000 2004 
Region Employed 
directly by 
airport operator Total 
employees on 
airport sites Employed 
directly by 
airport operator Total 
employees on 
airport sites 
Africa/Middle East 24,000 140,000 50,000 250,000 
Asia/Pacific 108,000 911,000 100,000 950,000 
Europe 128,000 1,171,000 135,000 1,100,000 
Latin America/Caribbean 16,000 150,000 25,000 200,000 
North America 43,000 1,106,000 40,000 2,000,000 
Total 319,000 3,478,000 350,000 4,500,000 
 
Note.  ACI information is based on data collected from a sample of member airports .  For instance, the Airport 
Economics Survey 2005 relies on 2004 information collected from some 600 airports. 
Source :  ACI Airport Economics Survey, 2000 & 2005. 
 
 
3. Overall financial situation 
387. The trend for the proportion of non-aeronautical revenues to rise worldwide has continued 
during the period under review.  According to Ai rports Council International (ACI) figures, non-
aeronautical charges, which in the early 1990s re presented less than 30 per cent of total revenues, 
have steadily grown to about 50 per cent.98  In 2004, they were slightly lower than aeronautical 
revenues (49 and 51 per cent, respectively), but ACI considers this to reflect a temporary decline 
(Table 33).  It can be explained by airports and concessionaries having to cope with security-driven 
design modifications and their impact on retail space or sales.  No global data are available for the 
breakdown of non-aeronautical revenue.  Availabl e information suggests that retail concessions 
represented the single largest source of income in  Europe, whereas in the US these were parking 
concessions, accounting for about 25 per cent of  revenue, followed by car rentals.   
 
 
 
    
                                                     
 
98  The data have been provided by Paul Behnke, Director, Economics, ACI.  It is important to note that 
in these figures ground handling is considered to be part of the non-aeronautical business.  S/C/W/270 
 Page 111 
 
 
   
Table 33 
Revenue by source - 2000 and 2004 
(US$ billion and Percentage) 
 
2000  2004  
Region Aeronautical 
revenue  Non-Aeronautical 
revenue  Aeronautical 
revenue  Non-Aeronautical 
revenue  
Africa/Middle 
East 0.61 69.31% 0.27 30.68% 3.56 56.96% 2.69 43.04% 
Asia/Pacific 4.78 47.09% 5.37 52.90% 6.16 48.27% 6.60 51.72% 
Europe 9.56 54.25% 8.06 45.74% 14.56 52.05% 13.41 47.94% 
Latin America/ 
Caribbean 0.98 66.21% 0.50 33.78% 1.26 65.28% 0.67 34.71% 
North America 4.43 40.49% 6.51 59.50% 7.71 49.74% 7.79 50.25% 
Total 20.36 49.6% 20.71 50.4% 32.71 51.2% 31.16 48.8% 
 
Source :  ACI Airport Economics Survey, 2000 and 2005. 
 
 388. Table 33 also shows that aeronautical revenue  has continued to exceed non-aeronautical 
revenue in Latin America/Caribbean and Africa/Middle East, where the smaller size of airports tends 
to reduce the potential for lucrative landside act ivities, such as retail and parking concessions.  
A 2002/2003 Airport Retail Study published by URS Corp provides performance indicators on an airport size basis.
99  The study found that larger airports  (i.e., those with more than 20 million 
passengers) achieved more than twice the retail in come per passenger airports with less than ten 
million passengers. 
389. Airport operating margins during the period u nder review are described in Table 34. 
Table 34 
Financial performance of the largest airport groups * 
 
 2000/1 2001/2 2002/3 2003/4 2004/5 
Operating margin 27.9% 22.8% 19.2% 19.3% 20.9% 
Net margin 14.5% 11.0% 9.5% 8.6% 10.4% 
 
* Top 100 for 2004/5 and 2003/4, top 50 for the years before.  The composition may change in individual 
years.  The margin figures are based on the airports for which data were available. 
Source :  Airline Business, December 2005. 
 
 390. Airports have obviously suffered from the downt urn that has affected the air transport 
industry over the 2001-2003 period, but have nevertheless managed to rema in profitable.  With traffic 
picking up again in 2004, both operating margins and profits have improve d, although they did not 
quite reach the pre-2001 levels (see compilation, page  89).  A necessary qualification to the net profit 
data is that US airports, which make up a large shar e of the top 100 airports, are not-for-profit entities.  
Any surplus is re-invested in the airpor t operation or used to maintain reserves.
100   
                                                      
99  As reported in the ACI Airport Economics Survey, 2002/2003. 
100  ACI Airport Economics Survey, 2005. S/C/W/270 
Page 112  
 
  4. Capital expenditure 
391. According to the ACI surveys, overall capital e xpenditure has risen sharply over the 2000 to 
2005 period.  This is particulary striking when gi ven that expenditure on new airports is not included 
in the figures reported in Table 35.  However, aggr egate figures hide significant variations, with falls 
in capital expenditure registered in the Asia/P acific and Latin America/Caribbean regions and 
dramatic increases in Africa/Middle East, driven, in particular, by heavy investment in the Middle 
East.  
Table 35 
Capital expenditure* by region 
(US$ million) 
 
Region 2000 2005 % change 
Africa/Middle East 473 3,500 640% 
Asia/Pacific 4,485 3,700 -17.5% 
Europe 7,026 12,800 82.2% 
Latin America/Caribbean 1,848 900 -51.3% 
North America 10,247 15,100 47.4% 
Total 24,079 36,000 49,5% 
 
* Excludes expenditure on new airports. 
Source :  ACI Airport Economics Survey, 2000 & 2005. 
 
 
392. On aggregate, airports are spending heavily on infrastructure to meet current needs and the 
anticipated doubling of passenger traffic over the 2004-2020 period, from 3.9 billion passengers in 
2004 to 7.4 billion in 2020.101  ACI estimates that domestic air passenger traffic will increase by an 
average of 3.7 per cent per year over the next fifteen years, while international traffic is expected to 
grow even faster, by 4.7 per cent.   
Table 36 
Domestic and international passenger tr affic growth by region - 2004/2020 
 
Domestic International 
Region Annual 
increase Increase by 
2020 Annual 
increase Increase by 
2020 
Africa 3.5% 73% 4.8% 112% 
Asia/Pacific 6.4% 170% 5.7% 143% 
Europe 3.1% 63% 4.2% 93% 
Latin America/Caribbean 3.7% 79% 4.9% 115% 
Middle East 1.0% 17% 9.3% 315% 
North America 2.7% 53% 3.1% 63% 
Total 3.7% 79% 4.7% 109% 
 
Source :  ACI Worldwide and Regional Forecasts , Airport Traffic 200 5-2020, August 2005. 
 
 
393. As Table 36 shows, the lowest expected grow th rates are in North America and Europe, 
which have the highest traffic base and are mature av iation markets, in which growth may be expected 
to diminish over time.  International air passenger traffic is forecast to increase more rapidly than 
                                                      
101  See ACI Worldwide and Regional Forecasts , Airport Traffic 2005 -2020, August 2005.  S/C/W/270 
 Page 113 
 
 
  domestic traffic in all regions, except in Asia /Pacific, where the large domestic markets and 
increasing GDP and personal disposable income in both China and India point to strong growth 
potential in domestic traffic.  The marked differe nce between the expected growth rates for domestic 
and international traffic in the Middle East reflects the region's limited domestic market, but also the 
importance of 6th freedom traffic for its carriers. 
394. In anticipation of the strong gr owth of air passenger traffic, and in particular of domestic 
traffic, the Indian government has decided on the cr eation of green field airports at Bangalore and 
Hyderabad, to be financed thro ugh a public-private partnership.102  The country suffers from severe 
congestion at its main hubs at Mumbai and New Delhi, as well as at Chennai, Kolkatta and 
Bangalore.103   
395. In a similar situation with regard to passenger growth, China's airport infrastructure is also 
under strain.  In 2004, passenger traffic grew by 38 per cent to around 120 million, of which 
100 million were domestic passengers, and estimates are that domestic traffic could reach 950 million 
by 2020.  This would make China the world's seco nd largest national air market after the US.  To 
meet anticipated demand, new airports are being built around the country:  over the past 25 years, the 
number of airports in China has doubled to reach 133,  of which a third currently handle more than 
1 million passengers per year.  The Civil Aviation Administration of China (CAAC) expects that, on 
average, three airports will be built each year thro ugh to 2020.  Although attention has tended to focus 
on China's densely populated and prosperous eastern provinces, the government is reportedly keen to 
develop infrastructure also in the more remote and relatively poorer areas to the west.   
396. Plans apparently exist to develop a new airport for Beijing by 2015, in spite of the expansion 
currently underway at Beijing's existing airport, Beijing Capital International Airport, which is 
scheduled to be completed in time for the 2008 Olympics.  Shanghai Airport Authority is also planning a massive expansion of the city's Pudong In ternational, which only opened in 2000 and is 
currently the second largest hub in China, with th e construction of a second passenger terminal and a 
second cargo area. Guangzhou, China's third largest c ity and home to the country's largest carrier, 
China Southern Airlines, saw the opening of a major new hub in August 2004.  There is plenty of 
other airport development activity also planned for the south of the country, with the approval of a 
project for the development of the country's sixth largest airport, Chengdu Shuangliu International.
104 
397. In order to accommodate increased demand for air travel, massive new investments in 
capacity must take place also in more mature mark ets to avert congestion.  In a 2004 study, the 
European Civil Aviation Conference (ECAC) a nd EUROCONTROL estimates that traffic without 
congestion will grow by an average 4.6 per cent.  By  the year 2025, it will imply in turn that 17.6 per 
cent of demand (i.e. 37 million flights per year) w ill not be accommodated, despite an expected 60 per 
cent increase in capacity in the airport network.  Th is will result in more than 60 airports, out of the 
133 sampled in the study, being congested, and the top-20 airports being saturated for at least 8-10 hours per day.
105 
                                                      
102  India's domestic traffic rose by over 20 per ce nt in 2004 and passenger numbers are forecast to 
nearly double to 100 million by the end of the decade (Airline Business, December 2005). 
103  Infrastructure constraints at Mumbai airport are reportedly the most serious.  The airport only 
manages modest runway usage, with air traffic control only handling 27-28 flights an hour when it operates on 
single-runway operations;  by way of comparison, London Gatwick's sole runway can handle on average 45 hourly movements during th e busy morning period (Air line Business, December 2005). 
104  Airline Business, June 2005. 
105  ECAC-EUROCONTROL, (2004), "Challenges to Growth 2004 Report (CTG04)", Ailine Business, 
June2005.  The above estimate is based on the most optim istic scenario in terms of economic growth and,hence, 
passenger traffic growth in Europe. S/C/W/270 
Page 114  
 
  398. Capacity constraints are expected to change th e pattern of traffic distribution, with extra 
flights possible only at secondary airports and/or at  less favourable times.  There will also be pressure 
to accelerate the switchover to larger aircraft, in order to accommodate more passengers while 
keeping the number of flights constant.  In Japan's severely congested airports, for example, Boeing 
747s are used even on short-haul routes.  Both Boei ng and Airbus have developed larger aircraft, the 
former with the stretched version of the 747 and the latter with the introduction of the world's largest 
aircraft, the A380.  
399. The entry into service of the A380, expected in  late 2006/early 2007, has been one of the two 
new factors that have contributed to the increase in airports' capital expenditure during the period 
under review, the other being the additional secur ity investment necessary in the wake of the 
11 September 2001 attacks (see discussion below).  The airports to which the A380 will fly are 
required to invest heavily in terminal facilities.  For example, at London Heathrow, which is expected 
to receive its first A380 services in December 2006, airport operator BAA has spent US$845 million 
to accommodate the new aircraft.  However, it will on ly be able to operate on the airport's southern 
runway due to potential taxiway issues, and addition al modification works will be needed to enable 
the aircraft to use the northern runway.  Other examples include Auckland International Airport, 
which is spending US$16.7 million on airside improve ments that will include widening the runway by 
7.5 meters on each side, as well as filleting taxiwa ys and aprons, and ADP, which is investing 
€740 million at Paris Charles de Gaulle airport.
106   
400. Given that all of these modifications imply significant costs for airports, airlines not operating 
the A380 have expressed concern about the prospect  of having to pay for A380-related work through 
increased airport charges applicable to all carriers.  
5. Ownership and management 
401. The first review documented how many countries had sought  to open up airport services to 
private involvement as a way of financing airports' growing capital needs through airport sales, taxes and concession fees (see compilation, pages 90-91).  Unfortunately, the information contained in 
Tables 22 and 23 of the compilation (see pages 91 and 92) has not been updated by ICAO, which 
makes it diffcult to identify precise trends over the current review period. 
402. According to a report produced for ACI by the Centre for Asia Pacific Aviation
107, the 
intensity of privatisation and acquisitions in the 1995-2000 period seemed to have ended with the 
terrorist attacks of 11 September 2001, and the other ex ternal shocks that followed.  Although airports 
were better placed than airlines to face these crises because of their diversified income base and more 
readily definable costs, investors have been reluctan t to invest while the airports' major clients, the 
airlines, were fighting for survival.  Only since the signs of a full-scale industry recovery became 
apparent in 2004 have investors looked at airports with renewed interest.  It has been the steady 
performance of airports throughout th e years (none of the airports rate d by Standard & Poor's has ever 
defaulted on its bonds or loans over the past 15 year s) that has helped to attract investors from a 
variety of sectors (construction companies, financ ial services providers, property investment groups, 
airlines, etc.).108 
403. The experience with airport privatisation through out the world has been mixed.  While some 
observers stress the achievements of the privati sed airports, such as BAA in the United Kingdom, 
others point out that the transfer of responsibility from the public to the private sector has not always 
                                                      
106  Airline Business, June 2006. 
107  See ACI Airports Economic Survey 2004. 
108  Airline Business, June 2004.  S/C/W/270 
 Page 115 
 
 
  enhanced performance.109  It would seem that the key issue is how the privatization process has been 
carried out and whether and how the new, private airport operator is regulated. 
404. Some of the most interesting investment oppor tunities are currently in Europe, with the 
privatisation process of Aéroports de Paris (ADP), one  of the world's five largest airport groups which 
operates the two main Paris airports, due to begi n by mid-2006 and Amsterdam Schiphol also moving 
towards privatisation.  Macquarie Airports of  Australia has bought Denmark's primary hub, 
Copenhagen Airport, and Brussels Zavantem, but h as pulled out of the race for Budapest, which is 
finally being acquired by a group led by BAA.110  The UK airports' operator, the largest in the world, 
had itself become the object of a fierce takeover ba ttle, which was finally resolved in June 2006 in 
favour of Spanish group Ferrovial, which will buy BAA for the equivalent of US$19 billion.111 
405. Asia has witnessed significant privatisation m oves as well.  In China, the transfer of 
ownership and control of some 90 airports fro m central government to local and provincial 
government control was completed in 2004, an d was followed by widespread moves towards 
privatisation.  Ownership caps were reduced and aggregate foreign ownership of Chinese airports by 
different companies is now allowed to exceed 50 per cent, as long as the largest single shareholder is a 
Chinese national.  Amongst the foreign investors in the country's airports are:  ADP, which has a 
9.9 per cent stake in Beijing Capital;  Copenhagen Ai rport, with a 20 per cent stake in Hainan Meilan 
International;  Hong Kong's Airport Authority, which is to buy a 35 per cent stake in Hangzhou's Xiaoshan International.
112  In turn, in Hong Kong, China, the government is preparing an initial public 
offering for Hong Kong International Airport in the course of 2006.   
406. In India, the government is planning to priva tise both Delhi and Mumbai airports in the form 
of a public-private partnership (PPP).  Each airport would be sold to a private joint venture company 
holding a 74 per cent stake, with the Indian government and Airports Authority of India retaining each 13 per cent of the shares.  Foreign companies are allowed to take up 49 per cent in the venture.  
Several consortia, each featuring an Indian firm a nd an international airport group, submitted bids for 
the Delhi and Mumbai PPPs.
113  In February 2006, a consortiu m led by the Indian construction 
company GMR and Fraport was awarded the Delhi contract, and a group led by Hyderabad-based 
construction company GVK and Airports Company South Africa the Mumbai project.114   
407. The US may also offer growth opportunities for airport groups keen to expand.  Although 
US airport ownership has remained firmly in the hands of local authorities, management contracts 
may appear as an interesting option as airports se ek to capitalize on the yet relatively underdeveloped 
retail side of their business.115  The City of Chicago, for instance, is reportedly interested in exploring 
the leasing of Midway Airport to a private entity  for revenue development, while BAA operates 
Indianapolis International Airport under an agr eement with local authorities.  Such forms of 
commercialisation, which are commonplace in other parts of the world, are not yet particularly widespread in the US, where airports are funded by  a mix of revenue and m unicipal bonds, in addition 
to state and federal funds.
116 
                                                      
109  This appears to have been the case, e.g., in pa rts of the Caribbean and Latin America.  See Centre 
for Asia Pacific Aviation summary report, in ACI Airport Economics Survey 2004. 
110  Airline Business, December 2005;  Centre for As ia Pacific Aviation, Airp ort Investor Monthly, 
January 2006. 
111  Financial Times, 7 June 2006;  La Tribune, 8 June 2006. 
112  Airline Business, June 2005;  Centre for Asia Pacific Aviation, Monthly Essential China, 
December 2005. 
113  Airline Business, December 2005. 
114  Financial Times, 9 February, 2006. 
115  Airline Business, December 2003. 
116  Aviation Week & Space Te chnology, 13 March 2006. S/C/W/270 
Page 116  
 
  408. At any rate, the airport sector is experiencing significant commercialisation and cross-border 
activities, both in terms of operations  and ownership.  This is illustrated in Tables A1, A3 and A3 in 
the Annex.  Table 37 provides a synthetic picture of cross-border activities in the airport services 
sector.  
Table 37 
Overview of cross-border activiti es in the airport services sector 
 
Between developing /transition economies ("South-South")  
Argentina-Uruguay;  Argentina-Armenia;  Chile-Jamaica;  Hong Kong ,China-China;  India-Mauritania;  
India-Togo;  Malaysia-Cambodia;  Malaysia-South Africa;  Mexico-Chile;  Mexico-Dominican Republic;  
Singapore-China;  Singapore-Costa Rica;  Singapore-Hong Kong, China;  Singapore-Vietnam;  Turkey-Egypt 
From a developing /transition to a developed economy  ("South-North") 
Hong Kong, China-United States;  Singapore-New Zealand;  Singapore-Netherlands 
Between developed econo mies ("North-North") 
Australia-New Zealand;  Australia-Belgium;  Aust ralia-Czech Republic;  Austra lia-Denmark;  Australia-
Germany;  Australia-United Kingdom;  Austria-Hungary;  Austria-Malta;  Austria-Spain;  Canada-Australia;  
Canada-France;  Canada-Malta;  Canada-New Zealand;  Denmark-Norway;  Denmark-United Kingdom;  
France-Belgium;  Germany-Australia ;  Germany-Greece;  Germany-La tvia;  Germany-United States;  
Germany-Spain;  Ireland-Canada;  Ireland-Germany;  Ireland-Greece;   Ireland-Hungary; Israel-Jamaica; 
Luxemburg-Switzerland;  Luxemburg-United Kingdom ;  New Zealand-Australia;  New Zealand-United 
Kingdom;  Spain-Australia;  Spain-Belgium;  Spain-Canada;  Spain-Ireland;  Spain-United Kingdom;  Spain-United States;  Netherlands-Australia ;  Netherlands-Austria;  Netherla nds-Hungary;  Netherlands-Malta;  
Netherlands-Switzerland;  Nether lands-United States;  United Kingdom-Australia;  United Kingdom-
Germany;  United Kingdom-Italy;  United Kingdom- Norway;  United Kingdom-Sweden;  United Kingdom-
United States;  United States-Canada;  United States-C zech Republic;  United States-Italy;  United States-
Spain;  United States-Netherlands ;  United States-United Kingdom 
From a developed to a developing /transition economy ("North-South") 
Austria-Turkey;  Austria-Ukraine;  Canada-Bermuda;  Canada-Chile;  Canada-China;  Canada-Dominican 
Republic;  Canada-Ecuador;  Canada-Honduras;  Ca nada-Jamaica;  Canada-Oman;  Canada-Romania;  
Canada-Russia;  Canada-Thailand;  Canada-Turk and Caycos;  Canada-Uruguay;  Denmark-China;  Denmark-
Mexico;  France-Cambodia;  France-Cameroon;  France- China;  France-Egypt;  France-Gabon;  France-
Guinea;  France-Indonesia;  France-I vory Coast;  France-Madagascar;  France-Mexico;  Ge rmany-China;  
Germany-Kenya;  Germany-Peru;  Germany-Turkey;  Germany-United Arab Emirates;  Ireland-Bahrain;  
Ireland-Kuwait;  Ireland-Lebanon;  Ireland-Russia;  Ireland- Syria;  Ireland-Ukraine;  Italy-Argentina;  Italy-
Dominican Republic;   Italy-South A frica;  Spain-Bolivia;  Spain-Chile;  Spain-Cuba;  Spain- Jamaica;  Spain-
Mexico;  Switzerland-Chile;  Switzerland-Egypt;  Switzerland-Oman;  Switzerland-South Africa;  
Netherlands-Indonesia;  United Kingdom-Argentina;  United Kingdom-Bolivia;  United Kingdom-China;  
United Kingdom-Colombia;  United Kingdom-Costa Rica;  United Kingdom-Dominican Republic;  United 
Kingdom-Macau, China;  United Ki ngdom-Peru;  United Kingdom-Panam a;  United Kingdom-Tanzania;  
United States-Costa Rica;  United States-Ecuador ;  United States-Peru;  United States-Uruguay 
 
Source :  Compiled by the WTO Secretariat on the basis of the information contained in the report Momberger 
Airport Information, which is reproduced in ACI Airports Economics Survey 2005. 
 
 
6. Security 
409. The events of 11 September 2001 have provoked a re-assessment of security measures.  At 
the multilateral level, they prompted ICAO to convene a High-level Ministerial Conference on Aviation Security in February 2002, with the goa l of endorsing a global strategy for strengthening 
aviation security.  A key element of this strategy is the ICAO Aviation Security (AVSEC) plan of 
action. 
410. The centrepiece of AVSEC is the Universal Security Audit Program (USAP), which was 
launched in June 2002.  USAP provides for the conduc t of universal, mandatory and regular audits of  S/C/W/270 
 Page 117 
 
 
  the aviation security systems in all ICAO Contracting States.  It is intended to help States to identify 
and correct deficiencies in the implementation of  ICAO security-related agendas.  Implementation 
commenced with the first ICAO AVSEC audit in November 2002.  Such audits are designed to 
determine the degree of a Contracting State's compli ance with the standards contained in the revised 
Annex 17 to the Chicago Convention.  The changes to Annex 17, which became applicable on 1 July 
2002, include provisions of particular rele vance for airport operators.  These relate, inter alia , to the 
selection, background checks, training and review of co mpetencies of staff;  certification of airport 
security screeners;  measures regarding passengers and cabin baggage as well as checked baggage;  
measures relating to access control, with the establis hment of specific security-restricted areas and the 
security control of all persons accessing these areas;  and access control for air crew and airport 
personnel.  Moreover, a new standard has been in troduced covering domestic operations, even though 
the Annexes to the Chicago Convention are,  by nature, internationally oriented.117 
411. The new security measures adopted all over the world after 9/11 have had a significant 
economic impact on airports and airlines.  By wa y of example, in 2004 Iberia decided to abandon 
Miami as its secondary hub for flights to Central Am erica because the new US security rules, and in 
particular visa requirements for transit passengers, had resulted in major delays and affected 
profitability of its operations at the airport.118  In addition, there has been a direct commercial impact  
in so far as airlines and airports have to fund a la rge part of the costs of the new security measures. 
412. Aviation security in the US has undergone dram atic changes, with the federal government 
assuming direct responsibility from the carriers and air ports for actual provision and funding.  With 
the enactment of the Air Transportation Security  Act (ATSA) in November 2001, a single body, the 
Transportation Security Administration (TSA), as sumed overall responsibility for aviation security in 
the US.  Key security activities are paid for primarily by the TSA out of federal funds. 
413. The TSA was mandated by Congress to ensure that, by 19 November 2002, screening of 
individuals and property in the United States be  conducted by TSA employees and companies under 
contract with TSA.119  Individuals who perform screening mu st be tested and have enhanced 
qualifications and training, and federal law enforcement officers must be present at screening 
locations.  Furthermore, the TSA had to ensure  that, by 31 December 2002, full, unified and 
consistent baggage screening was in place.  The TSA has since turned its attention to cargo 
operations, with the aim of ultimately screening 100 per cent of at-risk cargo.  For this purpose, it 
invested US$55 million in research and development for cargo security in fiscal year 2004 and requested another US$55 million for fiscal year  2005 to develop and deploy new cargo screening 
technologies.
120  For aviation security in total, the TSA's  spending amounted to US$4.5 billion for the 
fiscal year to September 2002 and US$6.1 billion for the fiscal year to September 2003.121 
414. It has been estimated that the new US security measure for airports and airlines will cost the 
country's airport system US$9 billion.  Moreover,  there are some revenue effects as airports 
reconfigure.  Spending on small retail items and food services is likely to increase because of longer 
waiting times, while purchases of bigger items, such as luggage, are expected to suffer because of 
                                                      
117  See ICAO Journal, Number 5, 2002, and Number 7, 2003. 
118  According to Iberia, connecting times have ne arly doubled as a result of the new security 
procedures.  Miami airport officials have conceded that security is understaffed for the airport's number of foreign transit passengers (see Airline Business, April 2004). 
119  Congress ordered the TSA to drop private screener s and replace them with federal employees;  this 
required the US subsidiary of UK-based Securicor to gi ve up its airport security op erations (Aviation Week & 
Space Technology, 22-29 August 2005, and WTO Re porter, 9 March 2006). 
120  See speech by Ray Montgomery, US Transportation Security Administration, at the International 
Chamber of Commerce, Commission on Transport and Logistics, Committee on Air Transport, Air Transport Security, 3 November 2004. 
121  See TSA's website at http://www.tsa.g ov/public/display?content=09000519800502ce S/C/W/270 
Page 118  
 
  security limits on bags and bag size.  As for airlines, the Chairman of American Airlines had 
estimated the direct cost to the US industry to  be over US$3.5 billion in 2002, split between US$1.6 
billion in the security segment tax, US$900 million in  increased cost of insurance, nearly US$300 
million in lost revenue due to government restri ctions limiting the mail airlines could carry, US$200 
million in foregone revenue for providing seats for federal air marshals, and nearly US$200 million 
for the fortification of cockpit doors.  These figures include about US$400 million for services such as 
screening catering supplies and materials, for which the airlines are reimbursed by the TSA.
122 
415. The European Communities adopted Regulation 2320/2002 (16 December 2002), which 
establishes common rules in the field of civil av iation security.  The Regulation is based on the 
standards contained in Annex 17 of the Chi cago Convention and the various recommendations 
developed by ECAC since 1989.123  The Regulation and its implemen ting legislation apply in full to 
all civil aviation airports in the EC124, to service providers, catering, cleaning and cargo operators as 
well as to EC and foreign airlines departing from or transiting any EC airport.  For the smaller 
airports, each Member State may adopt, on the basi s of local risk assessment, levels of security 
different from those laid down in Community legisla tion.  Moreover, the Regu lation allows individual 
Member States or airports to set higher safety st andards whenever objective risk assessments suggest 
that such action is necessary, either on a temporary or permanent basis.  
416. Security activities in the EC are paid for by a combination of stakeholders, including airports, 
air carriers, passengers and the Member States them selves.  A 2004 Study on Civil Aviation Security 
Financing estimates that total security-related expe nditure in 2002 in the then 15 EC Member States 
plus Iceland, Norway and Switzerland was betw een € 2.5 billion and €3.6 billion, depending on 
whether cockpit door modificati ons and insurance were included.125  The expenditure was shared as 
follows:  State expenditure, € 0.65 billion;  ai rport expenditure,  € 1.32 billion;  and carrier 
expenditure, between € 0.52 billion and € 1.66 billion.  The report also estimates that the total 
security-related funding in 2002 for the 18 States w as around € 2.0 billion, made up of State taxes, 
€ 0.59 billion;  airport charges, € 0.60 billion;  carrier surcharges, € 0.63 billion;  and state grants, 
€ 0.13 billion.   
417. Airports were left with an estimated shortfall of € 717 million.  As many airports do not levy 
specific charges, the costs of secur ity activities are recovered, to some extent, through other airport 
charges.  This is the case, for instance, of UK operator BAA and Copenhagen airport, which are 
subject to regulation of airport charges.   
7. Competition policy126 
418. The Secretariat has not been made aware of major developments in the area of competition 
except for the new EC guidelines on State aid to airports.   
419. In February 2004, the Commission ruled that a deal on charges reached between Belgium's 
Charleroi airport and low-cost carrier Ryanair breach ed Community State aid rules.  Soon thereafter, 
the Commission decided to issue guidelines setting out a legal framework for the financing of airports 
                                                      
122  Airline Business, December 2002. 
123  The European Civil Aviation Conference sets volunt ary standards, including security standards, in 
aviation. 
124   Smaller airports are defined in the Regulation as those with a yearly average of 2 commercial 
flights per day, or only general aviation flights or comme rcial activities limited to aircraft with less than 10 
tonnes of Maximum Take Off Weight or less than 20 seats. 
125  The study was commissioned by the EC.  See the website:  
http://ec.europa.eu/transport/air/safety/doc/studies/2004_aviation_security_s_0.pdf 
126  Issues related to charging are dealt with below,  while slot allocation is covered by the second part 
of the documentation for the review.   S/C/W/270 
 Page 119 
 
 
  and for State start-up aid used by regional airports for the benefit of airlines.127  The Guidelines 
reiterate that the financing of airports by public au thorities must comply with the Community rules on 
State aid.  Aid may be justified and declared comp atible, provided that it meets an objective of general 
interest, such as regional development or accessibili ty.  Also, the aid must be in proportion to the 
objective set and must not adversely affect the development of trade within the EC. 
420. Concerning subsidies for the operation of airport infrastructure, the Commission makes a 
distinction according to airport size.  An operating subsidy for an airport with more than one million 
passengers per year may constitute State aid and must  therefore be notified to the Commission, which 
will examine its impact and compatibility.  State aid gr anted to smaller airports that are in the general 
economic interest is deemed unlikely to distort comp etition or affect trade;  is exempted from the 
notification obligation and declared compatible. 
421. Start-up aid is viewed as an instrument to attract  airlines to new destinations.  Hence, such aid 
is justifiable temporarily, but only in the case of small airports (i.e., with fewer than 5 million 
passengers annually) that do not yet have the critical mass needed to break-even.128  In addition, the 
aid must provide airlines with the necessary incentive to create new routes or new schedules operated 
from the airport in question.  Subsidies must be li nked to the number of passengers transported, and 
must not lead to relocation of traffic.  They will no t be allowed if a high-speed rail link is in place.   
422. Concerns about possible distortions of competiti on have also been raised in connection with 
the allocation of airport terminals.  The focus in particular on the allocation of new terminals to the 
national carrier and its allies at the expense of members of other alliances.  The economic stakes are high
129, and a number of disputes have arisen where airlines felt discriminated by the terminal 
allocation.130   
                                                      
127  Commission Communication of 9 December 2005 "Com munity guidelines on financing of airports 
and start-up aid to airlines departing from regional airports", O fficial Journal C 312.  
128  The Commission considers that start-up aid shou ld be allowed for a maximum of three years (five 
years in the case of the outermost regions), and must not exceed an average of 30 per cent of total route costs per year over that period, with the maximum in any one year set at 50 per cent.  Subsidies must be limited to the 
start-up costs that the operator will not have to bear on ce the service is up and running, such as marketing and 
advertising services, or installation costs at the airports .  The Commission also requires that more transparency 
be introduced into the proceeding s for the granting of such aid. 
129  The advantages of being located at the same te rminal at major hubs:  ai rlines can share check-in 
facilities;  lounges can be operated and branded under th e alliance banner;  airport ticket offices, support desks 
and back-office facilities can be pooled;  and can assist  passengers with tight connections between the alliance 
carriers. 
130  One such dispute materialized at Madrid Barajas airport, where the airport operator Aena reversed a 
decision taken in June 2003 to install Spanair, Spain's se cond largest carrier and a member of Star Alliance, in 
the new Terminal 4.  The terminal was allocated to leg acy carrier Iberia and its oneworld partners, and Spanair 
and other Star Alliance carriers moved instead to Terminal 1 and parts of Terminal 2.  A similar dispute had arisen with regard to Heathrow's new Terminal 5, which will house British Airways and its oneworld partner 
Qantas when it opens in 2008.  Star Alliance had compla ined to the airport operator, BAA, that British Airways 
would be given a competitive advantage.  Reportedly, BAA agreed that all Star carriers will be housed in Terminal 1 which would be upgraded to the quality standards of Terminal 5 in time for the transfer in 2008.  
Airline Business, December 2004. S/C/W/270 
Page 120  
 
  8. Low-cost terminals 
423. One notable development in the period under review  was the creation of lo w-cost terminals at 
a number of airports, notably in Asia.  The emergen ce of low-cost carriers (LCCs) will be described in 
the second part of the documentation. 
424. Low-cost airlines have created both challenges and opportunities for airports.  Built and used 
typically for traditional network airline operations , airports often offer "bundled" services which 
LCCs do not require, such as lounges or high-tech gate facilities, yet must pay for.  Moreover, the design of "traditional" airport infrastructures conflic ts with the need for rapid turnaround that LCCs 
have to meet in order to operate profitably.  At the same time, airports are under pressure to reduce 
aeronautical charges as network carriers adjust to  compete with low-cost airlines, sometimes by 
establishing their own low-cost subsidiaries.   
425. In response to the forceful emergence of LCCs, airports have started building new, dedicated 
low-cost terminal facilities, especially in South- East Asia, given the region's general lack of 
secondary airports.  Singapore was the first airport to embark on such a project, and the Changi 
Budget Terminal opened on 26 March 2006.  Kuala Lumpur International Airport (KLIA) opened its 
Low Cost Carrier Terminal even three days earlier.   Both terminals have basic amenities, but no 
airbridges, as well as an open lounge where passengers can board the aircraft very quickly.  Landing 
and navigation charges at Changi's Budget Terminal will not be lower than at the main terminal, but 
passenger taxes have been reduced from S$21 to S $13, reflecting the fact that amenities are much 
more basic.
131  Table 38 illustrates the main features that  are generally associated with a low-cost 
terminal or airport. 
Table 38 
Main features of a low-cost airport 
 
 
• Small ticketing area .  This reflects the high percentage of sales conducted via the Internet (and in the 
future by 3G mobile telephone technology) and paperless travel.  Although promoted for universal 
adoption by 2007 by IATA, the fastest strides in this direction – e-ticketing and boarding documents – have hitherto been made by LCCs. 
• High-speed electronic check-in , including self-service kiosks  (or conversely, low speed check-in 
where electronic facilities are not available and chec ked baggage is required).  The ability to route 
incoming and outgoing passenger separately and to check-in passengers manually for flights at any 
open station (off airport advance check-in is not yet a typical feature of LCCs, but may proliferate 
subject to security and similar constraints).   
• Facilities tailored to  point-to-point operations .  This implies, for example, specialist retail shops 
targeting short-haul passengers, notably food and beve rage outlets;  and, as noted below, operational 
processes and designs that facilitate fast turnaround.  
• Lounges , it provided, are economy-only  and compact.  
• Minimal passenger facilities airside  with a focus on retail and catering outlets, and any form of "last 
minute requirements". 
• Provision for market evolutio n, especially connectivity .  Terminal requirements – notably terminal 
space, retail configuration and lounge facilities – will change as LCCs build alliances with other LCCs 
and with network carriers, leading to "interlining" and even mergers. 
• Simplified, functional office accommodation  as the public is encouraged to deal with the airline via 
the Internet.  Similar standards for public offices, e.g. baggage queries.  
• Low key design and decor  throughout the terminal area.  
• Efficient systems  for the rapid loading and unloading of passengers, baggage and freight to ensure fast 
turnaround (typically 20 minutes). 
                                                      
131  Airline Business, June 2006.  S/C/W/270 
 Page 121 
 
 
  • Low-tech gate facilities , including the use of steps in lieu of air bridges, thus permitting aircraft to 
power in and out and access/egress th rough front and rear doors simult aneously.  Also greater use of 
bus surface transfer. 
• Limited seating and crowded gate areas.  
• Extended operating hours at full capacity , typically from 0600 to 2400. 
• No standby ai rcraft parking  during daytime operations. 
• Overnight  maintenance and clearing facilities. 
• Financial  support packages  demanded by LCC users, including discounted and/or performance-based 
changes and rentals. 
 
 
Source :  Centre for Asia Pacific Aviation, in ACI Economics Survey 2005. 
 
 
426. Other cities with low-cost terminals or whole low- cost airports are located mainly in Europe.  
These include Marseilles, Berlin, Budapest, Warsaw and Geneva.  Some airport operators have been 
criticised by the incumbent mainlin e carriers for allegedly cross-subs idising the development of these 
new terminals with revenue from the existing ones.  For instance, in 2004 Air France took Geneva 
airport to court over the airport's plans to convert a freight terminal for low-cost airline use by arguing 
that all carriers would have to pay for the SFr20 million (US$16.9 million) cost of the new second 
terminal.  In October 2004, the Swiss Competition Commission ruled that the airport's plans were 
compatible with State aid rules.   
427. As London Gatwick airport demonstrates, it is possible to house all types of airlines, both 
traditional and low-cost ones, in a single termin al.  BAA has chosen not to develop terminals 
specifically for LCCs, but has increas ed flexibility to meet the new market situation;  at Stanstead, for 
example, it has configured a satellite without airbri dges and with convenient taxiways to help speed 
up turnaround times for its most important customer , low-cost airline Ryanair.  BAA has also begun 
to plan another terminal at the airport, with LCCs specifically in mind. 132   
428. Although US airports are mostly publicly-owned, it is quite common for airlines to operate 
terminals and control gates, even if they do not use them for their own operations.  Increasingly, LCCs are following the same pattern.  For example,  at Baltimore-Washington International Airport, 
low-cost airline Southwest is expanding its alr eady dominant base by building a new terminal.  
Similarly, LCC JetBlue invested in a tailored low- cost terminal at its main hub, New York's JFK 
airport.  Other LCCs have remained hesitant, how ever, as they lack the market power, profitability 
base or motivation to invest heavily in terminals.
133 
9. Environment-related considerations 
429. Environmental concerns have continued to pl ay an important role in influencing policy 
decisions in the air transport sector, although the sector's total emissions are comparatively modest.  Air transport is estimated to contribute 2 per cent to global greenhouse gas emissions.
134  Carbon 
dioxide (CO 2) emissions are forecast to grow at a rate of 3 per cent annually until 2015;  any progress 
on environmental protection is outpaced by the averag e annual traffic growth rate of 5 per cent that 
the industry is expected to register over the same period.135   
                                                      
132  Airline Business, December 2004. 
133  ACI Economics Survey 2005. 
134  Airline Business, June 2006. 
135  See the Intergovernmental Panel on Climate Change (IPCC) special report "Aviation and the 
Global Atmosphere" (1999). S/C/W/270 
Page 122  
 
  430. Within ICAO, the Committee on Aviation Environmental Protection (CAEP) is a forum for 
discussion, information gathering and the formula tion of recommendations for consideration by the 
ICAO Council and adoption by the ICAO Assembly.
136  The most recent formal CAEP meeting took 
place in 2004 (CAEP/6) and its recommendations were  adopted by Assembly Resolution A35-5.  
Three major environmental goals were  established for ICAO and the world of aviation.  They concern 
the limitation or reduction of:  the number of people affected by significant aircraft noise;  the impact 
of aviation emissions on local air quality;  and the impact of aviation greenhouse gas (GHG) emissions on the global climate.  Also in 2004,  the ICAO Council adopted six strategic objectives, 
with high priority being given to environmental prot ection.  Furthermore, the Kyoto Protocol, adopted 
in February 2005, calls on industrialised countries to work through ICAO to pursue the limitation of 
emission of GHG from international civil aviation. 
431. As far as actions to mitigate aircraft engine  emissions are concerned, ICAO measures follow 
three principal approaches, namely:  taking action at source, through technology and standards;  
through operational measures reducing fuel burnt;  and through market-based measures. 
• As for reduction of emissions at the source, Airc raft engines must meet the standards laid out 
in Annex 16 to the Chicago Convention, whic h are periodically revised and upgraded by 
ICAO.  In June 2001, the ICAO Council adopted a new noise certification standard to become 
Chapter 4 of Annex 16.  With regard to NOx, ICAO increased the stringency limits by 12 per 
cent in 2005.  The new standards are appli cable to new engines from 2008, and CAEP will 
review them again in 2010.  In terms of li miting GHG emissions, the focus in on optimising 
fuel consumption as alternative fuels are un likely to emerge in the near future.  
•  The most significant fuel saving opportunities are thought to come from operational moves, 
including more direct routings, the continuous descent approach and more efficient air traffic 
control systems and procedures.
137   
• ICAO is also exploring the use of market-based mechanisms to reduce emissions and has 
prepared a template agreement and associated guidance for voluntary measures. 
432. National policy approaches place different emph asis on the main contributors to pollution.  
According to the FAA director of the Office of Envi ronment and Energy, noise is the key issue in the 
US, whereas global emissions are the main focus in  the EC.  The European Commission is expected 
to propose to include aviation in its emission trading scheme in the course of 2006.   
433. In March 2002, the Commission adopted a new Directive concerning the introduction of 
noise-related operating restrictions at Community airports, Directive 2002/30.  It implements the 
"balanced approach" to noise management around air ports contained in ICAO Resolution A33-7.  The 
four principal elements are:  reduction of aeroplane noise at source, land-use planning and 
management measures, noise abatement operationa l procedures, and operating restrictions.  The 
Directive contains principles and rules on how to carry out a noise assessment, which are mandatory 
prior to the introduction of noise -related operating restrictions. 
                                                      
136  See Report of the International Civil Aviation Or ganization, Note by the Secretariat, at the Ninth 
Special Session of the Governing Council/Global Minister ial Environment Forum, Dubai, 7-9 February 2006;  
and Statement from the International Civil Aviation Organization (ICAO) to the first Conference of the Parties 
serving as the meeting of the Parties to the Kyoto Pr otocol (COP/MOP1), 28 November to 9 December 2005. 
137  Inefficient air traffic control systems and procedur es have been identified as  the single largest cause 
of fuel wastage by Cathay Pacific, which believes that 10-12 per cent savings would be possible in this area (see 
Airline Business, June 2006).  S/C/W/270 
 Page 123 
 
 
  10. Airport design 
434. One of the main recent evolutions in airport design is the spread of self-service check-in 
kiosks.  These kiosks were present in about one-thi rd of all airports worldwide in 2004, but are 
expected to be deployed in 70 per cent by the end of 2006.  While initially devised as airline dedicated 
kiosks (see compilation, pages 97-98), the tendenc y is now towards installing common user self-
service check-in kiosks (CUSS), paid for and maintain ed by airports.  In a recent survey half of 
airports responded that they expected all or the majo rity of kiosks to be common-use, with two-thirds 
of airports planning to deploy su ch kiosks in the 2005-2007 period.138  CUSS are expected to save 
US$3.5 per passenger.  As part of its "Simplifyi ng the Business" initiative, IATA has developed a 
CUSS standard that will allow airlines to share kiosks which will be as convenient to use as 
Automatic Teller Machines, and is working with airlines and suppliers on a common interface for 
CUSS.139 
435. A less visible technological evolution concerns  the handling and sorting of baggage, away 
from a manual or basic bar-code treatment towards th e use of Radio Frequency Identification (RFID) 
baggage tags.  These are expected  to improve baggage handling e fficiency and generate yearly 
savings of around US$350 million by reducing the numb er of mishandled baggage.  IATA is working 
on a non-proprietary standard for the use of the technology and on the harmonization of the multiple 
bar-code standards that coexist at present as well as  on a series of pilot tests using standardised 
methodology.140 
B. CHARGING  
436. A controversy over airport charges between airlines and airports during the Montreal 
ANS/Conf Conference 2000 was explained in deta il during the first review (see compilation, 
pages 102-3).141 
437. The air transport sector has since been shak en by the events of 11 September 2001, the 
outbreak of SARS and the wars in Afghanistan and Iraq.  The resulting economic downturn has led to 
concerns that ICAO's policies on charges might lack the necessary flexibility to deal with difficult 
economic situations.  Because of th e strict application of cost-recovery principles, some providers 
tended to compensate for reduced revenues through in creased charges rather than strive for greater 
efficiency and cost-effectiveness.  As a result, ICAO 's policies in this area have been subjected to 
another revision, contained in Document 90 82/7, which was published in September 2004.142  I n  
addition, guidance material on the practical impl ementation is contained in the revised Airport 
Economics Manual, which has just been published.143 
438. The basic principles underlying the ICAO charging system have remained unchanged since 
the first review (see compilation, pages 99-101).  However, the recent revision introduced several 
business-oriented principles that go beyond the scope  of the traditional cost-recovery principles.  
Particular emphasis has been placed on the recovery of costs related to heightened security measures 
and on the collection of charges.  Any charges or tran sfers of security costs should be directly related 
to and not exceed the costs of providing the secur ity services concerned.  Moreover, civil aviation 
should not be charged for more general security functions performed by States, such as general 
                                                      
138  Airline Business, December 2005. 
139  Airline Business, May 2005. 
140  Airline Business, July 2004 and May 2005. 
141  The outcome of the discussions at ANS/Conf wa s reflected in the revised, Sixth Edition of ICAO's 
Policies on Charges for Airports and Air Navigation Services, contained in Document 9082/6, which had been 
circulated to WTO Members during the first review through document S/C/W/188, dated 7 February 2001. 
142  ICAO Journal, Number 2, 2005. 
143  ICAO Document 9562, Second Edition, 2006. S/C/W/270 
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  policing, intelligence gathering and national securi ty.  Annex I to Document 9082/7 contains a 
detailed list of the security measures, equipment an d facilities that could be taken into account in 
determining airport costs.  On the collection of ch arges, it is considered essential that a collection 
policy be established by an airport or air navigation services entity or, where applicable, by the State.
144   
439. The charging policies laid down by ICAO ar e generally considered as fair, based on 
principles such as non-discrimination, transparency and consultation.  However, they are not binding and, as the responses to an ICAO questionnaire dem onstrate, they are not universally applied among 
Contracting States.  Supplement 1 to Document 9082, published in 2004, contains the responses.   
• Accordingly, the following Contracting States a nd territories comply with ICAO's policies:  
Angola, Argentina, Australia, Austria, Bahr ain, Belgium, Botswana, Brazil, Bulgaria, 
Burundi, Canada, Chile
145, China, Colombia, Costa Rica, Cuba, Cyprus, Czech Republic, 
Denmark, Ecuador, Egypt, Estonia, Ethiopia, Finland, France, Germany, Greece, Hungary, 
India, Ireland, Israel, Italy, Kuwait, Lithua nia, Madagascar, Malawi, Maldives, Malaysia, 
Mexico, Monaco, Netherlands, New Zeala nd, Norway, Panama, Papua New Guinea, 
Philippines, Portugal, Republic of Korea, Republic of Moldova, Romania, Russian 
Federation, Saudi Arabia, Seychelles, Singapor e, Slovakia, Spain, Sri Lanka, Suriname, 
Sweden, Switzerland, Thailand, The Former  Yugoslav Republic of Macedonia, Turkey, 
Uganda146, Ukraine, United Kingdom, United Republic of Tanzania, United States, 
Uzbekistan, Vanuatu. 
 
• The following States have responded that their national regulations and practices are not (or 
not fully) in compliance with the principles in paragraph 22 and 23 of Document 9082/6147:  
in respect to both paragraphs, Pakistan;  in respect to paragraph 22 only, Malta, Paraguay, 
Peru, Poland, Syrian Arab Republic and the UEA.   
 
• The following Contracting States have responded, but not given a clear indication whether 
they comply with ICAO's policies on airport charges:  Cameroon, Guyana and Uruguay.  
 
• Over one hundred Contracting Stat es have not responded at all. 
440. Such observations help to understand the te nsions between IATA and ACI over airport 
charges.  The difficult economic circumstances duri ng the period under review have heightened such 
tensions.  In 2001, for example, the world's top 50 airline groups registered a negative net operating 
margin below -4 per cent, while the world's top 50 airports, despite one the worst years on record, 
managed to record a net margin of 11 per cent.  Table 39 illustrates the profitability gap between 
airports and airline groups over the period under review.  
 
   
                                                     
 
144  ICAO Document 9082/7, paragraph 18.  The do cument places particular emphasis on up-to-date 
national legislation;  accurate invoici ng;  comprehensive and updated database s on airlines;  a transparent cost 
recovery system with a fair and equal treatment of all us ers;  precise and correct accounting;  credit control;  and 
enforced recovery procedures. 
145  Chile has provided no indication with regard to paragraph 22 of Document 9082/6. 
146  Uganda has provided no indication with regard to paragraph 22 of Document 9082/6. 
147  The text of paragraphs 22 and 23 can be found in the corresponding paragraphs in document 
S/C/W/188, dated 7 February 2001.  S/C/W/270 
 Page 125 
 
 
  Table 39 
Profitability gap between airpor t and airline groups - 2000/2004 
(percentage points) 
 
 2000/1 2001/2 2002/3 2003/4 2004/5 
Operating margin 23.7 24.8 19.2 18.4 18.3 
Net margin 13.4 15.2 12.4 10.8 11.7 
 
Note:   The figures correspond to the margins of top 100 airport groups less the margins of the top 150 airline 
groups. 
Source :  ATI/Airline Business Surveys, in  Airline Business, December 2005. 
 
 441. Such perceived economic unbalances have fue lled long-running airline complaints about 
excessive airport user charges.  In February 2006 , Virgin Blue won a lawsuit it had filed against 
Sydney airport for abuse of monopoly power.  In its  ruling, Australia's Competition and Consumer 
Commission (ACCC) stressed that any future such dispute may be referred by either party to 
arbitration which revived the possibility of rein troducing oversight of airports fees by the ACCC.
148  
Star Alliance members reportedly considered co-ordin ated action to persuade airports to moderate 
their spending and the concu rrent increase in airline fees.149  IATA also launched a particularly strong 
campaign against airport charging practices and their lack of financial transparency.   
442. In 2006, IATA took the unprecedented step of taki ng the French government to court over the 
increase in charges at Aéroports de Paris.  The operator of the Paris airport system had increased 
charges by 26.5 per cent over the five-year peri od from 2000 to 2005, and the French government had 
approved a 5 per cent annual increase for the subseque nt five years.  As the price rises are taking 
place against the backdrop of the proposed privatisat ion of ADP, IATA alleges that they are intended 
to maximise the profits from privatisation.  In its  judicial challenge, IATA argues that the Transport 
Minister had not fulfilled his responsibilities in approving these increases, and that there are 
deficiencies in the contract between the French State and ADP in particular with regard to the charges 
review procedure.150 
443. Faced with a continuous trend towards privatiza tion of airports, which IATA considers to be 
natural monopolies, and the possible implications for airport charges, IATA has set out a number of 
elements that it believes should be part of a su ccessful privatization process.  These include:  the 
engagement of airlines as key stakeholders from the outset;  the setting up of an independent 
regulator, overseen by an independent Compe tition Commission;  the introduction of economic 
regulation to ensure cost efficiency and continuous improvements, including "CPI minus x" price 
caps151;  the put in place of service level agreements to ensure that service quality standards are 
maintained or even improved.152   
444. For its part, ACI stresses that competition does ex ist between airports at two levels.  First, 
airports compete for connecting traffic (see for instance, Singapore, Bangkok and Kuala Lumpur on routes from Europe to Australia and New Zealand);  second, with the emergence of point-to-point 
                                                     
 
148  Airline Business, February 2006. 
149  Such action might include agreeing not to fly to certain destinations.  Some lawyers have noted, 
however, that a possible boycott at airports could c ontravene competition laws, particularly in the EC (see 
Airline Business, January 2006). 
150  Airline Business, June 2006. 
151  CPI stands for Consumer Price Index, and CPI-x regulation is a way of capping price increases by 
the regulated entity at a less than the general rate of co nsumer price inflation, with the factor "x" standing for 
expected increases in efficiency. 
152  IATA Economics Briefings, Airport Privatisation, July 2005. S/C/W/270 
Page 126  
 
  connections championed by LCCs, secondary airports increasingly compete for these carriers.  In 
defence of airports' charging policies, ACI notes the need to finance the massive investments to cope 
with traffic growth (see Tables 35 and 36).  Moreov er, ACI holds the view that the charges currently 
paid do not reflect the full cost of airport invest ment or even of the infrastructure and services they 
use, obliging airports to cross-subsidise from non-aeronautical revenue.
153  In addition, as illustrated 
by Table 40, airport and air navigation charges have represented a stable, if not declining, share in 
airlines' operating costs.  ACI further notes that la nding and associated airport charges have remained 
stable in percentage of airline's operating costs.  Th is is the case even if the co sts of fuel and insurance 
are removed from overall expenses.154   
Table 40 
Airport and air navigation charges as a share of airlines' operating costs – 1989/2004 
 
Item 1989 1998 1999 2000 2001 2002 2003 & 
2004* 
Landing and associated airport charges 3.7% 4.4% 4.4% 4.2% 4.0% 4.0% 4.0% 
Air navigation services charges 1.5% 3.0% 2.9% 2.8% 2.5% 2.4% 2.4% 
Total airport and air navigation 
charges 5.2% 7.5% 7.3% 7.0% 6.5% 6.4% 6.4% 
 
* 2004 data are provisional. 
Note:  The above data do not include passenger-related and other charges collected by the airlines from the 
passengers and paid to the airports since they do not appear as an expenditure item for the airlines and is not shown in their profitability statement. 
Source
:  ICAO Secretariat. 
 
 445. In 2005, ACI responded to IATA 's criticism of excessive air port charges by recommending to 
its members to avoid dealing with IATA on busin ess issues and to privilege instead direct local 
negotiations with the main airline cust omers and boards of airline representatives.
155   
446. The renewed controversy between IATA and AC I has led the European Commission to hold a 
colloquium on airport capacity and charges in Ap ril 2006.  Views were being sought from across the 
airline and airport divide, and with the aim of  considering the feasibility of a European-wide 
framework for airport charges.  The European Airlines Association (AEA) has supported the move 
and argued in favour of economic regulation of fees.  In contrast, the European Low Fare Airlines 
Association has called for regulatory restraint, as it considers that the situation with respect to 
charging varies considerably between airports.  ACI has welcomed the colloquium as an "enlightened 
move" and stressed the financial burden of the unavoi dable investment expenditure airports have to 
incur.  Most parties now expect the Commission to take some action, probably by the end of 2006.156 
                                                      
153  Airline Business, Decem ber 2002, 2003 and 2004. 
154 ACI Airports Economic Survey 2005 
155  Airline Business, December 2005. 
156  Airline Business, May 2006.  S/C/W/270 
 Page 127 
 
 
  ANNEX TO CHAPTER VIII 
   
Table A1 
Commercialization and cross-border activities in the airport sector
157 
  
Origin of airport 
investor/manager Country of 
operation Activities 
ARGENTINA 
 Armenia Aeropuertos Argentina 2000 S.A. (AA2000) won a 30-year concession to 
run Yerevan-Zwartnots Airport in Armenia. 
London Supply owns and operates Ushuhaia Airport/Tierra del Fuego and 
five airports in Neuquén province in Argentina (including Trelew, Rio 
Grande, El Calafate and Valle del Conlara-Merlo). 
Aeropuertos Argentina 2000 S.A. (AA2000) operates 32 airports in 
Argentina since 1999.  
Argentina 
London Supply builds and manages a new duty-free zone at Puerto Iguazú 
on the border with Brazil. 
 
Uruguay Aeropuertos Argentina 2000 S.A. (AA2000) won the 30-year concession 
to manage and develop Montevideo’s Carrasco International Airport;  
(Uruguay). 
AUSTRALIA 
 Australian Infrastructure Fund Pty Ltd:  holds stakes in seven Australian 
airports (Melbourne, Perth, Gold Coast, Launceston, Darwin, Alice 
Springs, and Tenant Creek) through Australia Pacific Airports Corp.;  
bought a 49.1% stake in Townsville and Mount Isa airports in the 
Australian state of Queensland;  alre ady owns a 15% stake in Gold Coast 
Airport. 
 APAC (Australia Pacific Airports  Consortium) owns and operates 
Melbourne-Tullamarine Internati onal Airport as well as 90% of 
Launceston Airport). 
 Ambidji operates Lismore Airport in Australia together with ATCO 
Airports Ltd. 
 Capital Airport Group owns and operates Canberra International Airport in 
Australia. 
 Ferrovial Aeropuertos provided 19.6% of the equity of the Southern Cross 
consortium (Southern Cross Airports Corporation Holdings Limited - 
SCACH), led by Australia’s investment bank Macquarie Bank Ltd, which 
acquired Sydney Airport Corporation in 2002;  the stake has been 
increased to 20.68% in the meantime. 
 Westralia Airports Corp operates Perth International Airport;  manages 
Christmas Island International Airport and Cocos (Keeling) Island Airport. 
 National Australia Asset Management holds 14.55% in Northern 
Territories Airports by acquiring the 29.1% TBI plc (ex-AGI) holding in 
Darwin, Alice Springs and Tennant Creek together with Laing Investments 
Ltd. 
 Macquarie Airports (MAp) has a total beneficial interest of 55.5% in 
Sydney Airport. 
 Australia 
Macquarie Airports Group Ltd (MAG) acquired 11.7% of the Southern 
Cross consortium (Southern Cross Airports Corporation Holdings Limited 
- SCACH) which acquired Sydney Airport Corporation in 2002. 
                                                      
157  The existence of airports that are privately-owned or managed by nationals is indicated by shading.  S/C/W/270 
Page 128  
 
  Origin of airport 
investor/manager Country of 
operation Activities 
  Linfox Transport Group  operates the Melbourne-Essendon and Avalon 
general aviation airports. 
 
New Zealand Australian Infrastructure Fund Pty Ltd holds stakes in Auckland 
International Airport in New Zealand through Westralia Airports 
Corporation. 
 
Belgium Macquarie Airports (MAp) acquired a 52.5% interest in Brussels 
International Airport Corporation (BIAC) in 2004.  Biac operates the Brussels Airport terminals;  won a contract from the regional Flemish 
Government to temporarily manage Ostend Airport. 
 Czech Republic Babcock & Brown acquired Plzen-Lin Airport from PlaneStation, which 
went into voluntary administration on 26 July 2005. 
 Denmark Macquarie Airports (MAp) acquired an 11.3% stake in Copenhagen 
Airports International A/S in 2005. 
 Germany Babcock & Brown acquired Black Forest Airport, Lahr. 
 Italy Macquarie Airports (MAp) holds a total beneficial interest of 33.6% in 
Aeroporti di Roma. 
 Ferrovial Aeropuertos acquired a 51% stake in Bristol International 
Airport from FirstGroup together with Macquarie. 
 United Kingdom Macquarie Infrastructure Company ow ns a 50% interest in the company 
that operates the Yorkshire Link shadow toll road and investments in 
South East Water, a UK regulated  water utility and in Macquarie 
Communications Infrastructure Group. 
AUSTRIA 
 Austria Vienna International Airport manages Vöslau. 
 Hungary Vienna International Airport part-owns Budaörs. 
 
Malta Vienna International Airport owns 57.1% of Malta Mediterranean Link 
Consortium Ltd (MML), which holds 40% of Malta International Airport 
plc. and manages the airport.  The st ake gives VIE a 22.8% share in Malta 
International Airport plc. 
 Spain Vienna International Airport plc acquired an 18.7% stake in the 
consortium that will build and operat e Ciudad Real Airport in Spain. 
 Airport Consulting GmbH provides consultancies services to the 
International passenger terminal project of Atatürk Airport, Istanbul. 
 Turkey Vienna International Airport was a joint-venture partner in the BOT 
contract for the new international terminal at Istanbul’s Atatürk 
International Airport, holding a 5% stake in TEPE-Akfen-VIE Investment, 
Construction & Operation Inc. 
 Ukraine Airport Consulting GmbH provides consultancies services in Ukraine 
(Kiev- Boryspil Airport). 
BELGIUM 
 
Belgium Brussels International Airport Comp any (BIAC) operat es the Brussels 
Airport terminals;  won a contract fr om the regional Flemish Government 
to temporarily manage Ostend Airport. 
CANADA 
 Australia ATCO Airports Ltd operates Lismore Airport in Australia together with 
Ambidji. 
 TradePort International Corp. manages the John C. Munro Hamilton 
International Airport /Mount Hope Airport in Ontario/Canada under a 40-
year concession with the City of Hamilton. 
 Canada YVR Airport Services Ltd - YVRAS manages six local Canadian airports 
(Cranbrook, BC;  Fort St. John, BC;  Hamilton, ON;  Grande Prairie, AL;  
Kamloops, BC;  Moncton, NB) via incentive contracts and a management 
fee.   S/C/W/270 
 Page 129 
 
 
  Origin of airport 
investor/manager Country of 
operation Activities 
 ATCO Airports Ltd operates Edmonton City Center Airport (since January 
2000) and the airports at Castlegar, B.C.;  North Bay, Ont.;  Iqaluit;  
Moose Jaw, Sas.;  and St. Andrews, Man., all in Canada also provides 
security services at Winnipeg Int. Airport. 
  
ADM Capital Inc. manages and develops its two international airports in 
Montreal, Dorval and Mirabel. 
 
Chile YVR Airport Services Ltd - YVRAS won the 15-year Santiago/Chile 
passenger terminal concession as me mber of the SCL Terminal Aéreo 
Santiago consortium, formed together with Agencias Universales S.A. (AGUNSA:  47%) and Sabco Administrador de Fondos de Inversión S.A. 
of Chile (13%), contractors FCC and Grupo Dragados of Spain (30%), 
with YVRAS holding 10%. 
 China YVR Airport Services Ltd is providing consultancy in China. 
 
Dominican Republic YVR Airport Services Ltd is a partner in the "Aeropuertos Dominicanos 
Siglo XXI, S.A." consortium that manages four airports in the Dominican 
Republic:  Santo Domingo (‘Las Americas’), Puerto Plata (‘Gregorio 
Luperón’), Samaná (‘Arroyo Barril’), and Barahona (‘Maria Montez’). 
 
Ecuador ADC (Airport Development Corporation) together with Houston Airport 
System’s HAS Development Corporation has an operating contract for 
Quito Airport, Ecuador. 
 
France ADM Capital Inc. and SNC-Lavalin of Canada won the concession for a 
Vatry cargo airport in France as a memb er of SEVE. SEVE is formed with 
Keolis, Sogaris, Pingat, Iénair, and the CCIs of Reims/Epernay, Chalons-
en-Champagne and Troyes of France. 
 
Honduras YVR Airport Services Ltd - in 20 04, acquired the 10% stake of San 
Francisco International Airport in the InterAirports consortium which 
manages four airports in Honduras. 
 
Jamaica YVR Airport Services Ltd won a 30-year contract to develop, manage and 
operate Sangster International Aiport,  Montego Bay/Jamaica together with 
Agunsa, Dragados and Ashtrom (an Israel-based construction company 
that has been working in Ja maica for over 30 years). 
 Malta SNC-Lavalin Investment owns 38.75% of Malta Mediterranean Link 
Consortium Ltd (MML), which manages Malta International Airport plc. 
 New Zealand YVR Airport Services Ltd won a management and development contract 
for Rarotonga International Airport in the Cook Islands. 
 Oman YVR Airport Services Ltd is providing consultancy in Oman. 
 
Romania Intelcan Technosystems Inc. will build a US$100 million international 
airport in Ghimbav, Brasov County in Romania, under a public-private 
partnership with Romanian authorities. 
 Russia YVR Airport Services Ltd is providing consultancy in Russia. 
 Thailand YVR Airport Services Ltd is providing consultancy in Thailand. 
 Turks & Caicos 
Islands YVR Airport Services Ltd won a 15-year contract to manage the new 
terminal and carpark of Providenciales International Airport in the Turks 
& Caicos Islands.  
 United Kingdom YVR Airport Services Ltd manages Bermuda International Airport. 
 
Uruguay The CAISA Consortium has a 20-year concession agreement with the 
Government of Uruguay to develop, manage, and operate the Punta del 
Este International Airport.  Partners in CAISA are:  Compañía Oriental de 
Transporte S.A. of Uruguay;  London Supply S.A.C.I.F.I. of Argentina;  Norlit S.A. of Uruguay;  International Finance Corporation of the World 
Bank;  and PAXPORT Laguna Inc. of Canada. S/C/W/270 
Page 130  
 
  Origin of airport 
investor/manager Country of 
operation Activities 
CHILE 
 
Chile Agencias Universales S.A (AGUNSA) Partner in the SCL Terminal Aéreo 
Santiago consortium, formed together with Sabco Administrador de 
Fondos de Inversión S.A. of Chile (13%), Grupo Dragados of Spain (30% 
with FCC), and YVRAS holding 10%.  AGUNSA holds a 47% stake. 
 
Jamaica AGUNSA holds 35% of the MBJ Airports consortium which has won a 
30-year concession to develop Sangster International Airport, Montego 
Bay/Jamaica.  The consortium also includes YVR Airport Services Ltd 
(15%), Ashtrom Group Ltd (15%), and Dragados Concesiones de Infraestructuras S.A. (35%). 
CHINA 
 Hainan Airlines owns 68% of Ha ikou-Meilan International Airport 
Company which it manages. 
 China Hainan Airlines signed a contract for the development and operation of the 
airport of Kelamayi City/Xinjiang. 
DENMARK  
 
China Copenhagen Airports International A/ S signed an agreement with Hainan 
Meilan Airport Company Ltd in China to buy 20% of that company’s 
shares. 
 Denmark Copenhagen Airports International A/S operates the Copenhagen-Kastrup 
and Roskilde airports. 
 
Mexico Copenhagen Airports International A/S is a partner in the Tribasa 
consortium (which won the 50-year concession contract  for nine airports in 
Mexico’s south-eastern, Yucatan region ) through its 36.5% equity stake in 
ITA S.A. (Inversiones y Tecnicas Aeroportuarias S.A. de C.V. - ITA), 
which held 15% of Grupo Aeroportuario del Sureste S.A. (ASUR) and a 
2.5% direct equity interest in ASUR. 
 
Norway Copenhagen Airports International A/S temporarily bought a 36.7% share 
in Rygge Sivile Lufthavn A/S in Norway and plans to convert the Rygge 
military airfield 60 km south of Oslo into a civil airport together with the 
Norwegian conglomerate Orkla. 
 
United Kingdom Copenhagen Airports International A/S in May 2001 acquired a 49% stake 
in Newcastle Airport in the U.K. (NIAL Holdings Plc) through CPH 
Newcastle Ltd (a wholly-owned holding company). 
DOMINICAN REPUBLIC 
 Dominican Rep. Corporación Aeroportuaria del Este operates Punta Cana International 
Airport (PUJ) in the Dominican Republic. 
EGYPT 
 Kato Investment Group is developing the new El Alamein Airport in 
Egypt on a BOT basis.  
 Egypt World Investment Group will develop the Farafira Oasis and Al Bahria 
Oasis airports in Egypt under BOT projects together with ABB. 
FRANCE 
 
Belgium ADP Management acquired a 25% stake in SAB S.A., the operating 
company of Liège Airpor t in Belgium, specializing in air freight and 
charter flights. 
 Aéroports de Paris Management operates Phnom Penh-Pochentong and 
Siem Reap in Cambodia under a 25-year contract as a majority partner 
(60%) of CAMS, which also provides ground-handling services at the 
airports.  
 Cambodia In airport management, VINCI Airports holds a participation in 
concessions in Cambodian airports (SCA), via ADP Management and in 
the operation of the Phnom Penh and Siem Reap in Cambodia through 
CAMS.  S/C/W/270 
 Page 131 
 
 
  Origin of airport 
investor/manager Country of 
operation Activities 
 Aéroports de Paris Management has a 35% stake in Aéroports du 
Cameroun (ADC), which manages three international and four provincial 
airports in Cameroon. 
 Cameroon 
In airport management, VINCI Airports holds a participation in 
concessions via ADP Management in airports in Cameroon. 
 China Aéroports de Paris Management owns 6.6% of the shares of Beijing 
Capital International Airport (BCIA). 
 Aéroports de Paris Management is manages and operates Mersa Alam 
Airport in Egypt since October 2001. 
 Egypt In airport management, VINCI Airports holds a participation in 
concessions in via ADP Management, in airports of Egypt Marsa Alam airport.  
 Gabon SEGAP holds a 34.7% stake in ADL (S.A. Aéroport de Libreville), which 
operates Libreville Airport. 
 Aéroports de Paris Management is a partner in SOGEAC (29% stake) 
which runs Conakry Airport in Guinea under a five-year concession and Kan Kan Airport.  
 Guinea 
VINCI Airports holds a participation in concessions via ADP Management 
in airports in Guinea. 
 Aéroports de Paris owns and operates 14 airports and airfields in the Paris 
region.  
 Keolis manages the new Angers-Marcé Airport and the La Mole airfield 
near St. Tropez in France;  provides ground transport services at a number 
of French airports;  manages Grenoble Airport and Chambéry/Aix les 
Bains Airport in France in joint venture with Vinci Airports since 2004. 
 Lyon CCI/Airport manages the two Lyon airports, Satolas/"Exupéry" 
(international) and Bron  (general aviation). 
 VINCI Airports manages Grenoble Airport and Chambéry/Aix les Bains 
Airport in France in joint venture with Keolis Group since 2004. 
 France 
VINCI Airports acquired SEN’s gr ound handling activities at French 
airports in 2002. 
 
Indonesia Together with ADP, Groupe GTM, France (owned by VINCI since 2000) 
was a joint bidder for up to 49% of the shares of a ye t-to-be privatized 
Sukarno-Hatta International Airport, Jakarta/Indonesia.  
 Ivory Coast SEGAP holds a 35% stake in AERIA (Aéroport International d’Abidjan 
S.A.), which operates  Abidjan Airport. 
 Aéroports de Paris Management holds a 34% stake in Aéroports de 
Madagascar (ADEMA), which manages twelve airports in Madagascar.   
 Madagascar VINCI Airports holds a participation in concessions via ADP Management 
in airports in Madagascar. 
 In airport management, VINCI Airports holds a participation in 
concessions in Mexico Centro Norte (OMA) through SETA (Servicios de 
Tecnologia Aeroportuaria). 
 Mexico Aéroports de Paris Management is an operating partner with a 25.5% stake 
in Mexico's Grupo Centro Norte airport privatization through Operadora 
Mexicana de Aeropuertos (OMA), together with Constructoras ICA 
(37.25%) and investor VINCI SA (37.25%).  ICA is reducing its stake by 11.5% to the benefit of ADP. S/C/W/270 
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GERMANY 
 Fraport AG acquired a 1% stake in Brisbane Airport Corporation Ltd 
(BACL). 
 Australia Hochtief AirPort GmbH owns 10.5% of the Southern Cross consortium, 
led by Australia’s investment bank Macquarie Bank Ltd, which acquired 
Sydney Airport Corporation via the Southern Cross Airports Corporation Holdings Limited - SCACH in 2002. 
 China Lufthansa Cargo has a 29% stake in a consortium building and is operating 
a cargo terminal at Shanghai’s new Pudong International Airport. 
 Fraport AG holding holds a 20% stake in Flughafen Hannover GmbH;  a 
74.9% of holding Unternehmen Hahn, the airport’s holding company;  a 
51% stake in the Saarbrücken Airport operating company;  a minority 
stake in the FAL cargo handling co mpany at Leipzig/Halle Airport. 
 GlobeGround Berlin GmbH provides ground handling services at the 
Berlin airports, at Munich and -tem porarily - through a subsidiary, at 
Niederrhein Airport in Germany. 
 Düsseldorf Airport is a majority-shareholder (70.03%) in Flughafen 
Mönchengladbach GmbH (Mönchengladbach Airport), which it runs as 
Düsseldorf Express Airport. 
 Hochtief Airport AirPort GmbH purchased a 50% stake in the Düsseldorf 
Airport company FDG together with Ae r Rianta of Ireland (their joint-
venture company Airport Partners GmbH is owned 60% by Hochtief and 
40% by Aer Rianta International plc), giving Hochtief a 30% stake.  FDG 
in turn owns 70.03% of Flughafen Mönchengladbach GmbH;  owns 49% 
of the privatized Hamburg Airport company together with Aer Rianta (the 
joint-venture Hamburg Airport Partners GmbH is owned 80% by Hochtief, 
20% by Aer Rianta International plc), giving Hochtief a 39.2% stake. 
 Germany 
Baden Airpark GmbH owns Karlsruhe/Baden-Baden Airport, an ex-
Canadian air base in the upper Rhine valley. 
 Fraport AGs  holds a stake in Goldair Avia tion Handling in Athens/Greece 
Provides advisory services for Athens International Airport S.A. at the new 
Athens airport (through FASP - Flughafen Athen-Spata Projektgesellschaft 
mbH which holds a 0.125% stake in AIA S.A). 
 Greece 
Hochtief AirPort GmbH owns 39.94% of Athens International Airport 
S.A., the operator of the new Athens International Airport at Spata. 
 Kenya Fraport AG holds a 10% stake in African Cargo Handling Ltd of Nairobi. 
 Latvia GlobeGround Berlin GmbH built, operates and owns a cargo terminal at 
Riga International Airport in Latvia. 
 
Peru Fraport AG holds 42.75% in a cons ortium that was awarded a 30-year 
concession to develop and operate Lima’s Jorge Chavez International 
Airport in Peru along with consortium partner Bechtel Enterprises 
International Ltd (57.25%). 
 Hochtief AirPort GmbH leads the Airport Partners Tirana consortium in 
Albania which has won a 20-year concession to develop and operate 
Tirana-Rina ‘Mother Teresa’ International Airport. 
 Spain 
Fraport AG  is handling contracts at seven Spanish airports through 
Ineuropa Handling U.T.E. in which Fraport has a 20% stake. 
 
Turkey Fraport AG operates the new terminal at Antalya Airport/Turkey under an 
8-year concession agreement in joint venture (50:50) with Bayindir 
Holding. 
 United Arab Emirates Fraport AG has been providing management assistance at Sharjah 
International Airport since the 1970s. 
 United States Hochtief AirPort GmbH is a partner in the South Suburban Airport 
Coalition with LCOR Holdings that is planning a Chicago-area airport.  S/C/W/270 
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Fraport AG is a partner in the A guadilla Consortium for Transportation 
(ACT), which has won the operating and development contract for 
Aguadilla ‘Rafael Hernandez’ International Airport. 
HONG KONG, CHINA 
 
China Airport Authority of Hong Kong To take a 35% share in China's tenth 
largest airport of Hangzhou Xiaoshan International Airport, for CNY 1.99 billion (US$240 million). 
 United States Hutchison Port Holdings Owns Gran d Bahama Airport jointly with the 
Grand Bahama Airport Authority and has management control. 
HUNGARY 
 Budapest Ferihegy International Airport Operating Plc. manages Siófok-
Kiliti-Ságvár Airport, a general aviation airfield 120 km from Budapest. 
 Hungary Cape Clear Aviation rents Balaton Airport - Sármellék for 99 years since 
2003.  Fly Balaton is co-owned by the municipalities of Sármellék and 
neighbouring town Zalavár. 
INDIA 
 Air-India holds a 5% stake in Cochin International Airport Ltd in India.  
 India Bharat Petroleum holds a minority stake in Cochin International Airport 
Ltd in India. 
 
Mauritania Bharat Petroleum partner in SAM (Société des Aéroports de Mauritanie), 
holding 5%;  other shareholders are Air Mauritanie, ASECNA, Air 
Afrique, and the Government of  Mauritania, each holding 10%. 
 Togo Bharat Petroleum Partner in SALT (Société Aéroportuaire de Lomé-
Tokoin), the operator of Lomé-Tokoin Airport in Togo. 
IRELAND 
 Bahrain Aer Rianta International (ARI) has duty-free operating and management 
contracts at airports in Bahrain. 
 Canada Aer Rianta International (ARI) has duty-free operating and management 
contracts at airports in Canada/Montreal-Dorval and Mirabel. 
 
Germany Aer Rianta owns  49% of the privatized Hamburg Airport company 
together with Hochtief;  40% stake in the Airport Partners GmbH joint 
venture with Hochtief at Düsseldorf Airport. 
 Greece Aer Rianta International (ARI) has duty free operating and management 
contracts at airports in Larnaca and Paphos. 
 
Hungary Cape Clear Aviation rents Balaton Airport - Sármellék for 99 years since 
2003.  Fly Balaton is co-owned by the municipalities of Sármellék and 
neighbouring town Zalavár. 
 Connaught Airport Development Co. Ltd operates Knock International 
Airport in Co. Mayo. 
 Ireland Aer Rianta owns and operates three Irish airports (Dublin, Shannon, and 
Cork). 
AER Arann owns the Connemara-Inverin regional airport. 
 Kuwait Aer Rianta International (ARI) has duty-free operating and management 
contracts at airports in Kuwait. 
 Lebanon Aer Rianta International (ARI) has duty-free operating and management 
contracts at airports in Beirut. 
 Russia Aer Rianta International (ARI) has duty-free operating and management 
contracts at airports in Russ ia/Moscow and St Petersburg. 
 Syria Aer Rianta International (ARI) has duty-free operating and management 
contracts at airports in Damascus. 
 Ukraine Aer Rianta International (ARI) has duty-free operating and management 
contracts at airports in Ukraine/Kiev. 
 Aer Rianta holds a 48.25% stake in Birmingham International Airport. 
 United Kingdom IIU ltd owns and operates London City Airport, ltd. S/C/W/270 
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ISRAEL 
 
Jamaica Dragados y Construcciones S.A., together with YVRAS, AGUNSA, and 
Ashtrom (an Israel-based construction company that has been working in 
Jamaica for over 30 years) won a 30-year contract to develop, manage and 
operate Sangster International Aiport, Montego Bay. 
 
Israel Arkia Israeli Airlines owns and operate s the civil part of Ovda Airport, 
40 km north of Eilat. 
 
ITALY 
 Argentina SEA SpA - Milan Airports acquired 32 airports in Argentina as a member 
of the Aeropuertos Argentinos 2000 S.A. consortium (28% stake) in 1999. 
 Dominican Republic Impregilo SpA Partner in the ‘Aeropuertos Dominicanos Siglo XXI, S.A.’ 
consortium that manages four airports in the Dominican Republic. 
 Catullo SpA operates the Verona-V illafranca and Brescia-Montechiari 
airports in northern Italy. 
 Piaggio Aero Industries owns 13% of Società Aeroporto Toscano (SAT), 
the operator of Pisa Airport in Italy. 
Aeroporti di Roma SpA owns and operates the Rome airports Fiumicino 
and Ciampino;  acquired the Alitalia stake (15%) in Aeroporti di Genova 
SpA (Genoa Airport) and a 16.6% st ake in SACAL SpA (Lamezia Terme 
Airport, Calabria). 
 SEA SpA owns and operates the two M ilan airports, Linate and Malpensa, 
as well as Bergamo-Orio Airport;  ow ns 5% of GESAC, the operator of 
Naples Airport, and 0.96% of SAGAT, the operator of Turin Airport;  
acquired a 12.534% stake in Aeradria , the operating company of Rimini 
Airport, from Alitalia. 
 Edizione Holding holds a 24% stake in SAGAT Turin Airport S.p.A. 
together with Nuova Holding Subalp ina SpA, SAB SpA, and AviaPartner 
(combined stake of 41.33%), Municipality of Turin (38.0%), Piedmont 
Region (8.0%), Province of Turin (5.0%), Chamber of Commerce of Turin 
(4.71%), Sicind of the Fiat Group (2.0%), and SEA SpA - Milan Airports 
(0.96%);  has a 29% holding in SAF SpA, the company which manages 
Florence airport. 
 SAVE S.p.A., the operator of Venice Airport, owns 45% of the Treviso 
airport company and holds a stake in the Padua airport company. 
 Bologna Airport (SAB) owns about 60% of SEAF, the operator of Forlí 
Airport. 
 Italy 
Aeroporti Holding S.r.l. holds a 29% stake in Aeroporto di Firenze (ADF). 
 
South Africa Aeroporti di Roma SpA won the tender for South African airports and 
owns 69% of ADR International Airports South Africa (Pty) Ltd, which in 
turn holds 20% of ACSA (Airports Company South Africa Ltd). 
LUXEMBOURG 
 Switzerland TAG Aviation SA operates the Prangi ns/VD general aviation airfield near 
Geneva. 
 
United Kingdom TAG Aviation SA manages and develops the former Ministry of Defence 
aerodrome at Farnborough, Hampshire/ UK into a business aviation centre, 
35 miles from Central London, under a conditional leasing agreement.  
The Farnborough airfield was officially handed over to TAG Aviation on 5 February 2003. 
MALAYSIA 
 Cambodia Malaysia Airports Bhd holds a 40% stake in CAMS which operates 
Phnom Penh-Pochentong Airport in Cambodia. 
 Malaysia Malaysia Airports Bhd operates 21 airports in Malaysia.  S/C/W/270 
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South Africa Penambang Group manages and develops Pietersburg’s Gateway 
International Airport in Northern Province/South Africa, a former air force 
base, under a 50-year concession since 2002. 
MEXICO 
 AGUNSA - Agencias Universales S.A Partner in the SCL Terminal Aéreo 
Santiago consortium, formed together with Sabco Administrador de Fondos de Inversión S.A. of Chile (13%), Grupo Dragados of Spain (30% 
with FCC), and YVRAS holding 10%. 
 Chile 
Agunsa holds a 47% stake. 
 Dominican Rep. Corporación Aeroportuaria del Este operates Punta Cana International 
Airport (PUJ) in the Dominican Republic. 
 ICA (Ingenieros Civiles Asociados) partner (37.25%) in Operadora 
Mexicana de Aeropuertos (OMA), together with ADP 25.5% and investor 
VINCI SA (37.25%), both of France, which operates Mexico’s privatized 
Grupo Centro Norte airports.  
 Unión Fenosa is a Member of Grupo Aeroportuario del Pacífico (GAP) 
with operates the Pacific airports in Mexico, the other partners being 
AENA, Dragados, and the Angeles Gr oup;  the operating company is 
called ‘Aeropuertos Mexicanos del Pacifico, S.A.’ 
 The Tribasa consortium  had won the 50-year concession contract for nine 
airports in Mexico’s south-eastern region.  
 Aeropuertos Sureste (ASUR), together with three other partners:  
Copenhagen Airports A/S, Cintra of Spain, and GTM of France (now 
VINCI).  The nine south-eastern airpor ts are: Cancún, Cozumel, Huatulco, 
Mérida, Minatitlán, Oaxaca, Tapachul a, Veracruz, and Villahermosa. 
 In airport management, VINCI  Airports holds a participation in 
concessions in Mexico Centro Norte (OMA) through SETA (Servicios de 
Tecnologia Aeroportuaria) - 13 airports, Mexico South East (ASUR*). 
 Mexico 
Ángeles Group  is a leading partner of the consortium, which won a 
concession for the Grupo Aeroportuar io del Pacifico (GAP) package of 
Pacific airports in Mexico, the other partners being AENA Internacional, 
Unión Fenosa, and Dragados;  the operating company is called 
‘Aeropuertos Mexicanos del Pacifico, S.A. 
NEW ZEALAND 
 
Australia Infratil NZ Ltd holds through Infratil Australia Ltd, a 49.5% stake in 
Airstralia Development Group, which manages Perth Airport, and 51% in Airport Development Group (ADG), now Northern Territory Airports 
(NTA), which manages Alice Spring s, Darwin and Tennant Creek in 
Australia;  partnered with AGI (now TBI) in these projects. 
 New Zealand Infratil NZ Ltd holds a 66% stake in Wellington Int.  Airport Ltd (WIAL) 
through NZ Airports, wholly owned by Infratil New Zealand Ltd. 
 
United Kingdom IAEL acquired 90% of Glasgow Prestwick International Airport in 
Scotland as a member of a consortium also comprising Omniport, which remained a minority shareholder until December 2003, and Specialist 
Utilities Investment Trust, who betw een them own the remaining 10%. 
OMAN 
 Oman Aviation Services owns 5% of OAMC (Oman Airports 
Management Company), which manages the Seeb and Salalah airports. 
 Oman Bahwan Trading Co., owns 35% of OAMC (Oman Airports Management 
Company), which manages the Seeb and Salalah airports. 
PERU 
 
Peru Cosapi S.A. Ingeniería y Construcción is a local partner, which held 14.5% 
in a consortium that was awarded a 30-year concession to develop and 
operate Lima’s Jorge Chavez International Airport in Peru along with S/C/W/270 
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consortium partner Alterra Partners/Bechtel Enterprises International Ltd 
(42.75%) and Fraport AG (42.75%);  has sold its stake to Alterra. 
POLAND 
 Polish Airports State En terprise (PPL) operates Mazury Airport at 
Szymany in Poland Poland through Port Lotniczy Mazury S.A. 
 Poland The Military Property Agency (AMW) and Polish Airports State 
Enterprise (PPL) jointly own the Modlin military airfield. 
 
PORTUGAL 
 
Portugal Aeroportos de Portugal owns and operates three mainland and four island 
airports (Lisbon, Porto, Faro, Ponta Delgada, Flores, Horta, and Santa 
Maria) in Portugal;  owns 70% of the Madeira (Funchal) airport operator 
ANAM. 
SINGAPORE 
 China Singapore Airport Terminal Services (Pte) Ltd has a joint venture in 
Beijing/China since 1995, Beijing Aviation Ground Services (BGS). 
 
Costa Rica Alterra Partners Costa Rica won a 20-year management and development 
concession for San José’s Juan Santamaria International Airport in Costa 
Rica, together with a group of companies including Bechtel Enterprises, 
AGI, Cormar, Agencia Datsun, Singa pore Changi Airport Enterprise, and 
Edica Ltda. Alterra holds 85% of th e consortium;  owned 50% each by 
Bechtel and SCAE/Singapore. 
 Hong Kong, China Singapore Airport Terminal Services (Pte) Ltd Has a 24.5% stake in Asia 
Airfreight Terminal Co Ltd (AAT), Hong Kong International Airport. 
 New Zealand SCAE, Singapore (Singapore Changi Airport Enterprise Pte Ltd) acquired 
a 7.14% stake in Auckland International Airport in New Zealand. 
 
Peru Alterra Partners, UK (owned 50% each by Bechtel and SCAE/Singapore) 
holds a 57.25% interest in a 30-year  concession to operate and develop 
Jorge Chavez International Airport, Lima/Peru with partner Fraport AG holding 42.75%;  a local contractor Cosapi S.A. held 14.50% initially and 
sold out to Alterra.  
 
The Netherlands Alterra Partners, UK (owned 50% each by Bechtel and SCAE/Singapore) 
signed a 30-year concession agreement in late 2002 to develop Hato International Airport in Curaçao/Netherlands Antilles together with 
consortium partners Trabajos Industri ales y Mecanicos from Venezuela, 
and Janssen de Jong Caribbean from the Netherlands Antilles. 
 Vietnam Singapore Airport Terminal Services (Pte) Lt d has a 30% stake in Tan 
Son Nhat Cargo Services Ltd (TCS ), Ho Chi Minh City/Vietnam. 
SPAIN 
 
Australia Aeropuertos provided 19.6% of the equity of the Southern Cross 
consortium (Southern Cross Airports Corporation Holdings Limited - SCACH), led by Australia’s investment bank Macquarie Bank Ltd, which 
acquired Sydney Airport Corporation in 2002.  The stake has been 
increased to 20.68% in the meantime. 
 Belgium FCC Agua y Entorno Urbano acquired the ground-handling activities of 
Sabena at Brussels Airport. 
 Airport Concessions & Development Ltd  acquired a 92.88% stake in TBI 
plc and its airport portfolio in 2004.  TBI PLC owns and operates in 
Bolivia by acquiring AGI (La Paz, Santa Cruz Cochabamba) Airports. 
 Bolivia Group International, Inc. (AGI) won a contract for three airports in Bolivia 
and formed SABSA (Servicios de Aeropuertos Bolivianos) to manage, 
operate, and maintain the La Paz-El  Alto, Cochabamba and Santa Cruz 
airports for a period of 25 years.  S/C/W/270 
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Canada Airport Concessions & Development Ltd acquired a 92.88% stake in TBI 
plc and its airport portfolio in 2004.  TBI PLC manages, either totally or 
partially for the account governments or local authorities airports in 
Toronto in Canada. 
 Ferrovial Aeropuertos is the winner  of the Antofagasta Airport/Chile  
concessions. 
 Dragados y Construcciones S.A. is a member of the consortium, which 
operates the international terminal at Santiago de Chile’s Arturo Benitez 
International Airport. 
 Chile FCC Agua y Entorno Urbano is a partner in the SCL Terminal Aéreo 
Santiago consortium, formed together with Agencias Universales S.A. 
(Agunsa:  47%) and Sabco Administrador de Fondos de Inversión S.A. of 
Chile (13%), Grupo Dragados of Spain (30% with FCC), with YVRAS holding 10%. 
 AENA Internacional (Aeropuertos Españoles y Navegación Aérea) was 
awarded a contract to manage Calí Airport in Colombia as partner of the 
Aerocali S.A. consortium in which it holds a 33.34% share;  handles the 
former Schiphol involvement in Cartagena Airport/Colombia through 
Sociedad Aeroportuaria de la Costa, S.A. (SACSA), in which it has a 38.08% holding as an operating partner;  owns 40% of Aeropuertos del 
Caribe S.A. (ACSA), which manages Barranquilla Airport in Colombia. 
 Colombia 
Dragados y Construcciones S.A. manages the second runway at Bogotá’s 
Eldorado Airport in Colombia. 
 
Cuba AENA Internacional (Aeropuertos Españoles y Navegación Aérea), 
manages the new international airport near Cayo Coco in Cuba under a 
five-year contract. 
 Dominican Republic AENA Internacional (Aeropuertos Españoles y Navegación Aérea) 
involved in building a new airport at Samaná. 
 
Jamaica Dragados y Construcciones S.A., together with YVRAS, AGUNSA, and 
Ashtrom (an Israel-based construction company that has been working in 
Jamaica for over 30 years) won a 30-year contract to develop, manage and 
operate Sangster International Aiport, Montego Bay. 
 Dragados y Construcciones S.A. owns 29% of the Mexican-Spanish 
consortium which acquired a 15% st ake in Grupo Aeroportuario del 
Pacifico (GAP) package of Pacific airports in Mexico.  The other partners 
being AENA, Unión Fenosa, and the Angeles Group (Inversora del Noroeste and Holdinmex).  The opera ting company is called ‘Aeropuertos 
Mexicanos del Pacifico, S.A.’ 
 Ferrovial Aeropuertos owns 24.5% of the Tribasa consortium, which won 
the concession for Mexico’s nine s outh-eastern airports - Aeropuertos 
SuresteASUR (Cancún, Cozumel, Huat ulco, Mérida, Minatitlán, Oaxaca, 
Tapachula, Veracruz, and Villahermosa), the three other partners are Copenhagen Airports A/S, Grupo Tribasa (Mexican contractors), and 
GTM of France. 
 Mexico 
AENA Internacional (Aeropuertos Españoles y Navegación Aérea) owns 
25.5% of the Mexican-Spanish consortium, which acquired a 15% stake in Grupo Aeroportuario del Pacífico (GAP) package of 12 Pacific airports in 
Mexico (the operating company is called 'Aeropuertos Mexicanos del 
Pacifico, S.A. - AMP), the other partners being Unión Fenosa, Dragados Industrial, and Mexico's Ángeles Group (Inversores del Noroeste and 
Holdinmex). 
 
United Kingdom Airport Concessions & Development Ltd acquired a 92.88% stake in TBI 
plc and its airport portfolio in 2004.  TBI PLC owns and operates Cardiff-Wales and took comtrol of London Luton and Cardiff-Wales (since 1995). S/C/W/270 
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  Ferrovial Aeropuertos acquired the 51% stake in Bristol International 
Airport from FirstGroup together with Macquarie. 
Ferrovial Aeropuertos acquired all the shares of Belfast City Airport, 
Northern Ireland. 
 Ferrovial Aeropuertos  is the winner of the Niagara Falls Airport/US 
concessions. 
 United States Airport Concessions & Development Ltd  acquired a 92.88% stake in TBI 
plc and its airport portfolio in 2004.  TBI PLC owns Central Florida 
Terminals and operates Orlando Sanford International airport. 
SOUTH AFRICA 
 Primkop Airport Management manages the new Kruger Mpumalanga 
International Airport in South Africa. 
 South Africa ACSA manages Pilanesberg Airport (since 1998) and Sun City in addition 
to its own nine airports (including Johannesburg and Cape Town). 
SWEDEN 
 
Sweden Kallax Cargo AB acquired the Luleå-Kallax air base in northern Sweden 
for development into an international cargo centre.  Kallax Cargo AB 
controls land and landing rights. 
SWITZERLAND 
 Chile IDC S.A. operates the Puer to Montt, Serena and Calama airports in Chile 
in joint venture with Un ique Zurich Airport. 
 Egypt ABB Equity Ventures leads a team fo r the BOT project of a new passenger 
terminal at Sharm el-Sheikh Airport in Egypt. 
 Oman ABB Equity Ventures owns 15% of OAMC (Oman Airports Management 
Company), which manages the Seeb and Salalah airports. 
 
South Africa ABB Equity Ventures led a consortium which built the Kruger 
Mpumalanga International Airport in South Africa, which is owned and operated by ABB through its specialist airport management company. 
 Unique (Flughafen Zürich AG) operates Zürich Airport.  
 Alpar AG owns and operates Bern Airport since 1985.  
 Switzerland The Dutch investor Rinse Strikwerda  owns St. Gallen/Altenrhein Airport 
in Switzerland through Air port Altenrhein AG (100%). 
TANZANIA 
 Tanzania Bharat Petroleum Partner in SALT (Société Aéroportuaire de Lomé-
Tokoin), the operator of Lomé-Tokoin Airport in Togo. 
THAILAND 
 Thailand Bangkok Airways operates Samui International Airport, Sukhothai 
Airport, and Trat Airport und er 20-year lease agreements. 
THE NETHERLANDS 
 Deutsche Asset Management owns 25% of APAC.  APAC (Australia 
Pacific Airports Consortium) owns and operates Melbourne-Tullamarine 
International Airport as well as 90% of Launceston Airport. 
 Australia Through its Schiphol International division, Schiphol is a partner in the 
management companies of Brisbane Airport in Australia (15.62% stake in 
BACL, which has a 50-year lease). 
 Austria Schiphol Group holds a 1% stake in Vienna International Airport plc.  
Vienna International Airport manages Vöslau. 
 Hungary Schiphol Group holds a 1% stake in Vienna International Airport 
plc.Vienna International Airport part-owns Budaörs. 
 
Indonesia Schiphol Group has a joint venture with Angkasa Pura II/Indonesia (nine 
airports) to introduce a passenger loyality programme based on iris identification at Indonesian airports and seaports.  S/C/W/270 
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Malta Schiphol Group holds a 1% stake in Vienna International Airport plc.  
Vienna International Airport owns 57.1% of Malta Mediterranean Link 
Consortium Ltd (MML), which holds 40% of Malta International Airport 
plc and manages the airport.   The stake gives VIE a 22.8% share in Malta International Airport plc. 
 Schiphol Group owns and operates the Amsterdam-Schiphol, Rotterdam 
and Lelystad airports, and acquired a 51% stake in Eindhoven Airport, all 
in the Netherlands.  Since 2004, has a 7-year contract to assist the 
management of Aruba’s Reina Beatrix Airport in the Netherlands Antilles. 
 The Netherlands Alterra Partners signed a 30-year con cession agreement in  late 2002 to 
develop Hato International Airport in Curaçao/Netherlands Antilles 
together with consortium partners Trab ajos Industriales y Mecanicos from 
Venezuela, and Janssen de Jong Cari bbean from the Netherlands Antilles. 
 Switzerland The Dutch investor Rinse Strikwerda owns St. Gallen/Altenrhein Airport 
in Switzerland through Air port Altenrhein AG (100%). 
 
United States Schiphol Group manages the International Air Terminal at JFK 
International, New York through Schiphol USA LLC (40% stake in 
JFKIAT) with partners LCOR Inc. and Lehman Brothers. 
TURKEY 
 TAV - Tepe Akfen Ventures won the contract in late 2004 to build Cairo 
Airport’s Terminal 3. 
 Egypt Kato Investment Group  is developing the new El Alamein Airport in 
Egypt on a BOT basis. 
 Airport Management & Aeronautical Industries Inc. built and operates the 
new Sabiha Gökçen International Airport in Istanbul as part of the 
Advanced Technology Industrial Park (ATIP) project developed by the 
Ministry of Defence’s Under Secretariat of Defence Industries. 
 Bayindir Holding operated the new terminal at Antalya Airport/Turkey 
under an 8-year concession agreement in joint venture with Fraport AG. 
 Turkey 
TAV - Tepe Akfen Ventures operates Istanbul Airport since January 2000, 
after having built the new passenger terminal and a parking garage;  is 
building the new domestic and interna tional terminal at Ankara-Esenboga 
Airport under a BOT project and operating it for 15 years and 8 months. 
UNITED KINGDOM 
 
Argentina Ogden Aviation (taken over by Menzies in the U.K.) is a partner in the 
Aeropuertos Argentina 2000 S.A. consortium that purchased 32 Argentinean airports (28%). 
 BAA owns 19.8%, of APAC (Australia Pacific Airports Consortium) owns 
and operates Melbou rne-Tullamarine Internationa l Airport as well as 90% 
of Launceston Airport. 
 BAA owns a stake in Perth/Australia. 
 Darwin, Alice Springs, Tennant Creek/Australia. 
 PlaneStation Group plc held an operating licence for the international 
terminal of Melbourne Airport. 
 Westralia Airports Corp. the owners of Westralia are Hasting. 
 Funds Management (85%) and BAA (15%) operates Perth International 
Airport manages Christmas Island International Airport and Cocos (Keeling) Island Airport. 
 The Manchester Airports Group  (MAG) manages the Adelaide and 
Parafield airports in Australia owned by the Adelaide Airport Ltd 
consortium, together with Serco Asia Pacific, under a 50-year lease started 
in 1998. 
 Australia 
Serco Aviation through Serco Asia Pacific partner in the Adelaide Airport 
Ltd consortium, together with Manchester Airport plc. S/C/W/270 
Page 140  
 
  Origin of airport 
investor/manager Country of 
operation Activities 
  Macquarie Airports Group Ltd (MAG) acquired 11.7% of the Southern 
Cross consortium (Southern Cross Airports Corporation Holdings Limited 
- SCACH), which acquired Sydney Airport Corporation in 2002. 
 
 Laing Investments Ltd holds:  equity (14.5%) in the Adelaide Airport Ltd 
consortium, which owns the Adelaide and Parafield airports in Australia 14.55% in Northern Territories Airports by acquiring the 29.1% TBI plc 
(ex-AGI) holding in Darwin, Alice Springs and Tennant Creek together 
with National Australia Asset Management. 
 
Bolivia Airport Group International, Inc. (AGI) won a contract for three airports in 
Bolivia and formed SABSA (Servicios  de Aeropuertos Bolivianos) to 
manage, operate, and maintain the La  Paz-El Alto, Cochabamba and Santa 
Cruz airports for a period of 25 years.  
 China AGI owns a stake in Haikou-Meilan Int. Airport in Hainan. 
 Colombia Ogden Aviation BOT is a partner in runway consortium at Bogotá Airport. 
 AGI won a 20-year concession to manage San José International Airport in 
Costa Rica together with local partners. 
 
Costa Rica Alterra Partners Costa Rica won a 20-year management and development 
concession for San José’s Juan Santamaria International Airport in Costa 
Rica, together with a group of companies including Bechtel Enterprises, 
AGI, Cormar, Agencia Datsun, Singa pore Changi Airport Enterprise, and 
Edica Ltda.  Alterra holds 85% of the consortium (owned 50% each by 
Bechtel and SCAE/Singapore). 
 
Dominican Rep. Ogden Aviation is a managing partner in the ‘Aeropuertos Dominicanos 
Siglo XXI, S.A.’ consortium that manages four airports in the Dominican Republic:  Santo Domingo (‘Las Americas’), Puerto Plata (‘Gregorio 
Luperón’), Samaná (‘Arroyo Barril’), and Barahona (‘Maria Montez’). 
 Germany PlaneStation Group plc had acquired Lahr ‘Black Forest Airport’ in 
Germany. 
 BAA International holds a 65% stake in GESAC, the Naples/Italy airport 
company. 
 Italy City Hopper Airports Ltd operates Biella Airport in northern Italy since 
1 September 2004 under a 25-year concession. 
 Macau, China Ogden Aviation Managing partner (29%) in the MASC-Ogden ground-
handling joint venture at Macau International Airport. 
 
Norway Omniport plc. has successfully comple ted an arrangement with Norfolk 
County Council and Norwich City Council to acquire Norwich 
International Airport. 
 
Peru Alterra holds a 57.25% interest in a 30-year concession to operate and 
develop Jorge Chavez International Airport, Lima/Peru with partner 
Fraport AG holding 42.75%. 
 Panama Ogden Aviation manages the fuel facilities at Tocumen 
International/Panama. 
 Sweden TBI plc. owns and operates Stockholm Skavsta. 
 
Tanzania Mott MacDonald Group is a majority stakeholder (75%) of Kilimanjaro 
Airports Development Company (KADCO), operated under a 25-year 
concession together with Inter-Consult of Tanzania and the Tanzania 
Government. 
 TBI PLC owns and operates Cardiff-Wales and took comtrol of London 
Luton and Cardiff-Wales (since 1995). 
 PlaneStation Group plc  was the owner of the Kent International (Manston) 
Airport in the UK and developed it as London-Manston Airport. 
 United Kingdom 
Serco Aviation  manages Newquay Cornwall International Airport under 
contract.  S/C/W/270 
 Page 141 
 
 
  Origin of airport 
investor/manager Country of 
operation Activities 
  Regional Airports Ltd  owns and operates Southend Airport (London 
Express Airport) and London Biggin Hill Airport, UK RAL operates as a 
holding company for subsidiary airport operations.  Regional Airports Ltd 
also operates Northolt Handling, the Premier Service passenger handling 
service for commercial flights at RAF Northolt. 
  Air Wales  acquired Swansea Airport in Wales from Martin & Louisa 
Morgan. 
TBI Airport Holdings Ltd owned and operates Belfast International in 
Northern Ireland (since 1996). 
  BAA International owns and operates seven UK airports. 
  City Hopper Airports Ltd operates Wolverhampton Airport in the UK;  
acquired Blackpool Airport together with MAR Properties Ltd in 2004. 
  BAE Systems plc  owns the Filton company airfield near Bristol, UK. 
  IAEL acquired 90% of Glasgow Prestwick International Airport in 
Scotland;  took over Kent International Airport.  
  The Manchester Airports Group (MAG ) acquired an 82.7% stake in the 
former municipally-owned Humberside Airport;  acquired the East 
Midlands (now:  Nottingham East Midlands) and Bournemouth airports;   
owns the operating companies Manchester Airport Plc., Manchester 
Airport Development Ltd, Manchester Airport Aviation Services, and 
Ringway Handling Services Ltd. 
  Peel Airports Ltd owns 76% of Liverpool’s ‘John Lennon Airport’, UK 
after having acquired British Aerospace (L iverpool Airport) Ltd in 1997;  
acquired the Doncaster-Finningly RAF station in South Yorkshire, which 
has been transformed into the regional ‘Robin Hood Airport’ 
(Doncaster/Sheffield);  owns 50% of Sheffield City Airport Ltd became a 
strategic partner of Teesside International Airport by acquiring a majority 
stake in 2003;  now called ‘Durham Tees Valley Airport’. 
  Sutton Harbour Holdings plc  purchased Plymouth City Airport Ltd in the 
UK, together with the management contract for Newquay Cornwall 
Airport from British Airways in April 2000. 
  Macquarie Airports Group Ltd  (MAG) acquired the 50% stake in Bristol 
International Airport from FirstGroup. 
  Inverness Air Terminal Ltd  has privately financed a GBP9 million 
terminal refurbishment project at Inverness Airport in Scotland under the 
Private Finance Initiative (PFI). 
  Highlands & Islands Airports Ltd (HIAL) manages and maintains the ten 
airports throughout the Highlands and Islands of Scotland.  HIAL’s Head 
Office is based at Inverness Airport but HIAL is responsible for the 
airports in Barra, Benbecula, Campbe ltown, Inverness, Islay, Kirkwall, 
Stornoway, Sumburgh, Tiree, and Wick. 
 BBA group acquired AGI Airport Group International Inc. (AGI), which 
managed 29 airports, including Burbank-Glendale-Pasadena Airport, CA 
(since 1978), Albany County Airport, NY;  Rickenbacher  Int. Airport;  
Columbus/OH;  Stewart International, Newburgh/NY;  the International Terminal (Concourse E) at Atlanta-Hartsfield, GA. 
 United States PlaneStation Group plc had acquired a 50-year lease of Smyrna Airport, 
Nashville, TN/USA, through its PlaneStation US subsidiary held an 
operating licence for Florida/USA for an initial period of 10 years with five consecutive five year extensions, subject to performance thresholds, 
up to a total of 35 years. 
  BAA International through BAA US has managed the entire airport system 
at Indianapolis, IN/USA since 1995 (1 0-year contract) and the concessions 
at Pittsburgh Airport/US, in Terminals B, D/E at Boston-Logan and at 
Baltimore/Washington (10-year contract awarded in March 2004). S/C/W/270 
Page 142  
 
  Origin of airport 
investor/manager Country of 
operation Activities 
  Under a 99-year lease agreement by  the New York State Department of 
Transportation, National Express Corporation (NEC) is the operator of the 
first privatized US airport, Stewart International Airport. 
UNITED STATES 
 Aeroterm US Inc. acquires, owns and develops airport properties at 
airports in Canada. 
 Canada Airport Group International, Inc. (AGI) managed under a five-year 
contract the Trillium Terminal at Pearson International Airport, 
Toronto/Canada. 
 
Costa Rica Alterra Partners Costa Rica won a 20-year management and development 
concession for San José’s Juan Santamaria International Airport in Costa Rica, together with a group of companies including Bechtel Enterprises, 
AGI, Cormar, Agencia Datsun, Singa pore Changi Airport Enterprise, and 
Edica Ltda. Alterra holds 85% of th e consortium (owned 50% each by 
Bechtel and SCAE/Singapore). 
 Czech Republic Ogden Aviation opera tes cargo terminals in Prague.  
 
Ecuador The Houston Airport System (HAS) and ADC (Airport Development 
Corporation) have an operating contract for Mariscal Sucre International 
Airport, Quito/Ecuador. 
 Italy Ogden Aviation is a partner in ADR handling at the Rome airports. 
 
Peru Bechtel Enterprises International Ltd & Bechtel Civil through Alterra 
holds a stake in a consortium that was awarded a 30-year concession to 
develop and operate Lima’s Jorge Chavez International Airport in Peru along with consortium partner Fraport AG. 
 Spain Ogden Aviation operates cargo terminals in Barcelona and Madrid. 
 The Netherlands Ogden Aviation operates cargo terminals in Amsterdam. 
 AFCO - Aviation Facilities Co. Inc has joint-ventured in the development 
of taxiway and apron facilities at London-Luton. 
 United Kingdom The Lynxs Group provides interactive, intermodal and international 
distribution facility solutions for emerging regions CargoPorts, e.g. 
London. 
 IAC (International Airport Centers) owns real estate at US airports. 
 IAT (International Aviation Terminals Inc. ) owns and leases real estate at 
North American airports. 
 Diversified Asset Management Group will own and develop Brown Field 
near San Diego, California. 
 FAA owns Atlantic City Airport, which is managed by AmPorts (ex-
Johnson Controls). 
 Comarco Services manages twelve small-carrier and general-aviation 
airports in the United States including five in Los Angeles County. 
 Lehman Brothers Inc. is a Partner and financial advisor for the new 
Terminal 4 at New York-JFK. 
 LCOR has been involved in the US$3 billion JFK International Air 
Terminal (Terminal 4)/Delta expansion, the largest public/private airport 
project in US history, completed in 2001 and manages T4 together with 
Schiphol US LLC and Lehman Brothers. 
 The Perot family  owns Alliance Airport in Texas where American Airlines 
has built a US$480 million maintenance base. 
 The Lynxs Group  provides interactive, intermodal and international 
distribution facility solutions for emerging regions CargoPorts, e.g. 
Anchorage, Austin, Chicago, Ft Lauderdale, Houston, Sacramento, San 
Antonia, Stewart, and Tulsa. 
 United States 
Sverdrup Aviation operates the new MidAtlantic Airport, the second-
largest privatized airport in the US.  S/C/W/270 
 Page 143 
 
 
  Origin of airport 
investor/manager Country of 
operation Activities 
  In the US, AMB has 22.9 million square feet of on-airport and near-airport 
distribution centre space owned, managed and under development at 15 
big US airports, including Los Angeles, San Francisco, Seattle-Tacoma, 
Dallas/Ft. Worth, Chicago, JFK, Washington-Dulles, Miami and Atlanta-
Hartsfield. Airis Corp. operates. 
  A US$100 million two-building cargo facility at New York’s JFK 
International Airport for the Port Authority of New York & New Jersey, 
and a mixed-use facility (offices/cargo) for LanChile at Miami 
International Airport. 
The International Air Cargo Center (IACC) at Newark International 
Airport for six major airlines, and f acilities at Los Angeles International 
Airport. 
  Aeroterm  US Inc. acquires, owns and de velops airport properties at 
airports in the Unites States.  The company recently added warehouses at 
nine US airports:  Dallas/Fort Wo rth International and George Bush 
Intercontinental in Houston/TX;  Kansas City, MO;  General Mitchell 
International in Milwaukee;  Louis Armstrong New Orleans International;  
Norfolk, VA; Pensacola, FL;  Philadelphia International;  and Hancock 
International in Syracuse, NY. 
  AFCO - Aviation Facilities Co. Inc currently owns, or has leaseholds and 
is developing or operating facilities at 23 airports in North America;  has 
developed and owns stakes in cargo buildings at Albany, Baltimore-
Washington, Pittsburgh, Richmond, Ja ckson, Jacksonville, Kansas City 
and Washington-Dulles airports and truck parking facilities at Dallas/Fort 
Worth and shuttle parking facilities at  Chicago-Midway;  has acquired and 
renovated cargo facilities at Baltimore-Washington, Seattle-Tacoma, 
Pittsburgh, Hartford, Austin, Bake rsfield, Louisville Orlando, 
Rickenbacker, Philadelphia, Dallas Fo rt/Worth, Kansas City, Los Angeles 
and Dayton airports. 
  AvPORTS manages and develops Teterboro Airport (TEB) under contract 
to PANY&NJ and manages Atlantic City International Airport (ACY) in 
New Jersey;  Republic Airport (FRG);  Tweed New Haven Regional 
Airport (HVN);  White Plaines/Westchester County Airport (HPN) in New 
York State, and the 34th Street Metroport heliport in New York City;  the 
FBO AvCenter at the Greater Pittsburgh International Airport;  Johnson 
Controls AvCenter at Sandiford Field, Louisville/Kentucky;  and Albany 
International Airport (since mid-2005).  
  Macquarie Infrastructure Company.  Its businesses and investments consist 
of an airport services business (Atlan tic and AvPorts), an airport parking 
business (PCAA and Avistar) and a district energy business (Thermal 
Chicago and Northwind Aladdin);  acquired six off-airport parking 
facilities in Buffalo, Columbus, Houston, Oklahoma City, Philadelphia, 
and St. Louis in Oct. 2005. 
  Raytheon Infrastructure, Inc is a partner in the Aguadilla Consortium for 
Transportation (ACT), which has won the operating and development 
contract for Aguadilla ‘Rafael Hernan dez’ International Airport, Puerto 
Rico.  
 
Uruguay As a member of the Cerealsur (now ‘Puerta del Sur’) consortium 
(comprising Italy’s SEA SpA, American International of the US, and 
Argentina’s Corporación América Sudamericana, each holding 33%), 
Aeropuertos Argentina 2000 S.A. (AA2000) won the 30-year concession to manage and develop Montevideo’s Carrasco International Airport. S/C/W/270 
Page 144  
 
  Origin of airport 
investor/manager Country of 
operation Activities 
URUGUAY 
 
Uruguay The CAISA Consortium has a 20-year concession agreement with the 
Government of Uruguay to develop, manage, and operate the Punta del 
Este International Airport.  Partners in CAISA are:  Compañía Oriental de 
Transporte S.A. of Uruguay;  London Supply S.A.C.I.F.I. of Argentina; 
Norlit S.A. of Uruguay;  International Finance Corporation of the World 
Bank;  and PAXPORT Laguna Inc. of Canada.  S/C/W/270 
 Page 145 
 
 
  Table A2 
Origins and destinations of airport investments and management contracts 
 
Origin of airport 
investor/manager Countries or territo ries of operation 
Argentina Armenia, Uruguay  
Australia New-Zealand, Belgium, Czech Repu blic, Denmark, United Kingdom  
Austria Hungary, Malta, Spain, Turkey, Ukraine  
Canada Australia, Bermuda, Chile, China, Ecuador, France, Honduras, Jamaica, Malta, New Zealand, 
Oman, Russia, Thailand, Turks and Caycos Islands  
Chile Jamaica 
Denmark China, Mexico, Norw ay, United Kingdom  
France Belgium, Cambodia, Cameroon, China, Egypt, Gabon, Guinea, Indonesia (bid), Ivory Coast, 
Madagascar, Mexico 
Germany Australia, China, Greece, Kenya, Latv ia, Peru, Spain, Turkey, US  
Hong Kong, 
China China, Bahamas  
India Mauritania, Togo  
Ireland Bahrain, Canada, Germany, Greece, Hungary, Kuwait, Lebanon, Russia, Syria, Ukraine, 
United Kingdom 
Israel Jamaica  
Italy Argentina, Dominican Republic, South Africa  
Luxemburg Switzerland, United kingdom  
Malaysia Cambodia, South Africa  
Mexico Chile, Dominican Republic 
New Zealand Australia, United kingdom 
Singapore China, Costa Rica, Ho ng Kong, China, New Zealand, Peru, Netherlands, Vietnam  
Spain Australia, Belgium, Bolivia, Canada, Chile, Cuba, Dominican Republic, Jamaica, Mexico, 
United kingdom, United States 
Switzerland Chile, Egypt , Oman, South Africa 
Netherlands Australia, Austria, Hungary, Indones ia, Malta, Switzerland, United States 
Turkey Egypt 
United kingdom Argentina, Australia, Bolivia, China, Colombia, Costa Rica, Dominican Republic, Germany, 
Italy, Macau, China, Norway, Peru, Pa nama, Sweden, Tanzania, United States 
United states Canada, Costa Rica, Czech Republic, Ecuador,  Italy, Peru, Spain, Netherlands, United 
Kingdom, Uruguay 
 
Source :  Compiled by the WTO Secretariat on the basis of the information contained in the report Momberger 
Airport Information, which is reproduced in ACI Airports Economics Survey 2005. 
 
 S/C/W/270 
Page 146  
 
  Table A3 
Destinations and origins of airport investments and management contracts 
 
Country or territory 
of operation Origin of the investor/manager 
Argentina Italy, United kingdom 
Armenia Argentina 
Australia Canada, Germany, New Zealand, Spain, Netherlands, United kingdom 
Austria Netherlands 
Bahrain Ireland 
Belgium Australia, France, Spain 
Bermuda Canada 
Bolivia Spain, United Kingdom 
Cambodia France, Malaysia 
Cameroon France 
Canada Ireland, Spain, United States 
Chile Canada, Mexico, Spain, Switzerland 
China Canada, Denmark, France, Germany, Hong Kong, China, Singapore, United Kingdom 
Colombia Spain, United Kingdom 
Costa Rica Singapore, United Kingdom, United States 
Cuba Spain 
Czech Republic Australia, United States 
Denmark Australia 
Dominican Republic Canada, Italy, Mexico, Spain, United Kingdom 
Ecuador Canada, United States 
Egypt France, Switzerland, Turkey 
France Canada 
Gabon France 
Germany Australia, Ireland, United Kingdom 
Greece Germany, Ireland 
Honduras Canada 
Hong Kong China  Singapore 
Hungary Austria, Ireland, Netherlands 
Indonesia France, Netherlands 
Italy Australia, United Kingdom, United States 
Jamaica Canada, Chile, Israel, Spain 
Côte d'Ivoire France 
Kenya Germany 
Kuwait Ireland 
Latvia Germany 
Lebanon Ireland 
Macau, China United Kingdom 
Madagascar France 
Malta Austria, Canada, Netherlands 
Mauritania India 
Mexico Denmark, France 
Netherlands Singapore, United States  
New Zealand Australia, Canada, Singapore 
Norway Denmark 
Oman Canada, Switzerland 
Panama United Kingdom 
Peru Germany, Singapore, United States 
Romania Canada 
Russia Canada, Ireland 
South Africa Italy, Malaysia, Switzerland 
Spain Austria, Germany, United States, United States  S/C/W/270 
 Page 147 
 
 
  Country or territory 
of operation Origin of the investor/manager 
Sweden United Kingdom 
Switzerland Luxemburg, Netherlands 
Syria Ireland 
Tanzania United Kingdom 
Togo India 
Turkey Austria, Germany  
Turks and Caycos Canada 
Ukraine Austria, Ireland 
United Arab Emirates Germany 
United Kingdom Australia, Denmark, Ireland, Luxemburg, New Zealand, Spain, United States 
United States Germany, Hong Kong China, Spain, Netherlands, United Kingdom 
Uruguay Argentina, Canada, United States 
Vietnam Singapore 
 
Source :  Compiled by the WTO Secretariat on the basis of the information contained in the report Momberger 
Airport Information, which is reproduced in ACI Airports Economics Survey 2005. S/C/W/270 
Page 148  
 
  IX. AIR TRAFFIC CONTROL SERVICES, INCLUDING CHARGING SYSTEMS 
447. Since the air traffic control sector was extens ively described during the first review (see 
compilation, pages 121-148), this section will focus on more recent developments.  In particular, it 
will look at the corporatization of service providers, at the tentative first steps towards internationalisation of the sector, and the Single European Sky and other bilateral or multilateral 
integration initiatives.  Recent regulatory developm ents regarding the ICAO charging policy will be 
described.  Consideration will also be given to t echnical and commercial cha nges including the entry 
of new players, such as the aviation manufacturers Bo eing and Airbus.  A review of the situation with 
regard to delays will be provided to update the data from the first review.  Finally, there will be a 
round-up of the most interesting deve lopments in each geographic region. 
A. C
ORPORATISATION158 
448. Two aspects of corporatisation will be dealt with :  first, changes in the structure of air 
navigation service providers and, second, their performance. 
1. The move towards commercialisation 
449. Commercialisation refers to the creation of a degree of autonomy from the government, 
providing scope for business/commercial practices and,  in certain instances, direct access to capital 
markets. 
450. Air Navigation Service Providers (ANSPs) ha ve historically operated as government 
departments, financed by taxes and charges.  This structure reflected the role of ANSPs as a form of 
policing of the skies.  However there are long-standing cases of commercialisation;  AeroThai (Thailand) has been operating as a corporatised en tity since 1948.  In the late 1980s, under pressure 
from a radically expanding air transport industry, th e Oceanic region started a more general trend in 
the sector with the commercialisation of ANSPs in  New Zealand and Austra lia in 1987 and 1988, 
respectively. 
451. Table 41, provided by the Civil Air Naviga tion Services Organisation (CANSO), lists all 
known corporatised ANSPs and their management stru cture.  However the list may not be complete, 
as a recent Study on commercialised ANSPs refers  to over 40 corporatised providers globally.
159  
Furthermore, the list omits France, where, a lthough the ANS provider operates as a governmental 
department, it is commercialised to the extent that it has a degree of financial autonomy.  In spite of 
possible omissions table 41contains close to 100 per cent more entities than the data set provided by 
CANSO for the first review (compilation, page 137). 
                                                      
158  Note that commercialisation and corporatisation will be used interchangeably, as they are in the 
specialized press.   
159  Source :  MBS Study, "Air traffic control commerciali zation strategy, has it been effective?", 2005.  
   S/C/W/270
 Page 149Table 41 
Corporatised Air Navigation Services Providers (CANSO full members) 
 
Country Air Navigation Service Providers  Privatised 
Profit Privatised 
non - Profit Corporatised 
Profit Corporatised 
non - Profit Not 
available 
Thailand  Aeronautical Radio of Thailand (AEROTHAI) ³     
Spain Aeropuertos Españoles y Navegación Aérea 
(AENA)     ³  
Czech Republic Air Navigation Services of the Czech Republic 
(ANS CR)     ³  
South Africa Air Traffic & Navigation Services South Africa 
(ATNS)     ³  
Bulgaria Air Traffic Services Au thority (ATSA Bulgaria)     ³  
India Airports Authority of India (AAI)      ³ 
Australia Airservices Australia    ³   
New Zealand Airways Corpora tion of New Zealand    ³   
Austria AustroControl     ³  
Norway AVINOR     ³  
Azerbaijan Azerbaijan Air Navigation Services (AZANS)      ³ 
Belgium Belgocontrol     ³  
Uganda CAA Uganda      ³ 
Germany Deutsche Flugsicherung (DFS)     ³  
Italy Ente Nazionale di Assist enza al Volo (ENAV)     ³  
Estonia Estonian Air Navigation Services (EANS)    ³   
Hungary Hungarocontrol     ³  
Ireland Irish Aviation Authority (IAA)    ³   
Kazakhastan  Kazaeronavigatsia      ³ 
Latvia Latvijas Gaisa Satiksme (LGS)    ³   
Slovakia (Slovak Rep.) Letové Prevádzkové Služby (LPS)     ³  
Sweden LFV Sweden     ³  
The Netherlands  Luchtverkeersleiding Nederland (LVNL)     ³  
Malta Malta Air Traffic Services (MATS)     ³  
Moldovia Moldovian Air Traffic Services Authority 
(MoldATSA)      ³ 
Egypt National Air Navigation Services Company 
(NANSC)     ³  
United Kingdom National Air Traffic Services (NATS)  ³     
Canada NAV Canada   ³    
Portugal NAV Portugal    ³  
Denmark Naviair     ³  
Nigeria Nigerian Airspace Manage ment Agency (NAMA)      ³  
   S/C/W/270 
 Page 150 
Country Air Navigation Service Providers  Privatised 
Profit Privatised 
non - Profit Corporatised 
Profit Corporatised 
non - Profit Not 
available 
Lithuania Oro Navigacija      ³ 
Poland Poland Air Traffic Agency (PATA)     ³  
Romania Romatsa     ³  
Georgia Sakaeronavigatsia      ³ 
Switzerland skyguide     ³  
Slovenia Slovenia Control     ³  
Ukraine Ukrainian State Air Traffic Service Enterprise 
(UkSATSE)     ³  
 
Source :  CANSO website (http://www.canso.org/Canso/Web/members/full+members/). 
 
 
  S/C/W/270 
 Page 151 
 
 
  452. Commercialisation has intensified in particular in Europe, where a large majority of States 
now operates air traffic control (ATC) in a business oriented way (Table 42).  Scandinavian countries 
and other new Members of the EC represent the majo rity of new corporatised entities in Europe.  
Africa has witnessed a 300 per cent increase compared with 2001, and there has been a similar trend 
in Asia.  In the Americas, apart from Canada, th e traditional governmental model has continued to 
prevail.  The countries newly listed by CANSO as ope rating corporatised entities since the last review 
are:  Azerbaijan, Bulgaria, Denmark, Egypt, Georgi a, Hungary, India, Kazakhs tan, Lithuania, Malta, 
Moldova, Nigeria, Norway, Poland, Slovak Republic, Slovenia, Uganda and Ukraine. 
Table 42 
Corporatisation cases since 2001 
 
Eastern Europe 8 
Western Europe 3 
Asia/Pacific 4 
Africa 3 
Americas 0 
 
Source :  CANSO. 
 
 
453. Corporatisation has also taken on new forms.  The German Parliament has announced plans to 
change the national ANSP from a government-owned  commercial entity to a majority privately-
owned entity, in which the government will retain a 25.1 per cent minority share with blocking power.  
This is the largest-scale privatization move in Europe, ahead of the 51 per cent privatisation of 
National Air Traffic Services Ltd.  (NATS) in the UK.160  Reportedly, there have been expressions of 
interest in buying up the German ANSP by either Lufthansa alone or a consortium of airlines and 
other companies led by Lufthansa.  These steps, which follow a 13-year period of corporatization, will be closely watched as a potential template for cha nge in Europe and a possible alternative to the 
concurrent corporatization and privatisation of NATS.  ICAO has also encouraged national 
governments to consider commercialisation of AN SPs notably in view of the positive financial 
experience with recent cases.
161  
2. Performance of commercialised ANS providers 
454. Commercialisation initiatives have, on occasions, b een strongly criticized in particular by 
trade unions.  Strikes brought Paris Orly airport to a standstill in early 2004 after reform proposals had 
been floated, which did not involve privatisation.  UK unions, although opposed the Public-Private Partnership (PPP) of NATS, stated that they woul d prefer any private investment to come from 
airlines, which they consider least likely to co mpromise prevailing industry standards for profit. 
455. Skyguide, the Swiss ANSP, has drawn some criticism after commercialisation with  a marked 
rise in safety incidents and a major accident in Sw iss-controlled airspace.  Data in 2004 showed a 
reduction of Air Traffic Mangament (ATM) and non-ATM safety incidents in Swiss airspace. 
456. The partial privatisation of NATS in the UK proved difficult initially, not least due to its 
timing in 2001 just before the devastating events  that hit the airline industry.  However, these 
difficulties, which brought NATS close to bankruptcy, ma y also be attributed to the financial structure 
adopted.  The "Airline Group" which bought into NATS only paid around 6 per cent of the purchase 
                                                     
 
160  For further information on the structure of NATS, see the compilation, page 139. 
161  Source:  "ICAO's updated policies on user charges address a new commercial environment", ICAO 
Journal #2, 2005. S/C/W/270 
Page 152  
 
  price for its 46 per cent interest, the rest being adde d to the debt of NATS.  Coupled with the industry 
downturn, this proved non-sustainable, and the pr oject had to be fundamentally restructured.  
However the problems have since been solved, and NATS reports itself to be in a solid financial state;  
it registered a profit for the first time in 2004.   
457. It has also been questioned in the MBS study whether NATS can operate effectively in view 
of the fact that its customers, the airlines, are also its owners.  Governments had initially been 
cautious to avoid conflicts of interest ether by  preventing airlines from having an interest in a 
privatised ANSP as in Switzerland, or by limiti ng their influence on the board as in Canada.  
However, possibly inspired by the NATS structure, the leading candidate interested in purchasing the 
majority stake in the German ANSP is Lufthansa.   
458. In spite of the problems identified above, the major recent study on the subject, from MBS, 
argues strongly in favour of commercialisation of ANSPs.  The study looks at data on cost, safety, wages, etc., for ten corporatised ATM units, and compares these with the traditional governmental-
department format of the FAA.  The countries re viewed are Australia, Canada, France, Germany, 
Ireland, the Netherlands, New Zealand, South A frica, Switzerland and the UK, and there may be 
doubts as to whether the results are equally applicable to less deve loped economies and/or countries 
with a less advanced air transport sector.  Furtherm ore, the degree of commercialisation varies widely. 
While France has granted only financial autonomy subject to Ministerial approval,  NAV Canada 
operates as an entirely private corporation.   
Table 43 
Overview of corporatised ANSPs 
 
ANSP Size of controlled 
airspace 
('000 km2) Area control 
centers/
terminal 
approach units Towers Air traffic 
control officers 
(number) Total number 
of staff 
Airservices Australia 11,830 
Domestic 
39,957 
Oceanic 2/7 26 1,000 2,400 
NAV 
Canada 15,602 
Domestic 
3070 
Oceanic 7 42 2030 5,370 
DSNA France 1160* 5/11 66 3,110 8,300 
DFS Germany 390 4/17 17 2,010 5,370 
IAA Ireland 453* 2/3 3 270 670 
LVNL 
Netherlands 52 1/3 4 185 1,000 
Airways New-
Zealand 844 
Domestic 
23,036 
Oceanic 3 16 310 630 
ATNS  
South Africa 2,100 
Domestic 
29,240 
Oceanic 2/9 19 250 690 
Skyguide 
Switzerland 69 2/2 4+7 military 
towers 422 1336  S/C/W/270 
 Page 153 
 
 
  ANSP Size of controlled 
airspace 
('000 km2) Area control 
centers/
terminal 
approach units Towers Air traffic 
control officers 
(number) Total number 
of staff 
NATS United Kingdom 878 
Domestic 
2,230 
Oceanic 4/11 14 1,910 5,000 
FAA ATO 
United States 8,516 
Domestic 
56,980 
Oceanic 23/150 222 plus 226 
contract 
towers 14,930 36,290 
 
Note:  * includes oceanic airspace. 
Source :  MBS study. 
 
 
3. Safety 
459. Some of the ANSPs covered by the study re ported that commercialisation had improved 
safety.  NAV Canada even considers these effect s to be the most remarkable consequence of 
privatisation.162 The UK Civil Aviation Authority (CAA), which is the regulator of NATS, also 
reports improvement in safety.163  All commercialised ANSPs included in the study have exhibited a 
reduced rate of serious safety incidents post corporatisation.164  Some operators had difficulties early 
in their corporatised form, particularly in Cana da and South Africa, however, the subsequent upturn 
has been remarkable in both countries.   
4. Charges 
460. The user fees charged under co mmercial operation have not incr eased, despite the reliance on 
direct user fees to fund the services.  ICAO principl es continue to require that pricing is based on 
weight and distance, even though weight is not a principal determinant in calculating the cost of 
service.     
461. After serious incidents affecting traffic volume, such as 9/11 and SARS, prices of en route  
and terminal navigation services have increased in ge neral.  The fact that NATS defied this trend 
might be due to it being partly owned by a group of airlines.  However, in almost all of the ANSPs 
examined by MBS, charges are now lower than they were in 1997.  Air Services Australia managed to 
decrease en route  costs by almost one-third by 2005, while the IAA (Ireland) had, at one point, cut the 
cost of terminal charges by more than 50% although they have risen since;  in 2005, charges were 
around 25 per cent lower than in 1997.  Figure 3 compares NAV Canada's ra tes with the consumer 
price index between 1999 and 2003, showing a si gnificant reduction in the price of services, 
particularly when compared to the consumer price index. 
 
                                                      
162  Source :  MBS Study. 
163  Source :  UK Civil Aviation Authority. 
164   Switzerland proved an exception initially. S/C/W/270 
Page 154  
 
  
 
 
 
5. Costs 
462. Six out of the ten commercialised ANS providers cut costs per flight movement post 
corporatisation.  Of the four other providers, exceptional circumstances occurred in South Africa and 
in Switzerland.  In the former case, costs were incr eased to adapt to dramatic  surges in traffic, while 
Switzerland took action in response to critical safety  reports.  Efficient business schemes appear to be 
the principal cause of improved cost efficiency;  in  Australia, for example, there has been a 60 per 
cent reduction in the number of facilities used for en route  services.  Further efficiency gains have 
been made via redundancies, especially amongst non-controller staff.   
6. Delays 
463. The situation with respect to delays will be discussed more generally below.  The MBS study 
found that all corporatized ANSPs, for which data we re available, showed a reduced average delay in 
minutes per flight where the delay is attributed to  ATM, as opposed to other causes of delay.  The 
information takes account of both frequen cy and duration of delays (Chart 9).  S/C/W/270 
 Page 155 
 
 
  Chart 9 
 
Note:  Skyguide, NATS, DSNA, DFS and FAA are the respective ANSP of  Switzerland, UK, France, Germany 
and US. 
Source :  MBS study. 
 
 
B. INTERNATIONALISATION  
464. There is a general consensus among economists that it is inefficient for small States to invest 
heavily in their own ATC systems.  However, owing to the historical links between air transport and 
sovereignty, and the protection of national interests,  economic considerations have not been decisive 
for a long time.  In turn, this has resulted in over-e xpenditure and excessive co sts for air transport.  
However, the internationalisation of ANS has beco me inevitable.  The principal example during the 
period under review has been the creation of the "Single European Sky" in the European 
Communities, although there have been many ot her cases of multilateral a nd bilateral cooperation 
throughout this period. 
1. The Single European Sky initiative  
465. The Single European Sky initiative dates back to  1999.  A high-level working group was set 
up in 2000;  its report contains the following main elements:   
• set up a strong independent Community re gulator, with sufficient resources;   
• consider airspace as a common resource that is to be organised as a continuum; 
• develop relations between the Eu ropean Union and Eurocontrol,165 
• facilitate the participation of military in the "redefinition" of the skies;   
• promote new and interoperable technologies; 
• increase professional and trade union participation in community dialogue;  and  
                                                      
165  Eurocontrol is the European Organisation for the Safety of Air Navigation.  The 36 current 
members are: Albania, Armenia, Austria, Belgium, Bo snia and Herzegovina, Bulgaria, Croatia, Cyprus, the 
Czech Republic, Denmark, Finland, France, Germany, Gr eece, Hungary, Ireland, Italy, Luxembourg, the former 
Yugoslav Republic of Macedonia, Malta, Moldova, Monaco, the Netherlands, No rway, Poland, Portugal, 
Romania, Republic of Serbia and Montenegro, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, 
Ukraine, and the United Kingdom. S/C/W/270 
Page 156  
 
  • ultimately introduce the concep t of European training. 
 
466. The initiative never sought to promote privatisa tion of air traffic control, nor to introduce 
competition in the sector.  The working group cons idered ANS provision to be a natural monopoly. 
(a) Legislation 
467. The transposition of the working group's sugges tions into EC legislation was a long process, 
which not all initial ambitions survived unscathed.  The rules governing the Single Sky initiative are 
covered in four separate pieces of legi slation, all passed on 10 March 2004. 
468. First, Regulation 549/2004 lays down the framework for the creation of the Single Sky.  It 
clearly states the objectives of Single Sky legislatio n, which is "to enhance current safety standards 
and overall efficiency for air traffic in Europe, to  optimize capacity meeting the requirements of all 
airspace users and to minimise delays".
166  The Regulation explicitly stipulates that neither national 
sovereignty of airspace, nor obligations under the Chicago Convention are affected.  It also sets out the framework for the associated or gans such as National Supervisory Bodies (NSBs), which must be 
independent from the ANSP, the Single Sky Comm ittee (SSC), on which every Member State will be 
represented and which is to be the vehicle for chan ge under the Single Sky legislation, and an Industry 
Consultation Body. 
469. Second, Regulation 550/2004 focuses on harmoni zing the organisation of air navigation 
services in the Single Sky.  It defines the prin cipal responsibilities, which will be assumed by the 
NSBs in order to ensure that they are working on a similar basis whilst further providing the division 
of responsibilities in cases wher e airspace is not regulated by the body of the Member State 
concerned.  The Regulation contains a non-exhaus tive list of areas in which common requirements 
must be established, including human resources, insu rance, systems, and quality of service.  Another 
major element is the introduction of common principl es of certification for air traffic controllers, thus 
facilitating the obligation to recognise certific ates originating from other Member States.  
Furthermore, the Regulation encourages coopera tion between national ANSPs and provides the 
principles of a common charging system.  These include a system of recuperation of fully allocated 
costs, including investments in equipment and the cost of the supervisory body;  non-discriminatory 
pricing with an exception for cross-subsidisation wh ere it is objectively justified and identified;  and 
transparency of pricing. 
470. Third, Regulation 551/2004 governs the organisati on and use of airspace in the Single Sky.  
Its objective is "to support the concept of a progr essively more integrated operating airspace within 
the context of the common transport policy and to establish common procedures for design, planning 
and management ensuring efficient and safe performan ce of air traffic management".  The Regulation 
defines the upper airspace as being above Flight Level (FL) 285
167, but Members may go below to 
reap operational benefits.  The Regulation aims  to develop a single European Upper Flight 
Information Region (EUFIR), to be recognised by ICAO.  The key provision is found in Article 5 
dealing with the reconfiguration of the European skies based on the establishment of Functional 
Airspace Blocks (FABs) to improve capacity, en hance security and lower costs of air traffic 
management services.  These FABs should be based on  operational requirements – in particular traffic 
                                                      
166  Article 1.1. 
167  Flight Level is a standard nominal altitude of an aircraft, referenced to a world-wide fixed pressure 
datum.  S/C/W/270 
 Page 157 
 
 
  flows – rather than existing national borders, to in crease efficiency in the provision of air navigation 
services. 168   
471. Fourth, Regulation 552/2004 is in tended to ensure the interoperability of the European air 
traffic management network and introduce common requi rements for the use of the various air traffic 
management systems.  Compatible systems are expe cted to facilitate extended cooperation in future.  
This might entail the simplification of transfers between operators in different countries, and the 
possibility for foreign bodies to provide air navi gation services to a Member State.  European 
standards are to be developed by standardisation bodies assisted by EUROCAE169 or by Eurocontrol, 
and Member States are required to create or nominate agencies to verify manufacturers' compliance with these norms.  Products will have to carry a decl aration of conformity which will be published in 
the EC Official Journal. 
(b) Working relationships with interested parties 
(i) Military 
472. Airspace is not only divided by national frontiers , but within States into civilian and military 
space.  Military aspects are, a priori,  outside of the scope of competence of the European 
Communities; therefore the Single Sky initiative has sought the cooperation of military bodies.  In 
formalizing the Single Sky legislation, Member States also issued a statement in which they 
undertook to ensure the c ooperation of their military as far as possible, and to involve it in the 
decision making phases of the initiative.  The 2006 Work Programme of the Single Sky Committee reported positive early contacts with military bodies, while noting the need for continued improvement.  However, much seems to depend on whet her Eurocontrol is able to meet its target to 
enhance interoperability between civil and milita ry Communication, Navigation, Surveillance Air 
Traffic Management (CNS/ATM) by 2009.
170   
(ii) Eurocontrol 
473. Eurocontrol, the European Organisation for the Safety of Air Navigation, continues to act 
both as a service provider and as a regulatory body.  This generates some tension with the policies 
adopted by the European Communities regarding th e separation of these functions.  Eurocontrol has 
vast experience with safety-related aspects and, as such, been given a prominent role in the 
development of the Single European Sky.  The EC  has acknowledge the importance of Eurocontrol to 
ensure that the rules and strategies of both sides are consistent, and avoid dup lication of efforts.  A 
formal status was achieved by the signin g of a Memorandum of Cooperation in late 2003.171    
474. The strengthening of mutual ties is also reflected  in the accession of the EC to Eurocontrol in 
2002.  In turn, Eurocontrol will also be invited to the Single Sky Committee where appropriate, even 
if it was not granted full observer status.  Eurocontro l is designated in the Single Sky legislation as the 
body responsible for research and the setting of common requirements in various fields. 
                                                      
168  The principal efficiency objectiv e has been investigated at length in a 2005 Eurocontrol report 
(http://www.eurocontrol.int/prc/gallery/content/public/Docs/fragmentation.pdf). 
169  The European Organisation for Civil Aviation Equipment (EUROCAE) was formed at Lucerne on  
24th April 1963.  At that time, there was no regular forum in Europe where admi nistrations, airlines and 
industry could meet to discuss technical problems.  EU ROCAE was created to fill this gap.  Today, the main 
European administrations, aircraft manufacturers, equipment manufacturers and service providers are members. 
170  Aviation Week & Space Technology 28 November  2005, quoting Bo Redeborn, director of ATM 
strategies at Eurocontrol. 
171  Text available at 
http://ec.europa.eu/transport/air/single_sky/doc/eurocontrol/2003_12_22_memorendum_en.pdf S/C/W/270 
Page 158  
 
  (iii) Single European Sky ATM Research (SESAR) 
475. SESAR (formerly SESAME
172) is the name of the project which will ensure the technical 
implementation of the Single European Sky.  The principal ambition of the project is to secure a coordinated and synchronised develo pment and deployment of the new generation of ATM systems.  
A definition phase has already been launched by Euro control and will last two years.  This will be 
followed by a foundation phase during which the technology required for the new systems will be 
installed (by 2010).  The deployment phase will then focus on research and refinement of technology 
in preparation for use by 2015.  Finally, a colla borative high performance phase should achieve a 
complete change of ATM systems by 2020.  SESAR brings together representatives from aircraft 
operators, ANSPs, airports, Eurocontrol, the Eur opean Commission, industry, research centres, and 
unions.  
(iv) ICAO 
476. In order to achieve the objectives of the Si ngle European Sky initiative, the European 
Commission intends to intensify cooperation with IC AO.  This should ensure that the new rules will 
be compatible with those in neighbouring regions, and integrate the Single European Sky into the 
worldwide aviation network.  The European Co mmunities will put forward relevant proposals at 
events like the Air Navigation Conference and the ICAO General Assembly.  In this context both organisations will discuss the institution of a si ngle European Upper Flight Information Region.
173 
(c) Recent developments 
477. The investments planned for the Single European Sky project are not expected to be recouped 
before 2018.  The Single Sky work programme of 2006 reports that the National Supervisory Bodies 
have been notified to the Commission by all but on e Member State, and that an industry consultation 
body has been set up.174  In addition, implementation rules have been adopted for common 
requirements for ANSPs and on the flexible use of airs pace.  Concrete progress is less evident in some 
other key areas including economic aspects, airs pace design and the European Upper Flight 
Information Region.  Perhaps most worrying is the situation concerning the establishment of 
Functional Air Blocks (FAB);  the Single Sky Co mmittee is already considering taking further 
measures in 2008.  However, Belgium, Germany, Luxembourg and the Netherla nds are reported to be 
establishing FAB Central Europe, which could poten tially be organised with one common service 
provider and one common regulator.   
2. Other integration/cooperation initiatives  
478. The Civil Air Navigation Services Organization (CANSO), which is the umbrella association 
of corporatised ANSPs, is a strong advocate of consolidation in the sector.  The point is made that the 
airspace cannot be efficiently managed on a terrirorial  basis.  Cooperation can be pursued either at a 
governmental level, for example by establishing a common aviation space in the form of a functional air block, or between ANSPs, for example by est ablishing common projects and specifications to 
improve interoperability between systems.  During the period under review, several plurilateral and 
bilateral agreements have been concluded between States and/or AN SPs foreseeing the integration of 
ANSPs. 
                                                     
 
172  The name SESAME (Single European Sky Ma ster Plan) was abandoned due to copyright 
difficulties. 
173  As foreseen by Article 3 of Regulation 551/2004. 
174  EC Document SSC 15, dated 3 February 2006.  S/C/W/270 
 Page 159 
 
 
  (a) Plurilateral agreements 
479. The most significant example of ANSP integration is the establishment of the "RADA" 
group, which brings together Eastern European St ates (Armenia, Azerbaijan, Georgia, Kazhakstan, 
Moldova and the Ukraine).  The participants, ma ny of which are now corporatised, intend to 
cooperate on service planning, the development of ATM concepts, and route development. 
480. The Nordic countries have launched the "NUAC" project which aims to integrate the upper 
levels of Nordic skies which will be controlle d from Sweden by 2007.  Denmark, Sweden and 
Finland, together with Hungary, Ireland and Swit zerland, also launched a Cooperative Air Navigation 
Services (COOPANS) initiative.  All members of COOPANS utilise Thales ATM technology, and 
have undertaken a major harmonisation scheme, which is expected to allow savings of 10 per cent 
over 10 years.  A further agreement has been conc luded by the Irish, Danish and Swedish ANSPs to 
cooperate on system developments.  On a smaller scale, but also reflecting common trends towards 
cooperation, the ANSPs of Germany, Austria and Switzerland have created a common international 
performance evaluation system which will see the co mbination of auditing teams from each of the 
three States.  Germany has separately concluded an  agreement with Switzerland and the Netherlands 
for joint procurement of ANS equipment. 
481. South Africa has launched an initiative to integrate its ATC systems with those of its 
neighbouring countries.  In Eastern Europe, Est onia, Latvia and Lithuania have begun to discuss 
integrating more closely their ATM operations and,  in May 2005, the Czech Republic, Slovenia and 
Austria created the "One ATMS" initiative to ha rmonise of the replacement of current systems 
between 2007 and 2012. 
482. CANSO attributes the coincidence of so many projects to the industry downturn post 9/11 and 
subsequent events.   
(b) Bilateral cooperation 
483. Efficiency enhancing cooperation between ANSPs can also be achie ved at bilateral level.  In 
2004 Airways New Zealand began to provide naviga tion services in China a nd oceanic services for 
the US. 175  In November 2002, a collaborative pact w as signed by Nav Canada and NATS with the 
aim of developing advanced computer-pilot data -link communications across the Atlantic Ocean. 
484. NATS has also been active in concluding an  agreement with the Irish ANSP, IIA, to 
reorganise common airspace and to consider the possi ble establishment of a Functional Air Block.  A 
joint company with the Spanish AN SP, AENA, has been set up with the aim of leveraging the Spanish 
ATM system into the UK.  Austria and Switzerland implemented, a strategic alliance on pre-flight 
briefing, at the end of 2005.  Further discussions have been held between Portugal and Spain, and 
France and Switzerland with a view to integrating their airspaces.  France and Italy have commissioned the joint initiative of the compani es Thales ATM and AMS to develop a common flight 
data processor system.   
C. ICAO
 CHARGING POLICY  
485. Since the last review, ICAO has made some minor  amendments to its charging system for the 
provision of air navigation services.  The content of the initial regulation (document 9082, sixth revision) was notified to Members in WTO Document S/C/W/188.   
                                                     
 
175  The latter consist of navigation and surveillance serv ices of the airspace over the high seas, in this 
case over the Pacific Ocean. S/C/W/270 
Page 160  
 
  486. The 2004 revision has seen the introduction of  two new provisions, responding to recent 
developments.  The changes are intended, first,  to reign in the increase in security costs
176 and second, 
to prevent excessive segmentation of Flight  Information Regions for revenue purposes.177  The latter 
provision is a reminder of the ICAO policy that FIRs should be determined on technical and operational considerations that promot e safety and operational efficiency.   
487. Accompanying these changes, ICAO published Su pplement No. 1 to Document 9082.  This 
Supplement compiles data and laws gathered by way of an ICAO questionnaire enquiring whether 
national legislation is compatible with ICAO char ging principles.  Chart 10 provides an overview of 
the responses received.  Since the majority of St ates (104 out of 185) chose not to respond, no firm 
conclusions can be drawn.  72 states notified to  ICAO that they were fully compliant with ICAO 
policies.
178  The five States, which notified that they did not fully comply are Pakistan, Paraguay, 
Peru, Poland and the Syrian Arab Republic. 
                                                      
176  A new subsection (iv) to paragraph 38 reads "Costs for certain security measures of a preventive 
nature for the provision of air navigation services, which are specifically related to civil aviation and performed 
on a routine basis, may be included in the cost basis for air navigation services to the extent that they have not 
already been considered in the context of safety-related measures.  Civil aviation should not be charged for any costs that would be incurred for more general security functions performed by States such as general policing, 
intelligence gathering and national security.  Further, co sts associated with airport security should not be 
combined with security costs incurred with rega rd to air navigation facilities or services". 
177 Paragraph 41 was supplemented by a new subsection (ix):  "States should refrain from segmenting 
Flight Information Regions (FIRs) solely for the purpose of generating revenue where this would not be related 
to the costs of service provision." 
178  Angola, Argentina, Austria, Bahrain, Belgium, Botswana, Brazil, Bulgaria, Burundi, Canada, Chile, 
China, Columbia, Costa Rica, Cuba, Cyprus, Czech republic, Denmark, Ecuador, Egypt, Estonia, Ethiopia, 
Finland, France, Germany, Greece, Hungary, India, Irel and, Israel, Italy, Kenya, Lithuania, Madagascar, 
Malawi, Maldives, Malaysia, Malta, Mexico.  Netherlands, New Zealand, Norway, Panama, Papua  New 
Guinea, Philippines, Portugal, Republic of Korea, Repu blic of Moldova, Romania, Russian Federation, Saudi 
Arabia, Seychelles, Singapore, Slovakia, Slovenia, Spain, Sri Lanka, Suriname, Sweden, Switzerland, Thailand, The former Yugoslav Republic of Macedonia, Turkey, Uganda, Ukrain e, United Arab emirates, United 
Kingdom, United Republic of Tanzania , United States, Uzbekistan, Vanuatu.  S/C/W/270 
 Page 161 
 
 
  Chart 10 
Government responses  regarding the conformity of 
charging systems with ICAO principles 
 
 
 
    
 
    
 
     
 
 
Source :  Compiled by WTO Secretariat from ICAO Supplement No. 1 to Document 9082. 
 
 
D. TECHNOLOGICAL DEVELOPEMENTS  
488. The introduction of new technologies has been a defining feature of the ATM market during 
the period under review.  Interes tingly, the process of financial innovation coincided with, and may 
have benefited from, the entry of new market participants. 
489. The two main manufacturers of large civil airc raft in the world, Airbus and Boeing, have 
started to play an important role in advanc ing ATM systems.  In late 2001, Boeing presented 
development plans based on a Global Communi cations, Navigation, an d Surveillance System 
(GCNSS), which it believes is equipped to deal with traffic passenger growth over the next 25 years.  
However, Boeing claims not to have a long-term in terest in ATM, and as such does not wish to own 
or operate the systems it intends to build.  They are rather viewed as part of a strategy to promote its 
core business.   
490. In 2002, Airbus followed Boeing's initiative by fo rming the "Air Traffic Alliance" along with 
EADS and Thales.  The European project pursues shor ter term targets and differs from Boeing in that 
it is less dependant on satellite-based support.  The long- term aim is to achieve a fully integrated air-
ground system by 2018.  The "Air Traffic Alliance" is working in close associ ation with the European 
Union's "Vision for 2020" programme, aiming to redu ce noise, accidents while tripling the capacity of 
the skies.   
491. In 2003, Boeing and Airbus announced plans to collaborate to ensure harmonised 
development of systems, which can operate in planes coming from either manufacturer. 
492. More advanced technology has allowed to redu ce the vertical separation between aircraft,  
without any negative impact on safety.  Improved altimeters and autopilots rendered the 2000 feet 
separation between FL 290 and FL 410 unnecessary.  As a result, ICAO recommended that the 7245
104Fully ICAO compliant
Not fully compatible
State response unclear
No responseS/C/W/270 
Page 162  
 
  separation be reduced to 1000 feet, thereby creating six new flying levels and allowing an immediate 
20 per cent capacity increase.  Once all aircraft ar e approved for the new technology, capacity could 
double, and delays may be cut by at least 30 per cent.
179  In addition, there are positive effects on fuel 
costs and access to upper airspace.  The new technol ogy was first introduced in Europe in 2002, and 
has since been widely applied in North Africa, Southeast Asia, North America and over the North 
Atlantic and Pacific Oceans.  Aircraft on certain oc eanic routes have also seen their lateral and trail 
separation criteria reduced from 50 or 100 nautical miles (nm) to 30nm. 
493. An increase in air traffic management operations that are carried out directly in the cockpit, 
might eventually result in the responsibility for co llision-avoidance being shifted from controllers to 
pilots.  The use onboard of Automatic Dependent Surveillance & Broadcast (ADB-S) provides pilots 
with detailed air displays.  Such systems have alrea dy been introduced in parts of the US and tested in 
Australia and Europe by the Swedish ANSP and by  Eurocontrol.  Another important change to 
promote greater awareness of safety within the co ckpit is the use of data-link exchanges between 
pilots and control centres.  Necessary equipment was first put into place at Miami airport and is expected to be introduced in Europe in 2006/2007.  It will help to reduce loads on congested radio 
frequencies and generate further cost savings. 
494. The future development of ATM is expect ed to be based the global introduction of 
CNS/ATM, which combines new satellite technology and established technology.  However, given 
the costs involved, widespread application is still  a distant prospect.  CNS/ATM gives an accurate 
picture to pilots and controllers of all movement on the ground, in the air, and in some instances even 
of the future intended paths of aircraft.  It could allow for "free flight" whereby pilots are able to 
choose the most efficient routing and modify it in real time in view of the exact traffic situation.  The 
US (Global Positioning System, GPS), Europe (Ga lileo) and the Russian Federation (Glonass) have 
all invested heavily into developing this system. 
495. Other technological breakthroughs include the introduction of User Request Evaluation Tool 
(URET) technology in the US, which provides imag es of traffic conflicts twenty minutes ahead of 
incident.  This has allowed the addition of up to 2500 new direct routes saving US$1.5 million per 
control centre and month.  URET will form a key part  of the future "free flight" concept.  The FAA 
has also developed Required Navigational Procedur es (RNP), which stipulate minimum requirements 
for aircraft;  they will allow for decreased separation by virtue of the improved accuracy of aircraft 
placement.  Eurocontrol, which initially introduc ed this procedure in 1998, has enhanced its 
requirements in certain areas with its Precision Rnav specifications in 2003.  Precision Runway 
Monitors (PRM), also developed by the FAA, will allow landing on parallel runways even in 
inclement weather.  The Standard Terminal Au tomation Replacement System (STARS), recently 
introduced in Philadelphia, provides controllers w ith advanced technology colour display screens, 
replacing older monochrome displays which are still in widespread usage.  While , the vast majority of 
these changes is introduced in Europe and North America, the most developed aviation markets, 
similar upgrading will subsequently be necessary elsewhere.   
E. D
ELAYS  
496. Reduction of delays is a key objective for ANSPs.  Punctuality of airlines is not only 
important for customer satisfaction, but also helps to  ensure the smooth operation of global air traffic 
control.  One five minute delay at a hub in the US can have national repercussions throughout the day.  
Delays are expensive for airlines and harmful fo r the environment as they  cause excessive fuel 
emissions.  While ANSPs are frequently blamed for dela ys, 50 per cent  of all flight delays are due to 
airline-internal causes, only 11 per cent are a ttributable to ATC under-capacity and a marginal 
percentage by ATM failures in bad weather (Chart 11).   
                                                      
179  Airline Business.  S/C/W/270 
 Page 163 
 
 
  497. At the time of the first review, delays were of paramount importance, especially owing to the 
crippling effects of the war in Kosovo (see compilation, page 131).  The industry downturn following 9/11, SARS and the wars in Afghanistan and Iraq,  coupled with technological advances such as the 
reduction of vertical separation, which have eased the burden of air traffic management, have brought 
a respite at least temporarily.  However, with tra ffic now reaching record highs in Europe and forecast 
to double within the next fifteen years, delays remain a key challenge for ANSPs.  2005 saw delay 
figures at their highest since 2000 in the United States.  In Europe, the number of flights delayed by over 15 minutes increased by 18 per cent in 2005 comp ared to 2004, a rate which far exceeds traffic 
growth.   
Chart 11 
Primary Departure Delay Causes - 2005 
 
   
 
     
 
    
 
     
 
Source
:  Association of European Airlines (AEA). 
  F. E
NVIRONMENTAL ASPECTS  
498. ANSP operations can have an impor tant impact on the environment.  For instance, the use of 
direct optimised routes as well as the reduction of "circling" time at airport terminals help to reduce fuel emissions and noise pollution.  In Europe, the situation has become a matter of urgency as the EC 
Environment Ministers have called on the Commission to table proposals for an aviation emissions-trading-scheme by the end of 2006.  In response, CANSO members set up a task force to measure the 
environmental impact of ANSP operations and iden tify ways of mitigating it.  An Environmental 
Forum has been mandated to facilita te the exchange of information and experience within the air 
navigation services industry.    50%19%13%
11%
4%
3%Airline
Airport
Weather
En-route
Security
Misc (98/99)S/C/W/270 
Page 164  
 
  G. 
NATIONAL DEVELOPMENTS  
1. Europe 
499. European ANSPs have sought to deepen their cooperation with airlines, with a view to 
achieving greater flexibility in sequencing arriva ls and departures, allocating gate resources and 
reducing expensive down time on the ground.  The Dutch ANSP, LVNL, and the national airline, 
KLM, intend to cooperate with a view to being able even ten minutes before touch-downs to work 
together on sequencing and prioritising.   
500. Modernisation elsewhere in Europe has been unequal.  Many Eastern States have seen an 
explosion of traffic after the enlargement of the European Union.  In response, Poland, Albania, 
Lithuania and (ex) Serbia and Montenegro have made major upgrades to their ATM systems during 
the period under review. 
501. The Russian Federation has undertaken to m odernize its ageing ATM systems.  While 
remaining under government ownership, there have been indications that the authorities ponder the 
possibilities of corporatizing and increasing by exposing to market principles their ANS provider Rosaeronavigatsia.  In 2003, Russia held discussions on the feasibility of reducing vertical separation 
and enhancing routing.   The room for improvements in Russian  airspace appears vast;  early trials 
undertaken during the review period demonstrate th at the introduction of a CNS/ATM system could 
save up to two hours of flying time compared with traditional routes.
180  
2. Africa 
502. South Africa has made further significant progr ess over the past five years in the field of 
ATC.  Air Traffic Navigation Services (ATNS), the ANSP of South Africa, scheduled the entry into 
force of a satellite navigation system for 2006, while maintaining and updating its conventional 
ground system.  This is expected to pave the wa y for a complete restructuring of South African 
airspace.  ATNS has also recruited the help of Thal es ATM to ensure the modernisation of three flight 
information regions.   
503. South Africa cooperates with the Agency for the Safety of Aerial Navigation in Africa and 
Madagascar (ASECNA), a 14 member agency for air safety in the region, to promote the 
harmonisation of operations and communications.  ASECNA has i nvested US$264 million to upgrade 
services and equipment and reduce incidents.  Th e agency has also ente red into cooperation 
agreements with the French authorities, Eurocontro l, Algeria and several Indian Ocean States.   
504. One of the most ambitious initiative in Africa is  the project by the East African Community 
States (Tanzania, Kenya and Uganda), to create a functional airspace block with centralised ANS 
provision. The feasibility of establishing a common Upper Flight Information Region is currently 
being studied.   
505. Despite recent progress, accident rates in Africa have remained disproportionately high.  
According to IATA data, Africa represented 25 per cent of accidents in 2004 despite contributing only 
4.5 per cent of world air traffic.  IATA set the target of reducing accidents in the regions by 25 per 
cent over the 2004-2006 period.   
506. Another particular concern in Africa relates to  understaffing.  For example, in Equatorial 
Guinea there are reportedly only four qualified controllers.181  The situation has been aggravated by 
                                                      
180  CANSO Air Traffic Management Review 2006. 
181  CANSO Air Traffic Management Review 2004.  S/C/W/270 
 Page 165 
 
 
  migration of staff towards the Middle East, which is e xperiencing fast growth in air transport.  At least 
in South Africa, some support has been provided by Naviair, the Danish ANSP, which after streamlining post privatisation has sent cont rollers to make up for the shortfall. 
3. Asia and Oceania 
507. Asia has made significant progress in updati ng its ATM systems during the period under 
review.  Change has been most dynamic in Chin a, whose airspace has been reorganised.  It will 
ultimately be reduced to five air control centr es in 2010, as opposed to 27.  These organisational 
changes have been accomp anied by institutional reforms, including the transfer of airspace from 
military to civilian use.   
508. Thailand has also fundamentally reorganised of its ATM, an initiative made possible by the 
construction of a new Bangkok international airp ort at Suvarnabhumi.  The Philippines have 
completed the basic design of their future CNS/ATM system due to be operational by the first quarter 
of 2008.   
509. Despite these strides, airlines in the re gion are seeking further improvements.  The 
Association of Asia Pacific Airlines has called for increases in route efficiency, arguing that a one-
minute reduction of flight time would result in savings of US$2.7 billion per year. 
510. New Zealand has undertaken the complete repla cement of its ATC system under a ten year 
partnership contract with Lockheed Martin.  The c ountry has also begun to reorganise its airspace, in 
particular since it has taken control of ai rspace management over Tonga and Samoa.   
4. North America 
511. The changes that have occurred, in the United St ates, fall short of full corporatisation for the 
time being, and privatisation is not on the agenda.  Executive Order 13180 was amended on 
6 June 2002 to remove the "inherently governme ntal function" of air traffic management.
182  B o t h  
unions and the general public voiced concerns on this modification, seen as a step towards 
privatisation.  Fears have been expressed that priva tisation of ATC would be in sharp contrast with the 
nationalisation of airport security.  
512. The Federal Aviation Authorities (FAA) has undergone major restructuring by creating a new 
division the Air Traffic Organisation (ATO).  One important initial change was the introduction of the 
institutional separation between service provision an d the regulatory oversight.  This separation is 
intended to bring a new element of accountability into  the operations of the ATO and to speed up 
decision making.  
513. The largest project undertaken to date by the ATO has been the restructuring of its service 
areas.  Three service centres have been created to  support the three ATO service areas, Eastern, 
Central and Western, and replace nine service area offices.  
514. The ATO has consistently underlined that its firs t commitment is to promote the safety of air 
traffic management.  It is not yet clear whether th e ATO will aim to cut labour  costs in the same way 
as many corporatised ANSPs have managed to do:  currently 75 per cent of ATO's costs are staff 
created for market-orientated ANSPs.   
                                                      
182  White House Press Release available at:  
http://www.whitehouse.gov/news/releases/2002/06/20020606-5.html S/C/W/270 
Page 166  
 
  515. In 2007, the FAA will issue its plan for the futu re financing of ATM services.  The current 
regime of taxes and fees, deposited into an Avia tion Trust Fund, will expi re on 30 September 2007.  
Discussions have already started as to whether user  fees will be introduced and, if so, whether fees 
will be directly proportionate to the cost of servi ce.  The latter move could result in general aviation 
being confronted with an almost four-folded increas e of fees.  In turn, cost s for commercial airlines 
would be reduced if the cross-subsidisation of ge neral aviation were to be eliminated.  A more 
traditional or intermediate solution would subject ge neral and business aviation to a fuel tax.  FAA 
analysts, however, predict that user fees will soon become operational in the US.
183 
516. NAV Canada has continued to streamline dur ing the period under review.  Its fees in 2003 
were still 28 per cent less than the tax they re placed.  Amongst the new initiatives employed in 
Canada has been the leasing rather than purchasing of  equipment, which is believed to have allowed 
savings of C$56 million per year.  Furthermor e, NAV Canada undertook a major modernisation 
programme of its facilities in 2003. 
5. Latin America 
517. Despite the high increase in passenger volumes in the region, ATC progress has been 
reportedly slow and largel y uncoordinated.  This may lead to increased incompatibility of systems and 
further delay the establishment of an efficient regional system of air traffic management.  IATA has underlined the need for modernisation in the regi on and further attention being given to safety, 
particularly in view of increasing traffic.  The stro ng influence of the military in matters of ATC has 
hindered progress in the field of air traffic management, according to CANSO in a 2004 Report.   
518. There have been calls in the region to devel op satellite-based air navigation, but the response 
so far has been slow.  Mexico and Brazil have ma de progress on this front.  While Mexico has joined 
the North American CNS/ATM Implementation and Transition Plan, Brazil has conducted trials on a 
satellite-operated system and considers the reorganization of its airspace.   
X. ANY OTHER SUPPORTING SERVICES
184 
 (see above section V II on ground handling) 
 
 
__________ 
 
  
                                                     
 
183  Airline Business, April 2006. 
184  CPC 7469 covers cleaning and disinfecting services, fire fighting and fire protection services, and 
hangar services.