Communication from the Commission to the Council - AIR TRANSPORT RELATIONS WITH THIRD COUNTRIES
Date: 1992-10-21
Institutions: DG VII – Transport, European Commission
Subjects: EU competition policy, air law, air transport, bilateral agreement, carrier, common transport policy, competitiveness, international negotiations, international transport, third country

CCI\MISSION  OF  THE  EUROPEAN  CCI\MUNITIES 

COM(92)  434  final 

Brussels.  21  October  1992 

Communication  from  the  Commission  to  the  Counci  I 

AIR  TRANSPORT  RELATIONS 

WITH 
THIRD  COUNTRIES 

- 2  -

INTRODUCTION 

I. 

Description  of  the  Existing  Situation 
Existing  Economic  Situation 
BIiaterai  Agreements 
BIiaterai  Agreements  and  Community  Law 
Existing  Community  Relations  with  Third  Countries 

11.  DevelOl)llent  of  a  Comnlunlty  Polley 

Community  and  national  Interest 
The  alms  of  a  Community  Polley 
Requirements  of  the  Single  Market  and 
Implementation  of  Treaty  principles 

111.  Establlshlllent  of  Procedures 

Responslblllty  for  Negotiations 
Negotiations  at  Community  Level 
Negotiations  at  Member  State  Level 
coordination 
Negotiating  directives 
The  Allocation  Procedure 
Cont lnul ty 
Confldentlallty 
Documentation 

IV.  Decisions 

Annex 

Proposal  from  the  Commission 

Annex  11 

The  procedure  step  by  step 

Annex  111 

Statistical  Tabulations  - General 

Page 

3 

4 
5 
6 
8 

10 
13 
17 

21 
23 
24 
24 
26 
26 
28 
28 
28 

29 

30 

46 

49 

Annex 

IV 

The  EC/US  Market  - A statistical  overview 

56 

Annex  V 

Agreement  on  Air  transport 

84 

- 3  -

AIR  TRANSPORT  RELATIONS  WITH  THIRD  COUNTRIES 

INJAOQUCJION 

1. 

2. 

In  February  1990  the  Commission  put  forward  a  proposal  for  a  Council 
Decision  on  a  consultation  and  authorization  procedure  for 
agreements  concerning  commercial  aviation  relations  between  Member 
States  and  third  countrles< 1> which  untll  now  has  not  been 
discussed  by  the  Council.  The  main  consideration  for  putting 
forward  this  proposal  was  that  with  the  gradual  development  of  the 
Internal  market,  the  Community  wlll  also  externally  have  to  act  as 
one.  Furthermore,  It  Is  necessary  to  take  account  of  the  special 
characteristics  of  the  aviation  sector:  considerable  goverment 
Influence,  very  frequent  negotiations.  protectionism,  State 
ownership  of  air  carriers,  etc. 

The  Council  of  Ministers  adopted  the  third  and  final  air  transport 
pol Icy  package  at  its  meeting  of  22  and  23  June  1992(2),  and 
consequently  the  single  market  for  aviation  will  be  a  reality  as 
from  1  January  1993.  The  fact  that  some  fundamental  Community 
principles  are  endangered  by  the  present  situation 
forces  the 
Community  to  consider  relations  with  third  countries  without  delay. 
The  establishment  of  the  single  market  Is  likely  to  Improve  the 
competitive  position  of  Community  air  carriers  In  relation  to  some 
of  the  very  efficient  carriers  of  third  countries.  It  will  be 
necessary,  however,  to  complement  the  Internal  market  with  a 
Community  pol Icy  for  the  relations  with  third  countries  to  allow 
them  to  make  full  use  of  the  new  commercial  opportunities. 
In  order  to  facilitate  the  discussions  In  the  Council  and  after 
consultations  with  experts  In  this  area.  the  Commission  has  decided 
to  put  forward  an  additional  communication  which  sets  out  In  some 
detail  how  an  external  aviation  pol Icy  can  be  developed. 

3. 

The  following  three  areas  are  addressed  In  this  Communication  and 
appropriate  proposals  for  Council  decisions  are  made: 

I. 

Description  of  the  existing  situation 

II. 

Development  of  a  Community  policy 

111. 

Establishment  of  transitional  procedures 

(1) 
(2) 

5080/90  AER  16  C0M(90)  17  final 
OJ  No  L  240,  24.8.1992,  p.  1. 

- 4  -

I • 

DESCRIPTION  OF  THE  EXISTING  SITUATION 

Existing  econo11lc  situation 

4. 

5. 

6. 

7. 

For  the  majority  of  Community  air  carriers,  operations  to  non 
European  countries  account  for  more  than  501  of  their  total 
operations.  Table  A and  Table  E of  Annex  Ill  detail  for  the  main  EC 
flag  carriers  the  relative  Importance  of  different  geographical 
markets  In  number  of  passengers  and  In  revenue  passenger  kilometer 
respectively  (RPK).  Not  surprlslngly  these  tables  also  demonstrate 
that  the  North  Atlantic  Is  the  most  significant  of  the  markets  In 
terms  of  traffic,  a  fact  also  reflected  In  Table  B which 
addltlonally  shows  the  major  significance  of  traffic  with  the  EFTA 
States.  For  US  airlines,  domestic  air  services  account  for  some  70X 
of  their  total  operations,  while  In  the  case  of  the  AEA  alrl Ines 
their 
Intra-Community  services  represent  less  than  30X  of  their 
total  operations.  This  demonstrates  the  relative  importance  of  non 
EC  markets 

to  EC  carriers. 

To  a  large  extent  the  same  picture  emerges  from  the  ICAO  statistics 
which  Include  all  Community  air  carriers.  However,  the  EC  and  EFTA 
gain  In  Importance  because  the  addltlonal  Community  air  carriers  are 
mainly  domestic  or  short  haul.  From  table  B  It  would  seem  that  It 
Is  In  particular  France,  Germany,  Italy,  Netherlands,  Spain  and  the 
UK  which  have  more  than  20X  of  International  activity  going  beyond 
Europe.  However, 
Importance  of  the  International  sector  Increases  considerably  (Table 
E). 

Is  taken  Into  account, 

in  case  RPK 

the 

It  Is  also  Interesting  when  looking  at  table  C  that  while  the  North 
Atlantic  market  is  important  for  all  Member  States  (except  maybe 
Luxembourg)  other  International  markets  vary  In  Importance  for 
Individual  Member  States. 
Portugal,  the  Middle  East  for  France  and  Italy,  the  Far  East  for 
quite  a  few  Member  States  while  Austral la  etc  Is  Important  for 
Greece  and  UK. 

South  America  Is  Important  for  Spain  and 

Table  D summarises  traffic  growth  by  long-haul  market  since  1980  as 
well  as  forecasting  traffic  to  the  year  2000.  This  table  shows  that 
the  North  Atlantic  market  will  continue  to  be  Important  with  a  high 
growth  rate,  while  Asia  will  grow  in  significance. 
In  view  of  the 
Influence  of  the  North  Atlantic  market  on  the  total  operations  of 
Community  air  carriers  a  separate  analysis  of  the  US/EC  situation  is 
attached  (Annex  IV)·which  shows  imbalances  in  opportunities  for  the 
respective  carriers,  but  also  hfghllghts  the  relative  success  that 
EC  carriers  have  had  until  now  In  spite  of  the  Imbalances. 

- 5  -

a. 

9. 

In  order  to  see  whether  this  encouraging  situation  will  continue  the 
Commission  commissioned  an  economic  study  on  the  competitiveness  of 
the  eommunlty  alrl ine  lndustryC1). 
The  study  Indicates  Increasing  competitive  pressure  from  third 
country  air  carriers  on  markets  of  prime  Interest  to  the  Community 
(North  Atlantic  and  Asia).  The  analysis  of  the  technical,  economic, 
flnanclal  and  market  strength-related  performance  of  a  sample  of  40 
European,  North-American  and  Asian  air  carriers  led  to  the  fol lowing 
key  results: 

- European  air  carriers  do  relatively  well  In  the  area  of  technical 
operating  efficiency,  but  many  of  them  have  a  low  performance  In 
relation  to  labour  efficiency 

- European  air  carriers  have  relatively  high  yields  compared  to 

their  US  competitors 

- There  is  room  for  improving  the  overall  cost  efficiency  of  the 

Community's  alrl lne  Industry 

The  financial  stabi I lty  of  the  Community's  alrl ine  industry  is, 
on  average,  better  than  that  of  US  competitors. 

From  the  study  It  can  be  concluded  that  the  high  yield  performance 
of  the  Community's  airline  Industry  has  - despite  some  obvious 
problems  In  the  area  of  operating  costs  - until  recently  ensured  a 
reasonable  degree  of  financial  and  economic  stab II  lty.  However,  It 
Is  also  Indicated  by  the  study  that  basic  changes  In  the  competitive 
situation  are  underway  In  the  form  of  llberallzatlon  and 
globalization  of  the  Industry,  which  wlll  reshape  the  market 
In  this 
structure  on  the  North-Atlantic  and  on  other  markets. 
regard,  according  to  AVMARK,  a  fundamental  reorientation  of  the 
International  regulatory  framework  may  be  needed  and  It  wl  I I  have  to 
be  analysed  carefully  what  new  measures  are  needed  to  meet  the 
changing  environment  In  civil  aviation. 

BIiaterai  agre81118nts 

10. 

On  the  basis  of  the  Chicago  convention  (1944)  the  worldwide 
regulatory  framework  for  civil  aviation  has  developed  by  bilateral 
Air  Services  Agreements  (ASA's).  These  agreements  regulate  the 
market  conditions  under  which  Community  air  carriers  are  able  to 
operate  services  to  third  countries.  At  present  each  Member  State 
has  a  considerable  number  of  ASA's  with  third  countries.  On  average 
there  are  some  60-70  per  Member  State.  These  agreements  do  not 
differ  fundamentally  in  form.  Their  main  body  contains  the  general 
prlnclples,  whereas  one  or  more  annexes  spell  out  the  detal led 
provisions  I.a.  the  routes  which  may  be  operated,  the  capacity  which 
can  be  used  and  the  fifth  freedom  rights  that  are  available. 

(1) 

AVMARK  Inc  "The  Competitiveness  of  the  European  Community's  air 
transport  industry",  28  February  1992. 

- 6  -

Often  there  are  (Confldentlal)  Memoranda  of  Understanding  (MOU's)  or 
exchanges  of  letters  which  deal  with  such  matters  aa  compensations, 
the  obllgatlon  for  carriers  to  conclude  cooperation  agreements, 
marketing  provisions,  etc. 
but  often  changes  In  the  market  force  airlines  to  adjust  their 
operating  schedules,  which  means  that  the  annexes  or  MOU'a  may  have 
to  be  renegotiated  freQuently.  In  fact  some  Member  States  have  quite 
a  large  number  of  negotiations  per  year. 

Some  ASA'a  remain  unchanged  for  years, 

Due  to  the  level  of  detail  In  which  bl lateral  agreements  regulate 
the  market,  these  agreements  determine  to  a  large  extent  the 
commercial  opportunities  of  airlines.  Depending  on  the  pol Icy  of  the 
governments  In  Question,  there  are  very  liberal  and  flexible 
agreements,  but  there  are  also  very  restrictive  agreements  which 
llmlt  the  air  carriers  In  their  operations  and  In  fact  eliminate 
competition  on  particular  routes  nearly  completely.  An  example  of  a 
recently  concluded  traditional  ASA  la  shown  In  Annex  v.  It  Is  also 
clear  that  Member  States  do  not  follow  the  same  pol Icy  regarding 
Individual  third  countries. 
As  an  example  an  overview  of  the 
agreements  with  the  United  States  Is  shown  In  Table  1<1>. 

The  most  recent  agreement  between  the  United  Kingdom  and  the  United 
States  Is  Interesting  In  this  respect.  In  this  agreement  the  UK  has 
anticipated  the  completion  of  the  Internal  market  by  Introducing 
possibilities  for  UK  air  carriers  to  operate  from  other  Member 
States  to  the  US  (7th  freedom).  Thia  la  probably  a  novelty  In  ASA's. 
However,  these  traffic  rights  can  only  be  exercised  with  the 
agreement  of  the  other  Member  State  or  when  community  rules  have 
been  established. 

11. 

12. 

BIiaterai  Agreeftl8nts  and  Community  Law 

13. 

The  majority  of  existing  ASA's  contain  elements  which  are  not 
compatible  with  or  potentially  Infringe  community  law,  for  example 
as  seen  below  with  respect  to  the  competition  rules,  the  right  of 
establishment  and  computer  reservation  systems. 

competition  rules 

14. 

Many  of  the  existing  bl  lateral  agreements  contain  provisions  which 
are  not  In  line  with  the  competition  rules  of  the  Treaty.  They 
encourage  or  require  carriers  to  agree  on  pricing,  schedules, 
capacity  and  revenue  sharing.  Member  States  participating  In  ASAs 
with  such  provisions  would  violate  their  duties  under.Articles  5  and 
85  of  the  EEC  TreatyC2). 

(1) 

The  table  reflects  the  situation  as  It  existed  In  1991. 
Developments  that  have  taken  place  since  are  not  Inserted  (e.g. 
the  "open  skies"  agreement  NL-US). 

(2)  Court  of  Justice,  Judgment  of  11  April  1989  In  case  66/86  (Ahmed 

Saeed). 

Country 

Pricing 

France 

Ge1111Gny 

Country  of 
origin 

Country  of 
origin 

Italy 

Country  of 
origin 

Netherland•  Double 

Dl1opproval 

Scandinavia  Double 

approval 

Spain 

Double 
approval 

United 
Kingdom 

Double 
approval 

TABLE  I  US/E\R)PE  BILATERALS 

Agreed  gat~• for 

Beyond  rl9hh 

Capacity 

US  carrlen 
In  Europe 

European 
In  US 

5  Te111porarl ly 
rHtrlcted• 

5 

10 

1 

Open 

Open 

12 

(plua  2  ouhlde 
bl lateral) 

us 

European 

Other  ltt111a 

20+ 
(fra11  Parle, 
Nice,  Lyon) 

1 

Open 

Open 

De1lgnatlon  (Maxl11111  No  of 
carrier•) 

us 

Europe 

8 

8 

5 

1 

frequency  I I.-
lted  to  dally. 

Uni lmlted 

Uni lmlted 

Open 

Open 

4 

8 

1 

Open 

1 

Open 

7 
(1 lmlted 
route  by 
route) 

2  RHtricted 
route  by 
route 

( I imlted 
route  by 
route) 

18 
( incl. 
terr I torle1) 

3 

5 

4 

12 

18 

8 

(plu1  3  ouhlde 
bl lateral) 

Open 

8 

Open 

Cargo  I• 
alngle 
dHlgnatlon 

-

-

..._, 

1  No  change  of 

(fran 
Anchorage)  for  US  f lfth 

gauge  language 

freedom  r I gh ta 
to  Scandinavia 

10 

25 

23 

(f ram 
Madrid, 
Barcelona) 

17 

(from  San 
Juan,  Mianl) 

' 

27 

7+ 

London  ace••• 
limited  by 
airport:  only 
2  US  carrier• 
al lowed  at 
Heathrow. 

•Te111porarlly  reatrlcted  for  addltlonal  deelgnation  on  apeclflc  rout••  for  US  carrier(cid:127)  until  Nov•ber  1992. 
Source:  Mainly  Airline  Bu1lne11  - Novanber  1991 

- 8  -

Nat1ona11ty  clauses 

15. 

According  to  traditional  bl lateral  agreements  a  Contracting  Party 
has  the  right  to  refuse  to  accept  the  designation  of  an  airline  or 
airlines  from  the  other  Contracting  Party  in  any  case  where  it  is 
not  satisfied  that  the  airline  or  alrllnes  are  "substantially  owned 
and  effectively  control led"  by  nationals  of  that  Contracting  Party. 
However,  the  Treaty  rules  on  right  of  establishment  create  the  right 
for  eommunlty  citizens  to  establish  themselves  anywhere  In  the 
eommunlty  while  otherwise  respecting  the  rules  of  the  Member  States 
in  question.  This  prlnclple  has  speclflcally  been  confirmed  In  the 
third  package< 1 > of  the  Community's  air  transport  pol  Icy.  This 
means  that  a  Community  air  carrier  may  well  be  controlled  by  another 
nationality  than  that  of  the  Member  State  In  which  the  air  carrier 
such  an  air  carrier  has  to  be  treated  as  any  other 
Is  registered. 
air  carrier  established  in  that  Member  State  for  which  the  majority 
of  shares  are  owned  by  Its  citizens  and  cannot  be  lawfully  excluded 
from  having  the  possibll lty  to  operate  to  third  countries.  These 
clauses  in  the  ASAs  are  therefore  contrary  to  Community  law,  since 
they  discriminate  on  the  basis  of  nationality  and  undermine 
effectively  the  right  of  establishment.  Although  these  Illegalities 
have  not  created  any  apparent  problems  so  far,  It  Is  clear  that  with 
the  third  package  which  specifically  envisages  the  creation  of  non 
national  air  carriers,  the  situation  may  change.  Indications  already 
exist  that  these  rights  will  be  used. 

Computer  Reservation  Systems 

16. 

There  are  Member  States  that  have  accepted  clauses  In  their 
bilateral  agreements  with  the  United  States  concerning  non 
discrimination  within  CRS  displays  and  discrimination  among  CRS 
suppliers.  Member  States  are  not  competent  bl laterally  to  accept 
obligations  which  furthermore  may  Infringe  on  Community  law.  In  fact 
some  of  the  clauses  concerned  are  not  compatible  with  the  code  of 
conduct  on  CRSs  and  thus  create  a  serious  legal  problem  especially 
If  discrimination  has  been  accepted. 

Existing  Colnnunlty  relations  with  third  countries 

17. 

Already  today  there  are  agreements  and  negotiations  between  the 
Community  and  third  countries  for  the  aviation  sector: 

The  Community  has  concluded  an  agreement  on  civil  aviation  with 
Norway  and  Sweden<2>.  This  agreement  extends  the  scope  of  the 
Community  air  transport  legislation  to  these  countries,  Including 
the  competition  rules. 

(1)  Article  4  of  Counci  I  Regulation  (EEC)  No  2407/92  of  23  July  1992  on 

Llcencing  of  Air  Carriers  (OJ  No  L  240,  24.7.1992). 
OJ  No  L  200/20,  22.6.1992. 

(2) 

- 9  -

The  draft  agreement  between  the  Conlnunlty  and  the  EFTA  States,  the 
European  Economic  Area  agreement  CEEA),  Includes  aviation.  When  the 
agreement  enters  into  force  on  1-1-1993,  as  envisaged,  the  Community 
leglslatlon  concerning  clvll  aviation  will  also  apply  In  the  EFTA 
countries.  This  wl  I I  make  the  separate  agreement  with  Norway  and 
Sweden  obsolete. 

The  NEuropean  agreementsN  concluded  between  the  community  and 
Poland,  Hungary  and  Czechoslovakia  envisage  the  conclusion  of 
agreements  concerning  the  conditions  of  access  to  markets  and  the 
supply  of  services  In  conformity  with  the  Community's  common 
transport  pol Icy,  with  a  view  to  assuring  a  coordinated  development 
of  transport  between  the  Parties  adapted  to  their  reciprocal 
commercial  needs. 

The  development  of  the  annex  on  air  transport  In  the  framework  of 
the  General  Agreement  on  Trade  In  Services  (GATS)  has  resulted  In  a 
Community  approach  to 
committee.  However,  the  proposed  air  annex  to  date  excludes  traffic 
rights  and  associated  matters  from  the  scope  of  GATS  for  at  least 
five  years. 

the  aviation  sector  through  the  113 

- 10  -

11.  QEVEt,OPNENJ  OF  A COMMUNITY  POLICY 

national  Interest 

18. 

19. 

In  the  development  of  a  Community  policy  due  account  has  to  be  given 
to  the  potential  conflict  between  on  the  one  hand  the  Interests  of 
the  eommunlty  as  a  whole  and  on  the  other  hand  the  national 
Interests  of  Member  States.  The  creation  of  the  Internal  market 
gives  new  opportunities  to  Community  air  carriers,  but  their 
competitive  position  could  be  even  further  enhanced  If,  with  regard 
to  third  countries,  the  Community  would  take  full  advantage  of  Its 
changed  position  and  Instead  of  being  divided,  would  speak  with  one 
voice.  It  cannot  be  denied  and  It  has  been  experienced  In  other 
economic  areas  that  the  Community,  as  one  of  the  most  Important 
trading  blocks  in  the  world,  effectively  creates  additional 
opportunities  to  those  created  by  a  national  approach.  It  would  be  a 
serious  mistake  if  for  whatever  reasons  common  action  is  delayed  and 
the  competition  from  third  countries  Is  given  a  chance  to  take 
further  advantage  of  the  present  divided  situation. 

As  a  consequence  of  the  very  large  influence  of  governments  on  the 
commercial  opportunities  of  air  carriers,  Community  Member  States 
are  In  direct  competition  with  each  other  In  their  struggle  to  get 
better  access  to  markets  for  their  air  carriers.  This  can  lead  to 
situations  where  Member  States  may  forget  the  broader  perspective  of 
eommunlty  interest  and  agreements  are  concluded  which  sometimes  only 
meet  the  short-term  interests  of  an  Individual  Member  State  or  of 
Its  carriers,  Irrespective  of  the  costs  for  the  Community  as  a 
whole.  The  "laissez-faire"  approach  of  the  US  for  example  may  be 
tempting  to  certain  individual  States  but  If  taken  up  In  an 
uncoordinated  manner  the  results  may  not  be  In  the  common  Interest. 

20. 

The  following  data  demonstrate  the  equilibrium  between  the  economic 
Importance  of  the  relevant  markets  (Europe,  U.S.)  on  the  one  side 
and  the  disequilibrium  in  relation  to  traffic  rights  actually 
obtained  on  the  basis  of  the  fragmented  negotiating  approach  of 
Member  States  on  the  other  side. 

- 11  -

EC/US  MARKET  COMPARISON  - August  1991 

A. 

Traffic  Data  (actual  scheduled  services) 

E .c.  carr lers 

U.S.  carr lers 

American  gateways 
(In  total  55) 

E.C.  gateways 
(In  total  28) 

Cabotage  rights  In  the  U.S.  VS 
5th  freedom  traffic  rights 
Within  the  E.C. 

5th  freedom  rights  (excluding 
lntra-E.C.  operations) 

Number  of  routes  operated 
between  the  U.S.  and  the  E.C. 

22 

27 

-

10 

97 

54 

22 

20 

33 

139* 

(*) 

276  advertised  operations  with  122  city  pairs  served  under  one 
flight  number  but  with  an  aircraft  charge. 

Source 

AEA 

- 12  -

e. 

Alrllne  Performance  Data  (1990) 

Total  Number  of  air  carriers 
operating  Jet  aircraft 

Passengers  carried  (1,000) 
(lntra-E.C./U.S.  domestlc)(1) 

RPKs  (bllllon)  (2) 

RPKs  for  Intra-European  and  US 
domestic  traffic  (billion)  (3) 

Financial  profit/loss 
(bll I Ion  U.S.$)  (1) 

Net  profit/loss  (1) 

E .C.  carr I era 

U.S.  carr lers 

76 

2-4 

95,611 

373,-478 

-417.2 

66.9 

(0.8) 

(2.1) 

759.8 

-499.0 

( 1. 7) 

C 1. 3) 

AEA  carriers 

(1) 
(2)  All  EC  carriers  Including  charters  and  regional  airlines 
(3) 

E.C.  AEA-member  carriers 

c. 

Economic  Data 

Population 

327,136,500 

2-46,329,000 

E.C. 

U.S. 

GDP  at  current  prices 
and  current  exchange  rates 
( b I I I I on  ECU) 

GDP  at  market  prices  per 
capita  (ECU) 

Imports  from  U.S. 

Imports  from  E.C. 

-4,-406.9 

'4,658.0 

13, -421 

18,910 

8-4 

-

-

78 

Source 

Eurostat  - 28th  Edition  1991 

- 13  -

21. 

It  Is  worth  noting  that  In  recent  months  It  has  become  clear  that 
the  development  of  the  Internal  market  has  given  a  stimulus  to  new 
negotiations  since  many  third  countries  are  Interested  In  obtaining 
Improved  access  to  the  Community  before  1993.  In  return  they  are 
prepared  to  grant  additional  rights  to  Member  States'  air  carriers. 
Thia  may  lead  to  a  sell Ing-off  of  traffic  rights  valuable  to  the 
Community  as  a  whole.  For  this  reason  It  Is  necessary  and  urgent 
that  a  framework  for  Community  coordination  and  negotiation  Is 
established  quickly  so  that  the  balance  of  Interests  can  be  ensured. 

The  al118  of  a  Colllllunlty  pol Icy 

22. 

23. 

Each  bl lateral  relationship  Is  different  depending  on  the 
competitive  situation  of  the  air  carriers  concerned  and  on  the 
policies  and  legislations  in  force  In  the  third  country.  Therefore  a 
detailed  examination  of  Individual  relationships  -
cooperation  with  Member  States  and  with  Interested  parties  - must  be 
the  basis  for  developing  specific  objectives,  priorities  and 
directives  for  actual  negotiations.  What  Is  required  without  delay 
Is  the  development  of  adequate  procedures  for  determining  Community 
priorities  for  the  negotiations,  which  take  account  of  the 
specificities  of  the  relationships  concerned. 

In  close 

Some  components  of  a  general  community  pol Icy  can  already  be 
Identified.  Clearly  such  a  policy  will  have  to  be  In  line  with  the 
objectives  of  the  Treaty  of  Rome.  This  wl  II  Imply  ensuring  the 
proper  functioning  of  the  Internal  market  and  Implement  fut ly  the 
principles  of  the  right  of  establishment  and  the  free  provision  of 
services,  taking  into  account  the  need  to  avoid  predatory  behaviour 
(para  36-49).  The  main  legal  concerns  as  seen  in  the  fol lowing 
paragraphs  exist  in  respect  of  the 

following  areas: 

- Competition  rules 
- Nationality  clauses  and  ownership 
- Non-Discriminatory  allocation  of  traffic  rights. 

24. 

The  general  economic  policy  objectives  which  were  set  out  In  the 
explanatory  memorandum  to  the  proposals  for  the  third  phaseC1)  are 
relevant  as  wel  I  as  the  aims  to: 

A.  promote  the  interests  of  Community  air  carriers  and  their 

workers; 

B.  promote  the  Interests  of  consumers; 

C.  promote  the  interests  of  airports  (regions); 

(1)  COM(91)  275  final  of  18  September  1991. 

- 1~  -

25. 

Of  course  Community  policy  cannot  develop  in  isolation,  as  third 
countries  have  their  pollcles  and  leglalatlon  which  wlll  have  to  be 
taken  Into  account.  Reciprocity  has  always  been  a  leading 
prlnclple  In  aviation  negotiations  and  the  Community  wlll  usually 
have  to  negotiate  on  that  basis. 

A. 

The  Interests  of  Community  air  carriers 

26. 

27. 

28. 

29. 

The  establishment  of  the  common  Internal  aviation  market  should 
Improve  the  situation  for  Community  air  carriers  because  they  can 
take  advantage  of  the  benefits  of  a  large  home-market,  they  can 
freely  schedule  their  services,  adjust  capacity  and  offer  tariffs  In 
the  market  according  to  their  own  commercial  Judgement.  Furthermore, 
they  will  be  able  to  establish  themselves  anywhere  In  the  Community 
according  to  harmonised  llcenclng  criteria.  This  new  flexlblllty 
will  stimulate  competition,  Improve  cost  efficiency  and  yield 
management  and  should  eventually  make  community  air  carriers  more 
competitive  vis-a-vis  third  country  competitors. 

However,  air  carriers  will  need  some  time  to  optimise  their  networks 
and  the  structure  of  the  industry  needs  to  adjust  to  the  new 
situation.  After  this  Initial  phase  they  should  be  able  to  operate 
on  a  more  competitive  basis.  Operational  barriers,  which  are 
created  by  agreements  with  third  countries,  would  then  be  a 
hindrance  to  this  development.  These  restrictions  should 
accordingly,  be  reconsidered  as  their  elimination  would  be  In  the 
Interest  of  the  Community.  A cautious  and  gradual  approach  should 
ensure  that  the  restructuring  of  the  market  can  take  place  in  a 
balanced  way. 

It  is  worth  noting  that  the  bilateral  agreements  between  Member 
States  and  third  countries  are  not  the  only  factors  which  determine 
the  competitive  situation.  Strong  worldwide  competition  exists  for 
example  between  EC  and  us  air  carriers.  The  fact  that  the  bl lateral 
agreement  between  e.g.  the  US  and  Japan  Is  less  restrictive  than  the 
agreements  between  Member  States  and  Japan  means  that  the  us 
carriers  can  develop  a  much  better  position  In  Japan  and  thereby  in 
the  global  competition.  As  a  consequence  Community  carriers  become 
less  attractive  for  a  number  of  business  passengers. 

This  example  shows  that  It  Is  Important  for  Community  air  carriers 
engaged  In  global  competition  to  be  able  to  operate  under  the  best 
possible  regulatory  regime.  In  fact,  if  other  governments,  due  to 
their  strong  negotiating  position,  are  able  to  secure  a  better  more 
flexible  regime,  Community  carriers  may  loose  market  share. 
In 
order  to  be  competitive  Community  air  carriers  should  therefore 
benefit  from  at  least  as  flexible  agreements  as  their  competitors 
have. 

- 15  -

30. 

Moat  bl lateral  agreements  llmlt  the  number  of  carriers  to  be 
designated,  the  number  of  frequencies  to  be  operated,  the  number  of 
seats,  etc.  The  more  efficient  air  carriers  from  the  COINllunlty  or 
third  countries  are  punished  for  their  efficiency  by  obligatory 
"commercial  agreements"  to  be  concluded  between  the  air  carriers  of 
both  parties.  Whenever  a  new  air  carrier  wants  to  enter  the  market 
or  If  air  carriers  want  more  frequencies  or  to  Introduce  different 
fare  levels,  this  will  have  to  be  negotiated. 
In  such  agreements 
not  market  demand  and  consumer  Interest,  but  often  the  specific, 
possibly  weak  competitive  position  of  the  air  carrier  of  one  party 
These 
la  decisive  for  the  number,  sort  and  quality  of  operations. 
practices  are  often  against  the  Interests  of  Community  carriers  as 
they  make  It  difficult  for  them  to  use  their  full  economic  potential 
on  a  world-wide  scale. 

31. 

When  5th  Freedom  opportunities  are  granted  to  third  countries 
careful  consideration  should  be  given  to  the  effects  this  may  have 
on  other  Member  States  or  air  carriers.  An  analysis  of  5th  freedom 
opportunities  available  to  Japan  Is  detailed  below  which 
demonstrates  the  opportunities  available  through  European  points  for 
Japanese  carriers. 
This  quite  clearly  affects  the  actual  and 
potential  operations  of  Community  air  carriers  on  these  routes. 

TABLE  2 

FIFTH  FREEDOM  RIGHTS  FOR  JAPANESE  AIR  CARRIERS 

IN  THE  Ee(*) 

Pursuant  to  bilateral 
agreement  between  Japan 
and 

Rights  granted 

U.K. 
(London) 

France 
(Par Is) 

Germany 
(Frankfurt) 
(DClsseldorf) 

Denmark 
(Copenhagen) 

The  Netherlands 
(Amsterdam) 

Italy 
(Rome) 

Spain 
(Madrid) 

(*)  Situation  1991 

Paris,  Copenhagen 
plus  3  unspecified  points 

London,  points  In  Germany  and 
Scandinavia,  Amsterdam,  plus 
one  unspecified  point 

Paris,  Amsterdam  plus 
3  unspecified  points 

London,  Paris,  Frankfurt, 
DClsseldorf,  Amsterdam,  Rome, 
Madrid 

London,  Paris,  points  In 
Germany,  Copenhagen,  Rome, 
Madrid 

3  unspecified  points 

London,  Paris,  Frankfurt 
Copenhagen,  Amsterdam,  Rome 

- 16  -

32. 

33. 

Many  community  air  carriers  have  relatively  smal  I  networks.  In 
order,  for  them,  to  be  able  to  compete  and  offer  the  services 
requested  by  customers  they  require  good  and  efficient  interline 
facil I ties.  This  al lows  them  to  issue  tickets  to  destinations  they 
do  not  serve  and  It  gives  passengers  the  posslbllltles  to  reroute  or 
change  flights  without  extra  costs.  The  existing  Interline  system, 
therefore,  should  be  maintained  within  the  limits  set  by  the 
competition  rules. 

A COmmunlty  policy  for  relations  with  third  countries  should  take 
account  of  the  interests  of  .All  Community  carriers.  In  principle, 
this  means  that  whenever  commercially  possible  all  Interested 
community  carriers  shall  be  allowed  to  operate.  Undue  I Imitations  In 
routings,  capacity,  designation  and  fares  should  be  avoided  and  In 
cases  where  a  selection  has  to  be  made  procedures  must  be  strictly 
non-discriminatory  (see  paragraphs  43-47  and  65-71). 

B.  The  Interests  of  air  transport  users 

34. 

Air  transport  users  are  generally  Interested  In  safe,  reliable  and 
frequent  high  Qua I ity  air  services  at  a  reasonable  price  from  an 
airport  in  the  vicinity  of  where  they  I Ive  to  an  airport  close  to 
their  destination.  It  is  normally  of  less  Interest  to  them  whether 
the  air  carrier  offering  the  service  Is  established  In  their  own 
country  or  in  another  as  long  as  their  requirements  are  met.  User 
Interests  are  best  served  in  a  reasonably  liberal  and  competitive 
environment  with  safeguards  to  ensure  the  proper  functioning  of  the 
market.  Air  carriers  should  have  the  necessary  flexibility  to 
respond  to  changes  in  market  demand  and  should  not  be  hampered  by 
regulations  which  aim  to  protect  less  competitive  air  carriers. 
In  particular  business  travellers  have  emphasized  that  Inter I lnlng 
Is  Imperative. 

c.  The  Interests  of  airports  creglons> 

35. 

The  economic  development  of  a  region  depends  often  on  access  to  air 
transport.  Many  regions  and  their  airports  consider  that 
traditionally  the  Interests  of  air  carriers  and  in  particular  of 
"national  carriers"  have  dominated  negotiations  on  traffic  rights. 
This  has  led  to  a  situation  where  traffic  has  been  concentrated  on 
relatively  few  gateways  leading  to  congestion  and  environmental 
problems  at  those  airports  and  regions  while  other  regions  suffer 
from  a  lack  of  adeQuate  air  I inks. 
The  regions  and  airports  are 
therefore  looking  for  a  more  I lberal  market  access  policy  with 
greater  opportunities  directly  to  regional  airports.  That  does  not 
mean  that  the  differences  In  market  strength  between  air  carriers 
should  be  ignored,  because  that  might  not  be  In  the  long  term 
Interest  of  the  travel I Ing  publ  le  and  of  airports.  A balanced  but 
liberal  pol  Icy  Is  advocated  by  these  parties. 

36. 

37. 

- 17  -

Requirements  of  the  Slngle  (cid:127) arket  and  lapl-ntatlon of  Treaty 
prlnclples 

One  of  the  fundamental  principles  for  the  single  market  is  that 
Member  States  should  not  deliberately  or  Inadvertently  act  against 
the  Interests  of  the  Community  or  each  other.  It  is  important  to 
note  that  negotiations  by  one  Member  State  will  practically  always 
affect  the  Interests  of  one  or  more  other  Member  States.  Additional 
opportunities  for  one  carrier  may  directly  Influence  the  market  and 
consequently  the  opportunities  for  carriers  from  other  Member  States 
operating  in  the  same  or  neighbouring  markets. 
the  basic  principle  that  Member  States  should  not  harm  each  other's 
Interests  unduly 
Community  level  to  Identify  and  balance  the  different  Interests 
Involved. 

requires  therefore  a  careful  coordination  at 

Implementation  of 

Competition  rules 

An  external  aviation  pol  icy  must  clearly  Include  the  external 
aspects  of  the  competition  rules.  At  present  the  Commission  has  not 
been  enabled  to  implement  community  competition  pol  Icy  In  respect  of 
routes  to  and  from  third  countrlesC1). 
Certain  forms  of  cooperation  between  air  carriers  may  restrict 
competition  but  bring  considerable  benefits  to  alrl Ines  and  air 
transport  users  alike.  This  has  prompted  the  Commission  to  give  an 
exemption  under  Article  85(3)  of  the  Treaty  to  e.g.  schedule 
coordination,  Joint  operations,  tariff  coordination,  slot  allocation 
and  Joint  computer  reservation  systems  In  respect  of  Intra-community 
transport  under  the  conditions  laid  down  In  the  applicable 
regulations.  However,  the  Commission  Is  not  in  a  position  to  grant 
an  exemption  to  these  practices  in  respect  of  transport  to  third 
countries.  Such  common  worldwide  practices  as  e.g.  IATA  tariff 
coordination  and  slot  allocation  are  consequently  vulnerable  to 
challenge  under  the  EEC  competition  rules.  Member  States  approving 
tariffs  arising  from  tariff  coordination  also  violate  their 
obligations  under  Article  5  of  the  EEC  Treaty.  The  Commission 
likewise  cannot  exempt  under  Article  85(3)  Joint  operations,  revenue 
pools,  schedule  coordination  etc.  which  fall  within  Article  85. 

Proper  enforcement  of  the  competition  rules  In  respect  of  air 
transport  to  third  countries  ls  therefore  urgently  required.  The 
Commission  has  made  proposals  to  give  It  the  normal  powers  of  fact 
finding,  exemption  of  useful  cooperation  and  termination  of 
lnfrlngments  which  it  has  In  other  fields.  The  Councl  I  ls  requested 
to  give  these  proposals  urgent  consideration. 
In  order  to  remove 
legal  uncertainty  and  to  ensure  the  benefit  of  the  appl lcatlon  of 
the  competition  rules,  the  Commission  would  have  no  alternative,  In 
the  absence  of  proper  enforcement  powers,  but  to  make  usi' of  Its 
residual  powers  under  Article  89  of  the  EEC  Treaty. 

(1) 

court  of  Justice,  Judgment  of  11  April  1989  In  Case  66/86  (Ahmed 
Saeed). 

38. 

39. 

40. 

41. 

42. 

- 18  -

Nationality  clauses  and  ownership 

A subject  that  also  requires  attention  Is  the  nationality  clauses  In 
bl lateral  agreements.  It  has  already  been  Indicated  In  para  15  that 
most  bilateral  agreements  contain  discriminatory  designation 
clauses. 

It  should  be  recognised,  however,  that  an  Immediate 

The  Commission  has  already  Informed  Member  States  that  nationality 
clauses  In  bilateral  agreements  with  third  countries  wlll  have  to  be 
changed. 
request  for  changing  or  deleting  nationality  clauses  In  existing 
ASA's  may  not  be  readily  granted  In  an  Individual  negotiation. 
the  I lght  of  such  problems  the  method  wlll  have  to  be  decided  after 
careful  consultation. 

In 

In  order  to  ensure  a  harmonious  and  gradual  Introduction  of  a  new 
framework,  it  wi  I I  be  necessary  to  develop  an  acceptable 
transitional  approach  similar  to  article  234  of  the  Treaty  whereby 
the  Commission  and  the  Member  States  will  temporarily  tolerate 
existing  bl lateral  agreements.  However,  Member  States  are  under  an 
obligation  to  take  al I  appropriate  steps  to  eliminate  the 
lncompatlbl I I ties,  such  as  the  national lty  clauses,  established  In 
agreements  with  third  countries  concluded  before  the  entry  Into 
force  of  the  Treaty. 

It  may  only  be  possible  to  tolerate  agreements  concluded  after  1958 
when  Member  States  agree  on  an  appropriate  consultation  and 
authorization  procedure  whereby  on  a  case  by  case  basis  steps  are 
developed  to  remedy  the  situation,  either  Individually  or  by  the 
adoption  of  a  common  attitude. 
some  cases  it  might  be  Impossible  under  reasonable  conditions  to 
make  the  necessary  amendments  to  the  nationality  clauses  and  other 
provisions  contrary  to  Community  law.  During  a  reasonable  period  of 
time,  the  Commission  wi  I I  accept  such  cases  as  unavoidable  In  a 
transitional  situation. 

The  Commission  recognizes  that  In 

As  to  future  agreements,  It  may  be  necessary  to  go  beyond 
nationality  clauses  as  referred  to  In  paragraph  15  and  to  reconsider 
existing  ownership  I imitations.  The  air  transport  Industry  Is 
It  Is  therefore  Important 
becoming  more  and  more  global  in  nature. 
for  air  carriers  to  be  able  to  respond  appropriately  to  competitive 
challenges  and/or  changes  in  the  market. 
In  a  worldwide  competition 
It  might  not  be  sufficient  to  look  only  for  direct  market  access 
poss lb II  I ties  but  it  could  be  more  effective  to  invest  in  local 
expertise.  Several  examples  of  this  already  exist.  Risk  capital 
might  also  be  more  readily  available  abroad  than  In  the  local 
market.  For  these  reasons  it  might  well  be  useful  to  examine  the 
possibl Ii ties  in  the  longer  term  of  opening  up  for  such  investment 
opportunities. 

- 19  -

43. 

44. 

45. 

46. 

In  fact  the  Community  already  proposed  more  flexibility  in  this  area 
In  the  context  of  the  General  Agreements  on  Trade  in  Services  (GATS) 
but  unfortunately  not  many  countries  were  sufficiently  Interested. 
Individual  Member  States  are  bound  by  the  obllgation< 1> only  to 
license  air  carriers  which  are  owned  and  control led  by  Community 
persons.  However,  a  provision  has  been  Included  in  the  same  article 
of  the  third  package  which  expressly  foresees  the  possibility  of 
Community  agreements  in  this  respect. 

Non  discriminatory  al location  of  traffic  rights 

The  problem  of  non  discriminatory  allocation  of  traffic  rights 
arises  when  the  number  of  Community  carriers  to  be  designated  Is 
llmlted  and  more  carriers  are  Interested  to  operate  on  the  route,  or 
when  the  capacity  is  I imited  and  Insufficient  to  meet  the 
requirements  of  Interested  Convnunlty  carriers. 

Already  today  some  Member  States  which  have  more  than  one  carrier 
established  In  their  territory  have  procedures  for  the  allocation  of 
acquired  rights.  Other  Member  States  and  the  Community  wil I  very 
soon  have  to  develop  non-discriminatory  procedures  because  with  the 
entry  into  force  of  the  third  package  the  rights  can  no  longer  be 
allocated  automatically  to  the  "national  carrier",  but  will  have  to 
be  allocated  among  Community  carriers. 

It  has  been  suggested  that  in  such  cases  the  routes  should  be  sold 
to  the  highest  bidder.  This  solution  does  not  seem  to  meet  the  aims 
of  Convnunlty  pol icy  because  it  leads  to  higher  costs  for  air 
carriers  and  consequently  for  passengers  and  it  increases  barriers 
for  new  entrants. 

Another  solution,  which  Is  practiced  in  the  Community  In  other 
economic  sectors,  is  the  establ lshment  of  a  quota  system.  New  routes 
would  be  allocated  to  Community  carriers  on  the  basis  of  a  simple 
quota  based  on  eg.  their  present  market  share.  This  would  lead  to  a 
rigid  system  with  very  I ittle  posslbllltles  for  newly  established 
air  carriers  to  secure  a  reasonable  market  share  and  It  would 
basically  be  against  the  freedom  to  provide  services.  The  best  way 
forward  would  seem  to  be  a  qualitative  selection  procedure  because 
this  allows  the  decision  making  body  to  take  account  of  a  range  of 
criteria  and  creates  the  necessary  flexibility  to  consider  each 
situation  on  Its  merits.  An  absolute  requirement  Is  that  non 
discrimination  Is  ensured. 
paragraphs  65-71. 

such  a  procedure  Is  further  outlined  in 

(1) 

See  footnote  (2)  on  page  6. 

- 20  -

47. 

48. 

49. 

Any  selection  procedure  wll I  Inevitably  lead  to  problems  for  one  or 
more  air  carriers.  Bilateral  agreements  which  are  based  on  liberal 
principles  wl  11  therefore  be  preferable  as  long  as  fair  competition 
Is  ensured.  However,  there  Is  no  doubt  that  designation 
posslbl II ties  wl  I I  be  I lmlted  In  a  number  of  bilateral  relationships 
and  therefore  a  mechanism  for  the  allocation  of  traffic  rights  has 
to  be  developed. 

When  considering  the  development  of  a  Community  policy,  it  will  also 
be  Important  to  look  at  the  Interests  non-eommunlty  carriers  have  In 
operating  services  to  Europe.  For  an  air  carrier  offering  long-haul 
International  services  Europe  Is  a  very  Important  market,  not  only 
for  point-to-point  Journeys,  but  in  the  context  of  its  total 
network. 

The  Interest  of  air  carriers  from  other  hemispheres  would  probably 
be  to  hub  in  Europe  and  to  be  able  to  use  their  own  services  to  get 
people  to  their  final  destinations  or  between  the  main  cities  of 
Europe.  As  there  has  been  no  common  external  pol  Icy  regarding  third 
country  air  carriers  flying  Into  the  European  market,  third  states 
have  gained  considerable  fifth-freedom  rights  through  bilateral 
negotiations  at  national  level.  Consequently,  they  can  carry  their 
own  passengers  between  European  points  and  at  the  same  time  compete 
with  European  air  carriers  for  other  passengers  on  those  routes. 
Many  have  also  obtained  stop-over  rights  with  change  of  gauge  which 
allows  them  to  use  more  efficient  aircraft  on  thinner  routes  by 
combining  two  destinations.  Some  third  country  air  carriers  have 
even  been  able  to  develop  hub  and  spoke  networks  In  the  COmmunity. 
Unfortunately  adequate  reciprocity  Is  sometimes  lacking.  This  Is  one 
of  the  reasons  why  the  Commission  has  always  emphasized 
freedom  aspects  of  bi  lateral  negotiations  (see  Para  31). 

the  fifth 

- 21  -

Ill.  ESJABLIStNENJ  OF  PROCEDURES 

Responslblllty  for  negotiations 

50. 

51. 

52. 

53. 

On  the  basis  of  the  Treaty  and  of  the  case  law  of  the  Court  of 
Justice  the  Community  has  In  any  case  exclusive  competence  for 
concluding  bl lateral  air  services  agreements  deal Ing  In  particular 
with  market  access,  capacity,  tariffs  and  related  matters. 

The  Convnlsslon  submitted  In  1990  to  the  Councll  a  proposal  for  a 
procedure  to  deal  with  aviation  relations  with  third  countries.  This 
proposal  Is  based  on  and  would  replace  as  far  as  aviation  Is 
concerned  Counci  I  Decision  69/494/EEC.  This  Decision  establishes  a 
notification  and  consultation  procedure  at  Convnunlty  level  and 
provides  for  Community  negotiations.  As  long  as  Counci  I  Decision 
69/494/EEC  has  not  been  replaced  by  a  Decision  on  external  aviation 
relations,  it  should  be  applied.  Member  States  have  been  reminded  of 
their  obligations  under  Community  law  by  letters  of  1/3/90  and 
2/7/90. 

The  procedures  in  Decision  69/494/EEC  have  not  been  respected  by 
Member  States.  Several  new  bl lateral  agreements  also  Including  fifth 
freedom  rights  have  been  concluded,  or  existing  agreements 
thoroughly  modified,  without  any  consultation  or  coordination  at 
Community  level.  The  Commission  has  so  far  refrained  from  starting 
Infringement  proceedings,  in  order  to  allow  for  open  discussions  on 
the  development  of  a  commonly  agreed  approach  to  the  aviation 
relations  with  third  countries.  However,  In  case  that  no  progress 
can  be  made  in  this  area  by  the  end  of  1992  the  Commission  will  be 
obliged  to  take  up  its  responslbllitles  without  further  delay. 

The  starting  point  for  the  development  of  transitional  procedures 
should  be  that  the  Community  Is  a  priori  responsible  for  the 
formulation  of  an  external  aviation  relations  pol  Icy  and  there  can 
be  no  negotiations  with  third  countries  on  these  matters  without 
Community  Involvement.  However,  the  Commission  recognises  that  under 
certain  circumstances  within  the  I lmlts  of  the  pol  Icy  developed  by 
the  Community  and  having  considered  compatlbl llty  with  Community  law 
In  many  instances  satisfactory  results  may  be  achieved  during  a 
transitional  period  when  Member  States  are  authorized  by  the  Council 
to  negotiate  bilateral  agreements  with  third  countries. 

- 22  -

54. 

55. 

56. 

In  the  light  of  the  considerations  In  chapter  II  and  the  above 
paragraphs  a  framework  which  Is  In  llne  with  the  requirements  of  the 
Treaty  must  be  established.  Within  such  a  framework  the  Community 
should  In  principle  take  responsibility  for  all  agreements  but  then 
In  a  number  of  Instances  authorize  the  Member  State  concerned  to 
negotiate  on  condition  that  Community  coordination  wlll  take  place 
In  order  to  safeguard  the  Interests  of  other  Member  States  and  of 
the  eommunlty  as  a  whole.  In  this  context,  the  Commission  recognizes 
that  Its  proposal  of  1990  needs  to  be  modified.  A proposal  for 
amendments  is  therefore  annexed  to  this  document.  The  procedures 
which  are  proposed  permit 

- Community  negotiations  or 

lndlvldual  Member  State  negotiation. 

Such  procedures  are  set  out  In  detal I  In  annex  I I.  The  key  question 
le  to  decide  which  facts  are  necessary  for  the  Commission  to  propose 
and  the  Councl  I  to  decide  on  the  option  which  may  lead  to  the  best 
possible  result. 

Negotiations  wi  I I  be  conducted  at  Community  level  or,  normally  on  a 
case  by  case  basis  a  Member  State  may  be  authorized  by  the  Council 
to  conduct  the  negotiations. 
Factors  which  would  have  to  be 
considered  are  whether  the  third  country  asks  for  a  Community 
negotiation,  whether  special  problems  of  Community  interests  exist 
(CRS,  foreign  ownership,  tariffs,  competition  rules  etc.),  or 
whether  there  are  other  pertinent  factors.  Such  sJtuatlons  will 
have  to  be  handled  in  a  pragmatic  way. 

A framework  which  includes  the  possibility  for  Member  States  to 
negotiate  Individually  will  have  to  avoid  legal  uncertainty 
regarding  existing  rights  and  the  allocation  of  responslblllty  In 
the  Community.  Already  today  many  third  countries  are  concerned  that 
the  creation  of  the  internal  market  may  affect  their  traffic  rights 
to,  from  and  within  the  Community  and  there  Is  uncertainty  about  the 
respective  competences  of  the  Community  and  of  Member  States.  It  Is 
Important  that  the  exercise  of  Community  competence  either  by  the 
Community  or  by  Member  States  guarantees  the  stablllty  of  the 
International  regulatory  system.  It  wlll  be  necessary,  therefore,  to 
create  a  clear  and  unambiguous  framework  for  all  aviation  relations 
with  third  countries  which  will  take  effect  on  January  1993. 
Agreements  concluded  between  Member  States  and  third  countries 
before  that  date  wi  I I  be  respected  by  the  Community,  provided  they 
are  In  I lne  with  the  requirements  of  Community  policy. 

- 23  -

Negotiations  at  Community  level 

57. 

several  areas  can  be  Identified  where  the  Community  should  assume 
Its  responslbi Ii ties  without  delay. 

a.  Action  at  Community  level  Is  necessary  In  situations  where 
negotiations  on  Community  level  would  give  better  economic 
results  than  negotiations  at  Member  State  level. 
It  wi  I I,  of  course,  be  dlfflcult  to  make  this  Judgement 
beforehand  but  the  strength  of  the  negotiating  partner,  the 
existing  balance  of  traffic  rights,  the  size  of  the  market  and 
the  overall  trade  relatlonshlp  of  the  Community  with  that  partner 
can  be  used  as  indicators  for  the  analysis. 
In  this  respect  the 
fact  that  some  Member  States,  In  order  to  obtain  even  a  small 
benefit  for  their  air  carriers,  negotiate  away  traffic  rights 
which  directly  affect  the  competitive  position  of  other  Convnunity 
air  carriers  is  an  argument  In  favour  of  negotiations  on 
Community  level.  The  United  States  and  possibly  Japan  are  the 
main  examples  of  third  countries  which  fal I  within  this  category. 

b.  Action  at  Community  level  Is  necessary  where  the  lnsistance  on 

acceptance  of  Community  principles  such  as  non-discrimination  on 
the  grounds  of  nationality  would  place  an  Individual  Member  State 
in  an  unacceptable  situation. 

c.  The  Community  is  developing  close  relations  with  countries  In 
Eastern  Europe.  For  the  development  of  these  relations  It  Is 
Important  that  an  effective  air  transport  system  Is  established 
which  can  meet  the  expected  Increase  In  market  demand.  To  ensure 
a  fair  balance  of  opportunities  In  the  European  air  transport 
market  and  to  avoid  a  widening  gap  between  the  Convnunlty  and  the 
rest  of  Europe  which  I imlts  the  opportunities  of  the  air lines  to 
develop  the  European  market,  a  common  regulatory  framework  for 
the  whole  of  Europe  should  be  pursued.  An  extension  of  the 
Community  regulatory  framework  which  has  been  established  with 
should  also  be  considered  as  a  follow  up  to 
the  EFTA  countries, 
the  association  agreements  with  the  countries  In  Eastern  Europe. 

d.  In  relation  to  the  successor  States  of  the  Soviet  Union  and 
· Slovenia,  Croatia  and  Bosnla-Herzegovlnla  the  Community  Is 

looking  for  a  close  relationship.  The  fact  that  in  many  cases  new 
bl lateral  air  transport  agreements  will  have  to  be  concluded  with 
these  countries  offers  a  unique  opportunity  to  establish  the 
relationship  in  a  Community-wide  agreement  which  respects 
Community  law  and  takes  into  account  the  specific  circumstances 
that  exist. 

- 24  -

e.  Air  transport  is  becoming  more  and  more  global  In  nature. 

conseQuently,  it  Is  In  the  Joint  Interest  of  air  carriers  and 
consumers  to  reconsider  the  principles  of  the  worldwide 
regulatory  framework  of  aviation.  The  Community  has  the  necessary 
weight  to  play  a  leading  role  In  developments  towards  liberal 
multilateral  agreements,  possibly  between  groupings  of  countries. 

f.  Not  only  In  Europe,  but  also  elsewhere  In  the  world  trading 
In  cases  where  third  countries 

blocks  are  being  developed. 
negotiate  as  a  block  also  the  Community  should  negotiate  as  one. 

g.  Even  If  due  account  should  be  given  to  the  existing  role, 

function  and  structure  of  International  organizations  and  of  the 
role  Member  States  therein  the  Community,  represented  by  the 
Commission,  wil  I  have  to  assume  progressively  Its 
responsibilities  in 
coordination,  to  express  common  positions  and  to  defend  Community 
interests  as  a  whole. 

ICA0,  ECAC,  etc.  to  ensure  Community 

Negotiations  at  Member  State  level 

58. 

In  other  cases,  where  Member  States  have  been  authorized  to 
negotiate,  there  wi  II  be  a  need  for  coordination  In  order  to  ensure 
that  the  interests  of  other  Member  States  and  of  the  Community  as  a 
whole  are  taken  Into  account  and  balanced  against  the  Interests  of 
the  Member  State  authorized  to  negotiate. 
The  Council,  therefore,  when  authorizing  a  Member  State  to  negotiate 
shall  where  necessary  specify  directives  for  the  negotiations  to 
ensure  that  the  Member  State  concerned  acts  within  Community  law  and 

. policy.  The  Commission  should  be  able  to  attend.  When  there  Is 

cause  for  concern  the  Commission  or  another  Member  State  can  reQuest 
a  discussion  in  the  Council,  for  example  in  an  Aviation  Committee  as 
discussed  below  (Para  60). 

59. 

The  result  of  the  negotiations  by  a  Member  State  should  be 
communicated  to  the  Commission  within  a  certain  time  before  its 
signature  in  order  for  the  Commission  to  check  the  conformity  with 
Community  Law  and  possible  Council  directives. 
also  be  submitted  to  the  Council  for  Information. 

The  results  will 

coordination 

60. 

As  from  1  January  1993  the  Community  would  need  to  take  up  Its 
responsibility  for  al I  negotiations  with  third  countries.  This  means 
that  as  from  that  date  all  reQuests  for  negotiations  coming  from 
either  the  Member  States  or  from  third  countries  wlll  be  channeled 

- 25  -

through  the  community.  As  this  wlll  Involve,  of  course,  considerable 
extra  work  for  the  Commission  and  the  Council  adequate  provisions 
wlll  have  to  be  made.  In  order  to  facllltate  this  work  the  Council 
could  consider  to  establish  an  ad-hoc  Aviation  Committee 
the  Commission  within  the  framework  of  such  directives  as  the 
Council  may  Issue  to  It.  To  ensure  confldentlallty  the  size  of  this 
Committee  could  be  limited  to  one  expert  per  Member  State  plus  one 
"back-up"  member. 

to  assist 

61. 

The  Committee  could  i.a.  be  active  In 

-assisting  the  Council  In  defining  the  pol Icy  for  external 
aviation  relations  of  the  Community  on  the  basis  of  proposals 
made  by  the  Commission 

-preparing  decisions  of  the  Council  on  proposals  of  the 
Commission  on  whether  a  negotiation  with  a  third  country  should 
be  dealt  with  at  Community  level,  or  at  Member  State  level  or 
both. 

-preparing  decisions  by  the  Council  on  the  recommendation  of 
directives  for  negotiations  In  case  of  negotiations  at  Community 
level.  The  Committee  shall  further  assist  the  Commission  In  the 
conduct  of  these  negotiations. 

-preparing  Council  decisions  and  guidelines  on  Commission 
proposal  for  negotiations  at  Member  State  level  to  ensure  a 
coordinated  approach.  Deviations  from  such  guidelines  wlll  have 
to  be  proposed  by  the  Commission  to  the  Council. 

-discussing  the  negotiating  results  and,  when  necessary,  prepare 
Council  decision  to  approve  the  agreement  reached. 

62. 

63. 

It  will,  of  course,  be  necessary  to  develop  procedures  to  obtain  the 
advice  of  interested  parties  and  In  particular  of  organizations  of 
air  carriers,  airports  and  consumers.  It  will  be  Important, 
therefore,  that  these  organizations  and  In  particularly  the  air 
carrier  organizations  really  represent  the  Industry. 

Close  contact  of  industry  representatives  will  be  ensured  on  the 
occasion  of  the  negotiations.  In  addition  to  the  existing 
consultation  processes  on  national  and  Community  level,  additional 
arrangements  may  be  necessary. 

- 26  -

Negotiating  directives 

64. 

Before  any  negotiation  at  Community  level  can  take  place  It  Is 
normally  necessary  to  develop  directives  for  negotiations  which  give 
the  negotiators  the  necessary  pol  icy  guidance,  without,  however, 
llmltlng  their  ability  to  negotiate.  To  this  end  the  Aviation 
Committee,  on  a  proposal  from  the  Commission  which  wlll,  If  need  be, 
have  consulted  interested  parties  will  have  to  balance  the  different 
Interests  of  Member  States,  air  carriers,  airports,  consumers,  etc. 
It  Is  the  Council  who  decides  on  the  directives  for  negotiations, 
but  It  may  decide  to  authorise  the  Aviation  Committee  to  act  on  its 
behalf  In  respect  of  detailed  negotiation  briefs. 

The  Parliament  wil  I  have  to  be  associated  in  an  appropriate  manner 
and  procedures  need  to  be  developed  with  the  Par I lament  which 
ensures  Insight  but  maintains  confldentlallty. 

The  allocation  procedure 

65. 

66. 

67. 

The  al location  problem  is  closely  related  to  the  outcome  of  the 
negotiations.  It  arises  i.a.  when  the  number  of  air  carriers  to  be 
designated  Is  I imited  by  the  agreement,  or  when  the  capacity  Is 
limited  or  both. 

In  para  47  the  need  for  a  selection  procedure  which  ensures  the  non 
discriminatory  treatment  of  air  carriers  for  the  al location  of 
traffic  rights  has  been  set  out.  The  best  solution  would  seem  to  be 
a  system  of  Qua I itative  criteria  which  should  normally  be  applied 
only  to  the  al location  of  additional  rights  while  taking  into 
account  the  existing  situation. 

First  it  has  to  be  established  that  the  proposals  are  bonaflde.  In 
order  to  carry  out  this  assessment  the  carriers  wi  I I  have  to  submit 
fairly  detailed  information  to  support  their  reQuest:  the  long  term 
objectives  of  the  carrier,  market  forecast  for  the  route  in 
question,  the  technical  ability  to  operate  the  route,  etc.  In  order 
to  ensure  that  the  information  provided  by  the  air I Ines  is  realistic 
and  does  not  give  an  over  optimistic  picture,  the  information  should 
be  carefully  checked. 

The  selection  among  bonafide  proposals  should  be  based  on  which 
carrier  can  best  make  use  of  the  traffic  rights  according  to  a  range 
of  criteria 

in  terms  of  service  to  the  pub I ic 
in  terms  of  competition  In  the  relevant  market 
in  terms  of  the  use  of  scarce  resources 
in  terms  of  establ lshed  Community  pol  icy 

-
-
-
-
(e.g.  slot  al location,  public  service  obligation). 

- 27  -

68. 

69. 

70. 

It  has  to  be  recognised  that  these  criteria  are  general  In  nature 
and  therefore  difficult  to  apply.  Therefore,  depending  on  the  route 
In  question,  additional  select Ion  criteria  can  be  added  to  meet 
special  circumstances  (the  operators  strategy,  sales  and 
promotional  plans,  etc.).  It  might  be  possible  that  a  designation 
would  have  to  be  withdrawn  when  the  results  of  the  operation  do  not 
meet  reasonable  expectations  and  better  candidates  are  Interested  In 
operating  the  route. 

Obviously  not  al I  considerations  In  the  analysis  leading  to  a 
decision  on  the  initial  allocation  of  traffic  rights  are 
quantifiable  and  objective  It  will  be  necessary,  therefore,  to 
ensure  that  the  procedures  leading  to  a  decision  are  non 
discriminatory,  transparent  and  that  an  effective  appeal  procedure 
exists  which  is  easy  to  apply. 

This  means  that  In  a  case  where  a  Member  State  has  negotiated  the 
agreement,  decisions  on  the  al location  of  rights  should  be  taken  by 
the  competent  authority  of  that  Member  State. 
It  Is  necessary  that 
an  appropriate  speedy  appeal  procedure  exists  or  is  created. 

Where  the  Community  has  negotiated  the  agreement,  the  allocation  of 
traffic  rights  reQuires  a  specific  procedure  at  Convnunlty  level. 
Treaty  rules  on  the  al location  of  Implementation  tasks  as  laid  down 
In  Article  145  wi  I I  have  to  apply.  Accordingly  the  decisions  shal I 
be  taken  In  line  with  rules  laid  down  In  the  Council  Decision  No. 
87/373/EEC  of  13  July  1987  ("procedure  11").  The  Convnlsslon  shall  In 
Its  task  be  assisted  by  a  Committee  ("Management  Convnittee  for  Air 
Transport")  composed  of  representatives  of  the  Member  States  and 
chaired  by  the  Commission.  Within  this  Convnittee  the  votes  of  Member 
States  shall  be  weighted  in  accordance  with  Article  148(2)  of  the 
Treaty. 
potential  economic  confl lets  In  a  way  which  ensures  neutrality  and 
compatibility  with  Single  Market  requirements. 

The  Commission  in  Its  decision  has  to  balance  out 

71. 

The  following  general  procedures  should  be  applied  both  when  a 
Member  State  and  the  Commission  will  have  to  carry  out  the 
allocation: 

there  has  to  be  a  publ  lshed  notice  in  the  official  Journal 
for  submissions  of  interest. 
calling 
parties  must  send  written  submissions. 
these  submissions  should  be  publicly  available,  except  for 
confidential  information. 
there  should  be  a  publ  le  hearing  where  parties  can  present 
their  case. 
the  decision  should  be  published,  together  with  the  reasons 
and  considerations  which  have  led  to  the  decision. 

- 28  -

Continuity 

72. 

The  Commission  Intends  to  take  the  necessary  measures  In  ordr  to 
ensure  that  there  will  be  sufflclaent  staff  (Including  recourse  to 
national  expertise)  deal Ing  with  external  aviation  relations.  The 
use  of  national  expertise  wlll  ensure  continuation  and  coordination. 

Confldentlallty 

73. 

One  of  the  most  dlfflcult  aspects  of  the  procedures  to  be  developed 
Is  the  necessary  confidentiality  of  the  directives  for  negotiations. 
Such  directives  wil  I  be  prepared  by  the  Commission  In  close 
collaboration  with  the  Interested  parties  and  with  Member  States. 
Experiences  so  far  have  demonstrated  that  It  wlll  only  be  possible 
to  avoid  public  knowledge  of  the  mandates  If  the  details  are  known 
to  only  a  few  people.  It  Is  necessary  that  the  Council  approves 
general  directives  for  negotiations  because  the  detailed  negotiation 
briefs  should  only  be  discussed  In  the  aviation  committee,  where 
confldentlallty  can  be  safeguarded. 

Docuaentatlon 

74. 

In  order  to  be  able  to  carry  out  Its  duties  It  wlll  be  necessary  for 
the  Commission  to  develop  a  data  bank  where  all  the  ASA's,  their 
annexes  and  all  additional  memoranda  of  understanding,  exchanges  of 
letters  etc.  concluded  between  Member  States  and  third  countries  are 
stored.  Where  necessary  this  Information  wlll  be  kept  confldentlal 
and  wlll  be  accessible  only  for  the  Commission  and  members  of  the 
Aviation  Committee. 
Together  with  the  Industry  and  with  Member  States,  the  Commission 
wlll  have  to  develop  statlstlcal  Information  related  to  the  air 
services  to,  from  and  within  the  Community,  on  traffic,  schedules 
and  yield  performance  in  order  to  prepare  and  facilitate  decisions 
on  the  level  of  the  negotiations  and  on  the  directives  for 
negotiations.  The  assistance  of  Member  States  In  the  development  of 
this  data  bank  Is  Indispensable. 

- 29  -

IV.  DECISIONS 

75. 

The  Council  Is  therefore  asked  to: 

- endorse  of  the  basic  elements  of  this  communication  and  the 
development  of  procedures  In  accordance  with  It,  including  the 
establishment  of  an  Aviation  Committee  to  create  an  efficient 
forum  for  coordination  and  decision; 

- adopt  the  proposal  for  a  Council  Decision  on  a  consultation  and 
authorization  procedure  for  agreements  concerning  commercial 
aviation  relations  between  Member  States  and  third  countries  (COM 
(90)  17  final  of  23  Febuary  1990  as  amended  by  the  proposal 
the  Annex  I); 

in 

- adopt  the  proposal  for  a  council  Regulation  (EEC)  on  the 
application  of  Article  85(3)  of  the  Treaty  to  certain  categories 
of  agreements  and  concerted  practices  In  the  air  transport  sector 
(COM(89)  417  final  - OJ  No  C 248,  29.9.1989); 

adopt  the  proposal  for  a  councl I  Regulation  (EEC)  amending 
-
Regulation  (EEC)  No  3975/87  of  14  December  1987  laying  down  the 
procedure  for  the  application  of  the  rules  on  competition  to 
undertakings  in  the  air  transport  sector  (COM(89)  417  final  -
OJ  No  C 248,  29.9.1989). 

- 30  -

Annex  I 

Proposal  from  the  Conllllsslon 

- 31  -

Proposa I  for  a 
COUNCIL  DECISION 

on  a  consultation  and 

authorization  procedure  for 

agreements  concerning  commercial 

aviation  relations  between 

Member  States  and  third  countries 

Proposal  from  the  Commission 

to  amend  the  proposal  for  a 

Counci  I  Decision  on  a  consultation 

and  authorization,procedure  for 

agreements  concerning  commercial 

aviation  relations  between 

Member  States  and  third  countries 

COM(90)  17  final  of  23  Febuary  1990 

THE  COUNCIL  OF  THE  EUROPEAN  COMMUNITIES. 

THE  COUNCIL  OF  THE  EUROPEAN  COMMUNITIES, 

Having  regard  to  the  Treaty  establishing 

Having  regard  to  the  Treaty  establishing 

the  European  Economic  Community,  and  in 

the  European  Economic  Community,  and  in 

particular  Article  113  thereof, 

particular  Article  113  thereof, 

Having  regard  to  the  proposal  from  the 

Having  regard  to  the  proposal  from  the 

Convnission, 

COIMlission, 

Whereas  the  Counci  I  Decision  69/494/EEC 

Whereas  Counci  I  Decision  69/494/EEC  of 

of  16  December  1969  on  the  progressive 

16  December  1969  on  the  progressive 

standardization  of  agreements  concerning 

standardization  of  agreements  concerning 

commercial  relations  between  Member 

commercial  relations  between  Member 

States  and  third  countries  and  on  the 
negotiations  of  Community  agreements< 1> 
provides  a  consultation  and  authorization 

States  and  third  countries  and  on  the 

negotiations  of  Community  agreements<1) 

provides  a  consultation  and  authorization 

procedure  for  a I I  commerc i a I  agr.eements 

procedure  for  al I  commercial  agreements 

with  third  countries; 

with  third  countries; 

Whereas  it  is  necessary  that  commercial 

Whereas  it  is  necessary  that  commercial 

relation  with  third  countries  in  the 

relations  with  third  countries  in  the 

field  of  civil  aviation  are  governed  by 

field  of  civi I  aviation  are  governed  by 

special  provisions  replacing  the 

special  provisions  replacing  the 

provision  of  Decision  69/494/EEC; 

provision  of  Decision  69/494/EEC; 

( 1)  OJ  No  L  326,  29.12.1969,  p.  39. 

(1) 

OJ  No  L  326,  29.12.1969,  p.  39. 

- 32  -

Whereas  commercial  aviation  relations  are 

Whereas  commercial  aviation  relations  are 

regulated  by  bilateral  air  services 

regulated  by  bilateral  air  services 

agreements,  their  annexes  and  amendments 

agreements,  their  annexes  and  amendments 

thereto,  and  other  bi lateral  and 
multilateral  arrangements  containing 
provisions  on  market  access.  capacity, 

thereto,  and  other  bi lateral  and 

multi lateral  arrangements  containing 

provisions  on  market  access,  capacity, 

tariff  arrangements  or  related 

tariff  arrangements  or  related 

provisions; 

provisions; 

Whereas  a  procedure  mus~  be  established 

Whereas  a  regulatory  framework  for 

to  ensure  that  the  replacement  of 

national  agreements  by  Convnunity 

negotiations  with  third  countries  and  a 

transitional  period  should  be  provided 

agreements  is  carried  out  progressively; 

for; 

Whereas,  while  all  negotiations  with  a 

view  to  conclusion  of  new  treaties, 

agreements,  or.  arrangements,  or  to 

Whereas  the  transitional  period  should  go 

beyond  31  December  1992  to  al low  for  a 

gradual  introduction  of  Community 

amendment  of  those  already  existing,  must 

negotiations; 

be  conducted  in  accordance  with  a 

community  procedure,  it  is  never  the  less 

permissible  for  existing  bi lateral  air 

services  agreements,  their  annexes  and 

any  amendments  thereto,  and  any  other 

commercial  bilateral  or  multi lateral 

arrangement  concerning  aviation  relations 

with  third  countries  to  be  provisionally 

extended,  expressly  or  tacitly,  provided 

that  their  extension  does  not  hinder  the 

implementa•t ion  of  the  common  commercial 

av i at ion  po I icy ; 

Whereas  the  transitional  provisions  need 

to  be  provided  for  6  years,  with  the 

possibi I ity  of  a  further  extension  on  a 

yearly  basis; 

Whereas  it  is  necessary  to  provide  for 

authorization  for  provisions  in  the  air 

transport  services  agreements  and 

additional  arrangements  concluded  before 

1  January  1993  between  Member  States  and 

third  countries  to  remain  in  force, 

in 

order  to  avoid  interrupting  their 

commercial  relations  with  the  third 

countries  concerned;  whereas  such 

- 33  -

Whereas, 

in  order  to  ascertain  whether 

authorization  does  not  absolve  the  Member 

this  condition  is  met,  prior  consultation 

should  take  place  at  Community  level 

between  the  Member  States  and  the 

Convnission; 

States  from  the  obi igation  to  take  al  I 
appropriate  steps  to  eliminate  any 
Incompatibility  between  such  agreements 

and  the  provisions  of  Community  law; 

Whereas,  however, 

in  certain  exceptional 

Whereas  most  of  the  matters  covered  by 

cases,  where  negotiation  by  the  Community 

these  agreements  will  in  future  be 

is  not  yet  possi.ble  and  an  interrupt ion 
in  relations  based  on  agreement  might 

governed  by  Community  agreements;  whereas 

the  provisions  of  the  agreements  which 

compromise  the  development  of  convnercial 

are  to  remain  in  force  must  not 

aviation  relations  with  the  third  country 

constitute  an  obstacle  for  the 

in  question  to  the  detriment  of  the 

Convnunlty  and  the  Member  States, 
provision  should  be  made,  as  a  temporary 

measure  and  for  a  limited  period,  for 

possible  negotiation  by  Member  States; 

implementation  for  the  common  external 

aviation  policy;  whereas  Member  States 

may  have  to  adapt,  or,  if  necessary, 

terminate  those  agreements  where  their 

remaining  in  force  hinders  the 

implementation  of  the  common  external 

Whereas, 

in  order  to  prevent  such 

aviation  policy; 

negotiations  hindering  the  implementation 

of  the  common  commercial  aviation  pol  icy, 

they  may  be  conducted  by  Member  States  in 

the  framework  of  guidelines  agreed  upon 

Whereas  during  the  transitional  period 

the  Counci  I  should  have  the  possibi I ity 

to  authorize  Member  States  to  conduct 

beforehand  in  accordance  with  a  Community 

bilateral  negotiations  with  third 

procedure  and  covering  the  basic  terms  of 

countries; 

the  agreement  to  be  negotiated; 

Whereas  in  cases  where  it  is  decided  that 

Member  States  can  conduct  negotiations 

with  third  countries  the  Counci  I  may 

issue  directives  for  such  negotiations; 

- 34  -

Whereas  Article  113  of  the  Treaty  not 
only  provides  for  the  procedure  for 

negotiations  by  the  Community,  but  also 

for  the  establishment  of  a  special 

committee  appointed  by  the  Counci  I  to 

assist  the  Commission  in  its  task; 

Whereas, 

in  cases  where  the  Community 

negotiates  with  third  countries, 

procedures  for  the  al location  of 

negotiating  results  should  ensure 

neutrality  and  compatibi I ity  with 

Community  legislation; 

Whereas,  before  an  agreement  is  signed, 

the  results  of  the  negotiations  should  be 

checked  to  ensure  that  they  conform  with 

the  Joint  conclusions, 

Whereas,  before  an  agreement  is  signed, 

the  results  of  the  negotiations  must  be 

checked  to  ensure  that  they  conform  with 

the  Joint  conclusions; 

HAS  ADOPTED  THIS  DECISION: 

HAS  ADOPTED  THIS  DECISION: 

- 35  -

TITLE  I 

TITLE  I 

Express  or  tacit  extension  of 

agreements  already  existing 

Express  or  tacit  extension  of 
agreeaents  already  existing 

Article  1 

Article  1. 

Member  States  shall  communicate  to  the 

Member  States  shall  communicate  to  the 

Commission  all  bi lateral  air  services 

Commission  all  bi  lateral  air  services 

agreements,  their  annexes  and  any 

agreements,  their  annexes  and  any 

amendments  thereto,  or  any  other 

amendments  thereto,  or  any  other 

commercial  bilateral  or  multi lateral 

commercial  bilateral  or  multi lateral 

arrangements  with  third  countries 

arrangements  with  third  countries 

concerning  aviation  relations  within  the 

concerning  aviation  relations  within  the 

meaning  of  Article  113  of  the  Treaty,  at 
the  latest  one  year  after  adoption  of 

meaning  of  Article  113  of  the  Treaty,  at 

the  latest  one  year  after  adoption  of 

this  Decision. 

this  Decision. 

However,  such  agreements  or  arrangements 

However,  such  agreements  or  arrangements 

the  extension  of  which,  whether  express 

the  extension  of  which,  whether  express 

or  tacit,  is  proposed  shal I  be  notified 

or  tacit,  is  proposed  shal I  be  notified 

to  the  Convnission  not  later  than  three 

to  the  Convnission  not  later  than  three 

months  before  the  date  of  express 

months  before  the  date  of  express 

extension  or  of  the  expiry  of  the  period 

extension  or  of  the  expiry  of  the  period 

during  which  notice  of  termination  of  the 

during  which  notice  of  termination  of  the 

agreement  or  arrangement  in  Question  may 

agreement  or  arrangement  in  question  may 

be  given. 

be  given. 

The  Commission  shall  communicate  the  text 

The  Commission  shall  communicate  the  text 

of  the  notified  agreements  and 

of  the  notified  agreements  and 

arrangements  to  the  other  Member  States 

arrangements  to  the  other  Member  States 

within  two  weeks  following  the 

within  two  weeks  following  the 

notification. 

notification. 

- 36  -

Article  2 

Article  _g_ 

After  the  notification  has  been  received, 
prior  cqnsultation  shal I  take  place  at 

After  the  notification  has  been  received, 

prior  consultation  shal I  take  place  at 

the  reQuest  of  a  Member  State  or  on,  the 

the  request  of  a  Member  State  or  on  the 

initiative  of  the  Convnission. 

such  a 

initiative  of  the  C011111ission. 

such  a 

reQuest  for  consultation  shal I  be  filed 

request  for  consultation  shall  be  filed 

with  the  Convnission  by  the  Member  State 

with  the  Commission  by  the  Member  State 

concerned  within  four  weeks  after  the 

concerned  within  four  weeks  after  the 

notification  to  it  of  the  agreement  or 

notification  to  it  of  the  agreement  or 

arrangement  by  the  Convnisslon. 

arrangement  by  the  Convnission. 

Consultation  shall  begin  within  three 

weeks  following  the  receipt  by  the 

Consultation  shall  begin  within  three 
weeks  following  the  receipt  by  the 

Convnission  of  the  notification  referred 

Commission  of  the  notification  referred 

to  in  the  second  paragraph  of  Article  1 

to  in  the  second  paragraph  of  Article  1 

or  of  the  request  from  a  Member  State. 

or  of  the  request  from  a  Member  State. 

The  main  purpose  of  the  consultation 

The  main  purpose  of  the  consultation 

shal I  be  to  establish  whether  a  Community 

shal I  be  to  establish  whether  a  Community 

negotiation  should  be  initiated  or,  if 

negotiation  should  be  initiated  or,  if 

not,  whether  the  agreements  to  be 

not,  whether  the  agreements  to  be 

extended  expressly  or  tacitly  contain 

extended  expressly  or  tacitly  contain 

provisions  relating  to  the  common 

commercial  aviation  policy  within  the 

provisions  relating  to  the  common 

commercial  aviation  pol  icy. 

If  such  is 

meaning  of  Article  113. 

If  such  is  the 

the  case,  It  shal I  be  established  whether 

case,  it  shall  be  established  whether 

such  provisions  could  constitute  an 

such  provisions  could  constitute  an 

obstacle  to  that  policy.  The 

obstacle  to  that  policy.  The 

consultation  shall  also  cover  al I 

instruments  currently  in  force  between 

consultation  shall  also  cover  all 

instruments  currently  in  force  between 

the  other  Member  States  and  the  third 

the  other  Member  States  and  the  third 

country  concerned. 

country  concerned. 

- 37  -

Article  3 

Article~ 

If  the  Commission  establishes.  either 
after  consultation  or  on  its  own 

If  the  Commission  establishes,  either 

after  consultation  or  on  its  own 

initiative,  that  even  though  certain 

Initiative,  that  even  though  certain 

provisions  in  the  instruments  to  be 

provisions  in  the  instruments  to  be 

extended  expressly  or  tacitly  come  within 

extended  expressly  or  tacitly  come  within 

the  scope  of  the  common  commercial 

the  scope  of  the  common  commercial 

aviation  policy  within  the  meaning  of 

aviation  policy  those  provisions  would 

Article  113  those  provisions  would  not, 

during  the  period  of  extension  envisaged, 

not,  during  the  period  of  extension 
envisaged,  constitute  an  obstacle  to 

constitute  an  obstacle  to  implementation 

implementation  of  the  common  commercial 

of  the  common  commercial  aviation  policy, 

aviation  policy,  it  may  authorize  Member 

it  may  authorize  Member  States  to  extend, 

States  to  extend,  expressly  or  tacitly, 

expressly  or  tacitly,  for  a  period  to  be 

for  a  period  to  be  specified,  the 

specified,  the  provisions  in  Question  of 

provisions  in  question  of  the  instruments 

the  instruments  which  were  the  subject  of 

which  were  the  subject  of  the 

the  consultation.  This  period  shal I  not 

consultation.  This  period  shall  not 

exceed  one  year. 

exceed  one  year. 

If,  however,  the  instruments  in  question 

If,  however,  the  instruments  in  question 

contain  either  a  Community  reservation 

contain  either  a  Community  reservation 

clause  or  a  clause  providing  for  annual 

clause  or  a  clause  providing  for  annual 

notice  of  termination,  express  or  tacit 

notice  of  termination,  express  or  tacit 

extension  may  be  authorized  by  the 

extension  may  be  authorized  by  the 

Commission  for  a  longer  period. 

Commission  for  a  longer  period. 

Article  4 

Article.! 

If  the  Commission  establishes,  either 

If  the  Commission  establishes,  either 

after  consultation  or  on  its  own 

Initiative,  that  provisions  in  the 

after  consultation  or  on  its  own 

Initiative,  that  provisions  in  the 

Instrument  to  be  extended  expressly  or 

instrument  to  be  extended  expressly  or 

- 38  -

tacitly  could,  during  the  period  of 

extension  envisaged,  constitute  an 

tacitly  could,  during  the  period  of 

extension  envisaged,  constitute  an 

obstacle  to  the  implementation  of  the 

obstacle  to  the  implementation  of  the 

common  commercial  aviation  policy,  in 

common  commercial  aviation  pol  icy,  in 

particular  by  reason  of  divergencies 

particular  by  reason  of,divergencies 

between  the  pol lcies  of  Member  States,  it 

between  the  policies  of  Member  States,  it 

shal I  submit  a  detailed  report  to  the 

shall  submit  a  detailed  report  to  the 

Council.  This  report  shall  be 

Counci  I.  This  report  shall  be 

accompanied  by  the  necessary  proposals 

accompanied  by  the  necessary  proposals 

and,  where  appropriate,  by 

and,  where  appropriate,  by 

recommendations  requesting  that  the 
Commission  be  authorized  to  open 

recommendations  requesting  that  the 

Commission  be  authorized  to  open 

Community  negotiations  with  the  third 

Community  negotiations  with  the  third 

countries  in  question. 

countries  in  question. 

Article~ 

The  provisions  governing  matters  covered 

by  the  common  external  aviation  policy 

within  the  meaning  of  Article  113  of  the 

Treaty  and  contained  in  air  transport 

services  agreements  and  additional 

agreements  concluded  before  1  January 

1993  between  Member  States  and  third 
countries  may  be  maintained  in  force  by 

the  Commission  unti I  31  December  1998  as 

regards  those  areas  not  covered  by 

agreements  between  the  Community  and  the 

third  countries  concerned  and  in  so  far 

as  their  provisions  are  not  contrary  to 

the  Community  pol icy. 

- 39  -

To  the  extent  that  such  agreements  are 

not  compatible  with  the  Treaty,  the 

Member  State  or  States  concerned  shall 

take  all  appropriate  steps  to  eliminate 

the  incompatibilities  established.  Member 

States  shall,  where  necessary,  assist 

each  other  In  accordance  with  the 

procedures  provided  for  in  this  Decision. 

TITLE  II 

TITLE  I I 

Transitional  provisions 

Transitional  provisions 

Article  5 

Article§. 

1. 

Without  prejudice  to  Article  113  of 

1. 

Untl  I  31  December  1998,  the  Council 

the  Treaty  and  until  31  December 

acting  by  qualified  majority  on  a 

1992,  the  Council  acting  on  a 

proposal  from  the  Commission,  after 

proposal  from  the  Commission  and 

the  required  prior  consultation, 

after  the  required  prior 

consultation  may,  by  way  of 

may  authorize  Member  States  to 

conduct  bi lateral  negotiations  with 

exception,  authorize  bi  lateral 

third  countries  concerning  the 

negotiations  between  Member  States 

conclusion,  modification  and/or 

and  certain  third  countries  in 

application  of  bi lateral  air 

cases  where  Connunity  negotiations 

services  agreements,  the  annexes 

prove  to  be  not  yet  possible  as  a 

thereto  or  any  other  commercial 

result  of  compelling  circumstances 

bilateral  or  multi lateral 

of  an  administrative  or  technical 

arrangements  with  third  countries 

nature. 

in  cases  where  Community 

negotiations  prove  to  be  not  yet 

possible.  Directives  and 

conditions  may  be  attached  to  the 

authorization. 

- 40  -

2. 

The  provisions  of  this  Article 

2. 

The  provisions  of  this  Article 

shal I  apply  where,  for  any  special 

shal I  apply  where,  for  any  special 

reason,  a  Member  State  considers 

reason,  a  Member  State  considers 

that,  in  order  to  avoid  any 

interruption  in  commercial 

that,  in  order  to  avoid  any 

interruption  in  commercial 

relations  based  on  agreements, 

relations  based  on  agreements, 

negotiations  must  be  undertaken 

negotiations  must  be  undertaken 

with  some  third  country. 

with  some  third  country. 

3. 

In  derogation  of  paragraph  1,  the 

3. 

By  way  of  derogation  from  paragraph 

Commission  may,  until  31  December 

1,  the  Commission  may,  unti I 

1992,  authorize  Member  States  to 

31  December  1998,  authorize  Member 

enter  into  bilateral  negotiations 

States  to  enter  Into  bilateral 

with  third  countries  concerning 

negotiations  with  third  countries 

modification  and/or  application  of 

annexes  of  existing  agreements  in 

respect  of  exercise  of  traffic 

rights,  designation  of  airlines, 

approval  of  air  fares  and 

schedu I i ng; 

Article  6 

concerning  the  modification  and/or 

application  of  the  annexes  to 

existing  agreements  In  respect  of 

the  exercise  of  traffic  rights,  the 

designation  of  airlines,  the 

approval  of  air  fares  and 

schedu I i ng. 

Article  2 

Consultation  conducted  in  accordance  with 

Article  5  shall  be  ensured  by  the 

Consultation  conducted  in  accordance  with 

Commission  and 

(  I ) 

shall  involve  such  co-ordination  as 
w i 1.1.  ensure  the  proper  functioning. 

and  the  strengthening  of  the 

internal  market,  as  wi  I I  take 

account  of  the  legitimate  interests 

of  the  Member  States,  as  regards 

Article  6  shall  be  ensured  by  the 

Commission  and 

(  I) 

shall  involve  such  coordination  as 

will  ensure  the  proper  functioning 

and  the  strengthening  of  the 

internal  market,  as  will  take 

account  of  the  legitimate  interests 

of  the  Member  States,  as  regards 

- 41  -

safeguarding  and  extending  their 
convnercial  aviation  relations  with 

third  countries  and  as  wi  II 

contribute  towards  the 
establishment  of  uniform  principles 

safeguarding  and  extending  their 

commercial  aviation  relations  with 

third  countries  and  as  wi  I I 

contribute  towards  the 

establishment  ot uniform  principles 

of  common  convnercial  aviation 

of  common  commercial  aviation 

policy  in  relation  to  the  country 

policy  in  relation  to  the  country 

in  Question; 

In  question; 

(11)  shall  be  resumed  during 

(II)  shall  be  resumed  during 

negotiations  if  developments  in  the 

negotiations  if  developments  in  the 

latter  so  require  and  particularly 

latter  so  reQuire  and  particularly 

if  the  Member  State  concerned 

Intends  to  digress  from  the 

if  the  Member  State  concerned 

Intends  to  digress  from  the 

guidelines  adopted  at  the  time  of 

guidelines  adopted  at  the  time  of 

consu I tat ion; 

consu I tat ion; 

(Ill)  shall  -as  regards  point  (I)  and 

(Ill)  shall  -as  regards  points  (I)  and 

(11)- lead  to  conclusions  which 

will  serve  as  guide I ines  for  the 

Commission  or  for  the  Member  State 

during  the  negotiations. 

(II)- lead  to  conclusions  which 

will  serve  as  guide I ines  for  the 

Commission  or  for  the  Member  State 

during  the  negotiations. 

Article  7 

Article~ 

At  the  end  of  negotiations  the  Member 

At  the  end  of  negotiations  the  Member 

State  concerned  shall  communicate  to  the 

State  concerned  shal I  communicate  to  the 

Commission  the  results  of  such 

Commission  the  results  of  such 

negoUat-lons  and  sha-11 

inform  the  other 

negotiations  and  shall  inform  the  other 

Member  States  thereof. 

Member  States  thereof. 

- 42  -

If  within  five  working  days  after 
communication  to  the  Commission  no  Member 

If  within  five  working  days  after 

communication  to  the  Commission  no  Member 

State  has  raised  any  objection  with  the 
Commission  to  the  proposed  agreement  or 

State  has  raised  any  objection  with  the 

Commission  to  the  proposed  agreement  or 

communicated  any  such  objection  to  the 

communicated  any  such  objection  to  the 

Member  State  concerned,  the  Commission 

Member  State  concerned,  the  Commission 

shall  forthwith  inform  the  Counci  I  and 

shall  forthwith  inform  the  Council  and 

the  other  Member  States  of  that  fact, 

the  other  Member  States  of  that  fact, 

unless,  for  its  part,  the  Commission  has 

unless,  for  its  part,  the  Convnission  has 

any  objection  to  raise. 

any  objection  to  raise. 

Upon  receipt  of  this  information  the 

Upon  receipt  of  this  information  the 

agreement  in  Question  may  be  concluded. 

agreement  In  question  may  be  concluded. 

In  all  other  cases,  the  agreement  may  be 

In  all  other  cases,  the  agreement  may  be 

concluded  only  after  authorization  by  the 

concluded  only  after  authorization  by  the 

Counci  I,  acting  by  a  Qualified  majority 

Councl  I,  acting  by  a  qualified  majority 

on  a  proposal  from  the  Commission. 

on  a  proposal  from  the  Convnission. 

TITLE 

I  I  I 

TITLE  I II 

Final  provisions 

Final  provisions 

Article  8 

Article~ 

The  information  and  consultations 

The  information  and  consultations 

provided  for  in  this  Decision  shal I  be 

provided  for 

in  this  Decision  shall  be 

covered  by  professional  secrecy  and 

covered  by  professional  secrecy  and 

shall,  in  particular,  not  involve  the 

shall,  in  particular,  not  involve  the 

disclosure  by  the  Commission  on 

disclosure  by  the  Commission  of 

information  provided  by  a  Member  State 

information  provided  by  a  Member  State 

under  this  Decision  and  certified  by  that 

under  this  Decision  and  certified  by  that 

State  as  being  convnercially  sensitive, 

State  as  being  commercially  sensitive, 

except  for  the  purposes  of  Article  1. 

except  for  the  purposes  of  Article  1. 

- 43  -

Article  .1Q. 

The  consultation  and  coordination 

provided  for  in  this  Decision  shal I  take 

place  within  the  framewoTk  of  a  special 
committee  appointed  by  the  Counci  I  and  as 

provided  for  in  Article  113  of  the 

Treaty. 

Article  ll 

1. 

The  Councl  I  having  concluded  an 

agreement  between  the  Community  and 
a  third  country  or  countries  and 

est ab I i shed  er i ter i a  inter  a I i a  for 

the  allocation  of  traffic  rights, 

the  Commission  shal I  take  the 

necessary  measures  for  its 

implementation. 

2. 

The  Commission  shal I  be  assisted  by 

a  committee  composed  of  the 
representatives  of  the  Member 

States  and  chaired  by  the 

representative  of  the  Commission. 

The  representative  of  the 

COmmission  shal I  submit  to  the 

committee  a  draft  of  the  measures 

to  be  taken.  The  committee  shal I 

deliver  its  opinion  on  the  draft 

within  a  time  I imit  which  the 

chairman  may  lay  down  according  to 

the  urgency  of  the  matter.  The 

- 44  -

opinion  shall  be  delivered  by  the 
majority  laid  down  in  Article 
148(2)  of  the  Treaty  in  the  case  of 
decisions  which  the  Council  is 
required  to  adopt  on  a  proposal 
from  the  Commission.  The  votes  of 
the  representatives  of  the  Member 
States  within  the  committee  shall 
be  weighted  in  the  manner  set  out 
In  that  Article.  The  chairman  shal I 
not  vote. 

The  Commission  shall  adopt  measures 
which  shall  apply  innediately. 
However,  if  these  measures  are  not 
in  accordance  with  the  opinion  of 
the  committee,  they  shall  be 
communicated  by  the  commission  to 
the  Council  forthwith.  In  that 
event  the  Commission  may  defer 
application  of  the  measures  which 
it  has  decided  for  a  period  of  not 
more  than  one  month  from  the  date 
of  such  communication. 

The  council,  acting  by  a  qualified 
majority,  may  take  a  different 
decision  within  the  time  limit 
referred  to  in  the  previous 
subparagraph. 

- 45  -

Article  9 

Article  ll 

The  following  Article  15a  is  inserted  in 

The  following  Article  15a  is  hereby 

Decision  69/494/EEC; 

Inserted  In  Decision  69/494/EEC: 

"Article  15a 

"Article  15a 

This  decision  does  not  apply  to 

This  Decision  does  not  apply  to 

agreements  and  arrangements 

concerning  aviation  matters." 

agreements  and  arrangements 

concerning  aviation  matters." 

Article  ll 

The  Councl  I  may  extend,  on  the  basis  of  a 

Commission  proposal,  the  transitional 

periods  of  Articles  5  and  6  for  one  or 
more  periods  of  one  year.  The 

Commission's  proposal  shal I  be  submitted 

at  the  latest  6  months  before  the  expiry 

of  the  relevant  transitional  periods. 

Article  10 

Article  H 

This  Decision  is  addressed  to  the  Member 

This  Decision  is  addressed  to  the  Member 

States. 

States. 

Done  at  Brussels, 

For  the  Counc i I 

Done  at  Brussels, 

For  the  Counc i I 

The  President 

- 46  -

Annex  11 

The  procedure  step  by  step 

- 47  -

The  procedure  step  by  atep 

Step  I 

Reauest  for  negotiations: 

One  or  more  Member  States  request  negotiations  with  a 
particular  third  country  or  group  of  third  countries,  or 
the  Community  decides  to  Initiate  negotiations. 

A  third  country  or  group  of  third  countries  requests 
negotiations  with  a  particular  Member  State  or  with  the 
Community  as  a  whole. 

Action:  These  requests  are  all  submitted  to  the  Commission 

step  11  Preparation  of  a  proposal 

The  Commission  considers  the  request  and  prepares,  after 
consultations  with  Interested  parties,  a  proposal 
Indicating  If  the  negotiations  should  be  carried  out  on 
Member  State  level  or  on  Community  level,  In  which  case  it 
also  proposes  draft  directives  for  negotiations. 

Action:  The  proposal  is  submitted  to  the  Council  for  examination  In  the 

ad  hoc  Aviation  Committee. 

step  111  Decision  of  the  council 

The  Aviation  Committee  prepares  the  decisions  of  the 
Council  on  the  proposal  of  the  Commission  to  authorize  the 
Commission  to  open  the  negotiations,  or  the  Member  States 
to  negotiate  individually.  According  to  normal  procedures 
the  Counci  I  can  decide  non-controversial  issues  as  an  A 
point.  In  other  cases  the  Council  may  have  to  decide  after 
a  debate. 

Consultation  of  Interested  parties. 

The  proceedings  of  the  Aviation  Committee  will  be  strictly 
confidential.  Detailed  directives  for  negotiations  will  be 
kept  secret. 

Action:  Decision  by  the  Council. 

Step  IV  Negotiations 

Depending  on  the  decision  the  negotiations  are  carried  out 
on  Member  State  level  or  on  Conrnunlty  level. 

On  Member  State  level:  the  negotiations  are  carried  out  by 
the  Member  State;  the  Commission  can  participate  as 
observer.  The  Member  State  wlll  negotiate  within  the 
framework  agreed  upon  by  the  Aviation  Committee  or  the 
Council  and  subject  to  directives  or  conditions  Imposed  by 
them. 

- 48  -

On  Community  level:  the  negotiations  are  carried  out  by  the 
Commission,  within  the  directives  for  negotiations  agreed 
upon  by  the  councl I;  the  normal  procedures  for  Community 
negotiations  shal I  apply;  close  contact  with  Industry 
representatives  will  be  Insured  on  the  occasion  of  the 
negotiations. 

Action:  After  inltlalling  of  the  agreement  the  texts  shall  be 

submitted  to  the  Aviation  Committee  and  to  the  Commission. 

Step  V  Conclusion 

An  agreement  negotiated  at  Member  State  level  can  be  signed 
by  that  Member  State  two  weeks  after  Its  referral  to  the 
Aviation  Committee  and  the  Commission,  unless  one  of  these 
parties  raises  objections  against  the  result  of  the 
negotiations.  In  such  cases  the  matter  will  be  discussed  by 
the  Aviation  Committee  and  when  no  agreement  can  be  reached 
the  Council  shal I  take  the  necessary  decisions.  This 
procedure  Is  without  prejudice  to  the  general  competences 
of  the  Commission. 

An  agreement  negotiated  at  Community  level  shall,  after 
discussion  in  the  Aviation  Committee,  be  referred  to  the 
Councl  I  for  conclusion. 

The  European  Parliament  will  be  Informed  in  line  with 
existing  procedures. 

Action:  Signature  of  the  agreement 

THE  PROCEDURE  STEP  BY  STEP 

STEP  1 

REQUEST  FROM 

MEMBER  STATES 

OR  COMMUNITY 

REQUEST  FROM 
THIRD  COUNTRY 

/ 

STEP  2 

STEP  3 

STEP  4 

STEP  5 

" - COMMISSION 

AVIATION 

COMMITTEE 

I 
MEMBER  STATE /   ~ COMMUNITY 

COUNCIL 

NEGOTIATION""' 

NEGOTIATION 

AVIATION/ 

COMMITTEE 

S IGNATURE /  

PARL. 

SIGNATURE 

- 49  -

Annex  111 

Statlatlcal  Tabulatlona  - General 

- so  -

TEAMS  AND  DEFINITIONS 

Geographlca1  Europe: 

Includes  all  International  routes  originating  and  terminating 
within  Europe  (Including  Turkey  and  USSR  up  to  55.E),  Azores, 
Canary  Islands,  Madeira  and  Cyprus. 

Europe-North  Africa  : 

services  between  Europe  and  Algeria,  Egypt,  Libya,  Morocco,  Sudan 
and  Tunisia. 

Europe-Mlddle  East  : 

Terminating  services  between  Europe  and  Bahrain,  Iran,  Iraq, 
Israel,  Jordan,  Kuwait,  Lebanon,  Oman,  Qatar,  Saudi  Arabia,  Syria, 
United  Arab  Emirates,  Yemen  and  the  Democratic  Republic  of  Yemen. 

North  Atlantic 

Routes  between  Europe  and  Canada/  USA 

Other  Long  haul  than  North  Atlantic: 

The  sum  of  Mid  and  South  Atlantic,  Sub  Saharan  Africa,  Far 
East/Australasia  and  other  routes. 

Total  1nternat1ona1 

The  sum  of  Int-short/medium  haul  and  total  long  haul 

Domestic= 

Routes  commencing  and  terminating  within  the  natural  frontiers 
(metropolitan  area)  of  the  reporting  carrier's  country  of 
registration.  Routes  between  a  State  and  territories  belonging  to 
It,  as  well  as  routes  between  two  suctLterrltorles. 

Revenue  passengers: 

All  passengers  counted  on  a  point-to-point  basis,  carried  at  25X  or 
more  of  the  normal  applicable  fare  for  the  Journey. 

Revenue  Passenger-KIiometres  - RPK 

One  fare-paying  passenger  transported  one  kilometre.  RPKs  are 
computed  by  multiplying  the  number  of  revenue  passengers  by  the 
kilometres  they  are  flown. 

TABLE  A 

INIERNATimAL  SCllDLFD  PASS~ 1'RAFFIC  BY  RIDICN  - :OC  CARRIERS 

.m. 

AP 

AZ 

M. 

IB 

ICL 

UI 

LG  ~  m. 

.z. 

.It. 

A'V.BbVE 

78.2 

49.S 

43.4 

49.3 

37.4 

S0.1 

44.6 

100 

26.0 

67.4 

48.8 

53.4 

S0.1 

86.9 

62.S 

71.S 

63.1 

77.8 

St.0 

68.4 

100.0 

72.6 

67.4 

87.6 

71 .9 

73.4 

Share  of  geographical  Bllr. 
in  total  traffic 
(dcme1tic  +  intl) 

Share  of  geographical  Bllr. 
in  total  intl  traffic 

Share  of  North  Atl.  traffic 
in  total  Intl  traffic 

13.1 

8.8 

11.0 

19.2 

7.3 

22.4 

15.2 

Share  of  Bllrope-NorthAfr 
traffic  in  total  inti  traffic  -
Share  of  Bllrope-Middle  Ea1t 
Traffic  in  total  inti  trffc 

-

Share  of  other  long  haul 
traffic  in  total  Intl  traffic  -

12.8 

4.9 

0.4 

2.S 

2.2 

1.7 

2.1 

2.4 

1.3 

o.s 

2.1 

2.2 

13.7 

10.3 

16.0 

12.0 

22.3 

12.4 

-

-

-

-

9.3 

13.6 

7.7 

12.1 

11.6 

S.1 

2.6 

0.2 

o.s 

2.7 

S.2 

1.8 

0.6 

-

LS 

7.8 

14.6 

4.0 

15.6 

10.7 

V, -

Total 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

Share  of  dcme1tic  traffic 
in  total  traffic 

Share  of  intl  traffic  in 
total  traffic 

10.1 

20.9 

39.3 

21.8 

52.0 

0.7 

36.0 

-

64.1 

-

44.3 

25.7 

26.3 

89.9 

79.1 

60.7 

78.2 

48.0 

99.3 

64.0 

100 

35.8 

100 

SS.1 

74.3 

73.7 

URE:  AF.A  - Statiltical Appendices  to  Yearbook.,  May  1991 
mm: 

Totall may  not  1\111  due  to  rounding 

TABLE  B 

INTRA-EC  NI>  ono INTEAM\TIQW.  TRAf'f'IC  B'f  MEMBER  STATE  Ml>  B'f  GEOGRAPHICAL  IMRICET  (PaH•ter• - 1990) 

Bel9h11 

Deraark 

France 

Gel'IICll'ly  Greece 

Ireland 

Italy 

Lux•bourg  Netherland• 

Portugal 

Spain 

U( 

lntro-£C  (•)  1158920 

1388388 

1415851 

821n14 

1211582 

1713211 

4520909 

12033 

28"818 

1157987 

3589117 

10550407 

70.1 

41.2 

54.7 

48.7 

.  51.1 

331173 

1058897 

1071183 

1874124 

190331 

12.0 

35.7 

1.1 

15.0 

1.1 

112n 

141217 

528793 

828407 

251910 

2.1 

5.0 

4.5 

8.8 

12.3 

15.0 

18.3 

17.2 

59.8 

71.5 

71.8 

53.8 

-
-
-
-

511145 

7.8 

214887 

3.2 

-
-
-
-

537928 

154821 

375741 

1944113 

11.1 

1.8 

7.8 

I.I 

211315 

4.4 

-
-

15025 

130854 

0.3 

3.2 

15.4 

11.1 

11.3 

71.3 

80.0 

95.0 

77.1 

17.2 

75.1 

81.1 

79.7 

18.1 

302IIO 

191270 

14080M 

1132321 

113242 

11531 

715253 

1.7 

11.1 

15.5 

7.1 

5.0 

10.5 

24803 

22NN 

181351 

0.1 

1.1 

1.3 

-
-

11521 

1414454 

418555 

141111 

0.4 

12.5 

3.7 

7.0 

5.2 
-
-

5.5 

7.7 

3.0 

-
-

5n10 

43811 

0.5 

2.1 

-
-
-
-
-
-
-
-

157483 

2.3 

411511 

1.1 

233385 

3.4 

3Ml4 

0.5 

11110 

153733 

157751 

H2934 

83043 

11.0 
-
-

ll3IO 

3.1 

0.1 

-
-
2711D> 

-
-
-. 
-

345 

2.1 

-
-
-
-

105879 

170483 

394188 

4158345 

12.5 

10.5 

7.1 

21.2 

13087 

123083 

454710 

120044 

1.3 

7.8 

1.1 

0.8 

121157 

11588 

91915 

152724 

2.8 

0.7 

2.0 

3.3 

V1 
N 

390528 

1.1 

11211 

0.4 

-
-
-
-
1117841 

10174 

1321381 

1.2 
-
-
4170378 

8.7 

2311!50 

1.2 

11118408 

11175773 

12!508924 

2083123 

1804822 

1117155 

12371 

4131571 

- ,  not  1111  aue  to  r0111C11n1 

Source:  ICM>  Dlge1t  of  Statl1tlc1  N•  314 
(•)  Exolucllng  dcae1tlc  traffic 

2111112 
.. 

X 

EFTA 

X 

. 

Europe 
(apart  fr• 
EC  I: EFTA) 

X 

Total  X 
Europe 

North 
Atlantlo 

" 

South 
Aaerlca 

X 

Mldclle  Eaat 
I: Africa 

" 

Far  Eaat 

X 

Au1tral la I: 
New  Zealand 

" 

Total 
- . .  

TABLE  C 

Europe 
(excludlng 
EC  a Ef'TA) 
s 
EFTA 
s 
North 
Atl•tlc 
s 
South 
Merica 
s 

Mldclle  Eoat 
s 
For·Eoat 
s 
Auatrol la a 
New  Zealand 
s 

INTEIII\Tl<M\L  lRAF'FIC  (DCLU>ltG  INTRA~  EC  TRAF'F'IC)  8t MEMBER  STATE  AND  8t GEOGRAPHICAL  INICET  (1110) 

Beith•  Denlark 

Fr•c• 

Ce,..,, 

Greece 

lr•l•d 

Italy 

Luxtllbourg  Netherland•  Portugal 

Spain 

ll( 

I.I 

1.3 

I.I 

13.2 

29.8 

41.0 

11.3 

20.0 

29.8 

22.0 

-
-

1.4 

22.8 

37.4 

12.4 

21.1 

30.7 

11.1 

100 

31.1 

-

1.5 

4.2 

2.7 

-

10.7 

0.7 

27.1 

7.4 

18.1 

2.1 

1.7 

12.2 

15.3 

7.3 

-

-

-

0.1 

5.1 

-

-
-

-

I.I 

11.2 

10.2 

1.8 

-
-

-

-

100 

-

-

10.8 

27.5 

-

1.1 

7.0 

33.7 

28.1 

21.4 

31.0 

37.1 

28.2 

45.1 

3.2 

28.8 

32.5 

1.3 

V1 
1.,,1 

8.5 

20.0 

0.1 

2.5 

7.1 

7.2 

-

-

4.3 

14.7 

-

2.1 

•Total•-, not  1111  clue  to  rounding 

Source:  ICAO  Dlgeat  of  Statlatlca N•  314 

- 54  -

Table  D 

Hlstorlcal  and  Forecast  growth  rates  In  European  long  haul  travel  by 
destination  region,  1980  - 2000  CS  per  annum;  arrivals  basis) 

Destination  region 

1980-1985  1985-1989  1989-2000 

North  America 

- 2.7 

17.9 

9.8 

Caribbean 

- 2.3 

21.5 

8.1 

Central/South  America 

Africa  (except  North) 

South  Asia/Indian  Ocean 

4.4 

5.7 

1.2 

5.5 

3 .1 

5 .1 

5.6 

9.5 

7.0 

South  East  Asia 

1.9 

20.0 

9.7 

Far  East/Pacific 

8.5 

7.3 

7.2 

Austral la/New  Zealand 

4.9 

U.9 

8.1 

Total 

1.4 

13.5 

8.3 

Source 

Economic  lntelllg~nce  Unit 

TABLE  E 

INIF..RNATimAL  SCJEll.B) PASSIHJER  'IRAFFIC  BY  RBJICN  - IC  C'.ARRIBS  (based  on  RH{s) 

Share  of  1eo1raphical  Eur. 
in  total  traffic 
(daneatic  +  inti) 

Share  of  geographical  Eur. 
in  total  inti  traffic 

Share  of  North Atl.  traffic 
in  total  Intl  traffic 

Share  of  Europe-North  Afr 
traffic  in  total  inti  traffic 

Share  of  Europe-Middle  Eaat 
Traffic  in  total  inti  trffc 

Share  of  other  Iona  haul 
traffic  in  total  Intl  traffic 

Total 

Share  of  daneatic  traffic 
in  total  traffic 

Share  of  inti  traffic  in 
total  traffic 

-

-

-
100 

.IL 

IL  & 

A 

1B 

& 

lll 

.IQ. 

m. 

1li. 

I 

1P 

AVBJDE 

41.3 

16.6 

25.3 

15.3 

29.8 

10.4 

18.6 

100 

34.7 

21.8 

34.9 

35.8 

32.0 

42.O 

21.0 

28.2 

16.3 

38.O 

10.4 

20.O 

100.0 

40.8 

21.8 

43.6 

40.3 

35.2 

58.O 

25.5 

32.1 

39.O 

20.4 

39.8 

38.2 

8.0 

2.8 

0.5 

1.2 

1.6 

1.4 

3.3 

2.4 

1.8 

0.7 

2.0 

2.7 

42.2 

34.5 

42.5 

39.7 

46.2 

37.7 

-

-

-

-

24.6 

34.7 

33.5 

23.2 

30.8 

1.7 

2.1 

0.3 

0.1 

1.6 

3.1 

2.3 

1.1 

-

1.6 

VI 
VI 

29.7 

39.0 

21.5 

36.4 

30.8 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

1.7 

20.8 

10.4 

5.9 

21.6 

0.02 

6.8 

-

15.1 

-

19.8 

11.2 

9.4 

98.3 

79.2 

89.6 

94.1 

78.4 

99.9 

93.2 

100 

84.9 

100 

80.2 

88.8 

90.6 

DID!:  APA  - Statiatical  Appendicea  to  Yearbook,  May  1991 
tOIE: 

Totala may  not  1\ID due  to  rounding 

- 56  -

Annex 

IV 

The  EC/US  Market  - A atatlatlcal  overview 

- 57  -

Jbe  Ec1un1teg  states  Market 

1. 

Routes 

The  total  number  of  different  North  Atlantic  routes  between  the 
United  States  and  the  European  Community  as  of  August  1991  was  278 
(lncludlng  122  city  pairs  served  under  a  publlahed  through  fllght 
number  but  with  aircraft  change  at  an  Intermediate  point).  (See  Table 
A). 

Table  B details  the  share  carrier  by  carrier. 
carriers  operate  on  97  routes.  Despite  this,  EC  carriers  do  perform 
well  In  terms  of  business  and  market  share  on  the  routes.  Table  C 
details  the  EC  share  of  capacity  flown,  broken  down  by  Member  States. 
Of  the  11  EC  Member  States,  5  have  the  majority  share  of  their  market 
with  the  us. 

In  summary,  EC 

2. 

Gatewavs 

Again  using  data  from  August  1991  there  is  an  imbalance  in  what  has 
been  achieved  between  the  Convnunlty  and  Member  States. 
there  are  28  Gateways,  27  used  by  EC  carriers  and  22  used  by  US 
Carriers  (see  table  D)  and  of  55  American  Gateways,  54  are  used  by  US 
carriers  and  22  by  EC  carriers  (see  Table  E).  The  AEA  have 
addltlonally  completed  an  analysis  (Table  F)  which  confirms  the 
present  imbalance. 

In  the  EC 

3. 

Fifth  Freedom  Operations 

Table  G details  the  Fifth  Freedom  "rights"  achieved  by  us  negotiators 
for  their  carriers ..  As  of  August  1991,  there  were  20  routes  operated 
by  4  carriers. 
In  addition  to  this.  there  were  33  routes  operated 
from  European  airports  by  US  airlines.  The  AEA's  analysis  is  also 
provided  (Table  H). 

- 58  -

TABLE  A 

August  a1 

AMSTERDAM 

CITY  PAIRS 

Anchorage:  JL  (onllne  stopover  traffic  only) 
Atlanta:  DL,  KL 
Baltimore:  KL 
Boston:  NW 
Chicago:  KL,  RO 
Da I las  :  DL* 
Denver  :  co• 
Houston:  co•,  KL 
Honolulu:  CO* 
Los  Angeles  KL,  TW*,  DL*,  NW* 
Miami 
Mlnneapolls  KL,  NW 
New  York:  PK,  PA,  TW,  KL,  co•,  RO,  RJ 
Orlando:  KL,  UA*,  DL* 
San  Franslco:  DL* 
Tampa:  DL* 
Washington  UA* 

:  DL* 

ATHENS 
Atlanta:  PA* 
Boston:  NW 
Jacksonville:  PA* 
Los  Angeles:  TW* 
New  York  :  OA,  TW*,  PA* 
San  Francisco:  TW* 
Washington:  PA* 

BARCELONA 
New  York  :  18,  PA,  TW 

BERLIN 
Atlanta:  DL 
Colorado:  UA* 
Denver  :  UA* 
Miami 
:  PA* 
New  York  :  TW,  PA,  LH 
Washington:  UA* 

(*)  Plane  change  at  an  Intermediate  point 

- 59  -

BRUSSELS 
Boston:  SN 
Chicago:  SN,  AA,  UA* 
Los  Angeles:  AA* 
Miami 
:  AA* 
New  York  :  PA,  AA,  TW,  SN,  TK,  UA* 
Ralelgh/Durham:  AA* 
San  Diego:  UA* 
San  Francisco:  AA,  UA* 
Seattle:  UA* 
Washington  TW* 

COLOGNE 
New  York  :  LH 

JL  (onllne  stopover  traffic  only) 

COPENHAGEN 
Anchorage 
Atlanta 
DL 
Chicago:  SK 
Detroit  :  TW* 
Los  Angeles 
:  FF 
Miami 
MI  I waukee  :  TW* 
New  York  :  FF,  TW,  SK 
Seattle  :  SK 

SK 

DUBLIN 
Atlanta:  DL 
Boston:  El 
Chicago:  DL*,  El 
CI nc Ina tt I  :  DL 
Dal  las  :  DL* 
Los  Angeles:  DL* 
New  York  :  El 
Orlando:  DL 
San  Francisco 

DL 

DUSSELDORF 
Anchorage:  JL  (onllne  stopover  traffic  only) 
Chicago:  LH,  AA  (operated  by  LH  aircraft) 
Los  Angeles:  LT 
MI am I  :  LT '  LH 
New  York  :  LH 
San  Francisco:  LT 

- 60  -

DL* 

FRANKFURT 
Albuquerque 
Atlanta:  LH,  DL  PA* 
Austin:  DL* 
Baltimore  :  TW,  us 
Boston:  NW,  LH 
Charlotte:  LH,  US* 
Chicago:  UA,  AA,  LH 
Cincinnati  :  DL 
Cleveland:  us•,  co• 
Dallas  DL,  LH,  AA 
Dayton:  us• 
Denver  :  DL*,  UA*,  co• 
Detroit  :  NW 
EL  Paso:  DL* 
Fort  Lauderdale:  DL* 
Fort  Myers:  DL* 
Houston:  DL*,  PA*,  LH,  CO* 
lndlanapolls:  US* 
Jacksonville:  Fl,  PA* 
Kansas  City:  DL* 
Las  Vegas:  DL* 
Los  Angeles:  DL*,  AA*,  UA*,  TW*,  LH,  us•,  CO*,  NZ 
Memphis:  DL* 
Miami',:  DL*,  LT'  PA,  LH 
MI  I waukee  :  NW* 
Mlnneapol is  :  NW 
Nashv I I le  :  DL* 
New  Orleans:  DL* 
New  York  :  PA,  TW,  LH,  co,  PK 
Oklahoma  City  :  DL* 
Orlando:  DL 
Philadelphia:  LH,  us 
Phoenix  :  DL 
PI ttsburg  :  us 
Raleigh:  US*,  DL* 
Salt  Lake  City:  DL* 
San  Antonio:  DL* 
San  Diego:  DL* 
San  Francisco:  DL*,  LH,  AA,  TW,  UA*,  PA,  us•,  CO* 
San  Juan:  LH 
Sarasota:  DL* 
Seattle  :  NW 
St  Louis:  TW 
Tampa  :  DL* 
Tucson:  DL* 
Tulsa:  DL* 
Washington:  TW*,  UA,  PA,  LH 
w Palm  Beach  :  DL* 

- 61  -

GLASGOW 
Boston:  NW 
Chicago:  AA 
Dal  las  :  AA 
Loa  Angeles:  AA* 
New  York  :  NW,  BA 
San  Francisco:  AA* 
San  Jose:  AA* 

HAMBURG 
Atlanta:  DL 
New  York:  PA,  UA*,  LH 

LISBON 
TP 
Boston 
New  York  :  PA,  TW,  TP 

LONDON 
Anchorage:  BA,  JL  (onllne  stpover  traffic  only) 
Atlanta  :  DL,  BA 
Baltimore:  TW 
Boston:  NW,  AA,  vs,  BA 
Charlotte  :  us 
Chicago:  AA,  BA,  UA*,  CO* 
Clnclnatt I 
:  DL 
Cleveland:  PA,  CO* 
Colorado:  UA* 
Dallas:  AA,  co•,  BA 
Denver  :  AA*,  UA*,  co,  DL* 
Detroit  :  PA,  NW*,  BA 
Honolulu:  co 
Houston:  BA,  co 
Kansas  City:  DL*,  TW* 
Los  Angeles:  AA,  UA,  CO*,  BA,  NW*,  vs,  TW,  DL*,  NZ 
Memphis:  DL* 
Miami 
MlnneaPolls:  NW 
Nashville:  AA*,  DL* 
New  Orleans  :  us•,  co•,  DL* 
New  York:  AA,  UA,  TW*,  BA,  vs,  co,  Al,  LY,  KU 
Norfolk  :  us• 
Orlando:  AA*,  TW*,  US*,  PA*,  DL*,  BA,  UA* 
Phlladelphla:  TW,  BA 
Phoenix  :  co•,  DL* 
Pittsburgh  :  BA 
Portland  Ord:  CO* 
San  Antonia:  co• 
Raleigh/Dur  :  us• 
St  Louis:  TW 
Salt  Lake  City  :  DL* 
San  Antonio:  co• 

:  UA*,  AA,  PA,  BA,  vs,  DL* 

- 62  -

LONDON  (cont'd) 

San  Diego:  UA*,  TW* 
San  Francisco:  AA*,  TW,  UA,  BA,  co•,  DL* 
San  Jose:  AA* 
San  Juan:  AA*,  BA 
Seattle:  UA,  CO*,  BA 
Tampa:  US*,  DL*,  PA*,  BA,  CO* 
Washington:  UA,  CO*,  BA 

LUXEMBOURG 
Baltimore:  Fl 
New  York:  Fl 
Orlando:  Fl 

.LYQti 
New  York 

AF 

MADRID 
Anchorage:  JL  (onllne  stopover  traffic  only) 
Boston:  TW* 
Chicago:  UA* 
Dal  las  :  AA 
Loa  Angeles:  18,  TW*,  AA* 
Miami 
New  York  :  PA,  TW,  1B 
San  Diego:  AA* 
San  Francisco:  AA* 
San  Juan  :  1B 
Washington:  UA,  TW* 

:  PA*,  AA,  1B,  AM 

MANCHESTER 
Atlanta:  DL 
Chicago:  AA 
Dallas/FTW:  AA*,  DL* 
Los  Angeles:  DL* 
Miami 
:  AA* 
Nashv I I le  :  AA* 
New  York  :  AA,  BA 
Orlando:  DL* 
Raleigh:  AA* 
San  Juan:  AA* 

MILAN 
Boston:  AZ/US 
Chicago:  AZ,  AA 
Dal  las  :  AA* 
Los  Angeles 
Miami 
:  AZ 
Nashv I I le  :  AA* 
New  York  :  PA,  TW,  AZ 
San  Francisco:  PA*,  TW* 

TW*,  AZ/US 

- 63  -

MUNICH 
Atlanta:  DL 
Chicago:  UA*,  TW*.  AA,  LH 
Cincinnati  :  DL* 
Da 11 as/FTW  :  DL* 
Los  Angeles  :  UA*,  DL* 
Miami 
:  PA*,  LH 
New  York  :  UA*,  TW*,  PA,  LT,  LH 
Orlando:  DL* 
St  Louis:  TW* 
Seattle  :  UA* 
Tampa:  DL* 

,NJ,g_ 
Honolulu:  PA* 
Loa  Angeles:  PA 
New  York:  PA,  AF 

PARIS 
Anchorage:  AF,  JL  (online  stopover  traffic  only) 
Atlanta:  DL,  TW*,  AA* 
Boston:  TW,  CO*,  AF 
Chicago:  UA,  TW*,  AA,  AF 
Cincinnati  :  DL 
Cleveland:  CO* 
Dallas  FTW:  AA,  DL* 
Denver  :  CO*,  DL* 
Detroit  :  NW 
Greenville:  DL* 
Houston:  CO*,  AF 
Jackaonvllle:  TW* 
Kansas  City:  DL*, 
Loa  Angeles:  UA*,  PA*,  AA*,  TW,  DL*,  NW,  AF 
Memphis:  DL* 
Miami 
Naahvllle:  DL*,  AA* 
New  Orleans:  DL* 
New  York  :  PA,  TW,  co,  AA,  FF,  AF,  PK 
Phoenix  :  TW*,  DL* 
Portland:  TW* 
Raleigh:  AA 
San  Diego:  UA*,  AA 
San  Francisco:  TW*,  UA*,  UT,  PA*,  DL*,  AA* 
San  Juan:  AA* 
Salt  Lake  City:  DL* 
Seattle  :  TW* 
St  Louis:  TW 
Tampa  :  DL* 
Washington:  PA*,  CO*,  UA,  TW,  AF 

:  PA,  UA*,  DL*,  AA*,  AF,  AM,  QN 

- 64  -

PQNTA  QELGAQA 
Boston:  TP 

GME. 
Anchorage:  JL  Conllne  stopover  traffic  only) 
Boston:  TW,  AZ/US 
Chicago:  AZ 
Loa  Angeles:  TW*,  PA*,  AZ/US 
:  AZ,  PA* 
Miami 
New  York:  TW,  PA,  AZ 
St  Louis:  TW* 
San  Diego:  TW* 
San  Francisco:  TW* 
Washington:  TW* 

SHANNON 
Atlanta:  DL 
Boston:  El 
Chicago:  DL*,  El 
Cincinnati  :  DL* 
Dal  las  :  DL* 
Loa  Angeles:  DL* 
:  SU 
Miami 
New  York:  El 
Orlando:  DL* 
San  Francisco 
Washington:  SU 

DL* 

STUTTGART 
Atlanta:  PA*,  DL 
Dal  las  :  DL* 
Jacksonville:  PA* 
Loa  Angeles:  DL* 
Miami 
:  DL* 
New  York:  PA* 
Orlando:  DL* 
San  Francisco 
Tampa:  DL* 

DL* 

JERCEIRA 
Boston:  TP 

VENICE 
New  York 

AZ* 

- 65  -

NORTH  ATLANTIC  OPERATIONS  BY  CARRIER  - August  91 

TABLE  B 

EC  CARRIERS 

ROUTES 

KL 
OA 
1B 
LH 
SN 
SK 
El 
LT 
BA 
TP 
vs 
AF 
AZ 
IW 
UT 

8 
1 
4 
22 
3 
4 
6 
5 
20 
4 
4 
10 
11  (4  code  sharing+  1  a/c  change) 
2  Cop.  subj.  to  confirmation) 
1 

us  CARRIERS 

ROUTES 

DL 
TW 
NW 
us 
co 
AA 
PA 
FF 
UA 

N 

21  +  79  (with  an  a/c  change) 
24  +  33  ( 
13  +  4 
7  (4  code-sharing)+  12  (a/c  change) 
6  +  27  Ca/c  change) 
27  •  29  (  N 
21  +  22  (  N 

N 

N 

N 

) 

) 

) 

3 
9  +  29  (  N 

N 

) 

THIRD  CARRIERS 

ROUTES 

JL 
RO 
PK 
RJ 
TK 
NZ 
Al 
LY 
KU 
Fl 
AM 
QN 
· SU 

7  (onllne  stvr  tfc  only) 
2 
3 
1 
1 
2 
1 
1 
1 
3 
2 
1 
2 

- 66  -

EC  AIRLINES  ESTIMATED  CAPACITY  SHARES  ON  US-EC  ROUTES,  JUNE  1882 

TABLE  C 

I I 

reland  74X 

1Netherl 

ande  en 

1c.reece  sax 

I Italy  54X 
1scandanavla  51X 

IUK  45X 
1Total  44X 

1Geruny  39X 

1aelgh•  36X 

1spaln  31X 
1Portugal  28X 
1France  16X 

I 

10X 

I 

20% 

I 

30% 

I 

40X 

I 

SOX 

I 

60X 

I 
70X 

Source 

AVMARK 

- 67  -

EC  GATES  BY  EC  AND  us  OPERATORS  - August  91 

TABLE  D 

AMS 
ATH 

BCN 
BER 
BAU 

CGN 
CPH 

DUB 
DUS 

FRA 

GLA 

HAM 

LIS 
LON 

LYS 
LUX 

MAD 
MAN 
MUC 
MXP 

NCE 

(LHR  +  LGW) 

PAR  CCDG+oRY) 

POL 

ROM 

SNN 
STR 

TER 

VCE 

g 

KL 
OA 

18 
LH 
SN 

LH 
SK 

El 
LH,  LT 

LH,  LT 

BA 

LH 

TP 
BA,  VS 

AF 
Fl 

18 
BA 
LH,  LT 
AZ 

AF 

AF,  IW 

TP 

AZ 

El 

TP 

AZ 

1m. 

DL,  NW,  CO,  TW,  PA, 
PA,  TW 

PA,  TW 
DL,  UA,  PA,  TW 
PA,  TW,  UA,  AA 

DL,  FF,  TW 

DL 
AA 

PA,  DL,  NW,  UA,  AA, 
co,  TW,  us 

NW,  AA 

PA,  UA,  DL 

PA,  TW 
PA,  TW,  us,  DL,  CO 
UA,  AA,  NW 

PA,  TW,  UA,  AA 
DL,  AA 
DL,  UA,  TW,  AA,  PF 
AA,  us.  TW,  PA 

PA 

PA,  TW,  co,  AA,  FF, 
UA,  DL,  NW 

us.  TW,  PA 

DL 
PA,  DL 

28  Gates 

27  used  by 
EC  carriers 

22  used  by 
US  carr lers 

- 68  -

EFTA  GATES  BY  EFTA  AND  us  OPERATORS  - August  91 

EFTA 

SR 

AY 

SK 
Fl 
SK 

OS 
SR 

llS, 

TW,  PA 
FF 
PA 

PA,  FF 

M,  TW,  PA,  FF 

TW,  PA 
AA,  TW,  PA 

GVA 
GOT 
HEL 

OSL 
REK 
STO 

VIE 
ZRH 

8  Gates 

7  used  by  5 
EFTA  carr lers 

7  used  by  4 
US  carriers 

- 69  -

us  GATES  BY  EC  AND  us  OPERATORS  - August  91 

TABLE  E 

ABQ  (Albuquerque) 
ANC  (Anchorage) 
ATL  (Atlanta) 
AUS  (Austin) 

BWI  CBaltl1110re) 
BOS  (Boston) 

CLT  (Charlotte) 
CHI  (Chicago) 

CVG  (Cincinnati) 
CLE  (Cleveland) 
cos  (Colorado) 

DFW  (Dallas  FTW) 
DAY  (Dayton) 
DEN  (Denver) 
DTT  (Detroit) 

ELP  (El  Paso) 

FLL  (Fort  Lauderdale) 
FMY  (Fort  Myers) 

GSP  CGreenv I I le) 

HNL  (Honolulu) 
HOU  (Houston) 

IND  C lndlanapol ls) 

JAX  (Jacksonv I I le) 

MKC  (Kansas  City) 

LAS  (Las  Vegas) 
LAX  (Los  Angeles) 

MEM  (Memphis) 
MIA  (Miami> 

MKE  (Ml  lwaukee) 
MSP  CMlnneapol  ls) 

.U.S. 

TW,  DL 

DL,  TW,  AA,  PA 
DL 

TW,  us 
TW,  co.  US,  NW, 
AA 

us 
AA,  UA,  DL,  co 
TW 
DL 
us,  co,  PA 
UA 
AA,  DL,  co 
us 
DL,  UA,  co.  AA 
NW,  PA 

DL 

DL 
DL 

DL 

co,  PA 
co,  DL,  PA 
us 

PA,  TW 

DL,  TW 

DL 
DL,  AA,  UA,  TW, 
us,  co,  PA,  NW 

DK 
DL,  PA,  AA,  UA, 
FF 
TW,  NW 
NW 

& 

BA,  BF 
LH,  KL,  BA 

KL 
SN,  AF,  TP,  El 
AZ,  VS,  BA,  LH 

LH  csubJ.  gvt  apr) 
LH ,  E I ,  AZ ,  BA , 
KL,  SK,  SN,  AF 

LH,  BA 

BA 

BA,  KL,  AF,  LH 

LH,  LT,  AF,  IB 
SK,  AZ,  KL,  BA 
VS, 

IW 

LT,  LH,  AF,  IB 
AZ,  BA,  vs 

KL 

- 70  -

BNA  (Nashv I I le) 
MSY  (New  Orleans) 
NYC  (New  York) 

ORF  (Norfolk) 
ORL  (Orlando) 

OKC  (Oklahoma  City) 

PHL  (Ph I lade lph la) 
PHX  (Phoenix) 
PIT  (Pittsburgh) 
POR  (Portland  OR) 

RDU  (Raleigh) 

SAT  (San  Antonia) 
SAN  (San  Diego) 
SFO  (San  Francisco) 

SJC  (San  Jose) 
SJU  (San  Juan) 
SLC  (Salt  Lake  City) 
SRQ  (Sarasota) 
SEA  cseatt le) 
STL  (St  Louis) 

TPA  (Tampa) 
TUS  (Tucson) 
TUL  (Tulsa) 

AA,  DL 
DL,  us.  co 
AA,  NW,  UA,  TW 
co,  PA,  FF 

us 
DL,  AA,  TW,  US 
PA,  UA 
DL 
us,  TW 
co,  DL,  TW 
us 
TW,  co 
us.  AA,  DL 
DL,  co 
DL,  UA,  AA,  TW 
AA,  TW,  UA,  co 
DL,  PA,  US 
AA 

AA 
DL 
DL 
NW,  UA,  TW,  co 
TW 
DL,  us,  PA,  co 
DL 
DL 

BA,  EI,  vs.  LH,  LT, 
LT,  OA,  AZ,  KL,  TP, 
SK,  18,  AF,  SN, 

BA,  KL 

LH,  BA 

BA 

BA,  LT,  UT, 
LH 

IW 

18 

BA,  18,  LH 

SK,  BA 

BA 

WAS  (Washington) 
PBI  CW  Palm  Beach) 

UA,  CO,  PA,  TW 
DL 

BA,  AF,  LH 

55  Gates 

54  used  by  US 
carriers 

22  used  by  EC 
carriers 

- 71  -

BILATERAL  ARRANGEMENTS 

TABLE  F 

EUROPEAN  AIRLINES  IN  THE  US  - AUGUST  1991 

eountrv 

1)  AUSTRIA 

2)  BELGIUM 

3)  FINLAND 

4)  FRANCE 

5)  GERMANY 

Rights  Granted 

New  York+  one 
optional  pt. 

1)  New  York 
Boston 
Chicago 
Atlanta 
Detro It 

2)  Pts  In  the  US 
(a I I-cargo 
serv.  only) 

New  York 
Seattle 
Anchorage 
One  pt  in 
Ca Ii fornla 

New  York 
Washington 
Boston 
Chicago 
Phi  I ade I ph I a 
Houston 
Los  Angeles 
Anchorage 
Miami 
San  Francisco 
San  Juan 

Anchorage 
Atlanta 
Boston 
Chicago 
Da  I las 
Fairbanks  (cargo) 
Houston 
Los  Angeles 
Miami 
New  York 
Phi  ladelphla 
San  Francisco 
San  Juan 
Washington 

Rights  Used 

New  York 

Boston 
Chicago 
New  York 

Los  Angeles 
New  York 

Anchorage 
Boston 
Chicago 
Houston 
LOS  Angeles 
Miami 
New  York 
San  Francisco 
Washington 

Atlanta 
Boston 
Charlotte(*) 
Chicago 
Dal  las 
Houston 
Los  Angeles 
Miami 
New  York 
Philadelphia 
San  Francisco 
San  Juan 
Washington 

(*)  Subject  to  government  approval 

8)  GREECE 

7)  IRELAND 

8)  ITALY 

- 72  -

New  York 
or 
Boston/Chicago 
or 
New  York/Chicago 
or 
any  one  other 
US  point 

New  York 
Boston 
Chicago 
Los  Angeles 

1)  New  York 
Boston 
Detro It 
p h I I a de I ph I a 
Washington 
Chicago 
Los  Angeles 

or 

San  Francisco 

2)  New  York 
Boston 
Chicago 
ca I I-cargo 
services  only) 

9)  LUXEMBOURG 

None 

10)  NETHERLANDS 

11)  PORTUGAL 

12)  SCANDINAVIAN 
COUNTRIES 

New  York 
Chicago 
Los  Angeles 
Houston 
Anchorage 
At  I anta 
Orlando 

New  York 
Boston 
Los  Angeles 
Miami  or 
San  Juan 

New  York 
Chicago 
Seattle 
Los  Angeles 
Anchorage 
San  Juan 

New  York 

New  York 
Boston 
Chicago 

New  York 
Boston 
Chicago 
Loa  Angeles 
Miami 

None 

Atlanta 
Baltimore 
Chicago 
Houston 
Loa  Angeles 
MlnneaPol  la 
New  York 
Orlando 

New  York 
Boston 

Chicago 
Los  Angeles 
New  York 
Seattle 

13)  SPAIN 

1-4)  SWITZERLAND 

15)  UK 

- 73  -

New  York 
Boston 
Washington 
Baltimore 
San  Juan 
Miami 
Chicago 
Los  Angeles 

New  York 
Boston 
Chicago 
Anchorage 
Atlanta 
Los  Angeles 

1)  Anchorage 
Atlanta 
Boston 
Chicago 
Dal  las  FW 
Detroit 
Houston 
Los  Angeles 
Miami 
New  York 
Newark 
Orlando 
Phi  ladelphla 
San  Francisco 
Seattle 
Washington 
San  Juan 
Tampa 
Pittsburg 
Denver 
San  Diego 
One  other  us  pt 
to  be  nominated 

2)  Pts  In  US 

(a 11  cargo 
services  only) 

New  York 
San  Juan 
Miami 
Los  Angeles 

New  York 
Boston 
Chicago 
Atlanta 
Los  Angeles 
Phi  ladelphla 

Anchorage 
Atlanta 
Boston 
Chicago 
Dal  las  FW 
Detro It 
Houston 
Los  Angeles 
Miami 
New  York 
Newark 
Orlando 
P"' I lade lph la 
San  Francisco 
Seattle 
Washington 
San  Juan 
Tampa 
PI ttsburg 

None 

- 74  -

BILATERAL  ARRANGEMENTS 

US  AIRLINES  IN  EUROPE  - AUGUST  1991 

TABLE  G 

Rights  Granted 

Rights  Used 

countrv 

1)  AUSTRIA 

2)  BELGIUM 

3)  FINLAND 

4)  FRANCE 

Vienna 

Pts  in  Belglum 

Pts  in  Finland 

Paris 
Nice 
Lyon 
Marseille 

5)  GERMANY 

Pts  In  Germany 

8)  GREECE 

7)  IRELAND 

8)  ITALY 

Athens 

Shannon 
Dub Ii n  (Via 
Shannon) 

1)  Rome 

Ml  Ian 
(Combination  & 
al I  cargo  ser.) 

2)  Turin 
or 
Pisa 
or 
Naples 
Ca 11  cargo 
serv.  only) 

9)  LUXEMBOURG 

None 

10)  NETHERLANDS 

11)  PORTUGAL 

12)  SCANDINAVIAN 
COUNTRIES 

Any  pts  in 
Netherlands 

Lisbon 
Azores 

Copenhagen 
Oslo 
Stockholm 
Gothenburg 
Bergen 
St avenger 

Vienna 

Brussels 

Helslnkl 

Par Is 
Nice 

Berl In 
Dusseldorf 
Hamburg 
Munich 
Stuttgart 
Frankfurt 

Athens 

Shannon 
Dub I In 

Rome 
Ml  Ian 

None 

Amsterdam 

Lisbon 

Copenhagen 
Oslo 
Stockholm 

13)  SPAIN 

14)  SWITZERLAND 

15)  UK 

- 75  -

Madrid 
Barcelona 
Malaga 
Palma 

Zurich 
Geneva 
Basie 

1)  London 

Manchester(*) 
Prestwick 
Glasgow 

2)  Pts  in  the  UK 
(a 11  cargo 
serv.  only) 

Madrid 
Barcelona 

Zurich 
Geneva 

London 
Manchester 
Glasgow 

(*)  provisional  and  for  use  on  Chicago  only 

- 76  -

FIFTH  FREEDOM  RIGHTS  PURSUANT  TO  BILATERAL  AGREEMENTS 

TABLE  H 

US  Al r I Ines 

European  Alrllnes 

Rights  Granted  Rights  used  Rights  Granted 

Rights  Used 

Between  one 
Intermediate  pt 
and  the  2nd  pt 
In  the  us 

Intermediate  pts 
and  beyond  pts 
In  Canada  and/or 
Mexico 

Intermediate  pte  HOU-MEX 
over  N.  Atlantic  ANC-TYO* 
New  York-Mexico 
Montreal-Chicago 
Houston-Mexico 

eountrv 

AUSTRIA 

2  Intermediate  VIE-FRA 
pte  except 
VIE-BUD 
PAR/DUS/MUC 

BELGIUM 

lntermed. 

Any 
and  beyond  pts 

BRU-BER 
BRU-GVA 

FRANCE 

1)  Between  Paris 

PAR-ATH 
PAR-GVA 
PAR-MUC* 
PAR-ROM 
PAR-TLV 
PAR-ZRH 

and  Switzerland 
Italy,  Greece, 
Turkey,  Egypt, 
Near  East, 
Pakistan,  India, 
Ceylan,  Burma, 
Thailand,  Hanoi, 
China,  and  beyond 

2)  Between  Nice/ 
Marse I I le,  and 
Spain,  Greece, 
Italy,  Switzerland, 
Albania,  Budapest, 
Bulgaria,  Roumanla, 
Turkey,  Yugoslavia, 
Pakistan,  India, 
Ceylan,  Burma, 
Thailand,  Hanoi, 
Singapore,  Jakarta, 
China,  Macao, 
Hong  Kong,  Mani  Ila, 
and  beyond 

3)  Between  Paris** 
and  Brussels**, 
Colognes  and 
Maastrlcht** 

GERMANY 

Any  Intermediate 
and  beyond  pts 

Any  Intermediated 
And  beyont  pts 

DFW-MEX 
DFW-ATL* 
HOU-CLT* 
ANU-SJU 
SXM-SJU 
PHL-YMQ 
ATL-DFW* 

FRA-BEG 
FRA-BUM 
FRA-BUH 
FRA-KHI 
FRA-DBV 
FRA-IST 
FRA-LED 
FRA-LON 
FRA-MOW 
FRA-NBO 
FRA-PRG 
FRA-KRK 

(*)  onllne  stpvr  trf  only 
(**)  cargo  only 

GREECE 

IRELAND 

ITALY 

- 77  -

FRA-RUH 
FRA-WAW 
FRA-ATH* 
FRA-ANK 
FRA-BUD* 
FRA-VIE 
HAM-LON 
MUC-LON 
MUC-PAR* 
STR-AMS 
STR-DBV 
NUE-BER 

Rome-Athens 
Athens-Cairo 
Athens-Tel  Aviv 

ATH-ROM 
ATH-FRA* 
ATH-PAR* 

Any  points 
beyond  Shannon 

DUB-SNN* 

None 

1)  Between  I ta I y 

and  intermediate 
pts  in  Ireland, 
UK,  France,  FRG 
Switzerland, 
Portugal,  Spain, 
and 

ROM-ATH 
ROM-PAR 
ROM-CAI 
ROM-IST 

Intermediate 
pts  In  France 
or  Spain, 
Ireland  or 
Portuga I,  UK, 
and  pt  In 
Canada 

2)  Between  Rome 

and  beyond  pts 
in  Greece, 
Turkey,  Lebanon, 
Israel,  Syria, 
Egypt, 
Saudi  Arabia, 
Iran,  Pakistan, 
India,  Sri  Lanka, 
Burma,  Thal  land, 
Malaysia,  CambodJa, 
Vietnam,  PR  China, 
Hong  Kong 

LUXEMBOURG 

None 

None 

None 

None 

NETHERLANDS 

Any  intermediate  AMS-STR 
AMS-HAM 
and  beyond  pts 

Montreal 
Houston 

(*)  onllne  conex/stpvr  trf  only 

- 78  -

PORTUGAL 

LIS-BCN 

Beyond  pts 
on  Med . I s I ands 
and  In  countries 
bordering  Med. 
sea,  Africa  North 
of  Equator,  Kenya, 
Uganda,  Tanzania, 
Near/Middle/Far 
East 

SCANDINAVIAN  Any  Intermediate  OSL-HEL 
CPH-STO 
COUNTRIES 
OSL-STO 
CPH-LON* 

and  beyond  pts 

SPAIN 

1)  Between 

BCN-LIS 

Azores/Lisbon 
and 
Madrid/Barcelona 

2)  Between 

Madrid/Barcelona 
and  pts  in 
South  of  France 
Italy,  Greece, 
Algeria,  Tunisia, 
Libya,  Egypt, 
Uganda,  Kenya, 
Tanzania,  Turkey, 
Israel,  Lebanon, 
Jordan,  Iraq, 
Iran,  Syria, 
Saudi  Arabia, 
Arabian  Peninsula, 
Afghanistan, 
Pakistan,  India 

(*)  onllne  conex  trf  only 

1)  Between  an 

Intermediate 
pt  In  Canada 
and  Los  Angeles 

2)  Between  Miami 

and  beyond  pts 
In  Caribbean/ 
Centr.Amerlca 
or 
between  San 
Juan  and  Caracas/ 
beyond  pts  In 
countries  on  the 
west  coast  of 
South  America 

1)  Anchorage-Tokyo 
2)  Between  Intermediate 
pts  In  part  of  FRG, 
UK,  . I re I and ,  Ice I and 
Azores,  Canada 
(Labrador, 
Newfoundland, 
Quebec)  and 
alternate  terminal 
pts  New  York 
and  Chicago 

SJU-SJO 

Between 
San  Juan 
and  pts 
In  Haiti 
Jamaica 
Mexico 
Guatamala 
Honduras 
Nicaragua 
El  Salvador 
Costa  Rica 
Panama 
Trinidad 
Curacco 
Venezuela 
Colombia 
Equador 
Peru 
Bol  lvla 
Chi  11 

- 79  -

UK 

1)  Between  London 
and  Glasgow/ 
Prestwick  on 
the  one  hand 
and  Frankfurt, 
Ber I in,  Hamburg 
and  Munich 
on  the  other 

LON-FRA 
LON-HAM 
LON-MUC 
LON-BER 
LON-CPH* 

2)  Prestwick-

Oslo 
3)  Between 

London  and 
Turkey,  Lebanon 
Syria,  Iran, 
Pakistan,  New 
Delhi,  Calcutta, 
Thai I and  and 
Japan 
4)  Prestwick-
Shannon 

(*)  onllne  conex  trf  only 

Source:  AEA,  ABC  - August  1991 

DET-YMQ 
TPA-BDA 
ANC-OSA 
ANC-TYO 
ORL-BDA 

1)  Between 
Boston, 
Chicago, 
Da 11 as, 
Detroit, 
New  York 
Ph I I ade I ph I a 
and  Washington 
on  the  one  hand 
and  Canada 
on  the  other 

2)  Between 
Boston, 
Detro It, 
New  York, 
Phlladelphla, 
and 
Washington  on 
the  one  hand 
and  Mexico  City 
on  the  other 

3)  Between 
Atlanta 
and  San  Juan 
on  the  one  hand 
and  Venezuela, 
Colombia  &  Peru 
on  the  other 

4)  Between 

San  Juan  and 
other  pts  In 
s.  America 

5)  Between 

Anchorage 
and  Japan 

- 80  -

5TH  FREEDOM  OPERATIONS  IN  THE  EC  AUGUST  1991 

TABLE  I 

CARRIER 
PA 
TW 
PA 
PA 
UA 
PA 
PA 
DL  (int'I  onllne  connections  traffic  only) 
TW  (onllne  connections  traffic  only) 
TW  (onl ine  connections  traffic  only) 
TW 
PA  (onl ine  connections/stopover  traffic  only) 
UA,TW 
UA 
UA 
DL  (onl ine  connections/stopover  traffic  only) 
DL  (onl ine  connections/stopover  traffic  only) 
PA  (online  connectlons/stoPover  traffic  only) 
PA 
TW 

ROUTE 
BCN-LIS 
BER-BRU 
BER-HAM 
BER-HAJ 
BER-LON 
BEA-NUE 
BEA-GWT 
COP-LON 
PAA-ATH 
PAR-MUC 
PAR-ROM 
FRA-ATH 
FRA-LON 
LON-HAM 
LON-MUC 
DUB-SNN 
STA-AMS· 
STA-FAA 
HAM-AMS 
ATH-AOM 

20  ROUTES,  4  CARRIERS 

US  AIRLINES  OPERATING  SERVICES  FROM  EUROPEAN  AIRPORTS 
(excluding  5th  freedom  operations  within  the  EC) 

Route 

BEG-FAA 
BEG-VIE 
BEG-BUH 
BAU-GVA 
BUH-FRA 
BUD-FRA 
BUD-VIE 
ROM-CAI 
DBV-VIE 
FAA-VIE 
FRA-ANIC 
FAA-BOM 
FRA-DEL 
FRA-DBV 
FRA-IST 

Carrier 

PA 
PA 
PA 
TW 
PA 
PA  (onl lne  connections/stopover  traffic  only) 
PA 
TW 
PA 
TW 
PA 
PA 
PA 
PA 
PA 

FRA-KHI 
FRA-KRK 
FRA-LED 
FRA-MOW 
FRA-PRG 
FRA-VIE 
FRA-NBO 
FRA-RUH 
FRA-WAW 
OSL-HEL 
OSL-STO 
PAR-GVA 
PAR-TLV 
PAR-ZRH 
STO-COP 
IST-ROM 
STR-DBV 
BUC-BEG 

- 81  -

PA 
PA 
PA 
PA 
PA 
TW 
PA 
PA 
PA 
PA 
PA 
TW 
TW 
TW 
TW 
TW 
PA 
PA 

H  B2Yill 

2  Carrier~ 

- 82  -

A1r11ne  Des1anat1ons 

Japan  Alrl Ines 
KLM 

AA  American  Airlines 
AF  Air  France 
Al 
Air  India 
AM  Aeromexlco 
Flnnalr 
AV 
AZ 
Al  Ital la 
BA  British  Airways 
CO  Continental  Airlines 
DL  Delta  Alrllnes 
Aer  Llngus  Pie 
El 
Tower  Air 
FF 
lcelandalr 
Fl 
Iberia 
18 
IW  Mlnerve 
JL 
KL 
KU  Kuwait  Airways 
Lufthansa 
LH 
LTU 
LT 
El  Al  Israel  Alrl Ines 
LY 
NW  Northwest 
NZ  Air  New  Zealand 
OA  Olympic 
PA 
PK 
QN  Air  Outre  Mer 
RJ 
RO 
SK 
SN 
SU  Aeroflot 
TK 
TP 
TW 
UA  United  Airlines 
US 
UT 
VS  Virgin  Atlantic  Airways 

Royal  Jordanian 
Tarorn 
SAS 
Sabena 

Turkish  Alrl Ines 
TAP 
TWA 

Pan  Am 
Pakistan  International 

USAlr 
UTA 

CITY'  CODES 

ABQ:  Albuquerque 
AMS:  Amsterdam 
ANC:  Anchorage 
ANK:  Ankara 
ANU:  Antigua 
ATH:  Athens 
ATL:  Atlanta 
AUS:  Austin 
BCN:  Barcelona 
BOA:  Bermuda 
BEG:  Belgrade 
BER:  Ber I In 
BNA:  Nashville 
BOM:  Bombay 
BOS:  Boston 
BRU:  Brussels 
BUD:  Budapest 
BUH:  Bucharest 
BWI:  Baltimore 
CAI:  Cairo 
CGN:  Cologne 
CHI:  Chicago 
CLE:  Cleveland 
CLT:  Charlotte 
COS:  Colorado 
CPH:  Copenhagen 
CVG:  Cincinnati 
DAY:  Dayton 
DBV:  Dubrovnik 
DEN:  Denver 
DFW:  Dal  las  FTW 
OTT:  Detroit 
DUB:  Dub I In 
DUS:  Dusseldorf 
ELP:  El  Paso 
FLL:  Fort  Lauderdale 
FMY:  Fort  Myers 
FRA:  Frankfurt 
GLA:  Glasgow 
GOT:  Gothenburg 
GSP:  Greenvl I le 
GVA:  Geneva 
GWT:  Wester land 
HAJ:  Hannover 
HAM:  Hamburg 
HEL:  Helsinki 
HNL:  Honolulu 
HOU:  Houston 
IND: 
1ST:  Istanbul 
JAX:  Jacksonv i I I e 
JJY:  Ju I I anehaab 
KHI:  Karachi 
KRK:  Krakow 
LAS:  Las  Vegas 
LAX:  Los  Angeles 
LED:  Leningrad 
LIS:  Lisbon 
LON:  London 
LUX:  Luxembourg 

lndlanapol is 

- 83  -

LYS:  Lyon 
MAD:  Madrid 
MAN:  Manchester 
MEM:  Memphis 
MEX:  Mex lco 
MKC:  Kansas  Cl ty 
MKE:  Ml  lwaukee 
MIA:  Miami 
MOW:  Moscow 
MSP:  Mlnneapol ls 
MSY:  New  Orleans 
MUC:  Munich 
MXP:  Ml  Ian 
NBO:  Nairobi 
NCE:  Nice 
NUE:  Nuremberg 
NYC:  New  York 
OKC:  Oklahoma  City 
ORF:  Norfolk 
ORL:  Orlando 
OSA:  Osaka 
OSL:  Oslo 
PAR:  Par Is 
PBI:  w.  Palm  Beach 
POL:  Ponta  Delgada 
PHL:  Ph I I ade I ph I a 
PHX:  Phoenix 
PIT:  PI ttsburgh 
POR:  Portland  OR 
PRG:  Prague 
RDU:  Raleigh 
REK:  Reykjavik 
ROM:  Roma 
RUH:  Riyadh 
SAN:  San  Diego 
SAT:  San  Antonio 
SEA:  Seattle 
SFO:  San  Francisco 
SJC:  San  Jose 
SJO:  San  Jose,  Costa  Rica 
SJU:  San  Juan 
SLC:  Sa It  Lake  City 
SNN:  Shannon 
SRQ:  Sarasota 
STL:  St.  Louis 
STO:  Stockholm 
STR:  Stuttgart 
SXM:  Saint  Maarten 
TER:  Tercerla 
TLV:  Tel  Aviv 
TPA:  Tampa 
TUL:  Tulsa 
TUS:  Tucson 
TYO:  Tokyo 
VCE:  Venice 
VIE:  Vienna 
WAS:  Washington 
WAW:  Warsaw 
YMQ:  Montreal 
ZRH:  Zurich 

- 84  -

Annex  V 

AGREEMENT  ON  AIR  TRANSPORT 

.- •·:.-

- 85  -

Annex  V 

ON  AIR  TRANSFORT 

The  Goverrunent  of 

ard 

Goverrurent,  hereinafter  referred  to  as  the  "Contracting 

Parties", 

Being  parties  to  the  Convention  on  International  Civil 

Aviation  opened  for  signature  at  Oticago  on  the  seventh  day 

of  Decesnrer,  1944, 

Desiring  to  prarote  their  mutual  relations  in  the  field  of 
civil  aviation  aoo  to  conclude  an  agreernent,  supplenentary  to 
the  said  Convention,  for  the  purpose  of  establishing  air 

services  bet~n arrl  beyord  their  respective  territories, 

Have  aq reed  as  foll~ : 

- 86  -

ARTICT..E  l 

Definitions 

1.  For  the  purpose  of  this  Agreement 

(a)  the  tenn  "Convention"  means  the  Qmvention  on 

International  Civil  Aviation  opened  for  signature  at 

Clicago  on  t.,e  seventh  day  of  December,  1944  ard 

includes  any  Annex  adopted  urrler  Article  90  of  that 

Convent ion  arrl  any  atrerrlrnent  of  the  Annexes  or  of 

the 

Convention  under  Articles  90  arrl  94  thereof  so  far  as 

those  Annexes  and  atren::hrents  have  been  approved  by  lx>th 

Contracting  Parties; 

(b)  the  teon  "aeronautical  auth::>rities"  1reans,  Ln  the  case 

of 

,  the  Minister  for 

arrl,  in  the  case  of 

the 

Minister  for 

or,  in  ooth  cases,  any  person  or  tx:::dy 

authorised  to  perfonn  any  functions  being  the 

resp:,nsibility  of  the  said  autoorities; 

(c)  the  tenn  "designated  airline"  1reans  an  airline  which 

has  been  designated  ard  autrorised  in  acc:ordance  with 

the  provisions  of  Article  3  of  this  Agreerent; 

(d) 

the  tenn  "tariffs"  1reans  the  prices  to  be  paid  for  the 

carriage  of  passengers,  baggage  ard  cargo  ard  the 

conditions  urder  which  trose  prices  apply,  inclLrling 

prices  and  conditions  for  agency  ard  other  auxiliary 

services  but  excluding  rernuneration  or  corditions  for 

the  carriage  of  mail; 

(e)  the  tenn  "capacity"  means: 

(  L) 

i.n  relation  to  an  aircraft,  the  payload  of  that 

aircraft  available  on  a  route  or  section  of  a  route; 

, ----. 

- 87  -. 

(ii) 

in  relation  to  a  specified  air  service,  t?ie 

capacity  of  the  a·ircraft  used  on  such  service, 

multiplied  by  the  frequency  q,erated  by  such  aircraft 

over  a  given  perioo  on  a  route  or  a  sect ion  of  a  route; 

( f)  the  tenns  "territory",  "air  service",  "international 

air  service",  "airline",  "stop  for  non-traffic  pu.qx:>ses" 

have  the  ineani~  respectively  assigned  to  them  in 

Articles  2  and  96  of  the  Convent ion. 

2.  The  Annex  to  this  Pqreement  shall  fonn  an  integral  part  of 

the  Agreenent  and  any  reference  to  the  Agreenent  shall  be 

understoo:i  to  inch.v:le  the _Annex,  except  where  otherwise 

provided  for. 

ARTICLE  2 

Grant  of  Traffic  Rights 

l.  Each  Contracting  Party  grants  to  the  other  Contracting  Party 

the  rights  specified  in  this  Agreerent  for  the  purp:,se  of 

establishing  scheduled  international  air  services  on  the 

routes  spec if ied  in  the  Annex  hereto.  Such  services  and 

routes  are  hereinafter  called  the  "agreed  services"  arrl  the 

"specified  routes"  respectively. 

2.  The  airline  or  airlines  designated  by  each  Contracting  Party 

shall  enjoy  the  following  rights,  subject  to  the  relevant 

provisions  of  this  Agreement: 

(a)  to  fly,  without  laming,  across  the  territory  of  the 

other  Contracting  Party; 

(b)  to  11\.'ike  steps  in  the  territory  of  the  other 

Contracting  Party  for  non-tr-aff ic  purposes;  arrl 

- 88  -

(c)  in  the  territory  of  the  other  Contracting  Party,  while 

operating  an  agreed  service  on  a  specified  route,  the  r-ight 

to  anbark  ard  disanbark  international  traffic  in  passengers, 

cargo  arrl  mail,  separately  or  in  conbination. 

3.  Airlines  of  each  Contracting  Party  not  designated  urrler 

Article  3  of  this  Agreanent  shall  also  enjoy  the  rights 

specified  in  paragraphs  2(a)  and  (b)  of  this  Article. 

4.  Nothing  in  this  Agreenent  shall  be  deemed  to  a:>nfer  on  the 

designated  airline  or  a~rlines  of  one  Contracting  Party  the 

privilege  of  taking  on  lx>ard,  in  the  territory  of  the  other 
Contracting  Party,  passengers,  cargo  am  mail  carried  for 

hire  or  reward  and  destined  for  amther  point  in  the 

territory  of  that  other  Contracting  Party. 

ARTICT£  3 

Designation  of  Airlines 

l.  Each  Contracting  Party  shall  have  the  right  to  designate  rn 

writing  to  the  other  Contracting  Party  an  airline  or 

airlines  for  the  purpose  of  operating  the  agreed  services  on 

the  specified  routes.  On  receipt  of  such  designation,  t:1e 

other  aeronautical  autoori ties  sha 11,  subject  to  the 

provisions  of  paragraphs  2  ard  3  of  this  Article,  witrout 

delay  grant  to  the  designated  airline  or  airlines  the 

appr-opiate  oper-ating  authorisations. 

2.  The  aeronautical  authorities  of  either  Contracting  Par:·:·  11\3y 

r-equire  an  airline  or  airlines  designated  by  the  other 

Contracting  Party  to  satisfy  the.in  that  it  is  qualified  to 

fulfil,  while  operating  the  agreed  services,  the  conditions 

prescr-ib?d  urder- the  laws  arrl  regulations  nonnally  arrl 

reasonably  applied  to  the  operation  of  international  au· 

services  by  such  authorities  in  confonni ty  with  the 

provisions  of  the  Convention. 

- 89  - · 

3.  Each  Contracting  Party  shall  have  the  right  to  refuse  to 

accept  the  designation-of  an  airline  or  airlines  fran  the 

other  Contracting  Party  or  to  withh:>ld  or  revoke  the  grant 

to  such  an  airline  or  airlines  of  the  rights  specified  in 

Article  2  of  this  ~reeirent  or  to  i.up,se  such  ronditions  :1s 

it may  dean  necessary  on  the  exercise  by  the  designated 

airline  or  airlines  of  those  rights,  in  any  case  w~re  it  is 

not  satisfied  that  the  airline  or  airlines  in  question  have 

their  central  adJninistration  ard  principal  place  of  business 

in  the  territory  of  the  other  Contracting  Party,  that  the 

majority  of  their  shares  are  a.-med  by  nationals  or  by  the 

Goverrurent  of  that  other  Contracting  Party  ard  are 

effectively  controlled  by  such  nationals  or  Goverrurent. 

4.  The  designated  airline  or  airlines,  when  so  auth:>rised,  1ray 

canrence  at  any  ti.Jre  to  operate  the  agreed  SP.rJices  in  whole 

or  in  part,  provided  that  the  airline  canplies  with  the 

applicable  provisions  of  this  Agreerent  an:l  that  tariffs, 

estaplished  in  accordance  with  the  provisions  of  Article  6 

of  this  Agreerent,  are  in  force  in  respect  of  such  services. 

5.  F.ach  Contracting  Party  shall  have  the  right  to  revoke  an 

operating  auth=>risation  or  to  susperrl  the  exercise  of  the 

rights  specif ierl  in  Article  2  of  this  Agreement  by  the 

airline  or  airlines  designated  by  the  other  Contracting 

Party  or  to  i.Jrp:::>se  such  corrlitions  as  it 1ray  deem  necessary 

on  the  exercise  of  these  rights: 

(a)  in  the  case  of  failure  by  such  airline  or  airlines 

to 

couply  with  the  laws  or  regulations  of  the  Contracting 

Party  which  has  granted  these  rights,  or 

(b)  if  the  airline  or  airlines  otherwise  fail(s)  to 

operate  in  aca:n-dance  with  the  oorrlitions  prescnced 

under  this  Agreement  a.rd  the  Annex  thereto. 

6.  Unless  imrediate  revocation,  suspension  or  i.J~sit ton  of  the 

conditions  1rentioned  in  paragraph  5  of  this  Article  are 

--

·- 90  -

essential  to  prevent  i.nfringerents  of  the  laws  or  regulations 

referred  to  in  paragraph  S  of  t.ltls  Article,  such  right  shall  be 

exercised  only  after  consultation  with  the  other  O:>ntracting 

Party,  in  accxmiance  with  Article  15  of  this  Agreenent. 

ARTICLE  4 

capacity 

1.  The  capacity  to  be  operated  oo  the  agreed  scheduled  air 

sezvices  shall  bear  close  relationship,  at  a  reasonable  lead 

factor,  to  the  desrard  for  the  carriage  of  traffic 

.. 

originating  in  the  territory  of  each  O:>ntracting  Party  a.rd 

destined  to  the  territory  of  the  other  0:>ntracting  Party. 

2.  In  order  to  achieve  a  fair  am.  equal  treatJnent  of  the 

designated  airlines,  the  airlines  have  to  agree  in  gocrl  ti.ire 

-, .. upon  the  frequencies  of  their  scheduled  services,  the  types 

of  aircraft  to  be  used  ani  the  flight  schedules, inclu:iing 

the  days  of  operation  as  well  as  the  esti.uated  ti.mes  of 

arrival  ani  departure. 

3.  The  schedules  so  agreed  upon  shall  be  suhnitted  for  approval 

to  the  aeronautical  authorities  of  both  0:>ntracting  Parties 

at  lea.st  thirty  (30)  days  before  the  proposed  date  of  their 

int.reduction.  In  special  cases,  this  time  lunit  may  be 

reduced  subject  to  the  oonsent  of  the  said  auth:>ri ties. 

4.  If  the  designated  airlines  cannot  agree  on  t.he  schedules 

1rentioned  al:x:>ve,  the  aeronautical  authorities  of  the 

Cbntracting  Parties  shall  e.rrleavour  to  settle  the  problen. 

5.  Subject  to  the  provisions  of  this  Article,  ro  schedules 

shall  CXJre  into  force,  unless  the  aeronaut ica.l  authorities 

of  the  Cbnt.cacting  Parties  have  approved  of  them. 

- 91  -

6.  The  schedules  established  for  one  season  in  accordance  with 

the  provisions  of  this· Article  shall  remain  in  force  for 

corresporrling  seasons  unti_l  new  schedules  have  been 

established  in  accorcance  with  the  provisions  of  this 

Article. 

ARTICLE  S 

Provision  of  Statistics 

1.  The  aeronautical  authorities  of  one  Cl:>ntracting  Party  shall 

supply  to  the  aeronautical  authorities  of  the  other 

Contracting  Party,  at  their  request,  periodic  or  other 

staternents  of  statistics. 

2.  Such  staternents  shall  include  all  infonnation  required  to 

detennine  the  auount  of  traffic  carried  by  that  airline  on 

t.b.e  agreed  services  an:i  the  origin  an:i  destination  of  such 

traffic. 

ARTICLE  6 

Tariffs 

l.  'I'1e  tariffs  to  be  charged  by  the  airline  of  one  Contracting 

Party  for  the  carriage  to  or  fron  the  territory  of  the  other 

Cl:>ntracting  Party  shall  be  established  at  reasonable  levels, 

due  regard  being  paid  to  all  relevant  factors  including  cost 

of  operation, 

reasonable  prof it  ard  characteristics  of 

service,  such  as  standards  of  speed  ard  accanrmation. 

2.  The  tariffs  referred  to  in  paragraph  l  of  this  Article  shall 

be  agreed  upon  by  the  designated  airlines  of  both 

Contracting  Parties. 

- 92  -

3.  'The  tariffs  so  agreed  upon  shall  be  subnitted  for  approval 

to  the  aeronautical  authorities  of  the  Contracting  Parties 

at  least  thirty  (30)  days  before  the  proposed  date  of  their 

intrc:duction;  in  special  cases  this  ti.me  limit  may  be 

reduced,  subject  to  the  consent  of  the  said  autrorities. 

4.  If  the  designated  airlines  cann:,t  agr.:?e  on  any  of  these 

tariffs,  or  if  for  sane  other  reasons  a  tariff  cannot  t::e 

fixed  in  accordan:e  with  paragraph  2  of  this  A.rt icle,  or  if 

during  the  first  fifteen  (15)  days  of  the  thirty  (30)  days' 

pericrl  referred  to  in  paragraph  3  of  this  Article,  the 

aeronautical  autoorities  of  one  Contracting  Party  give  the 

aeronautical  authorities  of  the  other  Contracting  Party 

notice  of  their  dissatisfaction  with  any  tariff  agreed  upon 

in  accordance  with  the  provisions  of  paragraph  2  of  this 

Article,  the  aeronautical  authorities  of  the  Ccntracting 

Parties  shall  errleavour  to  agree  upon  the  tariffs. 

5.  If  ~~e aeronautical  autoorities  cannot  agree  on  the 

approval  of  any  tariff  suhnitted  to  them  under  paragraph  3 

alx>ve  or  on  the  detennination  of  any  tariff  under  paragraph 

4,  the  Contracting  Parties  shall  eooeavour  to  agree  upon  the 

tariffs. 

6.  :-.b  tariff  shall  cone  into  force  unless  the  aeronautical 

autoorities  of  either  Contracting  Party  have  approved  of  it. 

7.  The  tariffs  established  in  acoortlance  with  the  provisior.s  of 

this  Article  shall  rerain  in  force  until  new  tariffs  ha\~ 

teen  established  in  accordance  with  the  provisions  of  this 

Article. 

- 93  -

ARTICLE  7 

Application  of  Laws  arrl  Regulations 

1.  The  laws  arrl  .regulations  of  a  Contracting  Party  g0verning 

entry  into  an:i  departure  fran  its  territory  of  aircraft 

engaged  in  international  air  transp:,rt  or  the  operation  a.rrl 

navigation  of  such  aircraft  while  within  its  territory  shall 

apply  to  aircraft  of  the  designated  airline  of  the  other 

Contracting  Party. 

2.  The  laws  arrl  regulations  of  a  Contracting  Party  governing 

entry  into,  stay  in  an:i  departure  fran  its  territory  of 
passengers,  crew,  cargo  am  mail,  such  as  fonnalities 
regarding  passports,  custans,  currency  an:i  sanitary 

1reasures,  shall  apply  to  passengers,  crew,  ca...rgo  and  trail 

carried  by  the  aircraft  of  the  designated  airline  of  the 

other  Contracting  Party  while  they  are  within  the  said 

territory. 

3.  Certificates  of  ail"-Orthiness  ,  certificates  of  canpetency 

and  licences  issued  or  rendered  valid  by  one  Contracting 

Party,  ard  still  in  force,  shall  t:e  reccgnised  as  valid  by 

the  other  Contracting  Party  for  the  purpose  of  operating  the 

agreed  services. 

4.  F.ach  Contracting  Party  reserves  the  right,  however,  to 

refuse  to  reccgnise,  for  the  purpose  of  flights  a.l::::ove  tts 

own  territory,  certificates  of  carpetency  arrl  1 icences 

granted  to  its  own  nationals  or  rendered  val id  by  another 

State. 

- 94  -

ARTICLE  8 

Investigation  of  Accidents 

l.  In  the  case  of  a  forced  landing  or  accident  of  an  aircraft 

of  either  Contracting  Party  within  the  territory  of  the 

other  Contracting  Party,  the  aeronautical  autoori ties  of  the 

Contracting  Party  in  whose  territory  the  forced  landing  or 

accident  takes  place  shall  unnediately  notify  the 

aeronautical  authorities  of  the  other  Contracting  Party 

thereof,  take  unnediate  steps  to  assist  the  crew  ard  the 

passengers,  provide  for  the  safety  of  the  aircraft  arrl  mail, 
baggage  arrl  cargo  on  board  and  take  necessary  measures  for 

an  inquiry  into  the  particulars  an:i  circumstances  of  the · 

forced  landing  or accident. 

2.  'Ihe  aeronautical  authorities  of  the  Contracting  Party 

conducting  the  inquiry  into  the  particulars  and 

circunstances  of  the  forced  larx:Hng  or  accident  shall  i.nfonn 

the  aeronautical  auth:>ri ties  of  the  other  Q:mtracting  Party 

of  the  holding  of  the  inquiry  arrl  the  aeronautical 

autoorities  of  the  other  O::>ntracting  Party  shall  be  granted 

full  facilities  to  be  represented  at  the  inquiry.  The 

aeronautical  authorities  of  the  Contracting  Party  corducting 

the  inquiry  shall  serrl  to  the  aeronautical  auth:>ri.ties  of 

the  other  Contracting  Party  the  rep::,rt  of  the  inquiry  as 
soon  as  it  is  available. 

ARTICLE  9 

Aviation  Security 

1.  In  accordance  with  their  rights  and  obligations  urrler 

international  law,  the  Contracting  Parties  reaff inn  that 

their  obligation  to  protect,  in  their  mutual  relati.onship, 

the  security  of  civil  aviation  against  acts  of  unlawful 

interference  form.s  an  integral  part  of  this  Agreement. 

- 95  -

2.  7he  Cbntracting  Pc;trt~es  shall  provide  upon  request  all 

necessary  assistance.to  each  other  to  pi;event  acts  of 

unlawful  seizure  of  aircraft  ard  other  unlawful  acts  against 

the  safety  of  passengers,  crew,  aircraft,  aiqx:>rts  and  air 

navigation  facilities  ard  any  other  threat  to  aviation 

security. 

3.  The  Cbntracting  Parties  shall  act  in  full  c:onfonni ty  with 

the  provisions  of  the  Convention  on  Offences  and  Certain 

other  Acts  Conni tted  on  Boa.rd  Aircraft,  signed  at  Tokyo  on 

14  September  1963,  the  Convention  for  the  Suppression  of 

Unlawful  Seizure  of  Aircraft,  signed  at  nie  Hague  on 

16  Oecanber  1970  arrl  the  Convention  for  the  Suppression  of 

Unlawful  Acts  Against-the  Safety  of  Civil  Aviation,  signed 

at  t-bntreal  on  23  Septenber  1971  or of  any  other  aviation 

security  conventions  to  which  the  t"-10  partie.::  may  adhere. 

4.  The  Contracting  Parties,  in  their  mutual  relations,  shall 

act  in  confonnity  with  the  aviation  security  provisions 

established  by  the  International  Civil  Aviation  Organisation 

ard  designated  as  Annexes  to  the  Convention  on  International 

Civil  Aviation  signed  at  Chicago  on  7  Decenber  1944,  to  the 

extent  that  such  security  provisions  are  applied  by  the 

Contracting  Parties;  they  shall  require  that  operators  of 

aircraft  of  their  registry  or operators  who  have  their 
principal  place  of  business  or pennanent  residence  in  their 

territory  an:i  the  q,era tors  of  airports  in  their  territory 

act  in  confonnity  with  such  aviation  security  provisions. 
Each  Contracting  Party  shall  advise  the  other  of  i. ts 

intention  to  notify  any  difference  to  the  standards  of  the 

Cbnvention  on  International  Civil  Aviation. 

5.  Each  Contracting  Party  agrees  to  observe  the  security 

provisions  required  by  the  other  Contracting  Party  for  entry 

into  the  territory  of  that  other  Contracting  Party  arrl  to 
take  adequate  measures  to  protect  aircraft  c1.rrl  to  inspect 

passengers,  crew,  their  carry-on  items  as  well  as  cargo  arrl 
aircraft  stores  prior  to  am  during  lx>a.rding  or  loading. 

- 96  -

F.ach  Contracting  Party  shall  also give  positive 
consideration  to  any  request  frcxn  tile  other  Contracting 

Party  for  special  security  measur~s  to  1reet  a  particular 

threat. 

6.  When  an  incident  or  threat  of  an  incident  of  unlawful 

seizure  of  aircraft  or  other  unlawfnl  acts  against  the 
safety  of  passengers,  crew,  aircraft,  airports  am  air 
navigation  facilities  occurs,  the  Contracting  Parties  shall 
assist  each  other  by  facilitating  connunications  arrl  such 

other  appropriate  ,reasures,  as  may  be  agreed,  inteooed  to 
teaninate  rapidly  a.oo  safely  such  incident  or  threat  thereof. 

7.  When  a  Contracting  Party  has  reasonable  grourds  to  believe 

that  tile  other  Contracting  Party  has  departed  fran  the 

aviation  security  provisions  of  this  Article,  the 

aeronautical  autrorities  of  that  Contracting  Party  may 

request  unnediate  consultations  with  the  aeronautical 

43:~thori ties  of  the  other  Contracting  Party.  Failure  to  reach 

a  satisfactory  agreeanent  within  15  days  frao  the  date  of 

such  request  will  constitute  grourrls  to  withh::>ld,  revoke, 

limit  or  urpose  conditions  on  the  operating  authorisation  or 

technical  pennission  of  an  airline  or  airlines  of  the  other 

Contracting  Party.  When  required  by  an  eirergency,  a 

O:mtract ing  Party  may  take  interim  act ion  prior  to  the 

expiry  of  15  days. 

ARTICLE  10 

Ai q:x:>rt  Fees  and  Olarges 

Fees  arrl  charges  urposed  in  the  territory  of  either  Contracting 

Party  for  the  use  of  aiq:x:>rts  ard  other  aviation  facilities  by 
the  aircraft  of  the  designated  airline  or  airlines  of  the  other 

Contracting  Party  shall  not  be  higher  than  those  iJrposed  on 

aircraft  of  an  airline  of  the  first  Contracting  Party  engaged 
in  s i.Jnilar  international  air  services. 

- _97  -

ARTICLE  11 

OJstans  O\arges  arrl  Procedures 

1.  Aircraft  operated  on  international  air  services  by  the 

designated  airline  or  airlines  of  either Contracting  Party, 

as  'well  as  the  fuel,  lubricants,  spare  parts,  equipnent  arrl 

aircraft  stores  ( including  focd,  alcooolic  an::1  non-alcooolic 

drinks  arrl  tobacco)  on  board  such  aircraft  on  arriving  in 

the  territory  of  the  other  Contracting  Party  shall  be  exempt 

fran  all  custans  duties,  inspection  fees  and  other  charges 
ard  taxes,  provided  such  equipuent  am  suwlies  retrain  on 
board  the  aircraft  up  to  such  tune  as  they  are  re-exported. 

2.  f\Jel,  lubricants,  spafe  parts,  equiptrent  and  aircraft 

stores  (including  food,  alcoholic  an:l  non-alcoholic  drinks 

and  tobacco)  delivered  or  which  are  to  be  delivered  by  the 

designated  airline  or airlines  of  either Contracting  Party 

to  the  territory  of  the  other  Contracting  Party  exclusively 
for  its  operational  needs  shall  te  exet(t)t  f ran  all  custans 

ciuties,  inspection  fees  arrl  other  charges  and  taxes  on  their 

arrival,  departure  and  while  within  the  territory  of  that 

other  Contracting  Party. 

3.  There  shall  also  be  exe(t)t  fran  such  custans  duties,  fees, 

charges  and  taxes,  with  the  exception  of  charges 

corresporrl ing  to  services  perf onned: 

(a)  aircraft  stores  ( incltrling  food,  alcoholic  arrl 

non-alcoholic  drinks)  taken  on  lx>ard  aircraft  in  the 

territory  of  either  Contracting  Party  for  use  on  t:oa.rd 

aircraft  used  in  the  operation  of  international  air  services 

by  ~he  designated  airline  or  airlines  of  the  other 

Contracting  Party; 

(b)  spare  parts  arrl  equiprent  entered  into  the  territory 

of  either  Contracting  Party  for  the  1raintenance  or  repair  of 

aircraft  used  in  the  operation  of  international  air  services 
by  the  designated  airline  or  airlines  of  the  other 
Contracting  Party; 

- 98  -

(c)  fuel  arxl  lubrican~s  destined  for  use  in  the  cperation 

of  international  air  services~  the  designated  airline  or 

airlines  of  the  other  Contracting  Party,  even  when  these 

supplies  are  to  be  used  on  the  part  of  the  journey  perfonned 

over  the  territory  of  the  Contracting  Party  in  which  they 

are  taken  on  b:>ard. 

4.  Supplies  referred  to  in  paragraphs  1  to  3  of  this  Article 

may  be  required  to  be  kept  under  custans  supervision  or 

control. 

s.  The  regular  airborne  equipment  as  well  as  the  materials  arxl 

supplies  retained  on  boc\rd  the  aircraft  of  either 
Contracting  Party  may  be  unloaded  in  the  territory  of  the 

other  Contracting  Party  only  with  the  approval  of  the 

custaru;  autoorities  of  such  territory.  In  such  case,  they 

·may  be  placed  W'Xier  the  supervision  of  said  autoorities  up 

to  such  tune  as  they  are  re-exported  or  otherwise  disposed 

of  i'ri  accordance  with  custan.s  regulations. 

6.  Passengers,  baggage,  cargo  arrl  mail  in  direct  transit  across 

the  territory  of  either  Contracting  Party  arrl  not  leaving 

the  area  of  the  airport  reserved  for  such  purpose  shall, 

except  in  respect  of  security 1neasures  against  violence  and 

air  piracy,  an::i  snuggling  of  controlled  drugs,  be  subject  to 

no  uore  than  siuplif ied  control. 

7.  Baggage,  cargo  arrl  mail  in  direct  transit  shall  be  exesnpt 

f ron  custaru;  duties  ard  other  similar  taxes. 

ARTICLE  12 

Airline  Representation,  Ticketing, 

and  Sales  Prarot ion 

l.  The  designated  airlines  of  each  Contracting  Party  shall  have 

an  equal  opportunity  to  euploy,  subject  to  the  laws  an:i 

- 99  -

regulations  of  the  other  Contracting  Party,  the  technical 

ard  canrercial  persormel  for  the  perfoanance  of  the  agreed 

sei:vices  on  the  specified  routes  an:i  to  establish  ard 

operate  off ices  in  the  territory  of  the  other  Contracting 

Party. 

2.  'Ibe  designated  airlines  of  each  Con~racting  Party  shall 
further  have  an  equal  opportunity  to  issue  all  kinds  of 
docU1rents  of  carriage  am  to  advertise  and  prouote  sales  in 
the  territory  of  the  other  Contracting  Party. 

ARTia..E  13 

Transfer  of  Fun:ls 

1.  All  the  accounts  between  the  designated  airlines  shall  be 

done  in  convertible  currency. 

2.  Each  Cbntracting  Party  shall  grant  to  the  airline  or 

airlines  designated  by  the  other  Contracting  Party 

pennission  to  transfer  with:>ut  any  restriction  to  the  Head 

Office  of  the  said  airline,  in  accordance  with  the  rules  and 
regulations  existing  with  regard  to  currency  exchange 

control,  the  prof it arising  in  respect  of  its  operation  of 

the  agreed  services  in  the  territory  of  the  other 

Contracting  Party. 

ARTia..E  14 

Taxation 

l.  Profits  fran  the  operation  of  aircraft  in  international 

traffic  shall  be  taxable  only  in  the  territory  of  the 

Contracting  Party  in  which  the  place  of  effective  1nanagerent 

of  the  enterprise  is  situated. 

- 100  -

2.  Capital  represented  ~y  aircraft  operated  in  international 

traffic  a.rrl  by  uovable  property  pertaining  to  the  operation 

of  such  aircraft  shall  be  taxable  only  in  the  territory  of 

the  Cbntracti.ng  Party  in  which  the  place  of  effective 

manage.irent  of  the  enterprise  is  situated. 

3.  Where  a  special  Agreerent  for  the  a,,o idance  of  double 

taxation  with  respect  to  taxes  on  incane  arrl  on  capital 

exists  bet~ the  Contracting  Parties,  the  provisions  of 

the  latter  shall  prevail. 

ARTiciE  15 

Consultations 

1.  In  a  spirit of  close  ro-operation,  the  aeronautical 

authorities  of  ooth  Contracting  Parties  shall  consult  with 

eaeh  other  fran  tilne  to  ti.me  with  a  view  to  ensuring  the 

i.upleuentation  of,  an:i  satisfactory  carpliance  with,  the 

provisions  of  this  Agreement. 

2.  The  aeronautical  auth::>rities  of  either  Contracting  Party  110y 

request  cons~tations,  through  discussions  or 

corresporrlence,  which  shall  cnnnence  within  a  pericxi  of 

sixty  ( 60)  days  fran  the  date  of  receipt  of  the  request, 

unless  ooth  aeronautical  auth::>rities  agree  to  an  extention 

of  this  pericxi. 

ARTiciE  16 

Settle.irent  of  Disputes 

1.  Any  dispute  rel.at ing  to  the  interpretation  or  application  of 

this  />qreerent  or  the  Annex  thereto  shall  be  settled  by 

direct  negotiations  between  the  Contracting  Parties.  Such 

negotiations  shall  canrence  as  soon  as  practicable  but  in 

any  event  not  later  than  sixty  (60)  days  fran  the  date  of 

- 101  -

receipt  of  a  request.  for  such  negotiations,  unless  otrerwise 

agreed  by  the  Contracting  Parties. 

2.  If  the  O:>ntracting  Parties  fail  to  reach  a  settlenent  by 

negotiation,  they  may  agree  to  refer  the  dispute  for 

decision  to  sane  person  or  bxiy,  or  the  dispute  anay,  at  the 

request  of  either  Contracting  Party,  be  subnitted  for 

decision  to  a  tribunal  of  three  arbitrators,  one  to  be 

naninated  by  each  Contracting  Party  an::l  the  third  to  be 

appointed  by  the  o-,,o  so  naninated.  Each  of  the  O:>ntracting 

Parties  shall  naninate  an  arbitrator within  a  pericxi  of 

sixty  (60)  days  fran  the  date  of  receipt  by  either 

Contracting  Party  fran  the  other  of  a  notice,  through 

diplaratic  channels,  ·requesting  arbitration  of  the  dispute 

an::l  the  third  arbitrator  shall  be  appointed  within  a  further 

period  of  sixty  (60)  days.  If  either of  the  Contracting 

Parties  fails  to  naninate  an  arbitrator within  the  period 

specified,  or  if  the  third  arbitrator  is  oot  appointed 

within  the  pericd  specified,  the  President  of  the  O::>uncil  of 
the  International  Civil  Aviation  Organisation  may  be 

requested  by  either  Contracting  Party  to  appoint  an 

arbitrator or  arbitrators  as  the  case  requires.  In  such 

case,  the  thi~ arbitrator  shall  be  a  national  of  a  thiro 

State  an::l  shall  act  as  President  of  the  arbitral  t:ody. 

3.  '!he  Contracting  Parties  uooertake  to  carply  with  any 

decision  given  wrler  paragraph  2  of  this  Article. 

4.  If  an::l  for  so  long  as  either  Contracting  Party  fails  to 

carply  with  a  decision  given  urrle.r  paragraph  2  of  this 

Article,  the  other  Contracting  Party  may  li.Jnit,  susperd  or 

revoke  any  rights  or  privileges  which  it  has  granted  by 

virtue  of  this  .&qreesnent  to  the  Contracting  Party  in  default. 

5.  fach  Contracting  Party  shall  ~ar  the  expenses  ard 

remuneration  necessary  for  its  arbitrator;  the  fee  for  t.he 

third  arbitrator  ard  the  expenses  recessary  for  this- one  as 
twell  as  those  due  to  the  activity  of  the  arbitration  shall 

t:e  equally  shared  by  the  Contracting  Parties. 

- 102  -

ARTICLE  17 

Mcxiification 

1.  If  either  of  the  Cbntracting  Parties  oonsiders  it desirable 

to  arcdify  any  provision  of  this  Agreement,  including  the 

Anrex  thereto,  it may  request  oonsultations  bet,-..ieen  the 

Contracting  Parties  in  relation  to  the  prcp::>sed 

anodif ication.  Such  oonsultations  shall  cnnnence  within  a 

perioo  of  sixty  (60)  days  of  the  date  of  receipt  of  the 

request.  Any  uodifications  so  agreed  shall  cx::ine  into  force 

when.  they  have  been  confinned,  in  writing,  O'f  the 

Cbntracting  Parties. 

2.  A uodification  to  the· Annex  anay  be  anade  by  direct  agreenent 

bet~ the  appropiate  auth:>rities  of  both  Contracting 

Parties  ard  shall  be  C'Onf inned  by  exchange  of  diplanatic 

notes. 

ARTICLE  18 

Registration 

This  Agreenent  arrl  all  ainen:brents  thereto  shall  be  registered 

with  the  Council  of  the  International  Civil  Aviation 

Organisation  an::l  the  Secretariat  of  the  United  Nations. 

ARTICLE  19 

Applicability  of  Multilateral  Agreenents  or  Convent ions 

If  any  provision  of  the  Agreenent  conflicts  with  an  obligation 

which  either  Contracting  Party  1nay  have  towa.Itls  a  third  Party, 

both  Contracting  Parties  shall  enter  into  oonsultations,  in 

accordance  with  Article  15,  to  amerrl  the  Agreerent  in  order  to 

resolve  any  such  conflict  as  scxm  as  possible. 

- ·103  -

ARJiq.E  20 

tbt ice  of  Teoninat ion  of  Agreanent 

1.  Either  Contracting  Party  may  at  any  ti.me  give  notice,  in 

writing,  to  the  other  Contracting  Party  of  its decision  to 

tenninate  this  .Pqreement;  such  noti~  shall  be  sent 

sunultaneously  to  the  International  Civil  Aviation 

Organisation  arrl  the  Secretariat  of  the  United  Nations.  In 

such  case,  the  Agreement  shall  tenninate  twelve  (12)  uonths 

after  the  date  of  receipt  of  the  noti~  by  the  other 

Contracting  Party,  unless  the  notice  to  tenninate  is 

with:irawn  by  agreement  before  the  expiry  of  this  pericxi. 

2.  In  the  absence  of  acknowledgesrent  of  receipt  by  the  other 

Contracting  Party,  notice  shall  be  deemed  b  have  been 

received  fourteen  (14)  days  after  the  receipt  of  the  notice 

by  the  International  Civil  Aviation  Organisation. 

- 104  -

ARTICLE  21 

Entry  i.nto  Force 

This  Agreement  shall  enter  into  force  on  the  first  day  of  the 

secorrl  1ronth,  following  the  date  of  signature. 

·-

IN  WITNESS  WHERIDF  the  tmdersigned  Plenipotentiaries,  being 

duly  autoorised  thereto  by  their  respective  Governments,  have 

signed  the  present  Agreenent. 

Done  in  duplicate  at 

this 

day  of 

each  in 

the  ~lish and 

authentic. 

l~uages,  both  texts  being  equally 

FOR  THE  GJVffiNMENr 

....... ..... 
...  ~ -~ _ ..... 

_..._. 
- ,  
~ ....._ 

r 

- 105  -

ANNEX 

A.  The  airline( s)  designated  by 

shall 

be  entitled  to  cperate  scheduled  air  services  in  both 

directions  on  routes  specified  hereafter: 

.. 

/ 

Foints  of  departure: 

Foints  of  arrival: 

Foints  in 

Foints  in 

B.  nie  airline(s)  designated  by 

shall  be  entitled  to  c:perate  sc:  iuled  air 

services  in  both  directions  on  routes  speci.tied  hereafter: 

Foints  of  departure: 

R:>ints  of  arrival: 

Foints  in 

Fbints  in 

C.  Any  intennediate  points  may  be  served  by  the  designated 

airlines  of  each  Contracting  Party  without  exercising  Fifth 

Freedan  traffic  rights. 

D.  (1)  The  airline(s)  designated  by  either  Contracting  Party 

,nay  exercise  fifth  freed.an  rights  initially  at 

:m  a  route  between  toth  a:>tmtries,  provided 

that  such  rights  are  available  to  the  airlines  of  lx>th 
Contracting  Parties. 

(2)  The  exercise  of  Fifth  Freedan  rights  at  other  p:)lnts 

1nay  t:e  agreed  upon  by  the  aeronautical  auth::>rities  of 
the  t'-0  Cbntracting  Parties. 

- 106  -

FICHE  FINANCIERE 

VOLET  1 

IMPLICATIONS  FINANCIERES 

1. 

lntltu1,  de  l'actlon 

Preparation  for  negotiations  with  Third 
countries  on  civi I  aviation 

2.  Llgnes  budg6talres  concern6es  Article  82-704 

3.  Base  1,gale  Article  113  of  the  Treaty 

The  data  bank  is  proposed  in  Communication  to  the 
Counci  I  on  aviation  relations  with  third  countries 
(No  COM  ... ) 

4.  Description  de  l'actlon 

4.1  ObJectlfs  sp6clflques  de  l'actlon: 

The  establishment  of  a  data  bank  on  aviation  activities  within 
the  Community  and  between  the  Community  and  third  countries. 
On  the  basis  of  this  information  the  Community  can  take  up  its 
responsibilities  in  the  area  of  external  aviation  relations 
and  in  particular  develop  the  necessary  directives  for 
negotiations. 

The  information  should  contain 

the  rights  exchanged  in  bilateral  agreements  in  the  air 
transport  sector  between  Community  Member  States  and  third 
countries 

a  summary  of  bl lateral  agreements,  MOU's,  and  other 
official  documents 

4.2  Dur6e: 

Establishment  of  data  base  one  year  and  thereafter  normal 
updating 

4.3  Population  v1s,e  par  l'actlon 

National  administrations,  air  carriers,  airports,  Commission 
services 

s.  Classlflcatlon  de  la  d,pense  ou  des  recettes 

5.1  ONO 

5.2  CND 

5.3  None 

- 107  -

6.  Quelle  est  la  nature  de  la  d,pense  ou  des  recettes 

6.1  Subvention  i  1001:  Yes 

6.2  Subvention  pour  co-flnancement  avec  d'autres  sources  du 

secteur  public  et/ou  prlv,:  No 

8.3  Bonlflcatlon  d'lnt,r&t  :  No 

6.4  Alltres:  No 

6.5  En  cas  de  r,usslte  ,conomlque  de  l'actlon.  un  remboursement 
partlel  ou  total  de  l'apport  financier  communautalre  est-II 
pr,vu? 

No 

6.6  L'actlon  propos,e  l(cid:127) pllque-t-elle  une  (cid:127) odtftcatlon  du  nlveau 

des  recettes?  SI  oul.  de  quelle  nature  est  la  (cid:127) odlflcatlon  et 
quel  type  de  recette  est  vis,? 

No 

7. 

Incidence  flnanc1,re  sur  les  cr,dlts  d'lnterventlon  (partle  B du 
budget) 

7.1 

lndlquez  le  mode  de  calcul  du  coat  total  de  l'actlon 

The  costs  have  been  estimated  on  the  basis  of  previous 
experience  in  the  context  of  the  establishment  of  a  special 
data  base  on  statistics. 

7.3  Ech,ancler  lndlcatlf  des  cr,dtts  d'engagement  et  de  pale(cid:127) ent 

Engagement 

1993:  500.000  Ecus 

Payment 

1993 
1994 

250.000  Ecus 
200.000  Ecus 

(already  included  in 
the  draft  preliminary 
budget) 

8.  Quelles  sont  les  dispositions  antt-fraude  pr,vues  dans  la 

proposition  d'actlon? 

Normal  Commission  provisions 

VOLET  2:  DEPENSES  ADMINISTRATIVES 

(PARTIE  A  DU  BUDGET) 

1.  L'actlon  propos,e  l(cid:127) pllque-t-elle  une  aug(cid:127) entatton  du  no(cid:127) bre 

d'effectlfs  de  la  eo(cid:127)
SI  oul.  de  co(cid:127) blen? 

lsslon? 

Oui. 

(cid:127)
- 108  -

This  activity  wl  I I  be  ensured  by  the  staff  of  unit  VI  1/C.1  (which  will 
need  some  additional  staff  dependant  on  the  speed  and  scope  of  the 
transitional  period  adopted  by  the  Councl  I). 

2) 

lndlquez  le  montant  des  depenses  de  fonctlonnement  et  de  personnel 
generees  par  la  proposition. 
Expllcltez  le  mode  de  calcul. 

involve  real location  of  work  inside 
The  additional  staff  wi  I I 
DG  VI  I  and  administrative  expenses  for  missions  and  meetings. 

VOLET  3 

ELEMENTS  D'ANALYSE  COUT-EFFICACITE 

1.  ObJectlfs  et  coherence  avec  la  programmatlon  flnanc1,re 

1.1  ObJectlf(s)  speclflque(s)  de  l'actlon  proposee.  11  dolt  &tre 
quantlfle  (dans  la  mesure  du  possible)  et  presente  pour 
chacune  des  ann6es  concernees  s'II  s•agit  d'une  action 
plurlannuelle. 

The  establishment  of  an  external  aviation  pol icy  Is  an 
essential  element  of  the  internal  market. 

The  negotiation  of  a  large  number  of  agreements  with  third 
countries  requires  different  procedures  in  the  Community.  The 
necessary  proposals  have  been  adopted  by  the  Commission  and 
submitted  to  the  Councl  I.  According  to  the  proposals  the 
Commission  is  responsible  for  the  development  of  directives 
for  negotiations.  This  can  only  be  done  on  the  basis  of 
updated  and  readily  available  information.  The  data-bank 
proposed  wl  I I  give  such  information. 

1.2  L'actlon  est-el le  prevue  dans  la  programmatlon  flnanc1,re 

de  la  DG  Pour  les  annees  concernees? 

Reference  Is  made  to  fiche  financiere  APB  1993 

1.3  lndlquez  i  quel  obJectlf  plus  general  deflnl  dans  la 

programmatlon  flnancl,re  de  la  DG  correspond  l'obJectlf  de 
l'action  propos6e. 

Preparatory  action  for  the  negotiation  of  international 
transport  agreements 

- 109  -

2.  Justification  de  l'actlon 

2.1  Justification  de  1·actlon  choisie  par  rapport  i  une 

alternative  qui  permetrait  d'attelndre  les  m&me  obJectlfs.  La 
Justification  dolt  se  baser  notamrnent  sur  trois· critires: 

a)  COdt  :  The  alternative  for  a  data  bank  would  be  to  request 
the  information  on  a  case  by  case  basis.  This  would  also 
make  it  very  difficult  for  the  Community  to  make  any 
progress  In  this  area. 

b)  Effets  d6rlv6s  (Impact  au-deli  de(s)  obJectlf(s) 

sp6clflque(s))  :  A data  bank  work  ensures  that  the 
Commission  has  the  necessary  information  to  develop 
directives  for  negotiations. 

c)  Effet  multlpllcateurs  (capacit6  de  mobilisation  d'autres 

sources  de  flnancement)  :  No  multiplier  effects. 

3.  Sulvl  et  6valuatlon  de  l'actlon 

3.1 

lndicateurs  de  performance  sel6ctlonnes: 

Immediate  avai labi I ity  of  the  information 

3.2  Modalit6s  et  perlodlclte  de  l'evaluation  prevues 

Monthly  and  ad-hoc 

3.3  Prlnclpaux  facteurs  d'lncertltude  pouvant  affecter  les 

resultats  speclflques  de  1·action 

Cooperation  by  Member  States  to  submit  the  information 

- 110  -

ISSN m.,.i-1475 

COM(92) 434 final 

DOCUMENTS 

EN 

11  07 

Catalogue number : CB-C0-92-464-EN-C 

ISBN 92-77-48S30-2 

Oflicc for Official Publications of the European Comrnmuties 
L-2985 Luxembourg