Air Freight Course III:Regulatory Aspects

Dr Narudh Cheramakara

MAY16

Aviation Regulations

• Mostly compliance-based

• ICAO and Thailands problem

• EU-banned lists

International Civil Aviation Organisation (ICAO)

• A specialised agency of the United Nations

• Overseeing civil aviation affairs of the UN member states

• Headquartered in Montreal, Canada• Asia-Pacific office in Bangkok• 191 UN members

Chicago Convention on International Civil Aviation

• 191 members• Effective from 1947• Global rules for civil

aviation (e.g. safety, standards, airspace, etc.)

• No legal status• Each member state

may interpret differently

Annexes

• The Convention is supported by nineteen annexes containing standards and recommended practices (SARPs). The annexes are amended regularly by ICAO and are as follows:

• Annex 1 – Personnel Licensing• Licensing of flight crews, air traffic controllers & aircraft maintenance personnel.

Including Chapter 6 containing medical standards.• Annex 2 – Rules of the Air• Annex 3 – Meteorological Service for International Air Navigation• Vol I – Core SARPsVol II – Appendices and Attachments• Annex 4 – Aeronautical Charts• Annex 5 – Units of Measurement to be used in Air and Ground Operations• Annex 6 – Operation of Aircraft• Part I – International Commercial Air Transport – Aeroplanes• Part II – International General Aviation – AeroplanesPart III – International

Operations – Helicopters• Annex 7 – Aircraft Nationality and Registration Marks• Annex 8 – Airworthiness of Aircraft• Annex 9 – Facilitation (E.g. Air cargo electronic data)

Annexes

• Annex 10 – Aeronautical Telecommunications• Annex 11 – Air Traffic Services – Air Traffic Control Service, Flight

Information Service and Alerting Service• Annex 12 – Search and Rescue• Annex 13 – Aircraft Accident and Incident Investigation• Annex 14 – Aerodromes• Annex 15 – Aeronautical Information Services• Annex 16 – Environmental Protection• Vol I – Aircraft Noise• Vol II – Aircraft Engine Emissions• Annex 17 – Security: Safeguarding International Civil Aviation

Against Acts of Unlawful Interference• Annex 18 – The Safe Transport of Dangerous Goods by Air• Annex 19 – Safety Management (Since 14 November 2013)

ส ำนกังำนกำรบินพลเรือนแห่งประเทศไทยThe Civil Aviation Authority of Thailand

• Licensing authority for airlines in Thailand

• Issuing AOC (Air Operator Certificate)

• Overseeing safety and operational standard of Thai operators

• Recently restructured as an independent governmental units.

• Formerly Department of Civil Aviation under the Ministry of Transport

ICAO and Thailand Issue

• ICAO occasionally conduct audits with its member states for compliance

• USOAP: Universal Safety Oversight Audit Programme

• USOAP assess the level of implementation of standards of each member states

• Thailand’s verdict: Significant Safety Concern (SSC)

• SSC – Mostly concerned the lack of qualification of licensing officers

• The aviation industry has been growing too fast to cope

• It has been used for money laundering operations

SSC Repercussions

• Various countries used it as an excuse for refusing traffic rights to Thai airlines (Japan, Korea)

• US FAA downgrade Thailand to Category II (TG had to suspend its LAX service)

• May end up in the EU banned list

• These are seriously undermining the competitiveness and opportunities of Thai operators.

Economic Regulations

• Registered Capital (Currently 200 MB)

• Financially fit to operate (Depending on each state) – Air transport operators are prone to liquidity issues

• Foreign Ownerships (51% must be Thai share holders)

Traffic Rights:

• Air carriers must obtain traffic rights before commencing on a route.

• This is generally negotiated on a bi-lateral basis through the governments.

• The traffic rights may be governed by number of flights/week or number of seats.

• Cargo traffic rights are generally less protective that passenger traffic.

Freedoms of the AirFreedom Description Example

1st The right to fly over a foreign country without landing

THAI Bangkok-Hanoi flying over Laos

2nd The right to refuel or carry out maintenance in a foreign country without embarking or disembarking passengers or cargo (Technical Stop)

Travel Service (Czech Airlines) stop in Abu Dhabhi on Bangkok-Prague serive (Refuel)

3rd Right to fly from one’s own country to another

THAI Bangkok-Hanoi

4th Right to fly from another country to one’s own

Thai Hanoi-Bangkok

5th Right to fly bewteen two foreign countries ona flight originating in one’s own country

THAI Bangkok-Tokyo-LosAngeles

6th Right to fly between two foreign country to another while stopping in one’s own country for non-technical reason

Birmingham-Asgabat-Amedhabad by Turkmenistan Airlines

Freedoms of the AirFreedom Description Example

7th Right to fly between two foreign countries while not offering flights to one’s own country

Cityjet (Ireland) London-Paris

8th The right to fly inside a foreign country continuing to one’s own destination

No example exist

9th The right to fly inside a foreign country without continuing to one’s own country (Cabotage)

EU onlyAer Lingus (Ireland) London-Edinburgh

Deregulation/Liberalisation

• In the past, the governments around the world favoured ‘Protectionism’ approach. Where the airlines are heavily subsidised, owned and operated by the government and traffic rights are heavily protected.

• Recent trend suggest a move towards privatisation of airline industries and the liberalisation in traffic rights

Intra-ASEAN: Half-baked liberalisation

1) First Agreement

- 3rd, 4th, 5th, Freedoms to ASEAN capitalsExcept Philippines and IndonesiaPhilippines allows access to other cities as Manila is full in terms of CapacityIndonesian is heavily lobbied by its carrier to stay out of it: This undermines the purpose of openskies policy

2) 2nd Agreement3rd, 4th, 5th, freedoms to all ASEAN citiesExcept Brunei, Laos, Cambodia, Indonesia

-There remains the restriction on foreign ownership-No 7th freedom or cabotage (where as these provisions are available in the EU liberalisation)

ASEAN Liberalisation