Manual on the Regulation of International Air Transport

1 International Civil Aviation OrganizationApproved by the Secretary Generaland published under his authorityManual on theRegulation ofInternationalAir TransportSecond Edition 2004 Doc 9626 International Civil Aviation OrganizationApproved by the Secretary Generaland published under his authorityManual on theRegulation ofInternationalAir TransportSecond Edition 2004 Doc 9626 AMENDMENTSThe issue of amendments is announced regularly in the ICAO Journal and in themonthly Supplement to the Catalogue of ICAO Publications and Audio-visualTraining Aids, which holders of this publication should consult. The space belowis provided to keep a record of such OF AMENDMENTS AND issueDateenteredEnteredby112/8/05 ICAO225/10/05 ICAO(ii)(iii)FOREWORDThe main purpose of this Manual on the Regulation of Inter-national Air Transport is to meet an ever-increasing need fora comprehensive and objective source of information aboutthe many facets of this dynamic activity.

2 This need was fore-seen by the ICAO Assembly which, by Resolution A24-11,directed the preparation and publication of this need for and expected usefulness of this Manual isnot confined to any particular State or category of States,whether small or large, whether least developed, developing,or having developed economies. Rather, it was prepared tomeet the needs of all ICAO Contracting air Transport authorities of these States may wellbecome the most frequent users of this Manual . Yet manyothers in these States may also find it very useful. Inter-national air Transport evokes considerable interest of manypeople: those associated with airlines; airports andcommunities seeking new air services; users of air Transport ;air carrier labour; aircraft manufacturers; certain inter-national organizations; people involved with aviationfinancing, tourism development and trade; people inacademia and the communications media; and, at times,members of the general public as well.

3 This Manual isintended to also meet the needs of and be useful to thesebroader constituencies within ICAO Contracting States and,in so doing, to increase its value to air Transport authoritieswho interact with such International air Transport developed and became morecomplex over the past half century, so too has its , much new terminology evolved, often without widelyaccepted definitions (or with conflicting ones) and some-times with more than one term applied to the same the approach taken in the preparation of this manualhas been to provide clear and adequate explanations andguidance in a well ordered context. Each relatively shortchapter is, in effect, a narrative composed largely of a seriesof definitions and explanations in a logical order of presen-tation derived from the topic is the giving of authoritative direction tobring about and maintain a desired degree of order.

4 Allregulation involves regulatory process, various patterns ofactivity by people interacting to establish and maintain somedesired result for the subject or entities being , all Regulation involves regulatory structure, organizations or other entities involved and the legalframework (such as licences, regulations and agreements).Finally, all Regulation involves regulatory content, theparticular subjects being regulated (such as market access,pricing and capacity).The process and structure of International air transportregulation have three distinct venues national, bilateraland multilateral; therefore, each venue has been assigned aseparate part in this Manual , Parts 1, 2, and 3, respect-ively. Regulatory content topics, which States deal with in allthree venues, are in Part 4. General terminology, thatwhich is common or supplemental to all parts of this Manual ,forms Part 5.

5 Appendices contain certain reference materials. This Manual is designed to be user friendly and to servethree distinct functions. First, it can be used as a dictionaryof International air Transport terms: each term listed in theIndex has a definition or an explanation on the page indi-cated. On that page, the term is highlighted in bold italic andits definition or explanation is presented in , it can be used as an encyclopedia. Each broadregulatory topic has its own chapter or section of a chapterin the Manual , written to compress essential facts into oneor a few pages. The Table of Contents assists the reader todetermine the location of material on broader topics ( thebilateral regulatory process, traffic rights, etc., each of whichmay involve many related definitions and explanations).BASIC COMPOSITIONOF THE MANUALFUNCTIONS AND SCOPEOF THE Manual (iv) Manual on the Regulation of International Air TransportThird, this Manual as a whole can be useful as a textbookfor academic or other educational and training scope of the Manual is limited to the economicaspects of International air Transport Regulation asdistinguished from the technical aspects thereof such asthose involving navigation, safety and security.

6 Neverthe-less, these other areas of Regulation are not totally separablefrom economic Regulation and can affect such matters asairline licensing, airport access and the structure of agreedroutes. Although air Transport regulators sometimes alsoregulate commercial non- Transport operations, such as aerialcrop dusting and surveying, as well as non-commercialflying, such as overflight and landing by private, militaryand State aircraft, both topics are outside the scope of thismanual. The term aviation is often used incorrectly in lieuof the term air Transport . While air Transport is morespecific, referring to those aspects related to the carriage byair (usually commercial air Transport ), aviation is genericand includes far more topics such as military, state andprivate flying, aircraft manufacturing, air navigation, non-commercial Transport and specialty air with the trend of globalization and liberalization, International air Transport has also undergone significantchanges in the last ten years.

7 This second edition has beenupdated and expanded to take account of the developmentsin International air Transport and its Regulation since 1996when the Manual was first edition includes many new topics ( State aids,competition laws, airline alliances, franchising, aircraftleasing, passenger rights, and privatization of airports),which are emerging issues drawing increasing regulatoryattention. A number of new air Transport terms anddefinitions have been added, including many that were non-existent when the first edition was published ( mega-alliance, e-commence, B2B, etc.). Additionally, newwebsites and e-mail addresses (primarily of air Transport -related International organizations and entities) have beenadded, enabling computer-equipped readers to vastly expandtheir knowledge updating of established topics, as well as theaddition of new information, adds significantly to themanual s value as a user-friendly tool for those who areinterested in knowing more about the regulatory aspects ofinternational air Manual both complements and supplements ICAODoc 9587 Policy and Guidance Material on the EconomicRegulation of International Air Transport , which is acompendium of all the formal policies and guidance adoptedby ICAO in this field (such as Assembly resolutions, Councildecisions, and conclusions and recommendations of airtransport conferences).

8 WHAT IS NEW INTHE SECOND EDITION(v)TABLE OF CONTENTSPagePagePart 1 NATIONAL to National Regulation .. of National Regulation .. The Legislative Component .. The Licensing Component .. The Ad hoc Authorization Component .. Comity and Reciprocity .. of National Regulation .. The Organizational Component .. The Legal Component.. Issues of National Regulatory Process and Structure .. The Relationship Between Air Transport Regulators and Interested Parties .. The Optimum Location of the International Air Transport Regulatory Function .. 2 BILATERAL to Bilateral Regulation .. Evolution of the Bilateral Regulation of International Air Services .. of Bilateral Regulation .. Initiation of and Preparation for a Formal Bilateral Consultation .. Consultations and Negotiations: Types of Meetings and Documents .. Consultations and Negotiations: Strategic and Tactical Considerations.

9 Conclusion, Implementation, Management, Dispute Resolution, Amendment and (Exceptionally) Termination of an Agreement .. of Bilateral Regulation .. Basic Document Types .. Typical Provisions of Bilateral Air Transport (Services) Agreements .. Types of Bilateral Agreements on Subjects Closely Related to Air Transport .. Issues of Bilateral Regulatory Process and Structure .. Balancing Benefits in a Liberalizing Environment .. Shortcomings of Bilateral Regulatory Structure .. Bilateral Relations Involving Groups of States .. Application of Competition Laws to Air Transport .. Effects of State Aids and Subsidies .. of International Air Services Negotiations .. 3 MULTILATERAL to Multilateral Regulation .. A Brief History of the Multilateral Regulation of International Air Transport .. of Multilateral Regulation .. Formal Multilateral Meetings .. Process within Formal International Organizations.

10 The Multilateral Treaty Process .. of Multilateral Regulation .. Basic Elements of the Organizational Component .. Basic Terminology of the Legal Component .. (vi) Manual on the Regulation of International Air TransportPagePage The Chicago Conference Documents .. The Warsaw System and the Montreal Convention of 1999.. Other Air Law Instruments.. Regional Multilateral Agreements .. Issues of Multilateral Regulatory Process and Structure .. Why the Multilateral Approach? .. Possible Processes in the Quest for a New Multilateralism .. The Likely Generic Structural Elements of a New Multilateral Air Transport Agreement .. The General Agreement on Trade in Services (GATS) and its Air Transport Annex .. Civil Aviation Organization (ICAO) .. Policy Development Bodies .. Air Transport Bureau .. ICAO Policy, Guidance and Information .. Intergovernmental Organizations .. Organs of the United Nations.