Today, many countries in the world having a prosperous aviation industry seek to avail airline routes of the developing countries. Such a business of air access within the regime of civil aviation is of immense economic benefits for the countries managing aircrafts and conducting flights, particularly in the case of flight above the airspace relating to overflight permits or transit rights. A foreign aircraft saves time and money if it is provided with a better route for air access. But in exchange, countries granting such access do not become financially benefited in the similar way. Rather reality is, many such countries even do not have the capacity to conduct international flights. Nevertheless, there remains an opportunity by which the developing countries can at least seek benefit from the developed nations in the name of meaningful reciprocal share.

The categorization and blacklisting of several developing countries’ international airports as the ‘worst airports in the world’ by the European Union (EU) and other states, reasonably gives rise to a question, i. e., can any legal measure be found that can possibly contribute to raise revenue for the development of airports of such countries? Moreover, can the developing countries impose royalty for overflight permits on foreign aircrafts as a humble compensation? Let us explore these questions and analyze the possibilities through the prism of global discourses on aviation laws and policies.

Arguments to these questions can be based on the fact that, agreeing in the air service agreements for airline access in reciprocity does not ensure the reciprocal benefits for the developing countries. The reason is that one airline can benefit by conducting frequencies of flights while the other is incapable of conducting flights internationally.

Global Discourse on Rights over Airspace and Overflight Charges

The very persistent controversy of the Siberian Overflight Charge issue is of major discussion here. In compliance with a commercial agreement, the airlines of the EU states flying over Siberia, the territory of Russia, have to pay special royalties imposed by their Russian competitor, Aeroflot. In this regard, the EU holds that it is “…not related to normal payments for Air Traffic Control Services”. The EU also expresses that “…these payments, which are imposed by Russia, constitute an unacceptable charge for transit, contradict universal practice and are considered to be incompatible with international law including Article 15 of the Chicago Convention.”

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As a part of new international economic order, aviation industry could play a vital role in the economy of the developing countries. Photocredit: imgarcade.com

Article 15 of the Chicago Convention forwards that no charges can be imposed ‘solely’ for the transit over, entry into and exit from the territory of a state. In some instances, this has given rise to ambiguities that deserve an interpretation to mean that – no charges are to be levied when an aircraft flies into, out of or over a state. That, however, is not the intent of the drafters of the Chicago Convention since all the states are fully within their rights in exercise of their sovereignty to recover benefits provided from aircraft operators and set the ‘terms’ of such levy.

To support the validity of royalty payments, in the first place, the ‘commercial agreement clause’ in Bilateral Air Service Agreements (ASAs) concluded by different governments generally paves the way for the approval of commercial agreements to be formulated by the aeronautical authorities of the contracting parties. Such agreements have been facilitating ‘reciprocity’ basis to some states, and this can be taken as a state practice to support the legitimacy of the overflight charges practice, especially while considering the economic value attached to the airspace and, in particular, the trans-national routes. The provisions of International Air Service Transit Agreement (IASTA) are, as a matter of counter argument, said to have been generally granting transit rights to contracting states unconditionally. But it can be established even through the plain interpretations of the IASTA and Chicago Convention that they do not restrict the commercial character of overflight rights. And as a matter of practice, it is difficult to enforce the basic right of flying over another state’s airspace.

The EU-Russia dispute regarding air access through Siberia reminds us that the overflight charge was to be denounced after negotiations and was to be effective from the 1st of January 2014. However, it is still to come in effect. On the other hand, the Siberian overflight issue cannot be taken as a relevant state practice for the developing nations, where the EU is by far Russia’s largest international aviation market. Statistics shows that 75% of all Russian passenger traffic is directed towards European destinations. For the EU too, the Russian Federation is currently the fourth largest foreign aviation market. Thus, there was a justified reciprocal share of EU-Russia to call Siberian overflight charge as extravagant. But this would not be available for the developing countries in relation to other countries with prosperous aviation market.

Possibility of Trading International Air Access on the Basis of Bilateral Agreement

Article 6 of the Chicago Convention, by not distinguishing between transit and other commercial traffic rights, indirectly recognizes the potential commercial value of overflight rights and foresees their ‘trade’ on a bilateral basis. It is still a debate whether this distinction amounts to a complete prohibition of any ‘tradability’ of transit rights in bilateral ASAs or just to the recognition of the fact that, such rights do not have any economic value and, are freely granted. Due to this debate, the argument that states are free in the exercise of their sovereign rights to determine the ‘terms’ of the permission granting access to its national airspace through bilateral ASAs, tends to prevail. The wording of Article 6 implies involvement and responsibility of the states in the content of the commercial agreements, and such agreement can be a valid legal basis of trading air access.

Most importantly, the ‘Bilateral Approach’ to air services negotiation is based on the ‘reciprocity’ of rights. Reciprocity in terms of air services agreements may not always be based on the exchange of exactly the same rights. It would, for instance, be possible to exchange different traffic rights, based on the principle of ‘Balance of Benefits.’ Unused frequencies of airline, where they exist, can be agreed in the context of agreements which, in principle, be assumed a basis for balance of rights and obligations on each side. Royalty for such unused frequencies can be a meaningful balance of benefits for the developing countries, whose airlines may not have capacity to perform international flights in reciprocal to rights granted to other foreign aircrafts.

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Revisiting the discourse of aviation laws and polices is needed for the development of developing countries’ aviation market. Photo Credit: dingmanphoto.com

Back in 1990’s, the controversial Brussels’ airport tax levy, and the so called Dutch Ticket Tax in The Netherlands, were abolished because they were found being charged solely’ for the right to entry into, or exit from the territory and in violation of Article 15 of the Chicago Convention. Here, the inclusion of royalty payments cannot be classed as such introduction of a fee, tax or other charge because royalties are not ‘designed and applied’ specifically to recover any ‘costs’ of providing facilities and services for civil aviation. The intention should be shown as being exclusively for developmental purposes, thus in this light too, Article 15 would not apply restrictions.

Some supporting practices on airlines access are evident, for instance, the Yamoussoukro Decision of the Organization of the African Union (OAU). African Ministers responsible for civil aviation in 1999 adopted this decision on the liberalization of air transport markets in Africa. Despite a liberal air access approach, there are countries that restrict market access under the pretext that their national airlines are not ready to compete in a liberalized market and some countries insist that non-local airlines pay royalties for air access. Whilst most states do apply Yamoussoukro Decision, rights are granted on selective bases, influenced by the need for reciprocity and in some cases the request for royalties to be paid. Turkey adopted a Step-By-Step Liberalization Approach by which the developing countries need not to incorporate a much liberalized system and through a usage of such liberalization approach states could restructure and reorganize itself for a better liberalized market.

International Civil Aviation Organization has also in practice taken a flexible approach to the basic equality of treatment of states. It has issued guidance materials on preferential measure of the developing countries in the economic regulation, and includes a qualified exemption that states shall “take into account the problems of operators of developing countries”.

Statutory requirements confirm that there is no express prohibition on the ‘tradability’ of transit rights in the Chicago Convention. It barely deals with commercial aspects of civil aviation and leaves any further regulation on the matter to bilateral ASAs between contracting states – the regulation of any commercial matters. And to the question whether State practice together with expressions of opinio juris has led to the customary recognition of the ‘non-commercial’ character of overflight rights – it can be noted that the drafters of the Chicago Convention have not succeeded in setting up a universal system – based on a uniform treatment for all aspects of air transport.

The most topical examples of imposition of unilateral measures liable to affect the uniformity of international civil aviation are indeed found in the economic field. Hence, the economic operation of international air transport services is not based on uniform global regulations, due to which developing countries can secure their rights to form a policy to impose overflight charges in the form of royalties.

Citations:

Kunjan Shah, “Analyzing Aviation Policy for Developing Countries: A Prolific Approach” (DHLR Blog, 9 November 2014) http://www.dhakalawreview.org/blog/2014/11/aviation-policy-532

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Comments to: Analyzing Aviation Policy for Developing Countries: A Prolific Approach
  • November 11, 2014

    Learned a lot reading it. Keep writing 🙂

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