ICAO by xuyuzhu

VIEWS: 29 PAGES: 57

									                                                     Ci RCULAR 136-AT142




CIRCULAR                                                                   I

        1977




                POLICY CONCERNING
    INTERNATIONAL NON-SCHEDULED A TRANSPORT
                                 I
                                 R




                Approved by the Secretary General
                and published under his authority




                                                    INTERNATIONAL
                                                    C I V I L AVIATI'ON
i                                                   O R G A N I Z A T I O N
                                                    MONTREAL a CANADA
Published in separate English. French, Spanish and Russian editions b y the Inter-
national Civil A viation Organization. A 11 correspondence, except orders and sub-
scriptions, should be addressed tu the Secretary General of ICAO, P.O. Box 400,
Succursale: Place de I'Aviation internationale, 1000 Sherbrooke Street West,
Montreal, Quebec, Canada H3A 2R2.
Orders for this publication should be sent to one of the following addresses, together with the
appropriate remittance (by bank draft or post office money order) in U.S. dollars or the
currency of the country in which the order is placed.

               International Civil A vLtion Organization.
                  (Attention: Distribution Officer),
                  P.O. Box 400, Succursale: Place de 1'Aviation internationale,
                  1000 Sherbrooke Street West,
                  Montreal, Quebec, Canada H3A 2R2

Egypt (Arab Republic of). ICAO Representative, Middle East and Eastern African Office,
   16 Hassan Sabri, Zamalek, Cairo.
                           n
France. ~ e ~ r k s e i t adet l'OACI, Bureau Europe, 3bis, villa Emile-Bergerat,
   92200 Neuilly-sur-Seine.
India. Oxford Book and Stationery Co., Scindia House, New Delhi
   or 17 Park Street, Calcutta.
Japan. Japan Civil Aviation Promotion Foundation, No. 38 Shiba Kotohira-Cho,
   Minato-Ku, Tokyo.
Mexico. Representante de la OACI, Oficina Norteam6rica y Caribe,
   Apartado postal 5-377, M6xico 5, D.F.
Peru. Representante de la OACI, Oficina SudamtSrica, Apartado 41 27, Lima.
Senegal. Repdsentant de I'OACI, Bureau Afrique, Boite postale 2356, Dakar.
Spain. Libreria de Aeronslutica y Astronslutica Sumaas, Desengaiio, 12-30-3, Madrid 13.
Sweden. C.E. Fritzes Kungl. Hovbokhandel, Fredsgatan 2, Box 16356, Stockholm 16.
Thailand. ICAO Representative, Far East and Pacific Office, P.O. Box 614, Bangkok.
United Kingdom. Civil Aviation Authority, Printing and Publications Services,
   Greville House, 37 Gratton Road, Cheltenham, Glos., GL50 2BN.




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1.                       The f o l l o w i n g i n f o r m a t i o n paper was prepared
by t h e S e c r e t a r i a t of ICAO a s background documentation f o r
t h e a s s i s t a n c e of C o n t r a c t i n g S t a t e s and Observers i n t h e i r
c o n s i d e r a t i o n and f o r m u l a t i o n of recommendations on t h e
s u b j e c t of P o l i c y Concerning I n t e r n a t i o n a l Non-Scheduled A i r
~ r a n s ~ o - t Item 2 on t h e Agenda f o r t h e S p e c i a l Air T r a n s p o r t
                    r
Conference which w a s held i n Montreal i n A p r i l 1977. The
Report of t h e Conference w a s published as Doc 9199, SATC (1977).

2.                       One main s o u r c e of i n f o r m a t i o n was t h e r e p l i e s
submitted by 6 1 C o n t r a c t i n g S t a t e s t o t h e Q u e s t i o n n a i r e on t h e
s u b j e c t d i s p a t c h e d on 26 J a n u a r y 1976 ( S t a t e L e t t e r EC 2/19,
EC 2111.1 - 7612). The second s o u r c e was t h e m a t e r i a l on
i n t e r n a t i o n a l non-scheduled a i r t r a n s p o r t and r e l a t e d m a t t e r s
a v a i l a b l e a t ICAO Headquarters, i n c l u d i n g such i t e m s a s
previous ICAO s t u d i e s on t h e s u b j e c t , r e l e v a n t government
documents, s p e c i a l s t u d i e s and a r t i c l e s t h a t have a p p e r a r e d
i n aviation journals.

3.           The paper h a s been r e v i s e d and i s now
published as an ICAO C i r c u l a r i n o r d e r t o g i v e i t wider
circulation.
THIS PAGE INTENTIONALLY LEFT BLANK
                                                 ICAO C i r c u l a r 1 3 6 - A ~ / 4 2                                                 >
                                                                                                                                     (iii


                                                                F
                                                         TABLE O CONTENTS
                                                                                                                               Page

 I   .    INTRODUCTION

                                                ..................
            Changes i n post-war a i r t r a v e l                                                                 .   .   .     1
                                                     .............
            Tourism and non-scheduled a i r t r a n s p o r t                                                      .   .   .     1
            R e l a t i v e importance     .......................                                                 .   .   .     1
            Sizeofmajormarkets              ......................                                                 .   .   .     2
                                              ....................
            C u r r e n t p o s i t i o n of S t a t e s                                                           .   .   .     2

I1    .               F                         F
          EVOLUTION O THE BASIS FOR REGULATION O INTERNATIONAL
          NON- SCHEDULED OPERAT IONS

            A r t i c l e s 5 & 6 of t h e Convention and t h e C o u n c i l ' s D e f i n i t i o n       .....                3
                                                                                                   ...
            ECAC M u l t i l a t e r a l Agreement and a c t i o n s on I n c l u s i v e Tour C h a r t e r s                   4
            IATA R e s o l u t i o n 045 and A f f i n i t y Group C h a r t e r s        ............                           5
                                                                         ......
            C o o r d i n a t i o n of c h a r t e r r e g u l a t i o n f o r North A t l a n t i c r o u t e s                 6
            Current regulatory s i t u a t i o n         ......................                                                  6

I11   .   TYPES OF CHARTER SERVICE

            Groupcharters           .............................                                                                9
               Affinitygroupcharters                    .......................                                                  9
               N o n - a f f i n i t y group c h a r t e r s  ....................                                              10
             I n c l u s i v e Tour C h a r t e r s . . . . . . . . . . . . . . . . . . . . . . . . .                           11
                     Definition        ............................                                                             11
                  ITC r e g u l a t i o n s of ECAC-member S t a t e s                 ...............                          11
                  ITC r e g u l a t i o n i n North America              ...................                                    11
                                                                       .
             Own-use C h a r t e r s ( S i n g l e ~ n t i t ~ ). . . . . . . . . . . . . . . . . . .                           12
             S p e c i a l i z e d p a s s e n g e r c h a r t e r s and o t h e r c o n c e p t s . . . . . . . . . . .        12
                    S t u d e n t o r Study Group C h a r t e r s . . . . . . . . . . . . . . . . . .                           12
                    Special event c h a r t e r s . . . . . . . . . . . . . . . . . . . . . . .                                 12
                    All-cargocharter flights . . . . . . . . . . . . . . . . . . . . .                                          13
                    Other c o n c e p t s           ..........................                                                  13

 IV   .   REGULATORY PRACTICES

             Documentary Sources             .................                                  .   ........                    15
                                                         .....
                 L a w s . r e g u l a t i o n s and p o l i c y s t a t e m e n t s            .   ........                    15
                                                            ..
                 Published procedures f o r obtaining permission                                .   ........                    15
             Methods of d i s t i n g u i s h i n g non-scheduled from s c h e d u l e d s e r v i c e s....                    15
                                                 .............
                 D e f i n i t i o n by e x c l u s i o n                                       .   ........                    15
                 Positivedefinition            ...............                                  .   ........                    16
                                                            ..
                 Use of t h e terms 'non-scheduled' and ' c h a r t e r '                       .   ........                    16
(iv)                                               ICAO C i r c u l a r 136-A~/42
                                                                                                                    Page

               Regulation of I n t e r n a t i o n a l Non-Scheduled F l i g h t s        ........
                      Transit f l i g h t s  .......................
                                                               .....
                      T r a f f i c s t o p s by non-scheduled commercial f l i g h t s
                                                         ...........
                      Requirements t o o b t a i n p r i o r permission
                      P r i o r permission a c c o r d i n g t o circumstances determined by
                                                  ..................
                            b i l a t e r a l arrangements
                      Freedom of admission g r a n t e d f o r c e r t a i n c a t e g o r i e s of
                                          ..................
                            non-scheduled f l k g h t s
                      Freedom of admission according t o circumstances determined by
                                          ..................
                            m u l t i l a t e r a l agreement
                                        ....................
               R e s t r i c t i o n s and C o n t r o l s
                      General    ...........................
                      Marketing r e s t r i c t i o n s through c h a r t e r d e f i n i t i o n s and r u l e s
                                               .............
                      Geographical and r o u t e r e s t r i c t i o n s
                      Capacity Control......................
                      Price control ........................
 V   .   PROBLEMS AND POLICY

                                                ......................
               Problems of P o l i c y D e f i n i t i o n                                                           25
                                                    ..................
                      P r o t e c t i o n of Scheduled S e r v i c e s                                               25
                                                     .................
                      Role of non-scheduled a i r t r a n s p o r t                                                  26
                                                  ....................
                      Unified r e g u l a t o r y f ramewmk                                                          27
                                                   ...................
               D i f f i c u l t i e s of P o l i c y a p p l i c a t i o n                                          27
                                               .......................
                      Harmonization of p o l i c y                                                                   27
                                                 .....................
                      Compliance w i t h r e g u l a t i o n s                                                       27
                      Price control       ............................                                               28



         APPENDICES

         1   .QtsestI0nnair-e on         P o l i c y Concerning I n t e r n a t i o n a l Non-Scheduled
                          ..............................
               Air Transport                                                                                         29
         2 .Tabulation of S t a t e s ' R e p l i e s t o N e s t i o n n a i r e . . . . . . . . . . . . .          33
         3 .Summardes of Information Provided by S t a t e s on Questions 4. 8 and 10 . . .                          41
                                                      ICAO C i r c u l a r 136-AT/42                                                           1

                                                            I   -   INTRODUCTION



1.                Changes i n post-war a i r t r a v e l . - A s f a r back a s 1946, t h e Governments of t h e
United S t a t e s and t h e United Kingdom a f f i r m e d i n t h e a i r s e r v i c e s agreement concluded i n
Bermuda t h a t the a i r transport f a c i l i t i e s available t o the travelling public should bear a
close relationship to the Eequirments of the p ~ b l i cfor such tmns@ts 1/. During t h e
i n t e r v e n i n g t h i r t y y e a r s , t h e r a p i d development of i n t e r n a t i o n a l scheduled a i r s e r v i c e s
c a t e r e d t o t h e s e needs, o f f e r i n g t h e p u b l i c i n c r e a s e d frequency, on-demand a v a i l a b i l i t y ,
r o u t e f l e x i b i l i t y , m u l t i - s t o p s e r v i c e s and improved comfort and s a f e t y       .
                                                                                                                 Lower a i r f a r e s
were a l s o made p o s s i b l e by t e c h n o l o g i c a l change. Combined w i t h t h e s e lower f a r e s , t h e
growth i n d i s p o s a b l e income h a s l e d t o s i g n i f i c a n t changes i n t h e composition of t h e i n t e r -
n a t i o n a l market w i t h p e r s o n a l , as opposed t o b u s i n e s s t r a v e l emerging a s t h e dominant
c a t e g o r y . For a l a r g e p r o p o r t i o n of such t r a v e l l e r s , t h e most i m p o r t a n t c o n s i d e r a t i o n is
now t h e c o s t of a i r t r a n s p o r t a t i o n , w i t h less emphasis on such scheduled s e r v i c e charac-
t e r i s t i c s a s frequency, f l e x i b i l i t y and on-demand a v a i l a b i l i t y .

2.                Tourism and non-scheduled a i r t r a n s p o r t .            -          The demand f o r low c o s t i n t e r n a t i o n a l
a i r t r a n s p o r t s e r v i c e s f o r p e r s o n a l t r a v e l h a s been developed over t h e y e a r s by t h e so-
c a l l e d non-scheduled o r charter o p e r a t o r s a t r a t e s lower t h a n could economically b e
provided by scheduled a i r c a r r i e r s . Non-scheduled t r a n s p o r t a t i o n f i r s t emerged a s a n
important c a t e g o r y of a i r c a r r i a g e i n Europe, b e f o r e s p r e a d i n g t o North America and t o
o t h e r r e g i o n s , and h a s been i n s t r u m e n t a l i n t h e development of i n t e r n a t i o n a l mass t o u r i s m
which h a s assumed c o n s i d e r a b l e economic and s o c i a l importance f o r a l a r g e number of
developed and developing n a t i o n s . Although scheduled a i r l i n e s have a l s o t n a d i t i o n a l l y
p a r t i c i p a t e d i n c h a r t e r o p e r a t i o n s , e i t h e r d i r e c t l y o r through c h a r t e r s u b s i d i a r i e s , t h e
r e a l p r e s s u r e on Governments t o i n t r o d u c e new types of a i r c h a r t e r s and t o r e l a x r e g u l a t i o n s
h a s come from t h e non-scheduled o p e r a t o r s , v a r i o u s segments of t h e t r a v e l and tourism
i n d u s t r y and, i n c e r t a i n i n s t a n c e s , from t h e t r a v e l l i n g p u b l i c .

3.                R e l a t i v e importance. - S i n c e t h e mid 19609, non-scheduled a i r t r a n s p o r t h a s
become a major element i n i n t e r n a t i o n a l a i r commerce. By 1974 t h e t o t a l number o f
passenger-kilometres flown on i n t e r n a t i o n a l non-scheduled f l i g h t s by b o t h scheduled and
non-scheduled o p e r a t o r s had r i s e n t o 92 700 m i l l i o n , compared w i t h 250 000 m i l l i o n on
i n t e r n a t i o n a l scheduled s e r v i c e s . Non-scheduled t r a f f i c t h u s accounted f o r a b o u t 27 per
c e n t of t h e 342 700 m i l l i o n passenger-kilometres performed on a l l i n t e r n a t i o n a l passenger
s e r v i c e s . Approximately 63 p e r c e n t of non-scheduled t r a f f i c was c a r r i e d by non-scheduled
o p e r a t o r s (43% by o p e r a t o r s r e g i s t e r e d i n Europe, 18% by t h o s e i n North America and 2% by
t h o s e elsewhere), and t h e remaining 37 p e r c e n t by scheduled a i r l i n e s .



11
- U.S.   Department of S t a t e : T r e a t i e s and Other I n t e r n a t i o n a l Acts S e r i e s 1507, A i r
    Services Agreement between the United Stutes of America and the United Kingdom o f Great
    Britain and Northern IreZand and Final Act of the C i v i l Aviation Conference heZd a t
                                                                           .
    Bemruda, February 11, 1949 (Washington, U. S Government P r i n t i n g Off i c e )                                   .
2                                                    ICAO C i r c u l a r 136-AT/42


4.              S i z e of major markets. - The l a r g e s t s i n g l e i n t e r n a t i o n a l c h a r t e r market i n t h e
world i s comprised of t h e t r a f f i c c a r r i e d between t h e 20 S t a t e s belonging t o t h e European
C i v i l Aviation Conference (ECAC).                      I n the year ending October 1974, intra-ECAC c h a r t e r
t r a f f i c t o t a l l e d 19.7 m i l l i o n passengers, o r about 41 p e r c e n t of a l l intra-ECAC p a s s e n g e r s .
I n terms of passenger-kilometres, c h a r t e r t r a f f i c r e p r e s e n t e d 57.5 per c e n t of t o t a l
scheduled and non-scheduled i n t e r n a t i o n a l t r a f f i c         .     The second most important market was
the North A t l a n t i c which, i n 1974, amounted t o 3.4 m i l l i o n p a s s e n g e r s , r e p r e s e n t i n g about
26.4 p e r c e n t of t o t a l North A t l a n t i c passenger t r a f f i c - non-IATA c h a r t e r o p e r a t o r s
accounting f o r approximately 18 per c e n t and IATA c a r r i e r s f o r t h e remaining 9 p e r c e n t .
E f f o r t s t o h a r m n i z e n a t i o n a l r e g u l a t i o n s governing non-scheduled o p e r a t i o n s have been
influenced by t h e importance of t h e s e two markets.

5.              Current p o s i t i o n of S t a t e s .   -     T o o b t a i n a n i n d i c a t i o n of t h e c u r r e n t p o s i t i o n of
Contracting S t a t e s on m a t t e r s r e l a t i n g to i n t e r n a t i o n a l non-scheduled a i r t r a n s p o r t a
Questionnaire (reproduced h e r e as Appendix 1 ) was c i r c u l a t e d on 26 January 1976 ( r e f e r e n c e
S t a t e L e t t e r ~ ~ 2 / 1 9 ~ 2 / 1 1 . 1 - 7 6 / 2 ) . By t h e time of w r i t i n g , r e p l i e s had been r e c e i v e d
                                   ~,
from s i x t y - w o S t a t e s whose a i r l i n e s t o g e t h e r account f o r about 87 per c e n t of a l l i n t e r -
n a t i o n a l scheduled t o n n e - k i l w e t r e s performed and 89 p e r c e n t of a l l i n t e r n a t i o n a l non-
scheduled t r a f f i c . A t a b u l a t i o n of S t a t e s ' r e p l i e s t o t h e t e n q u e s t i o n s i s g i v e n i n
Appendix 2 and summaries of t h e i r comments on c e r t a i n q u e s t i o n s a r e g i v e n i n Appendix 3.
The r e p l y i n g S t a t e s a r e l i s t e d i n d i v i d u a l l y by r e g i o n i n Appendix 2 from which t h e percent-
age response from each r e g i o n and t h e t o t a l ICAO membership can be deduced. This informa-
t i o n t o g e t h e r w i t h t h e s h a r e s of t o t a l i n t e r n a t i o n a l non-scheduled t r a f f i c r e p r e s e n t e d by
t h e c a r r i e r s of r e p l y i n g S t a t e s , i s shown i n t h e t a b l e below. The i n f o r m a t i o n r e c e i v e d
from S t a t e s h a s provided one of t h e main bases f o r t h i s paper and i s r e f e r r e d t o s p e c i f i c a l l y
i n Chapters 1 1 IV and V.
                       1 ,

                                                                     Table 1

                                           STATES REPLYING TO ICAO QUESTIONNAIRE


                                 Contracting S t a t e s               Non-Scheduled I n t e r n a t i o n a l T r a f f i c i n
                              ' P o t a l ' ~ e ~ l ~ iSnt g t e s
                                                           a           1975 by Region of a i r l i n e r e g i s t r a t i o n
           Region
                                No.                                     Total                      Replying S t a t e s
                                             No.            %         TKP(mil1)        TKP ( m i l l )          X of Region

    Africa                      39           12            31             440                       180                     41
    Asia & P a c i f i c        23           11           48             420                        295                     70
    Europe                      28           18            64          6 805                     6 000                      88
    L a t i n America
      8 Carib.                 26            11           42              190                       145                     76
    Middle East                 14            7            50              55                         35                    64
    North America                2             2         100           3 155                     3 155                    100
           WORLD              132            61           46          1 065
                                                                       1                         9 810                      89
                                                                                                                                         a
                                                       ICAO C i r c u l a r 136-AT142                                                              3



                                       I1   -              F
                                                EVOLUTION O THE BASIS FOR REGULATION OF
                                                INTERNATIONAL NON-SCHEDULED OPERATIONS


A r t i c l e s 5 and 6 of t h e Convention and t h e ~ o u n c i l ' sD e f i n i t i o n

1.                   An e s s e n t i a l p r e r e q u i s i t e f o r e f f e c t i v e r e g u l a t i o n i s a c l e a r u n d e r s t a n d i n g of
t h e n a t u r e of t h e a c t i v i t y t o be r e g u l a t e d , b u t t h e Chicago Convention, a l t h o u g h i t
d i s t i n g u i s h e s between t h e r i g h t s t o be accorded t o scheduled a i r s e r v i c e s ( A r t i c l e 6 ) and
non-scheduled f l i g h t ( A r t i c l e 5 ) does n o t d e f i n e t h e s e t e m s , m e r e l y r e f e r r i n g i n A r t i c l e 6
t o scheduled international a i r service and i n A r t i c l e 5 t o a i r c r a f t not engaged i n sche-
duled international a i r services. By 1 9 4 8 , t h e Assembly had r e c o g n i z e d t h e need f o r a d e f i n i -
t i o n i n R e s o l u t i o n A2-18 and t h e C o u n c i l , guided a l s o by R e s o l u t i o n A4-15, p r e p a r e d and
submitted t o C o n t r a c t i n g S t a t e s i n 1952 a D e f i n i t i o n of a Scheduled I n t e r n a t i o n a l Air
S e r v i c e , accompanied by an a n a l y s i s of t h e r i g h t s c o n f e r r e d by A r t i c l e 5 of t h e Convention L/.

2.          The t e x t of t h i s D e f i n i t i o n r e a d s a s f o l l o w s : A scheduled international a i r
service i s a series of f l i g h t s that possesses a l l the following characteristics:

                 a)    it passes through the airspace over the t e r r i t o r y
                       of more than one State;

                 b)    it i s performed by a i r c r a f t for the transport of
                       passengers, mail or cargo for remuneration, i n
                       such a manner that each f l i g h t i s open t o use by
                       members of the public;

                 C)    i t i s opemted, so as to serve t r a f f i c between
                       the same two or more points, either:

                         f i ) i n accordance with a published timetable, or
                        (ii) with f l i g h t s so regular or frequent that they
                                 c o n s t i t u t e a recognisable systematic series.

In   i t s n o t e s on t h e a p p l i c a t i o n of t h e d e f i n i t i o n , t h e Council emphasized t h a t i f any one
of   t h e c h a r a c t e r i s t i c s i s m i s s i n g , a s e r i e s of f l i g h t s must b e c l a s s i f i e d a s non-scheduled.
In   d i s c u s s i n g t h e i n t e r p r e t a t i o n of t h e words open t o use by members of the general public,
it   was a l s o observed t h a t the fact t h a t each f l i g h t of a scheduled international a i r
service i s open to the publCc distinguishes such a service fran a charter service operated
under special arrangements whereby f l i g h t s are booked i n t o t o and are thereafter not open
t o members of the public. Two i m p o r t a n t c a t e g o r i e s of comnercial t r a n s p o r t o p e r a t i o n s n o t
open t o u s e by members of t h e p u b l i c , i t was n o t e d , a r e s i n g l e e n t i t y c h a r t e r s and a f f i n i t y
group c h a r t e r s .

11
-     ICAO Doc 7278</841,               1015152.
4                                                 ICAO C i r c u l a r 136-AT142


3.             A r t i c l e 5 of t h e Convention d e a l s i n some d e t a i l with t h e r i g h t s of non-
scheduled f l i g h t . The f i r s t paragraph r e q u i r e s t h a t each C o n t r a c t i n g S t a t e accord t h e
f i r s t and second freedoms (non-commercial r i g h t s ) t o b o t h c-ercial                          and non-commercial
non-scheduled f l i g h t s by a i r c r a f t of o t h e r C o n t r a c t i n g S t a t e s , t h a t i s t h e r i g h t s t o make
f l i g h t s i n t o or i n t r a n s i t non-stop across i t s t e r r i t o r y and t o m k e stops for n o n - t r a f f i c
purposes without the necessity of obtaining prior permission. The second paragraph
s t i p u l a t e s t h a t commercial non-scheduled i n t e r n a t i o n a l f l i g h t s s h a l l a l s o have t h e p r i v i l e g e
of t a k i n g on o r d i s c h a r g i n g passengers, cargo o r m a i l , t h a t is t h e t h i r d , f o u r t h and f i f t h
freedoms (commercial r i g h t s ) subject t o the r i g h t of any S t a t e where such embarkation or
discharge takes place t o impose such regulations, conditions or limitations as it may
consider desirable. The Council, i n i t s a n a l y s i s of A r t i c l e 5, w a s o f t h e o p i n i o n t h a t
although t h e r i g h t of S t a t e s t o impose such r e g u l a t i o n s was u n q u a l i f i e d , it should be
understood t h a t the r i g h t would not be exercised i n such a my as t o render the opemtion
of t h i s important form o f a i r transport impossibte or non-effective.

4.                  The r e l a t i v e l y l i b e r a l g r a n t of r i g h t s t o non-scheduled f l i g h t s i n A r t i c l e 5
r e f l e c t s t h e comparative unimportance of t h i s category of a i r t r a n s p o r t o p e r a t i o n s a t t h e
time t h e Convention was d r a f t e d . A r t i c l e 6, i n c o n t r a s t , d i d no more than s t a t e t h a t a
scheduled i n t e r n a t i o n a l a i r s e r v i c e c o u l d only b e operated over o r i n t o t h e t e r r i t o r y of
a Contracting S t a t e with t h e s p e c i a l permission o r o t h e r a u t h o r i z a t i o n of t h a t S t a t e .
Although non-commercial r i g h t s ( f i r s t and second freedoms) a r e accorded t o scheduled f l i g h t s
by t h e I n t e r n a t i o n a l A i r S e r v i c e s T r a n s i t Agreement, commercial r i g h t s a r e normally granted
only through b i l a t e r a l agreements. A s a p r a c t i c a l consequence of A r t i c l e 5, t h e r e g y l a t i o n
of aon-scheduled i n t e r n a t i o n a l f l i g h t h a s g e n e r a l l y been governed by u n i l a t e r a l r u l e s l a i d
down by t h e S t a t e a c r o s s , t o o r from whose t e r r i t o r y such f l i g h t s a r e o p e r a t e d by f o r e i g n
c a r r i e r s , and t h e f a c t t h a t t h e C o u n c i l ' s D e f i n i t i o n of a Scheduled I n t e r n a t i o n a l A i r
S e r v i c e has never received wide acceptance by S t a t e s has l e f t them r e l a t i v e l y f r e e t o
determine t h e a p p l i c a b i l i t y of A r t i c l e 5.

ECAC Mu1t i l a t e r a l Agreement and a c t i o n s on I n c l u s i v e Tour C h a r t e r s

5.            The next major s t e p i n t h e development of a r e g u l a t o r y framework f o r i n t e r n a t i o n a l
non-scheduled a i r s e r v i c e s was t h e MuZtiZateral Agrement on Commercial Rights of Non-
Scheduled A i r Services i n Europe which was opened f o r r a t i f i c a t i o n by S t a t e s members of
ECAC i n P a r i s i n A p r i l 1956. This agreement stemmed from a Resolution adopted a t t h e
Conference on Co-ordination of A i r Transport i n Europe, which was convened by ICAO i n
Strasbourg i n A p r i l 1954. The o b j e c t of t h e u n d e r t a k i n g w a s t o a r r i v e a t f u r t h e r agreement
a s t o t h e r i g h t of t h e i r r e s p e c t i v e commercial a i r c r a f t t o t a k e on and d i s c h a r g e passengers,
cargo o r m a i l on i n t e r n a t i o n a l f l i g h t s f o r remuneration o r h i r e on o t h e r than i n t e r n a t i o n a l
scheduled s e r v i c e s , as provided i n t h e second paragraph of A r t i c l e 5 of t h e Convention.
The Preamble t o t h e Agreement a l s o noted t h a t non-scheduled commercial f l i g h t s w i t h i n
.Europe u b i c h d i d not harm m z h e d u l d service8 should b e f r e e l y a d m i t t e d .

6.          The non-achedulad o p e r a t i o n s specifically r e f e r r e d t o i n t h e Agreement were t h o s e
performed f o r humanitarian and emergency purposes, t a x i - c l a s s passenger f l i g h t s , f l i g h t s on
which t h e e n t i r e space i s h i r e d by a s i n g l e person f o r t h e c a r r i a g e of h i s o r i t s s t a f f o r
                                                    ICAO C i r c u l a r 136-AT142                                                         5

merchandise, and s i n g l e f l i g h t s n o t exceeding one p e r month per o p e r a t o r between t h e same
two c e n t r e s of t r a f f i c . F u l l commercial r i g h t s were accorded t o such f l i g h t s w i t h o u t t h e
i m p o s i t i o n of t h e r e g u l a t i o n s , c o n d i t i o n s o r l i m i t a t i o n s mentioned i n A r t i c l e 5 of t h e
Chicago Convention, provided c e r t a i n c o n d i t i o n s were met. The same r i g h t s were accorded
t o a i r c r a f t engaged i n t h e t r a n s p o r t of p a s s e n g e r s between r e g i o n s which have no r e a s o n a b l y
d i r e c t c o n n e c t i o n by scheduled s e r v i c e s . While s a f e g u a r d i n g t h e s o v e r e i g n t y of t h e s i g n a -
t o r y S t a t e s i n r e s p e c t of non-scheduled s e r v i c e s , t h e s p i r i t of t h e Agreement was i n t h e
d i r e c t i o n of l i b e r a l i z a t i o n , r e q u i r i n g l i t t l e more t h a n p r i o r n o t i f i c a t i o n .

7.                 Although i n c l u s i v e t o u r c h a r t e r s (ITCS) were n o t s p e c i f i c a l l y mentioned i n t h e
Agreement, t h e y b e n e f i t e d i n p r a c t i c e from t h e t r e a t m e n t accorded s e r v i c e s between r e g i o n s
w i t h o u t r e a s o n a b l y d i r e c t scheduled a i r s e r v i c e s and because of t h e d e s i r e of c e r t a i n
S t a t e s t o f o s t e r t h e development of t h e i r t o u r i s m i n d u s t r i e s . The growing importance of
t h i s c h a r t e r t y p e on intra-European r o u t e s r e s u l t e d i n t h e European C i v i l A v i a t i o n Confe-
                                                                                                             CC
r e n c e t a k i n g f u r t h e r s t e p s t o d e f i n e ITCs, i n 1958/59, and, i n 1961, E A recommended t h a t
c o n s i d e r a t i o n s h o u l d be g i v e n t o the principles t h a t should govern the operation of inclu-
s i v e tour charters, with the object of establishing t h e maximum possible l i b e r a l i z a t i o n
of t h i s type of t r a f f i c     a.
                                 The ECAC-member S t a t e s had, a t a n e a r l y s t a g e , a g r e e d t h a t
                                                                                                          1
                                                                                                          -
i n c l u s i v e t o u r a i r s e r v i c e s should b e t r e a t e d as non-scheduled s e r v i c e s 3 a l t h o u g h i t
could be argued t h a t t h e y met t h e c r i t e r i a d e f i n i n g a scheduled s e r v i c e . T h i s p o s i t i o n
was r e i t e r a t e d by t h e ICM S e c r e t a r i a t i n a s t u d y e n t i t l e d Inclusive Tour A i r Services i n
International A i r Transport, p u b l i s h e d i n 1962 41.

IATA R e s o l u t i o n 045 and A f f i n i t y Group C h a r t e r s

8.                  The r e g u l a t i o n of c h a r t e r f l i g h t s performed by s c h e d u l e d a i r l i n e s which a r e
members of IATA, h a s been governed by IATA F.esolution 045, s i n c e i t was f i r s t adopted i n
1948. Over t h e y e a r s , many of t h e p r o v i s i o n s of t h i s R e s o l u t i o n have been i n c o r p o r a t e d
i n t o t h e v a r i o u s n a t i o n a l r e g u l a t i o n s and hence a l s o a p p l i e d t o c h a r t e r s performed by non-
IATA c a r r i e r s . The R e s o l u t i o n , which h a s been r e v i s e d on s e v e r a l o c c a s i o n s , d e f i n e s t h e
e l i g i b i l i t y t o c h a r t e r f o r t h e purpose of a f f i n i t y group charters and a l s o own-use and
student study group charters, a s w e l l as f o r t h e c a r r i a g e of c a r g o .

9.                   O u t s i d e of t h e Europe-Mediterranean c h a r t e r market which came t o b e based
p r i n c i p a l l y upon i n c l u s i v e t o u r s , t h e most widespread form of c h a r t e r was t h e a f f i n i t y
group. However, a s t h i s t y p e grew i n p o p u l a r i t y i t became i n c r e a s i n g l y d i f f i c u l t t o
e n f o r c e t h e r u l e s c o n c e r n i n g t h e composition o f groups, and i n J u n e 1972, t h e United S t a t e s
C i v i l A e r o n a u t i c s Board w i t h h e l d a p p r o v a l of R e s o l u t i o n 045. A t t h e same time, t h e United
S t a t e s , Canada and ECAC-member S t a t e s took measures i n t e n d e d e v e n t u a l l y t o phase o u t
a f f i n i t y groups and t o r e p l a c e them w i t h n o n - a f f i n i t y groups a s t h e main form of c h a r t e r
on t h e North A t l a n t i c .



- Reconrmendation No.6 of t h e F o u r t h S e s s i o n of ECAC (Doc 8185, ECAC/4-I),
21                                                                                                                  J u l y 1961.

- Recommendation No.3 (para.50) of t h e F o u r t h S e s s i o n of ECAC.
31
41
- ICAO Doc 8244-AT/717, 1962.
6                                                     ICAO C i r c u l a r 136-AT142                                        -
Coordination of c h a r t e r r e g u l a t i o n f o r North A t l a n t i c r o u t e s

10.                I n October 1972, by a DecZaration of Agreed Principles, Canada, t h e United S t a t e s
and t h e ECAC-member S t a t e s sought t o provide a g e n e r a l l y agreed framework which would permit
a l l North A t l a n t i c S t a t e s t o e s t a b l i s h s u b s t a n t i a l l y s i m i l a r c h a r t e r r u l e s w i t h r e s p e c t t o
t h e new n o n - a f f i n i t y c l a s s of a i r c h a r t e r s i n o r d e r t o f a c i l i t a t e and r e g u l a r i z e t h e i r ope-
r a t i o n on North A t l a n t i c r o u t e s . T h i s category of non-scheduled o p e r a t i o n , termed advance
booking c h a r t e r s (ABC) by Canada and s e v e r a l ECAC-member S t a t e s , and t r a v e l group c h a r t e r s
 (TGC) by t h e United S t a t e s , was i n t r o d u c e d on t h e s e r o u t e s i n 1973. Following r e g u l a r
c o n t a c t s between t h e above S t a t e s , t h e ECAC-member S t a t e s concluded a Memorandum of Under-
s t a n d i n g i n June 1975 concerning t h e p r i n c i p l e s t o govern any b i l a t e r a l agreement o r arrange-
ment on North A t l a n t i c c h a r t e r s t h a t t h e s e S t a t e s might conclude o r renew w i t h t h e Canadian
and/or United S t a t e s a u t h o r i t i e s b e f o r e t h e e n t r y i n t o f o r c e of a m u l t i l a t e r a l agreement
between Canada, E A S t a t e s and t h e United S t a t e s , and s p e c i f y i n g t h e t y p e s of c h a r t e r s
                            CC
t h a t might b e covered. It i s worthy of n o t e t h a t t h e 1975 memorandum and t h e non-scheduled
a i r s e r v i c e agreements concluded by t h e United S t a t e s i n r e c e n t y e a r s s p e c i f y i n annexes
t h e types of c h a r t e r s covered, r a t h e r than a t t e m p t i n g a broad d e f i n i t i o n of a non-scheduled
service.

Current r e g u l a t o r y s i t u a t i o n

1 .
  1                 Under t h e broad i n t e r n a t i o n a l l e g a l framework t h a t h a s evolved s i n c e 1944, sche-
duled and non-scheduled a i r t r a n s p o r t o p e r a t i o n s have been r e g u l a t e d under two d i s t i n c t
regimes, scheduled s e r v i c e s being a u t h o r i z e d on t h e b a s i s of b i l a t e r a l agreements between
S t a t e s , and non-scheduled s e r v i c e s g e n e r a l l y on t h e b a s i s of u n i l a t e r a l government r e g u l a -
t i o n s , although b i l a t e r a l and m u l t i l a t e r a l agreements have been developed t o cover c e r t a i n
o p e r a t i o n s and r o u t e s . T h i s framework h a s permitted t h e r a p i d expansion of i n t e r n a t i o n a l
c h a r t e r t r a v e l i n many markets, and allowed t h e continued development of scheduled s e r v i c e s .
But, w i t h t h e emergence of p e r s o n a l and r e c r e a t i o n a l t r a v e l as the l a r g e s t and f a s t e s t
growing passenger category i n t h e major i n t e r n a t i o n a l markets, scheduled and non-scheduled
c a r r i e r s have e n t e r e d more d i r e c t l y i n t o competition w i t h one a n o t h e r , c r e a t i n g d i f f i c u l t i e s
i n t h e a r e a s of p r i c i n g , c a p a c i t y and enforcement, which have been p a r t l y r e s p o n s i b l e f o r
t h e poor f i n a n c i a l r e c o r d of t h e i n d u s t r y .

12.                 Moreover, the development of i n c l u s i v e t o u r and non-af f i n i t y group c h a r t e r s ( t h e
latter s i n c e 1973) has made c h a r t e r s e r v i c e s more r e a d i l y open t o u s e by members of t h e
p u b l i c , and, i n c e r t a i n c a s e s , e i t h e r i n accordance w i t h a published t i m e t a b l e o r w i t h
f l i g h t s s o r e g u l a r o r f r e q u e n t t h a t they c o n s t i t u t e a r e c o g n i s a b l e s y s t e m a t i c s e r i e s . A t
t h e same time, scheduled a i r l i n e s have g r a d u a l l y moved t o p r o v i d e t r a n s p o r t a t f a r e s and
c o n d i t i o n s of c a r r i a g e (such a s p a r t c h a r t e r s , advance purchase e x c u r s i o n s , group i n c l u s i v e
t o u r s ) which c l o s e l y approximate t h o s e o f f e r e d on c h a r t e r s e r v i c e s . I n consequence, i t has
become i n c r e a s i n g l y d i f f i c u l t / t o d i s t i n g u i s h betveen scheduled and non-scheduled s e r v i c e s
a d to det-                   the f ranwork for the r e g u l a t i o n of mn-mcheduled f l f g h t s . The 1952



-
5/    T e fact ttnt ieclwive trrbr oa&Q~o?k-&d
       h                                                           as scbduhd s e r v i c e s on t h e b a s i s
      ef the 1952 Caurcil D e f i n l t i a a w u recolpixod by b o t h   ead ICAO. See para. 7 and
       ZlBtU    2 .Dd 3.
                                                        ICAO C i r c u l a r 136-A~/42                                                               7

Council D e f i n i t i o n of a Scheduled I n t e r n a t i o n a l A i r S e r v i c e , never widely a c c e p t e d , i s o f t e n
claimed t o be o b s o l e t e and no new i n t e r n a t i o n a l l y a c c e p t e d d e f i n i t i o n h a s been produced t o
r e p l a c e i t . I n f a c t t h e u s e f u l n e s s of a t t e m p t i n g t o d i s t i n g u i s h between scheduled and non-
scheduled o p e r a t i o n s h a s been q u e s t i o n e d 51.

13.                     I n t h e s e c i r c u m s t a n c e s i t may b e u s e f u l t o o u t l i n e some of t h e c h a r a c t e r i s t i c s
t h a t i n c u r r e n t p r a c t i c e s e t non-scheduled s e r v i c e s a p a r t from scheduled s e r v i c e s . One
b a s i c c h a r a c t e r i s t i c of most c h a r t e r s e r v i c e s , and t h a t which d e t e r m i n e s t h e i r economic
a t t r a c t i o n , i s t h e f a c t t h a t s u c h f l i g h t s a r e o p e r a t e d on a plane-load b a s i s . A second i s
t h a t non-scheduled o p e r a t o r s a r e n o t s u b j e c t t o t h e p u b l i c s e r v i c e o b l i g a t i o n s imposed upon
scheduled a i r c a r r i e r s s u c h a s t h e r e q u i r e m e n t s t o o p e r a t e f l i g h t s a c c o r d i n g t o a p u b l i s h &
t i m e t a b l e r e g a r d l e s s of l o a d f a c t o r and t o s e r v e d e s i g n a t e d r o u t e s even where t h e s e a r e
u n p r o f i t a b l e . T h i r d , i n t h e United S t a t e s l e g i s l a t i o n , a b a s i c c r i t e r i o n which h a s been
used i s t h a t such s e r v i c e s should n o t c a r r y individually ticketed passengers. A f o u r t h
c h a r a c t e r i s t i c t h a t a p p l i e s t o c h a r t e r s ( e x c e p t s i n g l e e n t i t y and a i r t a x i c h a r t e r s ) l i e s
i n t h e m a r k e t i n g method used. I n e f f e c t , non-scheduled a i r t r a n s p o r t o p e r a t o r s c a n n o t s e l l
c h a r t e r t r a v e l on a r e t a i l b a s i s . Non-scheduled c a p a c i t y i s t h e r e f o r e s o l d w h o l e s a l e by
t h e o p e r a t o r t o t o u r o p e r a t o r s o r o t h e r e n t i t i e s , w h i l e t h e o p e r a t o r of scheduled s e r v i c e s
may engage i n r e t a i l s e l l i n g d i r e c t t o p a s s e n g e r s .




61     The f o l l o w i n g q u o t a t i o n i s t a k e n from B r i t i s h A i r T r a n s p o r t i n t h e S e v e n t i e s , Report
       of t h e Committee of I n q u i r y i n t o C i v i l Air T r a n s p o r t ond don, 1969); page 55:
      To many people who have worked a l l t h e i r l i v e s i n the a i r transport industry the
      dichotomy between 'scheduled' and 'non-scheduled' services i s one of the basic
      characteristics of a i r l i n e operations, and one which does not need t o be questioned.
      To those of us who have been making an ab i n i t i o approach t o the problems o f the a i r l i n e
      industry (and indeed t o some people i n the industry), the v a l i d i t y and usefulness of the
      d i s t i n c t i o n between scheduled and non-schedu led operations are not so apparent. W                     e
      muZd go further than t h i s and say t h a t m n y o f the problems of the industry i n recent
      years have been aggravated by the confusions caused by t h i s particular d i s t i n c t i o n and
      by the failure t o recognise t h a t a more s i g n i f i c a n t d i s t i - p t i o n i n t r a f f 2 now a i s t s
      which d e f i e s c l a s s i f i c a t i o n i n the OM terms.
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                                                        ICAO C i r c u l a r 1 3 6 - ~ ~ 1 4 2                                                     9




                                                   I11    - TYPES      OF CHARTER SERVICE


1.                  General. - Three b a s i c t y p e s of commercial c h a r t e r have evolved over t h e y e a r s .
These a r e t h e group c h a r t e r ( b o t h pro-rata a f f i n i t y and m n - a f f i n i t y ) , t h e incZusive tour
c h a r t e r , and t h e s i n g l e e n t i t y ( o r own-use) c h a r t e r . Although n a t i o n a l r e g u l a t i o n s may
d i f f e r , t h e b a s i c c o n c e p t s remain comparable. C e r t a i n r e s t r i c t i o n s however may e f f e c t i v e l y
impede t h e development of a p a r t i c u l a r t y p e of c h a r t e r i n c e r t a i n m a r k e t s , w i t h t h e r e s u l t
t h a t one form may be more widely used i n one country o r r e g i o n , t h a n i n a n o t h e r . Other
t y p e s of c h a r t e r e x i s t which may be c o n s i d e r e d a s v a r i a n t s of t h e t h r e e b a s i c c o n c e p t s
l i s t e d above and a r e designed t o meet more l i m i t e d and s p e c i a l i z e d requirements.                         Such
v a r i a n t s i n c l u d e study group and student c h a r t e r s , specrial event c h a r t e r s , m i g r a n t , pilgrim
and miZitary overseas personnel c h a r t e r s . Where more t h a n one c h a r t e r p a r t y o r t y p e of
c h a r t e r i s involved on t h e same f l i g h t , t h e concept of s p l i t and mixed c h a r t e r s may a l s o
a p p l y . F i n a l l y , t h e r e a r e v a r i o u s forms of c h a r t e r s , a v a i l a b l e on some scheduled s e r v i c e s ,
which a r e termed part c h a r t e r s . S e v e r a l of t h e s e c o n c e p t s a l s o a p p l y t o cargo c h a r t e r s .
The t y p e s of c h a r t e r a u t h o r i z e d by i n d i v i d u a l S t a t e s a r e shown i n t h e T a b u l a t i o n of S t a t e s '
R e p l i e s t o t h e Q u e s t i o n n a i r e i n Appendix 2 (Question 6 ) .

Group C h a r t e r s

2.                 A f f i n i t y group c h a r t e r s . - Two forms of group c h a r t e r s may be d i s t i n g u i s h e d ,
namely a f f i n i t y o r c m o n purpose and n o n - a f f i n i t y group c h a r t e r s . The r u l e s governing
a f f i n i t y group c h a r t e r s are based upon t h o s e e s t a b l i s h e d by IATA i n R e s o l u t i o n 045 ( s e e
Chapter 11, p a r a . 8 ) , which, i n t e r a l i a , s t i p u l a t e s t h a t t o b e e l i g i b l e , a group must have
p r i n c i p a l purposes, a i m s and o b j e c t i v e s o t h e r t h a n t r a v e l and s u f f i c i e n t a f f i n i t y e x i s t i n g
p r i o r t o t h e a p p l i c a t i o n f o r c h a r t e r t r a n s p o r t a t i o n t o d i s t i n g u i s h i t and s e t i t a p a r t
from t h e g e n e r a l p u b l i c . Furthermore, t h e membership of t h e group may n o t exceed 50 000
persons ( i n c e r t a i n i n s t a n c e s 20 000) o r f i v e p e r c e n t of t h e p o l i t i c a l u n i t involved, and
t h e c o s t of t h e c h a r t e r must b e pro-rated e q u a l l y amongst a l l p a s s e n g e r s (hence t h e term
pro-rata c h a r t e r s ) . The e n t i r e c a p a c i t y of t h e a i r c r a f t must b e c h a r t e r e d , a l t h o u g h more
t h a n one c h a r t e r e r can b e involved ( s e e s p l i t c h a r t e r s , p a r a . 1 2 ) . I n such a c a s e , t h e
minimum s i z e of c h a r t e r group i s g e n e r a l l y 40 p e r s o n s , w i t h some l i m i t a t i o n f r e q u e n t l y
being placed upon t h e number of groups t h a t may b e c a r r i e d . S t a t e s which have approved
t h e R e s o l u t i o n may a l s o impose c e r t a i n r e s t r i c t i o n s o r minor amendments.

3.                    y
                    B 1972, i t was e v i d e n t t h a t t h e volume of t r a f f i c m w i n g on p r o - r a t a a f f i n i t y
c h a r t e r f l i g h t s had made i t v i r t u a l l y i m p o s s i b l e t o e f f e c t i v e l y e n f o r c e t h e r e g u l a t i o n s i n
a number of S t a t e s . It w a s a l s o w i d e l y recognized t h a t t h e a f f i n i t y group concept was
inherently discriminatory.                   Canada, t h e United S t a t e s and ECAC-member S t a t e s took measures
i n t e n d e d e v e n t u a l l y t o phase o u t a f f i n i t y c h a r t e r s and t o r e p l a c e them w i t h n o n - a f f i n i t y
c h a r t e r s . Under Canadian r e g u l a t i o n s , a f f i n i t y c h a r t e r s a r e now known a s p r o - r a t a common
purpose group c h a r t e r s and a r e o n l y allowed when a c h a r t e r cannot be r e a s o n a b l y performed
10                                                   ICAO C i r c u l a r 136-AT142

under any o t h e r c a t e g o r y of c h a r t e r s e r v i c e s . I n t h e United S t a t e s , a f f i n i t y c h a r t e r s
continue t o be p e r m i t t e d u n t i l workable a l t e r n a t i v e s a r e found ( i n c l u d i n g one-stop
i n c l u s i v e t o u r t r a v e l group c h a r t e r s , s p e c i a l e v e n t , m i l i t a r y o v e r s e a s and s t u d y group
c h a r t e r s ) . A s i m i l a r s i t u a t i o n e x i s t s i n most of t h e ECAC-member S t a t e s . However, e l s e -
where i n t h e world, l e s s c o n s i d e r a t i o n has been given t o t h e e v e n t u a l phasing o u t of
af f i n i t y group c h a r t e r s.
4.                  Non-affinity group c h a r t e r s .      -        Pursuant t o t h e c o n c l u s i o n of t h e Ottawa Declara-
t i o n i n 1972 ( s e e Chapter 11, p a r a . l o ) , Canada, t h e United S t a t e s and a number of ECAC-
member S t a t e s introduced non-affinity group c h a r t e r s on t h e North A t l a n t i c i n 1973. These
were termed adurmce booking charters (ABCs o r VARAs, voZs                                          re'servation a' z ' m a n c e ) i n
Canada and a number of ECAC-member S t a t e s , and tram1 group charters (TGCs) by t h e United
S t a t e s , w i t h a view t o r e p l a c i n g a f f i n i t y charters a s t h e primary form of c h a r t e r on t h e
North A t l a n t i c .         This aim has g e n e r a l l y been achieved. The b a s i c r u l e s governing non-
a f f i n i t y c h a r t e r s a r e t h a t t h e f u l l c a p a c i t y of t h e a i r c r a f t be c h a r t e r e d , t h a t each
c h a r t e r e r c o n t r a c t f o r a t l e a s t 40 s e a t s on t h a t a i r c r a f t , and t h a t p a s s e n g e r s book a t
l e a s t 60 days i n advance. While t h e ABC formula met w i t h c o n s i d e r a b l e s u c c e s s i n Europe
and Canada, t h e TGC concept has met w i t h only l i m i t e d acceptance. The v a r y i n g d e g r e e of
s u c c e s s encountered by t h e two t y p e s of n o n - a f f i n i t y c h a r t e r s may be p a r t l y a t t r i b u t e d t o
d e t a i l e d d i f f e r e n c e s i n r e g u l a t i o n s . Unlike t h e TGC, t h e ABC i s n o t s u b j e c t t o c a n c e l l a t i o n
45 days p r i o r t o d e p a r t u r e i f t h e r e a r e i n s u f f i c i e n t p a s s e n g e r s . The f i n a l TGC p r i c e i s
pro-rated depending upon t h e number of passengers on d e p a r t u r e , w h i l e t h e ABC p r i c e i s a
f i x e d p r i c e s e t by t h e o r g a n i z e r . Furthermore, t h e ABC r e t a i l e r may withhold h i s colmnission
                                                          G
a t t h e time of s a l e , w h i l e t h e T C r e t a i l e r i s only compensated a f t e r t h e f l i g h t has t a k e n
place.

5.                    I n September 1976, t h e United S t a t e s CAB approved ( f o r an e x p e r i m e n t a l p e r i o d
of f i v e y e a r s ) advance booking c h a r t e r s a s a move towards t h e harmonization of n o n - a f f i n i t y
group c h a r t e r r u l e s w i t h t h o s e adopted by ECAC-member S t a t e s and Canada. I n s o doing t h e
CAB s t a t e d i t s i n t e n t i o n of u l t i m a t e l y having o n l y two b a s i c t y p e s of c h a r t e r s , one f o r a i r
t r a n s p o r t a t i o n a l o n e , t h e ABC, and one f o r a n i n c l u s i v e t o u r w i t h a ground s e r v i c e s package,
w i t h t h e ABC being a n e v e n t u a l replacement f o r b o t h a f f i n i t y group c h a r t e r s and TGCs. The
new C B r u l e s a r e more l i b e r a l t h a n t h o s e of ECAC, even though t h e CAB imposed s l i g h t l y
         A
more r e s t r i c t i v e p r o v i s i o n s on ABCs t o c e r t a i n European c o u n t r i e s       t h a n on t h o s e t o o t h e r
destinations.               Thus, t h e advance booking period f o r European ABCs i s 45 d a y s , compared
w i t h 30 days f o r o t h e r s . A f t e r October 1, 1978, t h e advance purchase p e r i o d s w i l l be
reduced t o 30 and 1 5 days r e s p e c t i v e l y . The minimum d u r a t i o n f o r Ewlopean c h a r t e r s i s
seven days. For c h a r t e r s t o o t h e r d e s t i n a t i o n s , no minimum i s s t i p u l a t e d . C h a r t e r opera-
t o r s a r e a l s o allowed t o f i n d s u b s t i t u t e s f o r a l i m i t e d number of ABC p a s s e n g e r s who c a n c e l



-
1/    Belgium, t h e F e d e r a l R t p u b l i c of Germany, Ffnland, France, I r e l a n d , I t a l y ,
      t h e Netherlands, Switzerland a d t h e United Kingdom. I f any of t h e s e c o u n t r k e s
      d e s i r e t o be excluded from t h e European c a t e g o r y , t h e CAB w i l l a p p l y t h e more l i b e r a l
      rules.
                                                    ICAO C i r c u l a r 136-AT142                                                        11

t h e i r p a r t i c i p a t i o n af t e r t h e advance purchase d a t e . For European A B C s , t h e a l l o w a b l e
s u b s t i t u t i o n i s 10 per c e n t from t h e g e n e r a l p u b l i c and 10 per c e n t from a standby l i s t
f i l e d on o r b e f o r e t h e advance purchase d a t e . For a l l o t h e r A B C s , t h e a l l o w a b l e s u b s t i t u -
t i o n i s 15 per c e n t from t h e g e n e r a l p u b l i c .

I n c l u s i v e Tour C h a r t e r s

6.                D e f i n i t i o n . - The second b a s i c type of c h a r t e r i s t h e i n c l u s i v e t o u r which may
be o f f e r e d t o members of t h e g e n e r a l p u b l i c by a t o u r o p e r a t o r f o r a round t r i p which
i n c l u d e s accommodation and o t h e r ground arrangements.                 I t was d e f i n e d i n g e n e r a l terms by
E A i n 1958/59 a s f o l l o w s : An a i r inclusive tour consists of a round t r i p or c i r c l e t r i p
  CC
performed i n whole or i n part by a i r for a ccmprehensive price which includes accomodation
for the period the participants are a m y from the starting point of t h e i r journey. I t may
also provide for additional f a c i l i t i e s and may be undertaken either on normal scheduled
a i r services or on a i r c r a f t especiaZZy hired for the purpose. A tour i s normaZZy for a
predetermined period and to an announced destination or destinations. Where s p e c i a l l y
c h a r t e r e d a i r c r a f t a r e involved r e f e r e n c e i s made t o i n c l u s i v e t o u r c h a r t e r s (ITCs). Such
t o u r s may be o f f e r e d on scheduled s e r v i c e s , i n which c a s e they a r e known a s group i n c l u s i v e
t o u r s (GIT) o r , w i t h i n Europe, a s i n d i v i d u a l i n c l u s i v e t o u r s (ITx) d e f i n e d by IATA Resolu-
                                                                                                                                 .
t i o n s which a r e a p p l i c a b l e only w i t h i n T r a f f i c Conference 2 ( ~ u r o p e - ~ e d i t e r r a n e a n )N e i t h e r
t h e GIT ( o r v a r i a t i o n s t h e r e o f such a s t h e b u l k i n c l u s i v e t o u r o r BIT) nor t h e ITX a r e
considered as non-scheduled s e r v i c e s .

7.                   ITC r e g u l a t i o n s of ECAC-member S t a t e s . - A s h a s a l r e a d y been'mentioned, t h e
i n c l u s i v e t o u r c h a r t e r h a s become t h e dominant form of c h a r t e r t r a v e l w i t h i n t h e Europe-
                                                                                                            CC
Mediterranean r e g i o n . A r e v i s e d d e f i n i t i o n of t h e ITC adopted by E A s t i p u l a t e s t h a t i n
a d d i t i o n t o t h e c o n d i t i o n s l a i d down i n t h e d e f i n i t i o n c i t e d a b w e , a n ITC should a l s o be
organized by a t o u r o r g a n i z e r and t h a t i t should be paid f o r b e f o r e d e p a r t u r e . The condi-
t i o n s a p p l i e d t o ITCs w i t h i n Europe a r e g e n e r a l l y more l i b e r a l than t h o s e adopted f o r
t r a n s a t l a n t i c ITCs, which i n v o l v e a minimum s t a y of s i x n i g h t s and a minimum t o u r group
s i z e of 40 passengers and a r e g e n e r a l l y s u b j e c t t o c a p a c i t y and frequency l i m i t a t i o n s .
While few S t a t e s a p p l y p r i c e c o n t r o l on intra-European c h a r t e r s , t h e r a t e s f o r t r a n s a t l a n t i c
I T C s tend t o be f i x e d a t 110 p e r c e n t of t h e a p p l i c a b l e mid-week GIT f a r e , w i t h a n addi-
t i o n a l $7 per n i g h t f o r t o u r s l a s t i n g l o n g e r t h a n 1 5 days.

8.                ITC r e g u l a t i o n i n North America.- Canadian r e g u l a t i o n s now p e h i t one-stop ITCs
to Hawaii, Mexico, C e n t r a l America, t h e Caribbean, t h e United S t a t e s and w i t h i n Canada
(although p r i o r t o August 1973, Canadian ITCs t o t h e United S t a t e s and w i t h i n Canada were
obliged t o i n c l u d e two d e s t i n a t i o n s ) . The p r i c e of such ITCs cannot b e l e s s than 115 per
c e n t of t h e lowest scheduled r e t u r n f a r e a v a i l a b l e t o a n i n d i v i d u a l on a n o n - a f f i n i t y
b a s i s a t t h e time of t r a v e l . The regimes governing ITCs i n t h e United S t a t e s a r e consi-
d e r a b l y more r e s t r i c t i v e and have e f f e c t i v e l y precluded any s i g n i f i c a n t development i n t h i s
market. Under U.S. r e g u l a t i o n s , t h e supplemental c a r r i e r s can only conduct ITCs w i t h a
minimum d u r a t i o n of seven days, and w i t h o v e r n i g h t s t o p s a t t h r e e p o i n t s a t l e a s t 50 m i l e s
a p a r t a t a f u l l c o s t of no less t h a n 110 p e r c e n t of t h e lowest a v a i l a b l e scheduled a i r
f a r e . The t h r e e - p o i n t r u l e makes i t v i r t u a l l y i m p o s s i b l e f o r a t o u r o r g a n i z e r t o o b t a i n
12                                                      ICAO C i r c u l a r 1 3 6 - ~ ~ / 4 2

t h e economies of bulk buying and back-to-back 21 f l i g h t s t h a t a r e t h e key t o t h e s u c c e s s of
t h e concept i n Europe and Canada. I n November 1974, t h e CAB i s s u e d p r o p o s a l s t o i n t r o d u c e
one-stop i n c l u s i v e t o u r c h a r t e r s , c a l l e d OTCs. The new r ~ g u l a t i o n s    which became e f f e c t i v e
i n September 1975, included p r o - r a t a p r i c i n g , a minimum p e r diem ground c o s t of $15 and
advance purchase requirements.                     I T C s between Europe and North America have had only l i m i t e d
s u c c e s s i n t h e p a s t due t o r e s t r i c t i o n s placed on t r a n s a t l a n t i c ITCs by S t a t e s i n b o t h
regions.

Own-use C h a r t e r s ( S i n g l e E n t i t y )

9.                    The t h i r d b a s i c t y p e of c h a r t e r i s t h e own-use o r s i n g l e e n t i t y c h a r t e r .
National r e g u l a t i o n s governing own u s e c h a r t e r s tend t o be more uniform than t h o s e c o v e r i n g
group c h a r t e r s and ITCs. A s i n g l e e n t i t y c h a r t e r i s p e r m i t t e d when a p r i v a t e person o r
c o r p o r a t i o n c h a r t e r s a n a i r c r a f t f o r h i s or i t s own u s e f o r t h e c a r r i a g e of f r e i g h t o r
passengers, on c o n d i t i o n t h a t passengers do n o t s h a r e i n t h e c o s t e i t h e r d i r e c t l y o r
i n d i r e c t l y . Such c h a r t e r s have come t o be used i n c r e a s i n g l y by c o r p o r a t i o n s a s p a r t of
s a l e s - i n c e n t i v e programmes.

S p e c i a l i z e d passenger c h a r t e r s and o t h e r concepts

10.                    S t u d e n t o r Study Group C h a r t e r s . - Student charter f l i g h t s a r e a u t h o r i z e d by a
l a r g e number of S t a t e s . Under E A r u l e s , such a f l i g h t may be o p e r a t e d when t h e e n t i r e
                                                        CC
c a p a c i t y of a n a i r c r a f t i s c h a r t e r e d f o r t h e c a r r i a g e of f u l l - t i m e s t u d e n t s a t a recognized
e s t a b l i s h m e n t of h i g h e r e d u c a t i o n , s u b j e c t t o c e r t a i n a g e l i m i t a t i o n s . Under t h e Urdted
S t a t e s r e g u l a t i o n s t h i s type of c h a r t e r i s c a l l e d a study group charter. Any number of
groups may be c a r r i e d on t h e c h a r t e r e d a i r c r a f t , provided t h a t each group c o n s i s t s of a t
l e a s t 40 s t u d e n t p a r t i c i p a n t s . I n a d d i t i o n , a minimum of f o u r weeks must e l a p s e between
d e p a r t u r e and r e t u r n and t h e c o s t t o e a c h p a r t i c i p a n t i n c l u d e m e a l s , s u r f a c e t r a n s p o r t a t i o n
and accommodation.

11.                  S p e c i a l e v e n t c h a r t e r s . - S p e c i a l e v e n t c h a r t e r s (SECS) a r e a u t h o r i z e d i n most
ECAC-member S t a t e s when i t is n o t p o s s i b l e f o r a group t o t r a v e l under advance booking
c h a r t e r c o n d i t i o n s and when a n a i r c r a f t i s c h a r t e r e d f o r t h e c a r r i a g e of one o r more groups
t o a t t e n d o r p a r t i c i p a t e i n a s p e c i a l e v e n t of a r e l i g i o u s , s p o r t i n g , c u l t u r a l , s o c i a l ,
p r o f e s s i o n a l o r o t h e r n a t u r e . They can o n l y be o p e r a t e d t o t h e country where t h e s p e c i a l
e v e n t t a k e s p l a c e and t h e d u r a t i o n of s t a y i s c l o s e l y r e l a t e d t o t h e d u r a t i o n of t h e
event.




-
2/    A back-to-baok o p e r a t i o n i n v o l v e a the outward c a r r i a g e of a plane-load group of ITC
      pasBengers fram,point A t o B, a d t h e return c a r r i a g e from B t o A of a n o t h e r group
      which has completed i t s v a c a t i o n . I n the case of a series of IT f l i g h t s between two
      p o l n t r , a i r c r a f t would o n l y b e empty on t h e r e t u r n l e g of t h e f i r s t f l i g h t i n t h e
      series and on t h e outward leg of t h e f i n a l f l i g h t .
                                                        ICAO C i r c u l a r 136-AT142                                                               13

12.                  All-cargo c h a r t e r f l i g h t s . - All-cargo c h a r t e r f l i g h t s a r e g e n e r a l l y governed by
t h e r e g u l a t i o n s a p p l i c a b l e t o s i n g l e e n t i t y o r own u s e - c h a r t e r s .  Few S t a t e s have r e g u l a t i o n s
t h a t a p p l y s p e c i f i c a l l y t o a l l - c a r g o f l i g h t s a s d i s t i n c t from passenger f l i g h t s . I n t h e
m a j o r i t y of c a s e s , p r i o r p e r m i s s i o n a p p e a r s t o be r e a d i l y g r a n t e d , a l t h o u g h some S t a t e s
r e s e r v e t h e c a r r i a g e of c a r g o e x c l u s i v e l y f o r scheduled o p e r a t o r s i n a l l b u t e x c e p t i o n a l
c i r c u m s t a n c e s , o r c o n s i d e r each a p p l i c a t i o n on i t s m e r i t s . Approximately h a l f of t h e ECAC-
member S t a t e s t r e a t intra-European a l l - c a r g o c h a r t e r f l i g h t s as b e i n g f u l l y l i b e r a l i z e d by
v i r t u e of t h e European M u l t i l a t e r a l Agreement. P r a c t i c e s v a r y w i d e l y a s t o whether f r e i g h t
f o r w a r d e r s and c o n s o l i d a t o r s a r e p e r m i t t e d t o o p e r a t e such f l i g h t s and a s t o t h e number of
c o n s i g n o r s o r c o n s i g n e e s t h a t may s h a r e c a p a c i t y on a g i v e n f l i g h t ( i . e . s p l i t c h a r t e r s ) .
It a p p e a r s t o be g e n e r a l p r a c t i c e t o p r o h i b i t t h e mixed c a r r i a g e of c a r g o and p a s s e n g e r s on
a charter flight.

13.               Other c o n c e p t s .   - I n r e v i e w i n g t h e v a r i o u s t y p e s of c h a r t e r s g e n e r a l l y p e r m i t t e d ,
i t i s n e c e s s a r y t o o u t l i n e b r i e f l y a number of s p e c i a l c o n c e p t s t h a t a p p l y t o t h e o p e r a t i o n
of c h a r t e r s . A u t h o r i t y t o conduct a s p l i t - c h a r t e r i n v o l v e s t h e r i g h t f o r more t h a n one
c h a r t e r i n g e n t i t y t o s h a r e o r s p l i t t h e c a p a c i t y of a c h a r t e r e d a i r c r a f t , as opposed t o t h e
concept of a p l a n e - l o a d c h a r t e r .            S p l i t c h a r t e r a u t h o r i t y was made n e c e s s a r y by t h e s i g n i -
f i c a n t i n c r e a s e s i n a i r c r a f t c a p a c i t y . I n most S t a t e s which p e r m i t s u c h c h a r t e r s , each
c h a r t e r e r must c o n t r a c t f o r a t l e a s t 40 s e a t s , w h i l e i n some S t a t e s t h e r e i s a l i m i t a t i o n
on t h e number of groups t h a t may be c a r r i e d on t h e same f l i g h t ( g e n e r a l l y n o t more t h a n
three).           Comingling d e s i g n a t e s t h e c a r r i a g e of more t h a n one t y p e of c h a r t e r on a s p l i t
c h a r t e r f l i g h t , f o r example t h e c a r r i a g e of groups t r a v e l l i n g under ABC, ITC and s t u d e n t
c h a r t e r r u l e s . I n t e r m i n g l i n g a l l o w s s p l i t c h a r t e r groups which have flown t o g e t h e r o n t h e
outward l e g of a j o u r n e y t o r e t u r n a t a d i f f e r e n t d a t e on a d i f f e r e n t a i r c r a f t . The term
mixed c h a r t e r i n v o l v e s a c h a r t e r o p e r a t i o n whose c o s t i s borne p a r t l y by t h e . c h a r t e r e r
and p a r t l y by t h e p a r t i c i p a n t s as opposed t o a s i n g l e e n t i t y and a p r o r a t a c h a r t e r .
F i n a l l y , i t s h o u l d b e n o t e d t h a t under United S t a t e s r e g u l a t i o n s a wet Zease (an a i r c r a f t
l e a s e w i t h crew) i s r e g a r d e d as a c h a r t e r o r s e r i e s of c h a r t e r s of a n a i r c r a f t and n o t as
a true lease.
THIS PAGE INTENTIONALLY LEFT BLANK
                                 ICAO Circular 136-AT142                                15



                                IV   -   REGULATORY PRACTICES

Documentary Sources

1.                                                    -
            Laws, regulations and policy statements. This description of the documents
used in the regulation of international non-scheduled air transport is based on States'
replies to the-~uestionnaire  (Appendix 2, Questions 1, 2 and 3. About eighty per cent of
                                                               )
the States (48) indicated in their response to Question 1 that the conduct of non-scheduled
operations is governed by laws, regulations or policy statements, while in the remaining
thirteen cases an ad hoc approach appears to be adopted. However of these forty-eight
States, only fifteen referred to legal instruments such as Laws or Acts, which contain
sections or articles dealing with such operations and, in the main, governing the
authorization accorded to the relevant Government agency or department to regulate non-
scheduled air transport as found necessary. Nine made reference to Government Decrees,
Ordinances or Decisions, sixteen to Aeronautical Information Publications or Circulars
(AIP or AIC), while the remaining eight rely upon the issuance of administrative regulations
and notices. Detailed policy statements of substance are rare although brief statements
may sometimes be found in Laws or Acts.

2.         More than half of the responding States (31 out of 61) indicated in their reply
to Question 2 that they were changing their laws, regulations or policy statements governing
international non-schedules air transport, or in a few cases formulating these for the
first time. Such activity seems to indicate a widely felt need to adapt to changing
charter concepts and to harmonize their legislation and regulations. Two States in Africa
referred to the work of AFCAC in this field and two in Europe made mention of ECAC.

3.         Published procedures for obtaining permission.       -
                                                            Fifty-two of the sixty-one
responding States reported, in their answers to Question 3, the existence of published
procedures or practices applicable to obtaining permission to operate non-scheduled air
services. In the case of twenty-eight States, the procedures are set forth in the
Facilitation Section of the national Aeronautical Information Publication (AIP/FAL) , five
in Aeronautical Information Circulars (AIC) and eleven in Regulations or Decrees. (The
remaining eight States gave no particular indication as to the form of their procedures.)
These publications detail the procedures that must be complied with and the information
that must be provided to the authorizing department or agency.in seeking permission to
operate an intenational commercial non-scheduled flight or series of flights. The general
nature of the procedures and information normally required is indicated below in paragraphs 9
and 10 of this Chapter.

Methods of distinguishing non-scheduled from scheduled services

4.         Definition by exclusion. - National regulations adopted by States generally
define an international non-scheduled air transport service or charter in one of two ways,
by either a negative or a positive approach. The most connnonly used procedure is the
negative approach employed in the Chicago Convention, wherein air services which are not
16                                                   ICAO C i r c u l a r 136-AT/42

regarded a s scheduled a i r s e r v i c e s a r e considered t o be non-scheduled a i r s e r v i c e s . Forty-
one of t h e f i f t y - f i v e S t a t e s t h a t r e p l i e d t o Question 5 on t h i s s u b j e c t , ( s e e Appendix 2)
adopt t h i s method. Of t h e s e , f i f t e e n use a l l t h e c r i t e r i a of t h e Council D e f i n i t i o n t o
d e f i n e a scheduled s e r v i c e , twenty employ one o r more b u t n o t a l l elements of t h i s d e f i n i t i o n ,
sometimes i n c o n j u n c t i o n w i t h o t h e r c r i t e r i a , and s i x b a s e t h e i r d e f i n i t i o n of a scheduled
s e r v i c e s o l e l y on o t h e r c r i t e r i a . According t o t h e s e o t h e r c r i t e r i a scheduled a i r s e r v i c e s
may be t h o s e covered by a n a i r s e r v i c e agreement ( 7 S t a t e s ) , t h a t o p e r a t e a t approved f a r e s
( 3 S t a t e s ) , t h a t provide on-demand s e r v i c e , t h a t can b e booked d i r e c t l y through an a i r c a r r i e r ,
t h a t are approved on a r e g u l a r b a s i s , t h a t a r e provided by a i r l i n e s which a r e d e s i g n a t e d o r
t o whom an o p e r a t i n g l i c e n s e h a s been granted (1 S t a t e i n each c a s e ) .

5.                 P o s i t i v e d e f i n i t i o n . - Conversely, f o u r t e e n S t a t e s adopt a p o s i t i v e approach by
s t a t i n g e i t h e r t h e g e n e r a l o r s p e c i f i c c h a r a c t e r i s t i c s of a c h a r t e r s e r v i c e . The United
Kingdom i s t h e only responding S t a t e t o use a g e n e r a l d e f i n i t i o n f o r t h e purposes of
                                                                                                                      j
r e g u l a t i n g non-scheduled a i r s e r v i c e s . The C i v i l Aviation A u t h o r i t y I d e f i n e s t h e
expression charter f l i g h t a s a f l i g h t i n r e s p e c t of which t h e following c o n d i t i o n s a r e
satisfied:

               a ) a l l the a c c m o d a t i o n on the a i r c r a f t which i s occupied by
                   passengers or cargo has been sold t o one or more charterers
                   for re-sale.

               b)    i n the case of a f l i g h t for the carriage of passengers, the
                     operator had made availabZe not fewer than 1 0 seats t o each
                     charterer, provided t h a t t h i s shall not apply t o a service
                     for the carriage only of ships' crews, including masters, t h e i r
                     baggage and parts or equipnent for ships.
The t h i r t e e n o t h e r S t a t e s ( i n c l u d i n g Canada, France and United S t a t e s ) d e f i n e such
s e r v i c e s i n s p e c i f i c terms, on t h e b a s i s of the t y p e of c h a r t e r p e r m i t t e d ( i . e . , s i n g l e
e n t i t y , a f f i n i t y group, advance booking, e t c . ) and t h e a s s o c i a t e d r u l e s and c o n d i t i o n s .
One S t a t e (France) noted t h a t t h i s l a t t e r approach had been chosen i n view of t h e d i f f i -
                                                        CC
c u l t i e s encountered by ICAO and E A i n evolving a g e n e r a l d e f i n i t i o n .

6.               Use of t h e terms nm-scheduled and charter.- Although d i s t i n c t , t h e terms non-
scheduZed and charter have come t o be used i n t e r c h a n g e a b l y i n c o l l o q u i a l language. Non-
scheduled i s a p u b l i c law term, while charter i s a p r i v a t e law term p e r t a i n i n g t o t h e
c o n t r a c t between a n a i r c a r r i e r and a c h a r t e r e r . B d e f i n i t i o n , non-scheduzed a i r t r a n s -
                                                                           y
p o r t s e r v i c e s i n c l u d e a l l commercial t r a n s p o r t s e r v i c e s which a r e n o t scheduled, i n c l u d i n g
a i r t a x i , humanitarian and emergency o p e r a t i o n s u s i n g l i g h t a i r c r a f t . On t h e o t h e r hand,



- C i v i l A v i a t i o n A u t h o r i t y , O f f i c i a l Record Series 1 , A i r Transport Licensing Notices,
1/
     May 1976.
                 --                               ICAO C i r c u l a r 136-AT/42                                                     17

charter s e r v i c e s , when used i n a p u b l i c law c o n t e x t , g e n e r a l l y appear t o d e s i g n a t e s e r v i c e s
performed using l a r g e a i r c r a f t which f a l l i n t o t h e c a t e g o r i e s described i n t h e previous
chapter. This i s c l e a r from an a n a l y s i s of t h e positive d e f i n i t i o n adopted by some S t a t e s ,
and indeed by the phraseology used by t h e Scandinavian S t a t e s , who make use of both terms.
The r e g u l a t i o n s of t h e l a t t e r S t a t e s l a y down t h a t i n these rules the term charter f l i g h t s
shall mean comercia2 non-scheduled passenger f l i g h t s performed with a i r c r a f t whose maxi-
m permissible take-off weight i s i n excess of 5 700 kg, or uhich have been approved for
the carriage of more than 10 passengers. C l e a r l y i t i s only charter f l i g h t s i n t h i s
narrow sense t h a t a r e a matter of major p o l i c y concern from the s t a n d p o i n t of t h e i r r e l a -
t i o n s h i p with scheduled s e r v i c e s .

Regulation of I n t e r n a t i o n a l Non-scheduled F l i g h t s

7.               Transit flights.       -        The p o l i c y of most S t a t e s concerning f o r e i g n non-scheduled
commercial f l i g h t s e x e r c i s i n g f i r s t and second freedom p r i v i l e g e s (with no s t o p or w i t h
only t e c h n i c a l s t o p s ) a r e g e n e r a l l y i n keeping w i t h A r t i c l e 5 of t h e Convention and w i t h
the Air T r a n s i t Agreement 11. Subject t o t h e c o n d i t i o n of r e c i p r o c i t y , t h e m a j o r i t y of
S t a t e s g r a n t freedom of e n t r y t o such f l i g h t s upon p r i o r n o t i f i c a t i o n . Only a l i m i t e d
number of S t a t e s r e q u i r e p r i o r permission, due g e n e r a l l y t o s a f e t y o r s e c u r i t y considera-
t i o n s . It i s g e n e r a l p r a c t i c e f o r those S t a t e s g r a n t i n g freedom of admission f o r non-
t r a f f i c purposes t o r e q u i r e t h e f i l i n g of a f l i g h t p l a n or some form of p r i o r n o t i f i c a t i o n
f o r air t r a f f i c c o n t r o l , immigration, customs and p u b l i c h e a l t h purposes. The period of
p r i o r n o t i f i c a t i o n v a r i e s from S t a t e t o S t a t e , t h e most common being 24 hours. Standing
r u l e s a l s o i n c l u d e compliance with a i r navigation r u l e s and p r w e d u r e s . I n c e r t a i n cases,
i t i s a l s o mandatory t o c a r r y adequate i n s u r a n c e a g a i n s t t h i r d p a r t y damage.

8.                 T r a f f i c s t o p s by non-scheduled commercial f l i g h t s .     -
                                                                                       National p o l i c i e s with
r e s p e c t to the t a k i n g on o r discharging of t r a f f i c by f o r e i g n a i r c r a f t engaged i n non-
scheduled conrmercial s e r v i c e have taken a v a r i e t y of forms, ranging from r e s t r i c t i o n t o
complete freedom. The p o l i c i e s of t h e m a j o r i t y of Contracting S t a t e s l i e between t h e s e
extremes, g i v i n g v a r i o u s measures of p r o t e c t i o n t o t h e scheduled air s e r v i c e s and v a r i o u s
degrees of freedom t o t h e non-scheduled a i r s e r v i c e s . The methods by which S t a t e s e x e r c i s e
r e g u l a t o r y c o n t r o l i n t h i s matter can be grouped a s follows:

               a)    Requirement of p r i o r permission f o r each i n d i v i d u a l f l i g h t o r
                     s e r i e s of f l i g h t s w i t h t h e g r a n t i n g of permission based cin t h e
                     circumstances i n each c a s e , and s u b j e c t t o compliance w i t h
                     whatever c o n d i t i o n s may be a t t a c h e d t o such permission;




-1 The following 41 o u t of 132 Contracting S t a t e s had n o t r a t i f i e d t h e Air T r a i t
2
      Agreement as of 31 December 1975: Bangladeah, B r a z i l , B u m , C e n t r a l African Republic,
      Chad, China, People's Republic o f , Colombia, Congo, People's Republic of t h e , DePocratic
      Yemen, Dominican Republic, Ecuador, E q u a t o r i a l Guinea, Ghana, Guinea, Guyana, Haiti,
      Indonesia, I t a l y , Kampuchea, Kenya, Laos, Libyan Arab Republic, Maldives, Mauritania,
      Panama, Peru, Qatar, Romania, Saudi Arabia, S i e r r a Leone, South Viet-Nam, Sudan, Syrian
      Arab Republic, Tanzania, Uganda, USSR, Upper Volta, Uruguay, Yemen, Yugoslavia and
      Zaire.
18                                                    ICAO C i r c u l a r 136-AT142

               b)     Requirement of p r i o r permission f o r each f l i g h t o r s e r i e s of
                      f l i g h t s , with prescribed regulations, conditions o r
                      l i m i t a t i o n s g e n e r a l l y a p p l i c a b l e i n a l l circumstances;

               c)     Requirement of p r i o r permission on c o n d i t i o n of r e c i p r o c i t y ;

               d)     Requirement of p r i o r permission a c c o r d i n g t o circumstances
                      determined by b i l a t e r a l arrangements;

               e)     Freedom of admission granted f o r c e r t a i n c a t e g o r i e s of
                      non-scheduled f l i g h t s ;

               f)     Freedom of admission a c c o r d i n g t o circumstances determined by
                      m u l t i l a t e r a l agreement.

9.                  Requirements t o o b t a i n p r i o r permission. - The minimum p e r i o d r o q u i r e d f o r t h e
a p p l i c a t i o n f o r p r i o r p e r m i s s i o n v a r i e s from S t a t e t o S t a t e , and may r a n g e from two t o
s i x t y days b e f o r e t h e f l i g h t . The p e r i o d i s g e n e r a l l y s h o r t e r when only a s h o r t s e r i e s of
f l i g h t s i s i n v o l v e d , f o r example up t o f o u r f l i g h t s , t h a n f o r a long s e r i e s . T h i s i s
p a r t i c u l a r l y t r u e of c h a r t e r i n c l u s i v e t o u r progranrmes and such c h a r t e r s a s may r e q u i r e
advance booking, f o r example, ABCs and TGCs. I n most c a s e s r e q u e s t s a r e t o be forwarded
d i r e c t l y t o t h e a e r o n a u t i c a l a u t h o r i t i e s concerned, b u t i n some i n s t a n c e s r e q u e s t s have t o
be made through d i p l o m a t i c o r c o n s u l a r channels. Documentary proof of a c a r r i e r ' s
a u t h o r i t y t o o p e r a t e i s g e n e r a l l y r e q u i r e d and some S t a t e s s t i p u l a t e t h a t t h e a p p l i c a n t
f i g u r e upon a n approved l i s t of f o r e i g n c a r r i e r s e l i g i b l e t o perform non-scheduled f l i g h t s .
This i s g e n e r a l l y t h e c a s e among ECAC-member S t a t e s and Canada. I n t h e United S t a t e s
f o r e i g n c a r r i e r s must f i r s t o b t a i n a n o p e r a t i n g c e r t i f i c a t e .

10.            Although i t i s n o t always s p e c i f i c a l l y s t a t e d , a l l S t a t e s a l s o r e q u i r e a c e r t a i n
amount of i n f o r m a t i o n concerning a proposed f l i g h t b e f o r e permission t o o p e r a t e w i l l be
g r a n t e d 2/. I n t h e m a j o r i t y of c a s e s , t h i s c o n s i s t s of d e t a i l s similar t o t h o s e normally



-
31   Annex 9 t o t h e Chicago Convention c o n t a i n s , i n paragraph 2.3.2.1, t h e f o l l o w i n g p r o v i s i o n
     r e l a t i n g t o t h e e n t r y and d e p a r t u r e of a i r c r a f t engaged i n commercial t r a n s p o r t on non-
     scheduled i n t e r n a t i o n a l s e r v i c e s :
           RECOMWNDED PRACTICE             - Contracting States should not require more than t h e
           following d e t a i l s i n the application referred t o i n 2.32 ( f o r special permission
         t o operate):
             i ) name of operator;
           ii) tupe of a i r c r a f t and registration marks;
         iii) date and time o f arrival a t , and departure from, the airport concerned;
           i u ) place o r places of embarkation or disembarkation abroad, as the case
                 mQy be, o f passengers and/or freight;
             v l purpose of f l i g h t and number of passengers and/or nature and amount
                 of freight;
           v i ) m e , address and business of charterer, i f any.
                                                       ICAO C i r c u l a r 136-A~/42                                                    19

included i n a f l i g h t p l a n .         The i n f o r m a t i o n t o be provided f r e q u e n t l y p e r t a i n s t o :

               a)    Owners/operators of t h e a i r c r a f t (name, p l a c e of b u s i n e s s ,
                     legal status);
               b)    A i r c r a f t ( n a t i o n a l i t y , r e g i s t r a t i o n marks, t y p e , c a p a c i t y ) ;
               c)    Crew;
               d)    Route ( p o i n t of d e p a r t u r e l d e s t i n a t i o n , custams p o r t of e n t r y ) ;
               e)    Purpose ( t y p e of c h a r t e r ) ;
               f)    P a s s e n g e r s l c a r g o (number/volume, o r i g i n and d e s t i n a t i o n , n a t i o n a l i t y ) ;
               g)    S e r v i c e ( s i n g l e l s e r i e s of f l i g h t s , d a t e , t i m e t a b l e ) ;
               h)    Cost ( c o s t of c h a r t e r , r a t e s , f a r e s o r c h a r g e s ) .

In a d d i t i o n , some S t a t e s r e q u i r e proof of i n s u r a n c e a g a i n s t t h i r d p a r t y damage, a copy of
t h e c h a r t e r c o n t r a c t o r t h e c o n t r a c t between t h e c h a r t e r o p e r a t o r and t h e p a r t i c i p a n t s ,
proof of t h e p o s t i n g of a s u r e t y bond and c o p i e s of s o l i c i t a t i o n m a t e r i a l . The i n f o r m a t i o n
                                                                                                                 CC
may v a r y f o r a g i v e n S t a t e a c c o r d i n g t o t h e t y p e of c h a r t e r o p e r a t e d . E A h a s adopted a
recommendation (Recommendation No. 4 of t h e Eighth I n t e r m e d i a t e S e s s i o n ) c a l l i n g f o r t h e
adoption of a s t a n d a r d form f o r non-scheduled f l i g h t n o t i f i c a t i o n s o r r e q u e s t s f o r
authorization.

11.             P r i o r permission a c c o r d i n g t o circumstances determined by b i l a t e r a l arrangements.
  n
A important development i n r e c e n t y e a r s h a s been t h e c o n c l u s i o n of a number of b i l a t e r a l
arrangements by t h e United S t a t e s w i t h o t h e r S t a t e s i n pursuance of t h e o b j e c t i v e s s e t
f o r t h i n t h e i n t e r n a t i o n a l a i r t r a n s p o r t p o l i c y s t a t e m e n t of June 1970 ( s e e Chapter V ,
para. 4 ). The f i r s t such arrangement was signed w i t h Belgium i n October 1972 i n t h e form
of a Memorandum of Understanding, on t h e u n d e r s t a n d i n g t h a t i t was not t h e n p o s s i b l e t o
conclude a b i l a t e r a l agreement A/.                    Charter r i g h t s under country-of-origin r u l e s 5 were     1
granted by t h i s Memorandum t o d e s i g n a t e d c a r r i e r s . Other Memoranda of Understanding were




- A t t h a t time i t a p p e a r s that t h e only b i l a t e r a l air s e r v i c e s agreement covering non-
41
    scheduled o p e r a t i o n s , w a s that concluded between France and Germany ( F e d e r a l Republic
    o f ) i n 1955.

- Country-of-origin r u l e s a r e t h o s e r u l e s governing d i f f e r e n t c h a r t e r t y p e s which a r e i n
5/
    f o r c e i n t h e S t a t e i n which t h e c h a r t e r o r i g i n a t e s o r i s s o l d . However, A r t i c l e 5 of
    t h e Convention s t a t e s t h a t commercial o p e r a t i o n s a r e s u b j e c t t o t h e r i g h t of any S t a t e
    where embarkation o r d i s c h a r g e t a k e s p l a c e t o impose such r e g u l a t i o n s , c o n d i t i o n s o r
    l i m i t a t i o n s as i t may c o n s i d e r d e s i r a b l e .
20                                                      ICAO C i r c u l a r 136-ATf42

exchanged i n 1973 between t h e United S t a t e s and t h e United Kingdom, Germany, F e d e r a l
Republic o f , France, I r e l a n d and t h e Kingdom of t h e N e t h e r l a n d s . The t r e n d i n t h e s e
memoranda towards a c c e p t i n g non-scheduled s e r v i c e s o p e r a t e d under c o u n t r y - o f - o r i g i n r u l e s
i s a s i g n i f i c a n t development. I n September 1973 t h e United S t a t e s concluded i t s f i r s t
comprehensive non-scheduled b i l a t e r a l a i r s e r v i c e s agreement w i t h Yugoslavia, followed by
agreements i n 1974 w i t h J o r d a n and Canada.

12.            Freedom of admission g r a n t e d f o r c e r t a i n c a t e g o r i e s of non-scheduled f l i g h t s .
A t l e a s t one S t a t e ( t h e N e t h e r l a n d s ) , g r a n t s freedom of admission t o o p e r a t o r s of
C o n t r a c t i n g S t a t e s f o r c e r t a i n c a t e g o r i e s of commercial non-scheduled f l i g h t s s u b j e c t only
t o p r i o r n o t i f i c a t i o n . T h i s regime a p p l i e s t o :

               a)     f l i g h t s f o r t h e purpose of meeting h u m a n i t a r i a n o r emergency needs;
               b)     t a x i - c l a s s passenger f l i g h t s of o c c a s i o n a l c h a r a c t e r on r e q u e s t ,
                      provided t h a t t h e a i r c r a f t does n o t have a s e a t i n g c a p a c i t y of more
                      t h a n s i x p a s s e n g e r s and provided t h a t t h e d e s t i n a t i o n i s chosen by
                      t h e h i r e r o r h i r e r s and no p a r t of t h e c a p a c i t y of t h e a i r c r a f t i s
                      resold t o the public;
               c)     f l i g h t s on which t h e e n t i r e space i s h i r e d by a s i n g l e p e r s o n
                      ( i n d i v i d u a l , f i r m , c o r p o r a t i o n o r i n s t i t u t i o n ) f o r t h e c a r r i a g e of
                      h i s o r i t s s t a f f o r merchandise, provided t h a t no p a r t of such s p a c e
                      is resold;
               d)     f l i g h t s f o r f r e i g h t t r a n s p o r t , provided t h e o p p o r t u n i t y t o t r a n s p o r t
                      f r e i g h t f o r remuneration i s n o t a d v e r t i s e d o r obherwise p u b l i c i s e d .

13.                 Freedom of admission a c c o r d i n g t o c i r c u m s t a n c e s determined by m u l t i l a t e r a l
agreement. - By t h e terms of t h e European M u l t i l a t e r a l Agreement of 1956, t h e s i n n a t o r y                       -
S t a t e s a g r e e d t o g r a n t freedom of admission s u b j e c t o n l y t o p r i o r n o t i f i c a t i o n t o c e r t a i n
non-scheduled commercial f l i g h t s o p e r a t e d by c a r r i e r s r e g i s t e r e d i n o t h e r s i g n a t o r y S t a t e s
( s e e Chapter 1 1 ) , paragraphs 5 and 6 ) . These c a t e g o r i e s were f l i g h t s f o r h u m a n i t a r i a n and
emergency purposes, t a x i - c l a s s passenger f l i g h t s and own-use ( s i n g l e e n t i t y ) c h a r t e r f l i g h t s .
I n 1964, ECAC adopted a recommendation                        61       calling for the liberalization (that i s the
requirement f o r p r i o r n o t i f i c a t i o n o n l y ) of two a d d i t i o n a l c a t e g o r i e s , a f f i n i t y group and
s t u d e n t c h a r t e r f l i g h t s . The f i n a l s t e p i n t h e p r o g r e s s i v e l i b e r a l i z a t i o n of i n t r a -
European c h a r t e r s was accomplished i n 1976, when E A adopted a recommendation 71 super-
                                                                                       CC
s e d i n g t h a t of 1964, t o t h e e f f e c t t h a t a l l non-scheduled f l i g h t s w i t h i n Europe should be
s u b j e c t o n l y t o p r i o r n o t i f i c a t i o n , and t h a t whenever t h e r e q u i r e m e n t f o r f u l l i n f o r m a t i o n
o r f o r p r i o r a u t h o r i z a t i o n i s m a i n t a i n e d , n a t i o n a l p r o c e d u r e s should b e a s e x p e d i t i o u s a s
p o s s i b l e , and t h a t S t a t e s should d e a l a t a l l times w i t h a p p l i c a t i o n s i n a l i b e r a l s p i r i t .



- Recommendation No. 2 of t h e F i f t h S e s s i o n of ECAC, (1964).
61

-
71    Recommendation No. 6 of t h e Ninth S e s s i o n of ECAC, (June 1976).
                                                       ICAO C i r c u l a r 136-AT142                                                      21

R e s t r i c t i o n s and C o n t r o l s

14.                 General. - I n o r d e r t o e n s u r e t h a t non-scheduled commercial a i r s e r v i c e s do n o t
impair t h e p r o f i t a b i l i t y and e f f i c i e n c y of scheduled a i r s e r v i c e s , S t a t e s impose v a r i o u s
r e s t r i c t i o n s and c o n t r o l s upon non-scheduled o p e r a t i o n s . Other c o n s i d e r a t i o n s which may
a l s o b e t a k e n i n t o account a r e t h e need t o r e g u l a t e c o m p e t i t i o n between non-scheduled a i r
c a r r i e r s and t o e n s u r e a n a c c e p t a b l e d i s t r i b u t i o n of t h i r d , f o u r t h and f i f t h freedom
t r a f f i c between n a t i o n a l and f o r e i g n c a r r i e r s . The r e s t r i c t i o n s and c o n t r o l s used may be
grouped i n f o u r c a t e g o r i e s ,namely :

                 a)     Marketing r e s t r i c t i o n s through c h a r t e r d e f i n i t i o n s and r u l e s ;
                 b)    Geographical and r o u t e r e s t r i c t i o n s ;
                 c)     Capacity c o n t r o l ;
                 d)     Price control.
The f o l l o w i n g paragraphs examine some of t h e methods used.

15.                 Marketing r e s t r i c t i o n s through c h a r t e r d e f i n i t i o n s and r u l e s . - The a v a i l a b i l i t y
of c h a r t e r t r a n s p o r t a t i o n can b e r e s t r i c t e d simply by n o t p e r m i t t i n g c e r t a i n t y p e s of
c h a r t e r , p a r t i c u l a r l y i n c l u s i v e t o u r s and advance booking c h a r t e r s . A l t e r n a t i v e l y , a
p a r t i c u l a r t y p e of c h a r t e r may b e a u t h o r i z e d by a S t a t e b u t s u b j e c t t o r u l e s which e f f e c t -
i v e l y l i m i t i t s use. These r u l e s may t h e n g r a d u a l l y be l i b e r a l i z e d i n such a way a s t o
g i v e t h e r e g u l a t o r y a u t h o r i t i e s a d e g r e e of c o n t r o l over t h e e f f e c t on scheduled s e r v i c e s .
For example, i n t h e United S t a t e s , i n c l u s i v e t o u r s were i n i t i a l l y r e q u i r e d t o make over-
n i g h t s t o p s a t t h r e e p o i n t s a t l e a s t 50 m i l e s a p a r t ( t h e s o - c a l l e d t h r e e - p o i n t r u l e ) ,
e f f e c t i v e l y n u l l i f y i n g t h e economic advantages of bulk-buying ground accommodation and
back-to-back 81 o p e r a t i o n s which a r e c h a r a c t e r i s t i c of intra-European ITCs. Recognizing t h e
                                                                              A
d i f f i c u l t y of marketing t h r e e - p o i n t ITCs, t h e C B i n t r o d u c e d t h e one-stop ITC ( c a l l e d a n
OTC) i n 1975 t o supplement t h e former. Other examples of r u l e s and c o n d i t i o n s designed t o
c o n t r o l t h e development of c h a r t e r t r a v e l a r e t h o s e a s s o c i a t e d w i t h s p l i t c h a r t e r s ,
comingling of groups, r e s a l e of s p a c e , group s i z e , advance booking p e r i o d s and one-way
t r a n s p o r t a t i o n . A number of S t a t e s , p a r t i c u l a r l y i n South America, s t i p u l a t e t h a t permis-
s i o n t o o p e r a t e a non-scheduled f l i g h t may n o t be g r a n t e d w i t h o u t p r i o r c o n s u l t a t i o n w i t h
t h e n a t i o n a l scheduled a i r l i n e , o r i n some i n s t a n c e s u n t i l t h e n a t i o n a l c a r r i e r h a s been
given t h e r i g h t of first refusal ( t h a t i s t h e o p t i o n t o o p e r a t e t h e f l i g h t ) .

16.            Geographical and r o u t e r e s t r i c t i o n s . - R e s t r i c t i o n s may a l s o b e g e o g r a p h i c a l i n
                                                   -
n a t u r e . Under United S t a t e s r e g u l a t i o n s , c e r t i f i c a t e s of p u b l i c convenience and n e c e s s i t y
a r e awarded t o supplemental a i r c a r r i e r s - w h i c h d e f i n e t h e g e o g r a p h i c a l a r e a s w i t h i n which




- See f o o t n o t e 2 , Chapter 111.
81
22                                                       LCAO C i r c u l a r 1 3 6 - A ~ / 4 2

they may engage i n supplemental a i r t r a n s p o r t a t i o n .                   Other S t a t e s sometimes a p p l y r e s t r i c -
t i o n s on t h e t y p e s of c h a r t e r s t h a t may be o p e r a t e d on d i f f e r e n t r o u t e groups. Thus ECAC-
member S t a t e s g e n e r a l l y make a d i s t i n c t i o n between t h e r u l e s t h a t a p p l y t o c e r t a i n c h a r t e r s
w i t h i n t h e Europe-Mediterranean r e g i o n , on t h e North A t l a n t i c and on o t h e r i n t e r c o n t i n e n t a l
r o u t e s . A s a r u l e , r e g u l a t i o n s governing c h a r t e r s o u t s i d e t h e Europe-Mediterranean r e g i o n
a r e more s t r i n g e n t . Canada and s e v e r a l ECAC-member S t a t e s do n o t permit t r a n s a t l a n t i c
ITCs, and i n t h e c a s e of t h e Scandinavian S t a t e s and Spain a r e s t r i c t i v e p o l i c y towards a l l
i n t e r c o n t i n e n t a l ITCs i s adopted. Conversely, advance booking c h a r t e r s , which a r e widely
used on t r a n s a t l a n t i c and i n t e r c o n t i n e n t a l r o u t e s a r e n o t a s y e t a u t h o r i z e d w i t h i n t h e
Europe-Mediterranean r e g i o n . A p r a c t i c e adopted by some South American S t a t e s r e g a r d i n g
c h a r t e r s o r i g i n a t i n g i n Europe and North America i s t o a u t h o r i z e c h a r t e r f l i g h t s by non-
scheduled c a r r i e r s only i f such f l i g h t s s t a r t a t p o i n t s l o c a t e d o u t s i d e t h e a r e a s of
i n f l u e n c e of t h e a i r p o r t s s e r v e d by t h e n a t i o n a l c a r r i e r .

17.               Capacity c o n t r o l . - A l a r g e number of S t a t e s a l s o a p p l y some form of c o n t r o l o v e r
c a p a c i t y . C o n t r o l s may a p p l y t o a l l c h a r t e r s , o r o n l y t o c e r t a i n t y p e s of c h a r t e r , o r v a r y
from one r o u t e group t o a n o t h e r . They may i n v o l v e a b s o l u t e q u o t a s , a r e l a t i o n s h i p t o sche-
duled t r a f f i c , a d i r e c t i o n a l b a l a n c e of t h i r d and f o u r t h freedam t r a f f i c and v a r y i n g t r e a t -
ment of f i f t h freedom t r a f f i c . S t a t e s which have e n f o r c e d a b s o l u t e q u o t a s i n c l u d e J a p a n
and A u s t r a l i a . A number of ECAC-member S t a t e s c o n t r o l t r a n s a t l a n t i c ITC c a p a c i t y by
l i m i t i n g such f l i g h t s t o 5 p e r c e n t of t h e number of scheduled f l i g h t s o p e r a t e d between t h e
c o u n t r i e s concerned d u r i n g t h e p r e v i o u s y e a r . The United S t a t e s h a s t r a d i t i o n a l l y adopted
t h e p o l i c y of c o n t r o l l i n g t h e d i r e c t i o n a l b a l a n c e of t r a f f i c by e s t a b l i s h i n g a r e l a t i o n s h i p
between t h e volume of t h i r d and f o u r t h freedom t r a f f i c ( t h e s o - c a l l e d u p l i f t r a t i o ) . F i f t h
freedom t r a f f i c i s sometimes p e r m i t t e d s u b j e c t t o r e c i p r o c i t y f o r c e r t a i n t y p e s of c h a r t e r
f l i g h t s . ECAC-member S t a t e s a c c o r d t h e most l i b e r a l t r e a t m e n t t o f i f t h freedom f l i g h t s
i n v o l v i n g s i n g l e e n t i t y passenger and c a r g o c h a r t e r s , and t o a l e s s e r e x t e n t t o s t u d e n t and
a f f i n i t y group c h a r t e r s .

18.               Price control.          -     Two b a s i c approaches a r e adopted i n c o n t r o l l i n g t h e p r i c e of
c h a r t e r f l i g h t s . P r i c e s may e i t h e r be f i x e d by r e l a t i o n s h i p t o IATA t a r i f f s o r t h e y may
b e determined by r e f e r e n c e t o a minimum c h a r t e r p r i c e based upon t h e e s t i m a t e d c o s t of
s e r v i c e . I n t h e l a t t e r c a s e a d i s t i n c t i o n may b e made between t h e p r i c e p a i d by t h e
o p e r a t o r ( t h e w h o l e s a l e p r i c e ) and t h a t paid by t h e passenger ( t h e r e t a i l p r i c e ) . A s a
g e n e r a l r u l e , t h e f i r s t approach i s a p p l i e d , i n c e r t a i n r e g i o n s , t o t h e c o n t r o l of i n c l u s i v e
t o u r c h a r t e r p r i c e s , w h i l e t h e second is used t o r e g u l a t e t h e p r i c e s charged f o r advance
booking and s p e c i a l e v e n t c h a r t e r s . P r i c e c o n t r o l of o t h e r forms of c h a r t e r s i s n o t u s u a l l y
p r a c t i s e d and i t i s s i g n i f i c a n t t h a t ITCs and t h e ABCs a r e t h e two t y p e s of c h a r t e r s which
most c l o s e l y meet t h e c r i t e r i a of a scheduled s e r v i c e . A number of S t a t e s o u t s i d e of t h e
European and North American r e g i o n s , which have n o t adopted s p e c i f i c p r i c e c o n t r o l s , never-
t h e l e s s e x e r c i s e g e n e r a l s u r v e i l l a n c e over c h a r t e r p r i c e s on a n ad hoc b a s i s . The g e n e r a l
a t t i t u d e towards p r i c e c o n t r o l of t h e i n d i v i d u a l S t a t e s t h a t r e p l i e d t o t h e q u e s t i o n n a i r e
i s shown i n t h e T a b u l a t i o n of R e p l i e s g i v e n i n Appendix 2 (Question 8 ) a s w e l l a s i n t h e
comment on Q u e s t i o n 8 g i v e n i n Appendix 3.
                                                    ICAO C i r c u l a r 136-AT142                                                     23

19.                 Among ECAC-member S t a t e s , c o n t r o l of I T C p r i c e s has g e n e r a l l y been based upon
                                                                     CC
t h e g u i d e l i n e s e s t a b l i s h e d i n r e l e v a n t E A recommendations. Most of t h e s e S t a t e s have
l i f t e d p r i c e c o n t r o l s on intra-European I T C s i n r e c e n t y e a r s , which h a s p e r m i t t e d t h e devel-
opment of I T C s of s h o r t d u r a t i o n and of w i n t e r programmes. A s r e g a r d s North A t l a n t i c ITCs,
ECAC r e s o l u t i o n s c a l l f o r t h e minimum p r i c e t o be n o t l e s s than 110 per c e n t of t h e appro-
p r i a t e mid-week IATA group i n c l u s i v e t o u r b a s i n g f a r e , w i t h v a r y i n g per diem add-ons t o
cover accommodation c o s t s f o r t o u r s l a s t i n g more t h a n seven n i g h t s . The United S t a t e s and
Canada apply s i m i l a r g u i d e l i n e s f o r a l l ITCs b u t based upon t h e lowest a p p l i c a b l e promo-
tional fare.

20.               I n r e c e n t y e a r s IATA and c e r t a i n i n d i v i d u a l a i r l i n e s have c a l l e d f o r t h e e s t a -
blishment of minimum r a t e s f o r group c h a r t e r s , p a r t i c u l a r l y on t h e North A t l a n t i c r o u t e s .
General IATA f a r e agreements on t h e s e r o u t e s have become i n c r e a s i n g l y d i f f i c u l t t o conclude
i n t h e absence of some r e l a t i o n s h i p between c h a r t e r r a t e s and promotional f a r e s on scheduled
s e r v i c e s which were p a r t l y designed t o compete w i t h t h e c h a r t e r o p e r a t o r s . Most of t h e
S t a t e s concerned endorsed t h e need f o r a n i n t e g r a t e d p r i c e s t r u c t u r e and meetings were h e l d
between scheduled and non-scheduled o p e r a t o r s i n 1973 and 1974 i n a n e f f o r t t o a g r e e on
minimum c h a r t e r r a t e s l i n k e d t o t h e l e v e l of IATA promotional f a r e s . However, t h e s e meetings
f a i l e d t o produce a g e n e r a l agreement and, i n 1974, ECAC-member S t a t e s i n t r o d u c e d minimum
wholesale and r e t a i l r a t e s a p p l i c a b l e t o advance booking c h a r t e r s on t h e North A t l a n t i c i n
1975. Rates were l a t e r s e t f o r 1976.

21.                The United S t a t e k C i v i l Aeronautics Board a l s o e s t a b l i s h e d g u i d e l i n e s f o r minimum
c h a r t e r r a t e s between t h e United S t a t e s and Europe f o r 1975, b d t t h e s e were c o n t e s t e d and
e v e n t u a l l y withdrawn. I n i s s u i n g i t s s t a t e m e n t on minimum r a t e s , t h e C B noted ?/ t h a t
                                                                                                       A
i n the absence of d i r e c t governmental intervention, and a harmonizing of d i f f e r i n g approaches,
charter r a t e s w i l l continue t o go unregulated as they have been i n the past. I n t h e absence
of regulation, it i s a l s o a v i r t u a l certainty that t h e financial r e s u l t s of both charter
and scheduled services w i l l remain a t unacceptable l e v e l s and t h a t the economic health of
the industry w i l l continue t o deteriorate. Moreover, t h e inter-carrier agreement on fares
for scheduled service w i l l i n a l l likelihood f a l l . D e s p i t e t h e s e comments,which were
                                                                         A
consonant w i t h t h e views expressed by ECAC, t h e C B withdrew t h e proposed g u i d e l i n e s i n
                                                                           e
February 1975 and i s s u e d t h e f o l l o w i n g s t a t e m e n t , W cannot ignore the practical fact t h a t
the European Community and i t s national c a r r i e r s hoM the strong view t h a t the scheduled
services must be priced ccmpetitively w i t h charter services. The Board, on the other hand,
i s just as strongly of the opinion t h a t an econunically sound pricing systwn requires t h a t
scheduled and charter services each be priced independently, amording t o the respective
c o s t s o f each service. This obviously i s a fundamental d i c h o t a y of approach which c a l l s
for continuing study und analysis by a22 concerned.


91
-     United S t a t e s C i v i l Aeronautics Board, Part 399                -
                                                                          Statements of GenemZ Policy,
     M i n i m Charter Rate Levels.          R e g u l a t i o n PS-57, adopted October 1 8 , 1974.
24                                                    ICAO C i r c u l a r 136-AT142

22.                   The p o l i c y of t h e U n i t e d S t a t e s on c h a r t e r r a t e s was f u r t h e r e l a b o r a t e d i n t h e
I n t e r n a t i o n a l A i r T r a n s p o r t a t i o n P o l i c y s t a t e m e n t i s s u e d i n September 1976. T h i s document
s t a t e d t h a t charter r a t e s , for both passengers and freight, should be subject t o the same
c r i t e r i a and policies [of t h e U n i t e d s t a t e s ] as fares for scheduled semrices, particularly
t h e i r relationship to costs. The C i v i l Aeroncrutics Board proposed several years ago a
system of m i n i m passenger charter rates related t o c o s t s . m i l e the Courts held t h a t
t h i s proposal exceeded the Board's powers, the Board can and should publish i t s c o s t data
against which p a r t i c u k r charter m t e s are t o be judged.
                                                   ICAO C i r c u l a r 136-AT142                                            25




                                              V   - PROBLEMS AND    POLICY


1.                  This Chapter g i v e s a summary of S t a t e s ' views based upon t h e i r r e p l i e s t o t h e
Q u e s t i o n n a i r e i n Appendix 1.

Problems of P o l i c y D e f i n i t i o n

2.                                                             -
                 P r o t e c t i o n of Scheduled S e r v i c e s . Most S t a t e s i n t h e i r r e p l i e s t o Question 9
(Appendix 2) i n d i c a t e t h a t they consider t h a t t h e p u b l i c need i s met i n a f u l l y s a t i s f a c -
t o r y manner a t t h e p r e s e n t time by i n t e r n a t i o n a l scheduled and non-scheduled o p e r a t i o n s
together. However, a number f e e l t h a t t h e r e a r e d e f i c i e n c i e s i n t h e c u r r e n t system ( s e e
response t o Question 10 i n Appendices 2 and 3). Whether expressed or n o t , t h e prime consi-
d e r a t i o n of n e a r l y a l l S t a t e s appears t o be t h e maintenance and development of e f f i c i e n t
and economically sound scheduled a i r s e r v i c e s . This concern was expressed i n t h e I n t e r -
n a t i o n a l Air T r a n s p o r t a t i o n Policy statement issued by t h e United S t a t e s i n 1970,1/ which
noted t h a t : Scheduled services are of v i t a l importance t o a i r transportation and o f f e r
services t o the public which are not provided by c h m t e r services. Only scheduled services
are expected t o o f f e r regular and dependabZy frequent schedules, provide extensive flexi-
b i l i t y i n length of stay, and maintain worMwide routes, including routes t o areas o f
l a , t r a f f i c volwne. Substantial impaiment of scheduled s e r v k e s could r e s u l t i n t r a v e l l e r s
and shippers losing the a b i l i t y t o obtain these b e n e f i t s . Accordingly, i n any instances
where a substantial impairment of scheduled services appears l i k e l y , it wouZd be appropriate,
where necessary t o avoid prejudice t o the public i n t e r e s t , t o take steps t o prevent such
impairment.
3.               I n d i s c u s s i n g t h e changing n a t u r e of t h e a i r t r a n s p o r t market, t h e ~ d w a r d s '
Committee / noted t h a t t h e ICAO d e f i n i t i o n of a scheduled s e r v i c e omitted t h e v i t a l charac-
t e r i s t i c of a common carrier obligation t o provide regular, continuous and reasonably
available capacity for a l l who want t h a t service. It described t h e demand f o r scheduled
s e r v i c e a s being coZZective i n t h e sense t h a t a significant proportion of t h e commcnity
could be ezpected t o take the v i m t h a t it shouzd be available i f they A s h t o use it. It




-
11    Although a new statement of Internatilonal A i r T r a n s p o r t a t i o n P o l i c y w a s i s s u e d by the
      United S t a t e s i n Septeniber 1976, i t w a s noted t h e r e i n t h a t t h e 1970 Statement of
      Internationa Z Aviation Po Ziey recognized the value of c a p e t i t i v e , yet complementmy,
      scheduled and charter passenger services. The basic policies articuZated there h Z Z he
      continued.
-
21    B r i t i s h A i r Transport I n t h e S w e n t i e s , Report of t h e Committee of Inquiry i n t o C i v g l
      A i r Transport (London, 1969).
26                                                    ICAO C i r c u l a r 136-AT/42

i s t h i s ' c o Z l e c t i v e f demand feature, plus the fact t h a t the operator of a scheduled service
i s vulnerable t o 'ad hoe' competition t h a t has led t o general agreement t h a t the obligations
of public service should be matched by some degree of protection for the scheduled opera-
t o r . The Committee observed t h a t t h e c r u c i a l q u e s t i o n f o r a i r t r a n s p o r t p o l i c y i s t h e
e x t e n t t o which t h i s p r o t e c t i o n should be extended. Given t h e changing p a t t e r n of a i r
t r a n s p o r t demand, t h e Committee f e l t t h a t undue p r o t e c t i o n of scheduled o p e r a t i o n s would
almost c e r t a i n l y i n h i b i t t h e development of a i r t r a f f i c and i t suggested t h a t a d i s c r i m i -
n a t i n g p o l i c y should be adopted i n o r d e r t o p r o v i d e v a r y i n g d e g r e e s of p r o t e c t i o n f o r
scheduled s e r v i c e s a c c o r d i n g t o t h e need f o r such s e r v i c e s on d i f f e r e n t r o u t e s .

4.               Role of non-scheduled a i r t r a n s p o r t . - The ~ d w a r d ' Committee 31 observed
                                                                                                   s
t h a t i n a d d i t i o n t o t h e c o l l e c t i v e demand f o r c o n t i n u o u s l v a v a i l a b l e s e r v i c e , there are
large areas of dmand i n which continuous a v a i l a b i l i t y i s - o f l i t t l e consequence and t h e
p r i m a r y concern of t h e customer i s t o secure the cheapest possible price for a particular
f l i g h t . The basic feature of t h i s type of demand i s t h a t t h e customers are w i l l i n g t o
adapt t h e i r own requirements to some extent t o t h e requirements of other people i f t h i s
ensures a lower operating c o s t ( p a r t l y through a b e t t e r load factor) and hence a lower
price for the individual seat. T h i s b a s i c d i f f e r e n c e was a l s o noted by t h e United S t a t e s
P o l i c y Statement of 1976 i n t h e f o l l o w i n g terms, there are generally two kinds o f i n t e r -
national a i r passengers: those who are departme time-sensitive and r e l a t i v e l y i n s e n s i t i v e
t o price, and those who are price-sensitive and r e l a t i v e l y i n s e n s i t i v e t o departure time.
5.                 The p a r t played by non-scheduled s e r v i c e s i n s a t i s f y i n g t h e o v e r a l l demand f o r
a i r t r a n s p o r t was d e s c r i b e d by t h e United S t a t e s P o l i c y Statement of 1970 i n t h e f o l l o w i n g
words: Charter services by scheduled and supplemental c a r r i e r s have been u s e f u l i n holding
down fare and r a t e l e v e l s and expanding passenger and cargo markets. They o f f e r oppor-
t u n i t i e s to e x p l o i t the inherent e f f i c i e n c y o f plane-load movement and t h e e l a s t i c i t y o f
demand for i n t e m t i o n a l a i r transport. They can provide low-cost transportation o f a s o r t
f i t t e d t o the needs o f a s i g n i f i c a n t portion of the t r a v e l l i n g public. Charter services
are a most valuable component of the international a i r transportation system, and they
should be encouraged. I f it appears t h a t there i s l i k e l y t o be a substantial impairment
o f charter services, it would be appropriate, where necessary t o avoid prejudice t o t h e
public i n t e r e s t , t o take steps t o prevent such impairment                         . ..
                                                                                        Regulatory and promotional
p o l i c i e s s h M give greater recognition to the dimensions, c h a r a c t e r i s t i c s and needs o f
the bulk transportation m r k e t , as such, and l e s s emphasis t o the type of c a r r i e r t h a t i s
serving t h a t market.

6.                  By c o n t r a s t , some S t a t e s , p a r t i c u l a r l y i n South America, f a v o u r a more r e s t r i c t i v e
p o l i c y . The N a t i o n a l P o l i c y on A i r T r a n s p o r t formulated by A r g e n t i n a (Law No. 19.030,
a r t . 2 0 ) s t i p u l a t e s t h a t each nun-scheduled n i g h t shall s a t i s f y a transport need which
the scheduled c a r r i e r services cannot meet ransl slat ion]. T h i s a p p l i e s o n l y t o c a r r i e r s
o p e r a t i n g l a r g e c a p a c i t y a i r c r a f t . S i m i l a r l y , Supreme Decree 10422 ( a r t . 45) r e l a t i n g t o
B o l i v i a n A e r o n a u t i c a l P o l i c y s t a t e s t h a t each non-scheduled f l i g h t must have as i t s purpose
a transport requirement t h a t cannot be s a t i s f i e d by t h e scheduled s e r v i c e s of the national
flag re ran slat ion]         .
-
3/      See f o o t n o t e 2.
                                                           ICAO C i r c u l a r 136-AT/42                                                     27
 7.                Unified r e g u l a t o r y framework. - A b a s i c problem i n t h e view of many S t a t e s i s
t h e r e f o r e one of judging t h e balance t o be s t r u c k between the commercial i n t e r e s t s of t h e
scheduled s e r v i c e o p e r a t o r s and those of t h e c h a r t e r o p e r a t o r s on t h e same r o u t e s , while
taking i n t o account t h e o v e r a l l economic i n t e r e s t s of t h e country concerned, f o r example
i n t h e a r e a s of tourism and f o r e i g n t r a d e . Although a l l S t a t e s have not expressed t h e i r
views on t h i s m a t t e r , i t appears t h a t many of t h e responding S t a t e s f e e l t h a t t h e p r e s e n t
s i t u a t i o n , where t h e r e a r e two s e p a r a t e r e g u l a t o r y regimes, i s u n d e s i r a b l e , and t h a t t h e r e
i s a need f o r an o v e r a l l r e g u l a t o r y framework, with some favouring a m u l t i l a t e r a l and o t h e r s
a b i l a t e r a l approach. To t h e e x t e n t t h a t t h e o r i g i n of s e p a r a t e r e g u l a t o r y regimes f o r
scheduled and non-scheduled s e r v i c e s l i e s i n t h e d i s t i n c t i o n s made i n A r t i c l e s 5 and 6 of
t h e Chicago Convention, some S t a t e s consider t h a t t h e r e i s a need t o r e v i s e t h e s e A r t i c l e s .

D i f f i c u l t i e s of P o l i c y a p p l i c a t i o n

8,                   Harmonization of policy.                  - One of t h e most important problems encountered by
S t a t e s i n r e g u l a t i n g i n t e r n a t i o n a l non-scheduled air t r a n s p o r t i s t h a t of harmonizing t h e i r
p o l i c i e s and r e g u l a t i o n s w i t h those of o t h e r S t a t e s . The l a c k of i n t e r n a t i o n a l harmoniza-
t i o n c o n t r i b u t e s t o widespread m a l p r a c t i c e and makes enforcement d i f f i c u l t and may hamper
t h e development of non-scheduled t r a f f i c . The g r e a t e s t need appears t o be f o r harmoniza-
t i o n of t h e r u l e s governing c h a r t e r c a t e g o r i e s and c h a r t e r c l a s s i f i c a t i o n c r i t e r i a . Further-
more, judging from r e s o l u t i o n s passed by ECAC and AFCAC, t h e r e is a need t o harmonize t h e
procedure and form f o r r e q u e s t i n g p r i o r permission f o r commercial non-scheduled f l i g h t s .
D i f f i c u l t i e s a r e a l s o encountered between S t a t e s on t h e q u e s t i o n of minimum c h a r t e r r a t e s
and c o n t r o l s on c a p a c i t y . I n t h e absence of i n t e r n a t i o n a l agreements, d i f f e r e n c e s e x i s t
between those S t a t e s t h a t adopt a p o l i c y of accepting country-of-origin r u l e s and those
t h a t do not.
9.                                         FA
                   Both ECAC and A C C have achieved varying degrees of success i n harmonizing
c h a r t e r r e g u l a t i o n s and p r a c t i c e s , and ECAC and t h e United S t a t e s and Canada have continued
t o seek agreement on t h e r e g u l a t i o n of North A t l a n t i c c h a r t e r s . However, e f f o r t s on a
m u l t i l a t e r a l and b i l a t e r a l l e v e l have not always been s u c c e s s f u l i n r e c o n c i l i n g d i v e r g e n t
p o l i c i e s and i n t e r e s t s , and agreement has been made more d i f f i c u l t by t h e slackening i n t h e
r a t e of a i r t r a f f i c growth i n r e c e n t y e a r s . It i s d i f f i c u l t f o r one country alone t o
balance t h e o v e r a l l economic c o n s i d e r a t i o n s of i n t e r n a t i o n a l t r a d e and tourism with consumer
needs, a i r l i n e economics and r e s o u r c e u t i l i z a t i o n , b u t i t i s even more d i f f i c u l t t o achieve
t h i s aim on a worldwide b a s i s or even among S t a t e s w i t h i n a r e g i o n w i t h t h e i r d i f f e r i n g
p o l i t i c a l and economic a t t i t u d e s .

10.                Compliance w i t h r e g u l a t i o n s .      -  D i f f i c u l t i e s i n applying r e g u l a t i o n s a r e a
problem experienced by a number of S t a t e s . F i r s t l y , t h e r e a r e d i f f i c u l t i e s of an i n t e r n a l
a d m i n i s t r a t i v e n a t u r e r e s u l t i n g from t h e i n c r e a s e i n t h e number of a p p l i c a t i o n s t o o p e r a t e
non-scheduled f l i g h t s and l a c k of adequately t r a i n e d personnel t o process t h e s e r e q u e s t s ,
and t o ensure proper compliance w i t h r e g u l a t i o n s . Secondly, problems a r i s e from i n c o r r e c t
f i l i n g of a p p l i c a t i o n s f o r permission which c r e a t e s a n a d d i t i o n a l workload f o r a h i n i s t r a -
t i v e s t a f f i f i r r e g u l a r i t i e s a r e t o be c o r r e c t e d p r i o r t o approval f o r a f l i g h t or s e r i e s
of f l i g h t s . Thirdly, d i f f i c u l t i e s are c r e a t e d by t h e submission of a p p l i c a t i o n s a t s h o r t
notice.
28                                                      ICAO C i r c u l a r 136-AT142

11.                   It h a s been s t a t e d t h a t problems of compliance a r i s e when c a r r i e r s f i n d t h a t
c h a r t e r r e g u l a t i o n s o v e r l y r e s t r i c t t h e i r a b i l i t y t o conduct o p e r a t i o n s . From t h e s t a n d -
p o i n t of c h a r t e r o p e r a t o r s , d i f f i c u l t i e s may a r i s e from t h e v a r i e t y of p r o c e d u r e s and dead-
l i n e s f o r f i l i n g f o r p r i o r permission and from what t h e y may c o n s i d e r t o be a n e x c e s s i v e
a d m i n i s t r a t i v e burden, p a r t i c u l a r l y i n f i l i n g f o r group c h a r t e r s where a s many a s t h r e e
s e p a r a t e passenger l i s t s (covering names, a d d r e s s e s and p a s s p o r t numbers) may have t o be
submitted t o t h e competent a u t h o r i t i e s p r i o r and subsequent t o e a c h f l i g h t .

12.                 P r i c e c o n t r o l . - There is c o n s i d e r a b l e v a r i a n c e of o p i n i o n on t h e m a t t e r of
p r i c e c o n t r o l depending upon t h e r e g i o n o r r o u t e group and t h e t y p e of c h a r t e r involved
( s e e Chapter I V , paragraphs 18-22).                  The problems a s s o c i a t e d w i t h p r i c e c o n t r o l i n r e c e n t
y e a r s have e s s e n t i a l l y been l i m i t e d t o t h e q u e s t i o n of whether o r n o t p r i c e c o n t r o l of long-
h a u l group c h a r t e r s i s d e s i r a b l e and, i f i t is d e s i r a b l e , a s t o t h e manner i n which minimum
c h a r t e r r a t e s should b e s e t . I t should b e s t r e s s e d t h a t p r i c e c o n t r o l of c h a r t e r s h a s o n l y
                                                                                                                                                           {
been a problem i n connexion w i t h group c h a r t e r s on t h e North A t l a n t i c r o u t e s , and t o a                                          I
l e s s e r e x t e n t , on r o u t e s between Europe and t h e Far E a s t and A u s t r a l i a . On t h e o t h e r hand,                             1
i n t h o s e a r e a s where p r i c e c o n t r o l of i n c l u s i v e t o u r c h a r t e r s i s c o n s i d e r e d d e s i r a b l e , t h e r e   1

a p p e a r s t o b e b a s i c agreement t h a t t h e p r i c e s h o u l d b e set on t h e b a s i s of IATA t a r i f f s .                           <
                                                 ICAO C i r c u l a r 136-AT/42                                           29

                                                          APPENDIX 1

        QUESTIONNAIRE ON POLICY CONCERNING INTERNATIONAL NON-SCHEDULED A I R TRANSPORT
           (with i n d i c a t i o n s of t h e numbers of S t a t e s replying t o each question)

            (Attachment t o S t a t e L e t t e r
                                                      EC 2/11.1)
                                                                     )   -   7612, 26 January 1976)



                      This q u e s t i o n n a i r e i s designed t o o b t a i n information f o r t h e p r e p a r a t i o n
of background documentation on t h e s u b j e c t of " ~ o l i c yConcerning I n t e r n a t i o n a l Non-Scheduled
A i r Transport" t o be considered by t h e S p e c i a l A i r Transport Conference i n A p r i l 1977,

-
Note:                     You a r e requested t o :

                1)        i n s e r t a t i c k ( 4 ) i n t h e a p p r o p r i a t e Y S or NO blank space t o
                                                                                       E
                          i n d i c a t e your answer t o each question;

                2         i n s e r t a t i c k ( \ / ) i n t h e a p p r o p r i a t e A T C M N blank space f o r
                                                                                         TAH E T
                          each q u e s t i o n i f you a r e i n c l u d i n g a n attachment; and

                3         r e t u r n one copy of t h e completed q u e s t i o n n a i r e t o g e t h e r w i t h
                          attachments t o reach ICAO i n Montreal by 1 A p r i l 1976.



QUESTION 1.               Do you have any n a t i o n a l laws, r e g u l a t i o n s , . o r g e n e r a l
                          p o l i c y s t a t e m e n t s r e l a t i n g t o your treatment of i n t e r -
                          n a t i o n a l non-scheduled a i r t r a n s p o r t ?      ................     1-        r        l
Attachment                I f your answer i s i n t h e a f f i r m a t i v e , p l e a s e provide
                          c o p i e s o r r e l e v a n t e x t r a c t s of t h e laws, r e g u l a t i o n s
                          o r p o l i c y s t a t e m e n t s i n question.



QUESTION 2.               Regarding t h e laws, r e g u l a t i o n s and p o l i c y s t a t e m e n t s
                          r e f e r r e d t o i n Question 1, do you contemplate
                          formulating t h e s e i f you do not have them, o r making
                          any changes i n t h o s e you have?                ....................... [YES1311
Attachment                I f your answer i s i n t h e a £f i r m a t i v e , p l e a s e i n d i c a t e
                          t h e n a t u r e of t h e laws, r e g u l a t i o n s , or p o l i c y
                          s t a t e m e n t s t h a t you contemplate formulating o r changing.
30                                       I C A O C i r c u l a r 136-AT142

QUESTION 3 .         o
                   D you have published procedures o r p r a c t i c e s which
                   a r e c u r r e n t l y a p p l i c a b l e t o o b t a i n i n g permission f o r
                   t h e conduct of non-scheduled i n t e r n a t i o n a l a i r t r a n s p o r t
                   s e r v i c e s t o and from your c o u n t r y ( s e e A r t i c l e 5 t o
                   t h e Chicago Convention) ?              .............................             1-     r   1
Attachment     0   I f t h e answer i s i n t h e a f f i r m a t i v e , p l e a s e a t t a c h
                   c o p i e s o r e x t r a c t s of t h e r e l e v a n t procedures o r
                   practices.

                   I f t h e answer i s i n t h e n e g a t i v e b u t p e r m i s s i o n i s
                   r e q u i r e d , p l e a s e submit d e t a i l s of t h e procedures o r
                   p r a c t i c e s t h a t you a c t u a l l y f o l l o w .



                   Have you encountered o r do you a n t i c i p a t e encountering
                   any problems i n a p p l y i n g your A d m i n i s t r a t i o n ' s p o l i c i e s
                   concerning i n t e r n a t i o n a l non-scheduled a i r t r a n s p o r t
                   w i t h r e s p e c t t o s u c h m a t t e r s as t h e f o l l o w i n g :

                      compliance by o p e r a t o r s w i t h your r e q u i r e m e n t s         ..... b ? [ r I
                      a p p l i c a t i o n f o r more f l i g h t s t h a n allowed under
                      your p o l i c y    ........................................[yEsllq
                      r e c o n c i l i a t i o n of your p o l i c y w i t h t h o s e of o t h e r
                      states        .............................................                  r]
                      p o s i t i o n of your scheduled c a r r i e r o r c a r r i e r s ..... [m
                      o t h e r .............................................. b                  m r ]
Attachment         I f t h e answers a r e i n t h e a f f i r m a t i v e , p l e a s e submit
                   d e t a i l s of t h e problems and t h e s o l u t i o n s a p p l i e d o r
                   considered.



QUESTION 5.        P l e a s e i n d i c a t e by what c r i t e r i a , i n a c t u a l p r a c t i c e ,
                   your a d m i n i s t r a t i o n d i s t i n g u i s h e s a non-scheduled
                   from a scheduled i n t e r n a t i o n a l a i r s e r v i c e .

Attachment     0   I n s o f a r a s t h i s d i s t i n c t i o n is set o u t i n any
                   document p l e a s e p r o v i d e a copy o r r e l e v a n t e x t r a c t
                   (or a p p r o p r i a t e r e f e r e n c e i f document h a s been
                   attached i n response t o a previous question).
                                             ICAO C i r c u l a r 136-AT142                                                      31

QUESTION 6.         Which of t h e following types of i n t e r n a t i o n a l non-
                    scheduled s e r v i c e do you a u t h o r i z e :

                       i n d i v i d u a l i n c l u s i v e t o u r on scheduled s e r v i c e (ITX)

                       group i n c l u s i v e t o u r by scheduled a i r l i n e (GIT)                  .... k        ?     r   ]
                       group i n c l u s i v e t o u r by non-scheduled o p e r a t o r (ITC)                 -1-b
                       a f f i n i t y group c h a r t e r (whole plane)            ............... V                        -
                                                                                                                            Ir1
                       non-af f i n i t y group (whole p l a n e ) ,             ( B , TGC, VARA) .. I
                                                                                 AC                                     ~   r]
                                                                                                                             Y
                       own u s e l s i n g l e e n t i t y c h a r t e r    ......................- 1 -
                       s p l i t , mixed o r p a r t c h a r t e r         ....................... f                 Y ?1-
                       o t h e r types of passenger s e r v i c e (common purpose,
                                                                        ............. B E S l
                       s p e c i a l event, s t u d e n t , p i l g r i m , e t c .

                       cargo c h a r t e r     ...................................... VIF]
Attachment    a     P l e a s e i n d i c a t e where a u t h o r i z a t i o n s a r e a p p l i c a b l e
                    to c e r t a i n routes only.

                    Where a v a i l a b l e p l e a s e submit d e f i n i t i o n s of t h e
                    v a r i o u s non-scheduled types or concepts t h a t you now
                    recognize o r w i l l i n t h e f u t u r e recognize or c e a s e t o
                    recognize.



QUESTION 7.         I n your a u t h o r i z a t i o n of i n t e r n a t i o n a l non-scheduled
                    o p e r a t i o n s do you make any d i s t i n c t i o n between
                    passenger and cargo s e r v i c e s ?              ........................ f                    Y m I r 1
Attachment          If your answer i s i n t h e a f f i r m a t i v e , p l e a s e d e s c r i b e
                    t h e d i f f e r e n c e i n t h e treatment accorded t o t h e s e
                    types of s e r v i c e ( u n l e s s t h e answer is contained i n
                    m a t e r i a l provided i n response t o previous q u e s t i o n s ) .



QUESTION 8.         I n your treatment of i n t e r n a t i o n a l non-scheduled
                    o p e r a t i o n s do you p r a c t i c e o r favour any form of
                    price control?            .......................................k m I r 1
Attachment    1-]   I f your r e p l y is i n t h e a f f i n n a t i v e , p l e a s e i n d i c a t e
                    t h e form of c o n t r o l t h a t you p r a c t i c e o r favour w i t h
                    r e s p e c t t o t h e v a r i o u s types of non-scheduled f l i g h t -
                                   ICAO C i r c u l a r 1 3 6 - A T 1 4 2                                                             33


                                                      APPENDIX _1


                  TABULATION OF STATES'                           REPLIES TO QUESTIONNAIRE

 ~IJESTIONS1, 2 6 3:    A S                                                         )
                       L W AND RELILAIIONS CDNCmIIE IMERMTIONAL U O W - S C ~ U L S AIR T-SmRT

                         1.         hietence                       2. I n t e n t t o l d a t e        3.      E x i s t e n c e of
                                       of L.wm                        or C w .                           Published Procedure
       S T A T E S           R a ~ u l a t i o r m ,P o l i c y       Law, R y u l a t i o n .           f o r 0bt.idng Prior
                             Statements on IUSAT                              or P o l i c ~                   ~ermission
                         yes        P o r m                        Yes C o m m a n t s                ,y          ? o r .
Afric.
 Algeria                   X      Law                                X                   --              1 Circular
 Cameroon                  X
 Ghana                     X    P c p l a t i o n s of               X   P c p l a c a a n t of          X          AIPIPIL
                                 Tourist Control                          M f i n i t y Croup
                                 Board                                    by AM: concept
 Ivory Coast               X                     --                                      --              X           --
 Ilda8ascar                                                          1 Within t h e f r u e w o r k      X          AIC
                                                                        of AKM
                                                                     -
  h l ~ i
  hritius                   -
                            X    Aviation Pc8ulatioM
                                 hrmits on ad hoe                    -                                   X
                                                                                                         X
                                                                                                                    AIPIFAL

                                  basis
  llorocco                  X    Dacrea                                                                  X          AIPIFAL
  Niser

 wigcria

  Swaziland

  Tunisia
&st and South Asia
 and P a c i f i c
 Aumtralia

  Fiji
  Indonesia
  Japan

  Iulaysi.

  Lp.1
  kv zealand

  P a p a New Guinea

  Philippines

  Singapore


  Thailand



  Demrk

  Pinlad


  Rloee
  Ccrung
    (Fed. Rep. o f )
  Greece
  Irelard

  Italy
  Netherlands



  Ilorvay
  Poland



  Por t u g a l
  a
  -
  Sp.in
                                                                                                                S c h e d u l d Air

  Sweden
  Switzerland
  United Kingdom
34                                                      ICAO C i r c u l a r 136-AT142                                                               -

                                                          APPENDIX 2 (Cont'd.)

     QUESTIONS 1, 2 & 3:              A S
                                     L W AND REGULATIONS CONCERNIN INTERNATIONAL NON-SCHEDULED A I R TRANSPORT
  -                                         -      -

                               1.           Existence                     2.   I n t e n t t o Formulate          3.     Existence of
                                             of Laws                           or Change Existing                  Published Procedure
        STATES
                                       Regulations, Policy                     Laws, Regulations                   f o r Obtaining P r i o r
                                       Statements on INSAT                                                               Permission
                               Ye0          F o r m                      Yes       C o m m e n t s                Yes      F o r m

L a t i n America
   and Caribbean
   Argentina                     X    Law No. 19.030                       -                  -                    X        Resolution No. 41
                                                                                                                             of D i r e c t o r a t e of
                                                                                                                             A i r Transport
     Barbados                    X    Air Navigation Regs.                 X    Changes contemplated               X               AIP/FAL
                                       1959
     Bolivia                     X    Supreme Decree 10422.                X    Carmnission t o d r a f t          X               AIP/FAL
                                                                                 complete r e g u l a t i o n s
     Brazil                      X    Decrees 46.124, 58 .I71              X    To be revised                      X        Edict 788/GH5,
                                       Edicts 788/GM5,                                                                       106lGM5
                                       106/GM5
     Chile
     Colombia
                                 -
                                 -                  -
                                                    -                      x                  -
                                                                                              -                    jt
                                                                                                                                        -
                                                                                                                                        -
     El Salvador                 X    C i v i l Aviation Law               X                  -                    -                    -
     Panama                      -
                                 -
                                                    -
                                                    -
                                                                           -                  -
                                                                                              -                    -
                                                                                                                   X        Decree     Law
                                                                                                                                        -    No. 19
     Surinam                                                               X
     Uruguay                     X    Decree 32Si971,                      -                  -                    x        AIP/FAL
     Venezuela                   X    C i v i l Aviation Law               X    Under r e v i s i o n              X        Charter
                                                                                                                              Regulations
Middle East
  Bahrain                        -                  -                      X A s required                          -                    -
  Iraq                           X               -                         X                  -                    X                    -
  Israel                         X Decisions                               X Policy under review                   X                    -
  Jordan                         X C i v i l Aviation Law                  X Being revised                         X               AIP/FAL
 Lebanon                         X NP/FAL, Aviation Law                    -                  -                    X               AIP/FAL
 Oman                            X Aviation Law                            -                  -                    X               AIPIFAL
  Saudi Arabia                  X     Policy of not                        -                  -                    X                    -
                                       encouraging Non-
                                       scheduled Services
North America
  Canada                         X    A i r C a r r i e r Regulations      X    Continuous review. N w  e          X        Air Carrier Regs.
                                                                                 r u l e s on ITCs and SECs                             B
                                                                                                                             Class 9-4 A C
                                                                                                                             Licences
     United S t a t e s         X     Federal Aviation Act                 X    Considering ABCs                   X        Federal Aviation
                                       CAB Regulations                                                                             A
                                                                                                                             Act, C B Regs.

TOTAL          S t a t e s : 61 48                                        31                                      52    1


-
Note:       The following abbreviations a r e used:
            INSAT   - I n t e r n a t i o n a l non-scheduled a i r t r a n s p o r t
            AIP     - Aeronautical             Information P u b l i c a t i o n
            AIC     - Aeronautical Information C i r c u l a r
                                          ICAO Circular 136-AT142                                                     35

                                           APPENDIX 2 (Cont 'd )        .
                       QUESTION 4:   PROBLEMS WCOUHTEPPD O ANTICIPATII) IN APPLYING POLICIES
                                                          R
                                                                                                     -
I               S T A T E S
                                           Compliance

                                          Requirments
                                                        ~pplicationa
                                                          for lore
                                                        flights t h n
                                                          allwed
                                                                        -Policy\- i t i o n
                                                                               Pos
                                                                              of
                                                                            other
                                                                            States
                                                                                        of
                                                                                     Scheduled
                                                                                      Carrier
                                                                                                        Other


     Africa
      Algeria                                  X             X                           X
      Cameroon
      Ghana
       Ivory Coast                             X             X                X
      Hadagascar
      Malawi                                                                  -
      Mauritius                                              -                X
      Morocco
      Niger
                                                             -                                             -
      Nigeria                                                                 -                            -
      Swaziland
      Tunisia
                                                             -
                                                             X
                                                                                                           -
    East and South Asia
      and P a c i f i c
      Australia                                -
                                                             -
                                                                                         -                 -
      Fiji                                                                                                 -
      Indonesia                                X             -                           -
                                                                                         X                 -
      Japan                                    X             X                X
      Malaysia                                                                           -
                                                                                         -
      Nepal
                                                                                         -                 -
      Nev Z e a l d
      Papua N e w Guinea
                                               X
                                               X             -                -
                                                                              X
                                                                                         X
      Philippines                              X             X                X          X
      Singapore
      Thailard                                 X                                         -                 -
      Austria                                  X             X                X          X
      Czechoslovakia                                                                                       -
                                               -                                         -
      Deourk
                                                             -                X
                                                                                                           -
      Finland
      France
                                               X
                                                                              -
                                                                              X
                                                                                         -
                                                                                         X
                                                                                                           -
      C e r u n y (Fed. Rep. o f )             -
                                               -
                                                                              -
                                                                              -          -
                                                                                         -
                                                                                                           -
                                                                                                           -
      Greece
      Ireland                                  X            X                 X          X           Safepadiq
                                                                                                     ..miu~
      Italy                                    X                              I          X                 -
      Iletherlmdm
            (Kingdom of t h e )
                                               -             -
                                                                              -          -                 -
      Norvay
      Poland                                   -             X                -
                                                                              I
                                                                                         X                 -
                                                                                                           -
      Portugal                                 X
                                               -             X
                                                             -                -
                                                                              X          X
                                                                                                           -
      -.
      1
      Spain                                    -
                                               -
                                                             -
                                                             -                X          X       :         -
      Sweden
                                               X             -                X
      8witnrL.ld
      U n i t d Uqdm                           x             -                X
                                                                                         X
                                                                                         x                 -
    L a t i n America
       d Cuibbun
                                               -                                         -                 -
       kgcmtilu
       hrbdoa                                  -
                                               -             -                -
                                                                              -
                                                                                         -
                                                                                         -
                                                                                                           -
                                                                                                           -
       bliPia
                                               -                                         x                 -
      Brazil
                                               -             X
                                                             -                -
                                                                              I
                                                                                         -                 -
      a l e
                                               -                              -          -                 -
      Coldi.
                                                             -                -                            -
      el S a l v d o r
      -PLY                                     -             -                -
                                                                              x          -
                                                                                         7       .         -
       Sur i n r
      urus'-Yu e l a
      kner
                                               -
                                                            -x                -          -
                                                                                         -
                                                                                                           -
                                                                                                           -
                                               X                              X
    Middle h a t
                                                             -                -          -                 -
      Behr.La
      Iraq                                     X             -                X          X                 -
                                                             -                -          x
      brael
      Jordan                                   -             -
                                                             -                X         -I
                                                                                         -                 -
      Lebanon
      hen                                                    -
                                                                              -
                                                                                         -
                                                                                         -
                                                                                                           -
                                                                                                           -
j     sprdi ~ r ~ b i .                        -
    North America
      Cad.                                     x                              X
      United S t a t e s                       -                              X          -           Difficulty i n
                                                                                                     cmcludi~
                                                                                                     Fnt.rneti0a.l
                                                                                                     qre.mt

.   TOTAL                  States:   61        18           11                22         17                2
36                                              ICAO Circular 1 3 6 - A T 1 4 2


                                                 APPENDIX 2 (Cont'd .)

                            QUESTION 5 :                    O
                                            CRITERIA USED T DISTIffiUISH A NON-SCHEDULtYl FROH
                                            A SCHEDIRED IUI'WNATIONAL AIR SWVICE

                                                    C r i t c r ~ aUsed t o Define A Scheduled
                                                   Service (Negative Def. of W.-Sched.)


                STATES                                                                                         Caent




                                                 8P88ml2ZZdt8d39123 d
     Afric.
        Algeria                                    x       x      x      x
        C.rroon                                                                                 x   m     p r i o r permission
        G h ~ v                                    X              X
        Ivory C o u t                              X      X       X      X
        Mnlqucar                                                  X
        klui                                       x      x       x      x
        .uuritius                           X
        Morocco     L/                             X      X       X      X
        Niter   L/                                 X      X       X      X
        Miteria                                                                                     ,no o f f i c i a l
                                                                                                        definition
       Sr*.ilud
       runiaia                                                    x
     mt   u d South k i a
       and P a c i f i c
       Australia                                                                             x      Ianurrce of lic.,,c.
       riji                                                      I       X
       Idowsia                             x
       Japan                                              X      X
       na1ay.i.                                    X      X      X      X
       w1
        .                                                                                            o
                                                                                                    N details
       New Z..l.nd                                               X              X
       Papue New Cuinea                                          X              X      X
       Pbflippiws                          X
       s i r y a p o r e A/                        X      X      X      X
       nuilud /                                    X      I      X      x

       Austria                                            X      X
       C t e c h o s l w a k i a L/                X      X      X      X
       kmrt                                I
       ?inland                                                                                      No d e t a i l .
       RMO.                                I
       Germ). (Id. Rap. o f )              X
       ~rmue                               I
       Ireland                                                   X      I      X       X     IO l r d d S . r r i c e
       Italy                               X
       Wctherl~a                                   1             X                           X      Booking d i r e c t w i t h
         ( U r y d m of t h )                                                                        airlilw
                                           I
       Pol&                                               X                    x
       ~ortqal                                                                 x
       Paurfa                                                                                       m   drrail.
       spaill                                             x      X      x              I
       Sueden                              X
       Mtter1.nd                                   X      X      X      X
       United U@m                          I
     Latin h t i u
      a r k caibb*.,,
          r ti
      A miu                                               x      x
       Barb-                                                                                        I*f i n i t i o n by
                                                                                                     adusion
       hliris                                             x                    I
       BCari1
                                                                                                    m    detdls
       Chile                                              X      x      I
       Coldia                                             I
       El Selvador                                 X      X      I      x
       P-
        a                 I/                       I
       Surinr             -                               X      I      1
                                                                                                    No d e t a i l .
       uwuw                U                       X      X       X      I
       Veoczuala                                   X      X      X      X
     Middle East
       W~rain                                                                                X      P e r d t t o Opu'ate
       I r 4
       I.t&l
                           u                       x      x      x       x
                                                                                X
      Jordan                               X
      Lebanon                                                                                       Ib d e t a i l s
       ban                                                       X       X
       Saudi Arabia                                                                          X      Approved
                                                                                                      periodically
     lbtth Aurica
       Cmda                                x
       United S t a t e s                  X
     TOTAL         State.:            61   14     18     24     29     21      7      3     6

       11 Reference made t o 1952 tCAO Council D e f i n i t i o n .
                   ICAO Circular 136-AT142   37




         S T A T E S




E.st and South Amia and Pacific




  (Mtrcrlud
  United Kingdom
h t i n h r i u r d Cuibbun
                 o




Middle Yst




Rorth America
38                                         ICAO C i r c u l a r 136-AT142

                                               APPENDIX 2 (Cont'd .)

                 QUESTION 7:      DISTINCTION B-EN                    O -C E U E
                                                       INTERNATIONAL N NS H D L D PASSENGER
                                                     AG
                                                AND C B O SERVICES

                      STATES                          YS
                                                       E   NO                           COmENTS


     Africa
       Algeria                                        X
       Camerm                                         X
       Ghana                                                X
       Ivoiy Coast                                    X
       kdag~scar                                            X
       Mala#i                                               X
       k u r it i1
                 t 8                                  x
       brocco                                               X
       Niger                                          X
       Nigeria                                        X
       Swaziland                                            X
       Tunisia                                        X
     h s t ud S r t h Aaim and P a c i f i c
       Australia                                      X
       P i ji                                               X
       Indonesia                                      X
       Japan                                                X
       Malaya1I                                             X
       Nepal                                                X
       New Zealand                                          X
       Papua Wcv Guinea                               X
       Philippines                                    X          - More     l i b e r a l treatment of cargo.
       Siugapose                                      X
       Thaild                                               X
     Europe
       Austria                                        X
       Czechoslwakia                                  X          - More     l i b e r a l t r u t u a t of c u g o .
       Dr
        -k                                            X          - Only     o m u8a cargo charter..
       Fi n l a d                                     X          - Morc     l i b e r a l t r u h o n t of cargo.
       France
        ey
       C-         (Fed. Bap. of)
                                                            X    - kt no m i n i a n p r i m         f o r cargo.
                                                      X
       Greeca                                               X
       Ireland                                              X
       Italy                                          X
       Netherlands (Kingdom of the)                         X
       &my                                            X          - Only am ura          cargo chartar*.
       Poland                                               x
       Por t u g d
       Romnnia
                                                      X          - Lens l i b e r a l   treatment of Eargo.
                                                            X
       Spain                                          X
       Sweden                                         X
       Switzerland                                    X
       United Kingdom                                 X
     Latin America .ad Caribbean
      Argentina                                       X
       8.rbPdos                                             X
       Bolivia                                        X          - More     l i b e r a l treatment of cargo.
       Brazil                                         X          - More c a r e f u l     . M y of passenger
                                                                    services.
       Chile
       Colombia
                                                      X          - More l i b e r a l   t r e a h c n t of cargo.
                                                      X
       E l Salvador                                   X
       Puuv                                                 X
       Surinam                                              X
       Utuguag                                              X
       Venezuela                                            X
     Middle Jhst
      Bahr s i n                                            X
       Iraq                                           X
       Iarael                                         X          -   More l i b e r a l treatment.
      Jordan                                          X
      Lebanon                                               X
      (kn                                                   X
      Saudi Arabia                                    X          -   R e s t r i c t i o n of cargo services.
     North America
       Canada                                         X          -   Only s i n g l e e n t i t y cargo c h a r t e r s .
      United S t a t e s                                    X
     OA
     TTL                            States:     61    35    26
                                               I C A O C i r c u l a r 136-AT142
                                                                            -
                                                                                                                                        39

                                                APPENDIX 2 . (Cont 'd .)

                                Q E TO 8:
                                 USI N                                      F
                                                   PRACTICE OR FAVOIIIIIHG O PRICE COHIWL

                       STATES                               E
                                                           YS
                                                          -
     Africa
       Algeria
       Cameroun
                                                            X        I-       U t e s wt be nubmitted f o r approval.

      Ghana
       Ivory Coast                                          X            - Tacit    approval unless otherwise
                                                                               indiuted.
       Madagascar                                           x            -    Control when c a p e t i t i o n i s h d u l
                                                                                to scheduled services.
       Malawi                                               X
                                                                         - Prices fixed.
                                                                     I
       Mauritius                                            X
       Morocco
       Niger
                                                            X
                                                            X
                                                                         - Prices controlled           on a s o p l i o g b u i s

       Nigeria
       Swaziland                                            X            -    In fwour but      M     coqtrols i n effect.
       ?mis i a                                             X

     East a d South Asia and Pacific
       Australia
       Fiji                                                              - Qevour price control.
       Indonesia
       Jam                                                               - Checked with regard to            e f f e c t on
                                                                                scheduled services.
       Malaysia
       Nepal
       New Z e a l d                                                     - Price      su~eillplce.
       Papua Neu Guinea
       Philippines
       Siogapore
       Th~ilad




                                                                     I   - Control/aurveillance
                                                                             r e t a i l prices.
                                                                         - Price 8tlrveill.nee.
                                                                         - Ibt i n favour.
                                                                             rec-ahtiom.
                                                                         - S t r i c t control.
                                                                                                           of wholesale and



                                                                                                     but applies ICX

       Frame
       Gerrny (Fed. %p. of)                                              - I1.Atlentic price.          controlled.
       Greece
I      1re1d                                             I x I       1-       s t r i c t control.                                  I
1      Wetherlmds (Kingdom of the)
                                                                                WISE retea controlled.

                                                                         - kd r e m u d . but no specific
                                                                                                                                    I
                                                                         - - rpolicy yet oadopted.
                                                                               at.     F l l w s EM
                                                                                 recolcnd8tiom.
        hl.
       I.i
       spain
.      Sweden                                                            - F o l l a EAC r e c ~ n d a t i o m .
       Switzald
       United    Kiwa                                                    - ?rice cozItrol only of A K . .ad
                                                                                 inter-continental IlC8.
     l a t i n * r r i c a .rd C u i b b u n
        krntin8
        Barbdo8
         Bolivt.                                                         -    In f-         but ao coatrols i n effect.
         Brazil
        Chile                                                            - Id     i v c control u raqnired.
        Colabi.
         El S i l v d o r
         P-
          Sur1n.r
         urumy
         'Veneruela


        Iraq
        Israel                                                           -    Icquires aubrission of &ta on price..
        J o r h
        Lebanon
        mn
        Saudi As8bi.

II   North C p r i c a
        canah

        United States
                                                                          -   Control of a11 r e e a l u b l e p8aaenger
                                                                             charters.
                                                                          - Control of IT prices only.
     OA
     TTL                             States:      61
40                                          ICAO Circular 136-AT142

                                             APPENDIX 2 (Cont ' .)
                                                      .       d
                             QUESTIONS 9 k 10: ADEQUACYO PRESENT SYSTW AND
                                                          F
                        MATTERS A V R E Y AFFECTED BY DEFICIENCIES OR INEPPICIENCES
                                 D ESL




     1                     STATES




           Ghana
           Ivory Coast
           Wgmmcar
           nalui
           Mauritius
           lbroeco
           Niger
           Niueria
           Sruilmnd
           Toaisia

         E u t od South & i a md P a c i f i c
           krstrali.
           Piji
           IndoDesia
           Japan
           nmlaysia
           wp.1
           New zealand
           P . p u W.v Guinea
           Philippines
           Singapore
           Thnilad




           rn-k
           Finland
           Rance
           h m a n y . ( F d . ilep. of)
           Creeee
           Ireld
           Itsly
           I l t h c r l a d s (Kiwdm of t h )

           Paid
           PortU8~l
           Ibunia
           Spain
           Sueden
           gritrerlaad
           UPitd K i q d d
         U t i n America and Caribbean
           Ar#mtim
           Bubdos
           Bolivia
           Lalil
          Chile
          Cololbia
           El Salvador
          Pa-
           Surinam
          Uruguay
          Venezuela
         Middle East
          Fahrain
          Iraq
           Israel
          Jordan
          Lebanon
           oman
           Ssudi Arabia
         North America
           Canda


         OA
         TTL                               States:
                                                      ICAO C i r c u l a r 136-AT142                                                           41

                                                              APPENDIX 3

                 SUMMARIES O INFORMATION PROVIDED BY STATES ON QUESTIONS 4 , 8 AND 10
                            F


           QUESTION 4 : PROBLEMS E C U T ERH) I N APPLYING LAWS AND REGULATIONS
                                  NON

           (a)    Compliance by o p e r a t o r s w i t h requirements

                Austria     - Lack o f compliance by o p e r a t o r s w i t h both t h e a d m i n i s t r a t i v e and
p o l i c y requirements r e n d e r s i t d i f f i c u l t f o r t h e CAA t o pursue i t s d u t i e s e f f i c i e n t l y .
Furthermore, t h e c o l l e c t i o n o r d a t a and documents missing from t h e a p p l i c a t i o n means addi-
t i o n a l work and waste of time. The u s e of i n d i r e c t ways and means v i a non-aviation c i r c l e s
t o p r e s s f o r t h e approval of c h a r t e r s which do n o t meet t h e C A A ' s p o l i c y c r i t e r i a , i s
becoming more and more widespread.

                  Canada - O c c a s i o n a l l y , b r e a c h e s of t h e A i r C a r r i e r R e g u l a t i o n s a r e d e t e c t e d o r
a l l e g e d . A c a r r i e r found i n v i o l a t i o n of c h a r t e r r e g u l a t i o n s may b e r e q u i r e d t o show c a u s e
why i t s l i c e n c e should n o t be suspended o r c a n c e l l e d , o r why i t s name should n o t b e removed
from t h e e l i g i b l e l i s t f o r a c e r t a i n p e r i o d . However, most requirements s e t o u t i n t h e
c h a r t e r r e g u l a t i o n s have t o b e met p r i o r t o t h e approval of t h e non-scheduled f l i g h t o r
s e r i e s of f l i g h t s and hence i r r e g u l a r i t i e s may b e c o r r e c t e d p r i o r t o approval.

          Finland           -
                        Due t o t h e s h o r t a g e of s t a f f , e f f e c t i v e c o n t r o l of compliance w i t h
requirements h a s n o t always been p o s s i b l e .

                 -
             Greece - Problems i n v o l v e non-compliance w i t h t h e t i m e - l i m i t s concerning
submission of r e l e v a n t a p p l i c a t i o n s , and t h e c o n d i t i o n s imposed.. E f f o r t s a r e made t o f i n d
ad hoc s o l u t i o n s t o t h e s e problems, p a r t i c u l a r l y when t h i s i s n e c e s s a r y t o avoid undue
nuisance t o t h e t r a v e l l i n g p u b l i c .

               Indonesia        -
                               I n d o n e s i a r e q u i r e s t h a t a c h a r t e r r a t e must n o t b e l e s s than 60 per
c e n t of t h e normal IATA f a r e , although t h e rates of most o p e r a t o r s a r e a s low a s
40 p e r c e n t (sometimes l e s s t h a n 40 p e r c e n t ) of t h i s f a r e . Since t h e l o a d f a c t o r
of t h e n a t i o n a l scheduled c a r r i e r remains low, i t i s d i f f i c u l t f o r i t t o a g r e e t o
non-scheduled f l i g h t s from a r e a s where i t a l r e a d y o p e r a t e s .

               Japan - It r e q u i r e s enormous e f f o r t s t o examine t h e e l i g i b i l i t y of t h e c h a r t e r t o
e n s u r e compliance w i t h t h e requirements concerning a f f i n i t y group and own u s e c h a r t e r s .

            Papua New Guinea - I n r e s p e c t of our scheduled c a r r i e r , t h e p r e v e n t i o n of an
"open sky" p o l i c y p r o v i d e s s u f f i c i e n t p r o t e c t i o n t o t h e o p e r a t o r f o r a i r s e r v i c e s w i t h
those c o u n t r i e s w i t h which we have a i r s e r v i c e s agreements.

           Philippines              -   The most common problem encountered i s t h e f i l i n g of a p p l i c a t i o n s
a t short notice.

                  P o r t u g a l - One of t h e main problems i s t h e enforcement of r e g u l a t i o n s . I n t h i s
f i e l d d i f f i c u l t i e s a r e g e n e r a l l y of a more i n t e r n a l n a t u r e , a r i s i n g from t h e l a c k of e i t h e r
l e g a l o r human means t o i n s t i t u t e t h e machinery r e q u i r e d .

               Thailand - Regulations s t i p u l a t e t h a t t h e a p p l i c a t i o n t o perform a non-scheduled
f l i g h t must be submitted n o t l e s s than 7 days i n advance, b u t i n p r a c t i c e , i t i s o f t e n
submitted w i t h i n two o r t h r e e days p r i o r t o t h e o p e r a t i o n of t h e f l i g h t .
42                                                ICAO C i r c u l a r 136-AT142

                   United Kingdom - Problems of compliance a r i s e where o p e r a t o r s f i n d c h a r t e r -
w o r t h i n e s s c r i t e r i a r e s t r i c t i v e of t h e i r commercial freedom.

             Venezuela - Non-scheduled o p e r a t o r s do n o t g e n e r a l l y f u l f i l our r e q u i r e m e n t s ,
such a s t h e p r i o r n o t i f i c a t i o n p e r i o d (seven d a y s ) , and t h e requirement t o s e e k
permission from t h e a e r o n a u t i c a l a u t h o r i t i e s .

                 (b)    A p p l i c a t i o n f o r more f l i g h t s t h a n allowed

                    Brazil -  A marked i n c r e a s e i s f o r e s e e n i n t h e number of a p p l i c a t i o n s d u e t o t h e
i n c r e a s i n g volume of t o u r i s t a r r i v a l s , and they w i l l b e d u l y c o n s i d e r e d c a s e by c a s e .

                     Canada - The number o f f l i g h t s t h a t may b e o p e r a t e d by f o r e i g n a i r c a r r i e r s i s
l i m i t e d w i t h some e x c e p t i o n s by t h e s o - c a l l e d " u p l i f t r a t i o requirement" a s s e t o u t i n t h e
A i r C a r r i e r R e g u l a t i o n s ( S e c t i o n 3 3 ) , t h e C a n a d a 4 . S . Non-scheduled A i r S e r v i c e Agreement
                                                   B
(Annex A) and t h e C l a s s 9-4 A C l i c e n c e s . A "market s h a r i n g " formula h a s been agreed upon
i n Annex C of t h e mentioned Canada-U.S. Agreement. While, t h e o r e t i c a l l y , f o r e i g n a i r
c a r r i e r s may a p p l y f o r f l i g h t s i n e x c e s s of t h e i r r e s p e c t i v e a l l o t m e n t s , no s e r i o u s
d i f f i c u l t i e s have been experienced s o f a r       .
                  Japan   -e
                          W have t o d e a l w i t h a p p l i c a t i o n s f o r more f l i g h t s t h a n t h e a i r p o r t
c a p a c i t y can accammodate     .
                  Philippines      - I n general,             t h e p o l i c y followed i s t o t r e a t c h a r t e r and o t h e r
non-scheduled f l i g h t s on a c a s e t o c a s e b a s i s . There a r e o c c a s i o n s where an a p p l i c a t i o n
i n v o l v e s a s e r i e s of c h a r t e r f l i g h t s and t h e d e c i s i o n whether t o a l l o w o r d i s a p p r o v e such
a s e r i e s of f l i g h t s is l e f t t o t h e d i s c r e t i o n of t h e CAB.
                                                     ICAO C i r c u l a r 136-AT142                                                       43

                 (c)    R e c o n c i l i a t i o n of p o l i c y between S t a t e s   .
                    A u s t r i a - E f f o r t s on t h e m u l t i l a t e r a l ( w i t h i n ECAC) and b i l a t e r a l l e v e l s have
n o t always been successf u l i n r e c o n c i l i n g t h e d i v e r g e n t p o l i c i e s and i n t e r e s t s . The
s l a c k e n i n g o f t h e development i n a i r t r a n s p o r t ( i n p a r t i c u l a r of t h e scheduled s e r v i c e s
of c e r t a i n European c a r r i e r s ) h a s aggravated t h i s problem. I t i s a d i f f i c u l t t a s k i n any
one country t o b a l a n c e t h e o v e r a l l economic c o n s i d e r a t i o n s of i n t e r n a t i o n a l t r a d e and tourism
w i t h consumerism, a i r l i n e economics and r e s o u r c e u t i l i z a t i o n . It i s a l l t h e more d i f f i c u l t
t o a c h i e v e t h i s aim o n a world-wide b a s i s o r even among S t a t e s w i t h i n a r e g i o n w i t h t h e i r
d i v e r g e n t p o l i t i c a l and o t h e r r e l e v a n t c o n s i d e r a t i o n s .

             One p o i n t which h a s become c l e a r from p a s t developments should, however, be
accepted by a l l S t a t e s : i t i s n o t p o s s i b l e t o s t r i c t l y r e g u l a t e p a r t of t h e market, v i z .
t h e scheduled s e r v i c e s , and l e a v e t h e remainder u n c o n t r o l l e d o r under a v e r y l i b e r a l
regime. An o v e r - a l l r e g u l a t o r y framework is needed.

                 Brazil     -      Problems a r e due t o t h e absence of any u n i f i e d approach on t h e p a r t
of t h e i n t e r n a t i o n a l a e r o n a u t i c a l community.

                      Canada-        I n c e r t a i n i n s t a n c e s , non-scheduled o p e r a t i o n s have t o meet d i f f e r e n t
c h a r t e r w o r t h i n e s s requirements i n t h e c o u n t r y of o r i g i n and t h e country of d e s t i n a t i o n ,
r e s p e c t i v e l y . G e n e r a l l y speaking, non-scheduled o p e r a t i o n s ought t o b e governed by t h e
r u l e s of t h e c o u n t r y of o r i g i n , p r e f e r a b l y w i t h i n t h e framework of an i n t e r n a t i o n a l l y
e s t a b l i s h e d system of understanding.                     Foreign o r i g i n c h a r t e r s ' d e s t i n e d t o Canada may, a s
a r u l e , be operated under t h e r e g u l a t i o n s o f t h e c o u n t r y of o r i g i n .

                France      -    The main d i f f i c u l t y , which i s a t t h e s o u r c e o f much of t h e t r o u b l e
and misunderstanding, stems from a l a c k of harmony i n t h e n a t i o n a l r e g u l a t i o n s . Such i s
t h e c a s e on t h e North A t l a n t i c . France, f o r i t s p a r t , does n o t ' a c c e p t c o u n t r y of o r i g i n
r u l e s and r e s e r v e s t h e r i g h t t o apply i t s own c o n d i t i o n s .

              Within t h e European framework, t h e agreement concluded on 5 June 1975 by t h e
                       CC
Member S t a t e s of E A r e g a r d i n g North A t l a n t i c c h a r t e r s r e p r e s e n t s a n important s t e p
towards harmonization.

                   I t r e p r e s e n t s a s t e p towards a broader, m u l t i l a t e r a l agreement which would
r e u n i t e t h e Member S t a t e s of ECAC, Canada and t h e United S t a t e s of America. T h i s m u l t i -
l a t e r a l agreement, aimed a t harmonizing c h a r t e r r e g u l a t i o n s on t h e North A t l a n t i c , was t h e
s u b j e c t of a p r o j e c t by ECAC, which i s p r e s e n t l y under review by t h e competent a u t h o r i t i e s
of Canada and t h e United S t a t e s .

                    Compliance by c e r t a i n o p e r a t o r s with requirements a l s o p r e s e n t s problems s i n c e
t h e s e o p e r a t o r s a r e n o t s u b j e c t t o IATA r u l e s . These o p e r a t o r s t a k e advance of t h e l a c k
of harmony i n t h e n a t i o n a l r e g u l a t i o n s t o engage i n i l l i c i t p r a c t i c e s . To remedy t h i s
s i t u a t i o n t h e French A d m i n i s t r a t i o n i s working towards s t r e n g t h e n i n g i t s l e g a l b a s e s and
i t s means of c o n t r o l .
44                                                   ICAO C i r c u l a r 136-AT142

                   Ivory Coast - The Ivory Coast h a s experienced problems r e s u l t i n g from con-
f l i c t i n g c o n c e p t i o n s r e g a r d i n g t h e r o l e of non-scheduled s e r v i c e s . While t h e Ivory Coast
wishes t o r e g u l a t e such f l i g h t s , many S t a t e s appear t o g r a n t them t o t a l l i b e r t y .

                      J a p a n - Some S t a t e s which a u t h o r i z e n o n - a f f i n i t y t y p e c h a r t e r s propose t h a t
 t h e r u l e s of t h e c o u n t r y of o r i g i n should apply and w i l l n o t a u t h o r i z e c h a r t e r s from o u r
 t e r r i t o r i e s u n l e s s t h e i r proposal is accepted.

                     N e t h e r l a n d s , Kingdom of t h e - I n g e n e r a l n o t many problems have been encountered
w i t h r e s p e c t t o t h e r e c o n c i l i a t i o n of o u r p o l i c y w i t h t h o s e of o t h e r S t a t e s . I t would b e
c o n s i d e r e d u s e f u l i f S t a t e s , s p e c i a l l y neighbouring S t a t e s and t h e S t a t e s of o r i g i n and
d e s t i n a t i o n , would b r i n g t h e i r r e g u l a t i o n s i n t o l i n e s o t h a t t h e same b a s i c p r i n c i p l e s and
p r a c t i c e s a p p l y t o t h e d i f f e r e n t c a t e g o r i e s of non-scheduled f l i g h t s .

                    Philippines     -    I n g e n e r a l t h e p r i n c i p l e of r e c i p r o c i t y i s followed - c h a r t e r s
by f o r e i g n a i r c a r r i e r s may be allowed provided t h a t a s i m i l a r g r a n t may b e g i v e n t o a
P h i l i p p i n e c a r r i e r . Some S t a t e s , v i z . t h e United S t a t e s , have adopted expanded c o n c e p t s
of c h a r t e r o p e r a t i o n s which c o n c e p t s may n o t be allowed under o u r p r e s e n t r u l e s . The
e x t e n t t o which t h e s e concepts may b e adopted i s a m a t t e r under c o n s i d e r a t i o n by t h e C B               A
a t t h e p r e s e n t time.

                     P o r t u g a l - D i f f i c u l t i e s a r e encountered i n c o n n e c t i o n w i t h i n t e r n a t i o n a l
harmonization of r u l e s and p r a c t i c e s . I n t h e f i e l d of i n t e r n a t i o n a l a i r t r a n s p o r t t h i s
i s n a t u r a l l y a b a s i c i s s u e , a s a g r e a t number of problems, i n c l u d i n g enforcement, depend
on such harmonization. It must b e s a i d , however, t h a t no m a t t e r how g r e a t such problems
may be, e x p e r i e n c e has shown t h a t s a t i s f a c t o r y s o l u t i o n s c a n b e found e s p e c i a l l y on a
m u l t i l a t e r a l b a s i s and i n r e l a t i o n t o w e l l c h a r a c t e r i z e d r e g i o n s and markets. ECAC
recommendations c o v e r i n g almost e v e r y s i n g l e a s p e c t of non-scheduled o p e r a t i o n s a r e a n
example of p o s s i b l e s o l u t i o n s .

                    Spain - To avoid o r remedy problems which may r e s u l t from                              t h e a p p l i c a t i o n of
i n d i v i d u a l p o l i c i e s by t h e v a r i o u s European Governments, t h i s c o u n t r y           is c o o p e r a t i n g ,
under t h e a u s p i c e s of t h e European C i v i l A v i a t i o n Commission, towards                      finding solutions
which a s f a r as p o s s i b l e c o o r d i n a t e and s a t i s f y t h e v a r i o u s i n t e r e s t s   i n t h e f i e l d of
international a i r transport.

                     United Kingdom      -          Problems a r i s e i n r e l a t i o n t o o t h e r S t a t e s because of
d i f f e r i n g c h a r t e r w o r t h i n e s s c r i t e r i a . I n Europe, t h e a p p l i c a t i o n of t h e P a r i s Agreement
on t h e Commercial R i g h t s of Non-scheduled A i r S e r v i c e s i n Europe (30 A p r i l 1956) h a s
l i b e r a l i z e d a l i m i t e d range of non-scheduled o p e r a t i o n s and reduced t h e f o r m a l i t i e s of
a p p l i c a t i o n i n such c a s e s . An u n d e r s t a n d i n g w i t h t h e United S t a t e s was f i r s t reached i n
1972 on North A t l a n t i c passenger c h a r t e r s ; a f u r t h e r u n d e r s t a n d i n g c o v e r i n g a wider f i e l d
was reached on 28 A p r i l 1976. ECAC i s d i s c u s s i n g w i t h t h e U.S. and Canadian a u t h o r i t i e s
t h e p o s s i b i l i t y of a m u l t i l a t e r a l agreement which would c w e r a l l passenger c h a r t e r s
between S t a t e s members of ECAC and t h e United S t a t e s and Canada.
                                                   ICAO C i r c u l a r 136-AT142                                                      45

                 (d)    P o s i t i o n of scheduled c a r r i e r s .

                   B r a z i l - Problems r e s u l t from t h e absence of any u n i f i e d approach on t h e p a r t
of i n t e r n a t i o n a l a i r l i n e s .

                   Canada - The p r e s e n t r e g u l a t i o n s governing t h e o p e r a t i o n of non-scheduled a i r
s e r v i c e s have been e s t a b l i s h e d on c o n s u l t a t i o n with Canadian scheduled a i r l i n e s . Moreover,
Canadian scheduled a i r l i n e s a r e s u b j e c t t o no l i m i t a t i o n s imposed by Canadian a u t h o r i t i e s
i n r e s p e c t of t h e e x t e n t t o which they p a r t i c i p a t e i n i n t e r n a t i o n a l non-scheduled opera-
t i o n s . S t i l l , a i r l i n e s tend t o f e e l t h a t t h e quasi-scheduled s e r v i c e s o f f e r e d by a i r
t r a n s p o r t o p e r a t o r s over some of t h e i r designated r o u t e s c r e a t e a competition d i f f i c u l t t o
f a c e i n y e a r s when t r a f f i c growth is negative, stagnant o r slow.

                    Finland   -         Permission h a s g e n e r a l l y not been granted t o non-scheduled c a r r i e r s t o
o p e r a t e on r o u t e s w i t h f r e q u e n t scheduled s e r v i c e s by Finnish a i r l i n e s . I n c e r t a i n
s i t u a t i o n s d i f f i c u l t i e s have been encountered i n maintaining t h a t p o l i c y .

                 Poland - Permission granted t o f o r e i g n c a r r i e r s i n t h e p a s t t o o p e r a t e c h a r t e r
f l i g h t s has sometimes a f f e c t e d scheduled s e r v i c e s operated by P o l i s h o r o t h e r a i r c a r r i e r s .
More a t t e n t i o n w i l l be paid i n t h e f u t u r e t o t h e l e g i t i m a t e i n t e r e s t s of scheduled s e r v i c e s ,
a s long a s they a r e a b l e t o handle t h e same t r a f f i c a t reasonable f a r e s , and t o ensuing
t h a t t h e P o l i s h c a r r i e r o b t a i n s a proper s h a r e of t h a t c h a r t e r t r a f f i c . R e c o n c i l i a t i o n
of t h a t p o l i c y with t h o s e of o t h e r S t a t e s may be required b u t no major problems have, a s
y e t , been encountered i n t h a t r e s p e c t .

                    Portugal - The complexity of t h e i n t e r e s t s involved i n t h e c h a r t e r i n d u s t r y may
l e a d t o c e r t a i n problems which governments have t o f a c e both i n d e f i n i n g and applying t h e i r
p o l i c i e s . I t is no easy t a s k indeed t o develop c h a r t e r c a t e g o r i e s aimed a t meeting t h e
demand f o r cheap t r a v e l without undermining t h e economic v i a b i l i t y of scheduled a i r
s e r v i c e s ; t o c r e a t e d e v i c e s t o p r o t e c t t h e t r a v e l l i n g public i n a market which i s i n some
r e s p e c t s r a t h e r l o o s e l y c o n t r o l l e d ; t o cover a l l a s p e c t s of t h e t r a v e l business i n order
t o be a b l e t o a c t e f f i c i e n t l y i n r e l a t i o n t o t h e a i r t r a n s p o r t p a r t of i t .

                   Spain  -      I n view of t h e l i k e l i h o o d of c o n f l i c t i n g s i t u a t i o n s because of t h e
overlap of scheduled and non-scheduled a i r l i n e s , t h i s Administration takes i n t o account i n
a l l i t s d e c i s i o n s t h e need t o allow f o r t h e s u i t a b l e development of non-scheduled a i r
t r a n s p o r t while a t t h e same time safeguarding t h e o p e r a t i o n of scheduled s e r v i c e s . Accor-
d i n g l y , t h e i n t r o d u c t i o n of promotional r a t e s i s encouraged f o r scheduled f l i g h t s , and
c e r t a i n provisos a r e imposed on t h e c a t e g o r i e s of approved c h a r t e r f l i g h t s t o prevent undue
d i v e r s i o n of scheduled t r a f f i c  .
              Switzerland            -
                                    Complaint of n a t i o n a l a i r c a r r i e r regarding t h e c o n s i d e r a b l e
growth r a t e of I T C ' s of s h o r t d u r a t i o n .

              United Kingdom             -
                                        Problems a r i s e i n judging t h e balance t o be s t r u c k between
t h e commercial i n t e r e s t s of t h e scheduled s e r v i c e o p e r a t o r s and t h e c h a r t e r o p e r a t o r s on
t h e same r o u t e s .
46                                                   ICAO C i r c u l a r 136-AT142

                               QUESTION 8:          PRACTICE OR FAVOURING OF PRICE CONTROL

                  Ivory Coast - Rates a r e c o n t r o l l e d by agreement between t h e n a t i o n a l and f o r e i g n
a i r l i n e s . The Ivory Coast wishes t o a v o i d pursuing a l i b e r a l p o l i c y i n t h i s a r e a i n view
of i t s e f f e c t on t h e i n t e r e s t s of i t s n a t i o n a l c a r r i e r .

                Japan - A t p r e s e n t , we check and approve c h a r t e r r a t e s , t a k i n g i n t o account t h e
e f f e c t on scheduled s e r v i c e s .

             Papua New Guinea - Because of t h e h i g h c o s t s of o p e r a t i o n s we f a v o u r some form
of "concessional" p r i c e s , w h i l s t a t t h e same time e n s u r i n g t h a t t h e o p e r a t o r a c h i e v e s a n
economic r e t u r n from t h e o p e r a t i o n .

                     P o r t u g a l - W b e l i e v e t h a t i n t e r v e n t i o n i n t h e f i e l d of p r i c e s i s one of t h e
                                          e
most important g o v e r m e n t t o o l s t o e n s u r e a sound and balanced development of a i r
t r a n s p o r t markets. For t h a t purpose governments should s e e k t h a t c h a r t e r p r i c e s a r e
e s t a b l i s h e d , d u e r e g a r d being paid t o c e r t a i n c r i t e r i a ( c o s t of o p e r a t i o n ; impact on t h e
market a s a whole; r e l a t i o n s h i p between a l l p r i c e s a v a i l a b l e i n a r o u t e or market, i n c l u d -
i n g scheduled f a r e s and r a t e s , e t c . ) and a r e submitted t o them f o r c o n s i d e r a t i o n o r
approval. I n c e r t a i n markets, where c o m p e t i t i o n s o j u s t i f i e s , governments should a l s o
f i n d ways of f o l l o w i n g j o i n t l y t h e development of such p r i c e s and p r e s s i n g a l l c a r r i e r s
o p e r a t i n g i n t h o s e markets t o a g r e e on minimum p r i c e s , on t h e abovementioned b a s i s . W                        e
t h e r e f o r e f a v o u r t h e p r i n c i p l e of p r i c e c o n t r o l o r s u r v e i l l a n c e and have a p p l i e d i t
through d i f f e r e n t f o m s (following p r i c e developments, u s i n g minimum l e v e l s , below which
p r i c e s a r e f u r t h e r a n a l y s e d o r a u t o m a t i c a l l y p r o h i b i t e d ) . Concrete examples of t h e s e
procedures c a n b e found i n r e l e v a n t E A recommendations.
                                                               CC                                     I n t h i s c o n t e x t i t is perhaps
u s e f u l t o mention t h a t , a l t h o u g h wholesale c h a r t e r p r i c e s a r e probably t h e key element
and t h e i r c o n t r o l i s consequently d e s i r a b l e , published r e t a i l p r i c e s a r e g e n e r a l l y e a s i e r
t o enforce.

                      Venezuela  -     W e a g r e e t h a t p r i c e c o n t r o l of non-scheduled s e r v i c e s should b e
e s t a b l i s h e d i n o r d e r t o a v o i d r u i n o u s c o m p e t i t i o n w i t h scheduled s e r v i c e s and t h a t such
c o n t r o l should b e c a r r i e d o u t by S t a t e s as w e l l as by s p e c i a l i z e d i n t e r n a t i o n a l a v i a t i o n
o r g a n i z a t i o n s such a s ICAO and IATA.
                                                    ICAO C i r c u l a r 136-AT142                                                       47


                                      QUESTION 1 0 :   MATTERS ADVERSELY AFFECTED BY DEFICIENCIES
                                                       OR INEFFICIENCIES I N THE PRESENT SYSTEM

                     F i j i - Tourism development. The blocking-of f of s e a t s on long-haul scheduled
                                                                                                                                .
s e r v i c e s h a s r e s u l t e d i n p o t e n t i a l t o u r i s t s seeking h o l i d a y s elsewhere t h a n i n F i j i
                               I n s u f f i c i e n t c a p a c i t y . A i r l i n e s are understandably a t t e m p t i n g t o f l y
w i t h t h e h i g h e s t p o s s i b l e passenger l o a d s . T h i s i s u n d e r s t a n d a b l e from t h e p o i n t of view
of t h e a i r l i n e ' s economy b u t F i j i i s s u f f e r i n g from such a p o l i c y .

                      France - The p r e s e n t s i t u a t i o n could b e g r e a t l y improved: a ) by a n agreement
between scheduled and non-scheduled c a r r i e r s ; b ) by t h e harmonization of n a t i o n a l c h a r t e r
r e g u l a t i o n s w i t h i n t h e framework of g l o b a l o r r e g i o n a l agreements; and c ) by t h e observance
on t h e p a r t of S t a t e s of t h e agreed i n t e r n a t i o n a l r e g u l a t i o n s i n o r d e r t o p r e v e n t t h e r e -
r o u t i n g of t r a f f i c and i l l i c i t p r a c t i c e s .

                      Ireland     -   Excessive o r p r e d a t o r y c h a r t e r competition, a p a r t from having a n
impact on t h e scheduled a i r l i n e s , i n d i r e c t f i n a n c i a l terms, a f f e c t s t h e i r a b i l i t y t o
m a i n t a i n t h e type of a l l - y e a r round on demand s e r v i c e n e c e s s a r y f o r t h e t r a d e , i n d u s t r y and
tourism development between c o u n t r i e s being s e r v i c e d . The p r i n c i p l e s on which c e r t a i n
c a t e g o r i e s of c h a r t e r f l i g h t s a r e based r e c o g n i z e t h a t they may a f f e c t t h e a b i l i t y of
a i r l i n e s t o c o n t i n u e t o p r o v i d e adequate scheduled s e r v i c e s and t a l k of c h a r t e r c a p a c i t y
r e g u l a t i o n , proper r e l a t i o n between scheduled and c h a r t e r p r i c e s , e t c .

                 Japan    -    W f i n d e x c e s s c a p a c i t y on c e r t a i n r o u t e s , which c a u s e s unlawful s a l e s
                                  e
activities.          I t i s n e c e s s a r y t o i n t r o d u c e a c a p a c i t y c o n t r o l system on t h e s e r o u t e s t o
e n s u r e a n o r d e r l y a i r t r a n s p o r t system.
                       m a g a s c a r - I n s o f a r as scheduled f l i g h t s a r e concerned, we n o t e a c e r t a i n
i n s u f f i c i e n c y i n t h e exchange of t r a f f i c r i g h t s w i t h many S t a t e s which g e n e r a t e a l a r g e
volume of t o u r i s t t r a f f i c . I n t h i s r e s p e c t , non-scheduled f l i g h t s f i l l t h e gaps by b r i n g i n g
u s t o u r i s t s from c o u n t r i e s a l l o v e r t h e world ( v i a c h a r t e r f l i g h t s , e t c . ) and t h i s is done
simply by d e l i v e r i n g a f l i g h t a u t h o r i z a t i o n .

             Morocco              -
                               There is a need f o r b e t t e r c o o r d i n a t i o n between i n t e r n a t i o n a l
scheduled and non-scheduled o p e r a t i o n s . There is a need t o r e v i s e the. d e f i n i t i o n of non-
scheduled a i r s e r v i c e s .

                    Niger     -     Supply should be b e t t e r adapted t o demand s o a s t o e n s u r e b e t t e r u s e
of a v a i l a b l e c a p a c i t y which would l e a d t o a r e d u c t i o n o r a t l e a s t a s t a b i l i z a t i o n of t r a n s -
p o r t r a t e s . The r e s u l t would b e t o a t t r a c t more customers t o a i r t r a n s p o r t and t o p l a c e
t h i s mode of t r a n s p o r t a t t h e s e r v i c e of t r a d e and tourism and t h u s make i t a t o o l f o r t h e
development of t h e economy and a way of b r i n g i n g peoples c l o s e r t o g e t h e r .

                      Nigeria     -  (a) I n t e r n a t i o n a l t r a d e is not adequate t o ensure t h e regular
t r a n s p o r t f l i g h t s of p a s s e n g e r s and goods between S t a t e s f o r t r a d i n g purposes. Traffic
r i g h t s should be l i b e r a l i z e d . M u l t i n a t i o n a l a i r l i n e s should b e encouraged.
48                                                     ICAO C i r c u l a r 136-AT142


                          (b) Tourism development a s i n ( a ) above:                                  Fares should be reduced
and promotional f a r e s introduced.

                                       ( c ) Excess c a p a c i t y on c e r t a i n r o u t e s l e a d s t o u n d e r c u t t i n g of f a r e s
and o t h e r m a l p r a c t i c e s . More mutual co-operation between n a t i o n s and a i r l i n e s i n t h e
d e t e r m i n a t i o n of c a p a c i t y .

                   P h i l i p p i n e s - Tourism development.              There i s only one f l a g c a r r i e r o f f e r i n g
scheduled a i r s e r v i c e s a t t h e p r e s e n t time. The P h i l i p p i n e s ranks very low a s compared
w i t h o t h e r d e s t i n a t i o n s i n Southeast A s i a i n volume of t r a f f i c . The government launched a
massive tourism development programme about t h r e e y e a r s ago. A 1 though very s u b s t a n t i a l
growth h a s been achieved, i t i s f e l t t h a t a more a g g r e s s i v e approach t o c h a r t e r o p e r a t i o n s
with t h e a u t h o r i z a t i o n of two o t h e r c a r r i e r s w i l l f u r t h e r improve t h e t r a f f i c p i c t u r e .

                  Portugal       -  I n s e v e r a l r e g i o n s c o m p e t i t i o n between c a r r i e r s o p e r a t i n g scheduled
s e r v i c e s and c a r r i e r s providing non-scheduled a i r t r a n s p o r t on t h e same r o u t e s and i n a
s i n g l e market, i n a way which i s no l o n g e r o c c a s i o n a l , i s i n our view a matter r e q u i r i n g
                  a c t ion.
                  The expansion of demand f o r cheap p l e a s u r e t r a v e l can be l a r g e l y considered
a s a p o s i t i v e achievement both from a s o c i a l and an economic p o i n t of view and h a s played
i t s r o l e on t h e development of a i r t r a n s p o r t . W recognize t h a t c h a r t e r s have c o n t r i b u t e d
                                                                 e
t o t h i s development and a r e now an important element of t h e i n d u s t r y t o cope w i t h t h e
consequent growth i n demand.
                 T h i s does n o t mean however t h a t c h a r t e r s should b e excluded from t h e a p p l i c a t i o n
of r u l e s and procedures which i t i s t h e d u t y of c i v i l a v i a t i o n a d m i n i s t r a t i o n s t o a d o p t
i n o r d e r t o e n s u r e t h e o r d e r l y and sound economic development of t h e i n d u s t r y .

                   Scheduled a i r l i n e t r a f f i c r i g h t s have always been r e g u l a t e d by w e l l d e f i n e d
c r i t e r i a contained i n b i l a t e r a l agreements through which t h e i n t e r e s t s of f o r e i g n and
n a t i o n a l c a r r i e r s a r e p r o p e r l y balanced i n a p r a c t i c a l manner.

                    It i s unacceptable t h a t s p e c i a l i s e d c h a r t e r c a r r i e r s should be allowed t o enjoy
complete freedom i n e x e r c i s i n g t r a f f i c r i g h t s on t h e same r o u t e s t h a t a r e o p e r a t e d by
d e s i g n a t e d a i r l i n e s . T h i s i s a l l t h e more o b j e c t i o n a b l e a s c h a r t e r o p e r a t o r s a r e n o t
bound t o t h e o b l i g a t i o n s imposed upon scheduled c a r r i e r s , and a s i t u a t i o n could be c r e a t e d
where d e s i g n a t e d a i r l i n e s would b e tempted t o g e t r i d of such o b l i g a t i o n s o r even t o
abandon t h e o p e r a t i o n of t h e i r s e r v i c e s t o c e r t a i n r e g i o n s t o t h e d e t r i m e n t of t h e p u b l i c
interest.
            On t h e o t h e r hand, t h e l a c k of a n i n t e r n a t i o n a l r e g u l a t o r y framework f o r non-
 scheduled o p e r a t i o n s h a s c o n t r i b u t e d t o c a p a c i t y being o f f e r e d i n e x c e s s on c e r t a i n r o u t e s .
                    The o t h e r m a t t e r s mentioned i n t h e q u e s t i o n n a i r e may a l s o b e a d v e r s e l y a f f e c t e d ,
b u t i n a c t u a l terms do n o t p r e s e n t l y r a i s e g r e a t d i f f i c u l t i e s t o u s . W a r e convinced,
                                                                                                              e
however, t h a t tourism development, f o r i n s t a n c e , could b u t b e n e f i t from a r e a s o n a b l e
r e g u l a t i o n of t h e o v e r a l l t r a v e l market   .
                                                       ICAO C i r c u l a r 136-AT142                                                            49


                     Having a l l t h i s i n mind, Portugal favours a harmonized development of                                     the
" r e g u l a t i o n s , c o n d i t i o n s o r l i m i t a t i o n s " r e f e r r e d t o i n A r t i c l e 5 of t h e Chicago   Convention.
Such r e g u l a t i o n s should not n e c e s s a r i l y be equal f o r a l l geographical a r e a s b u t ,                      within
those regions and markets we a r e b e t t e r acquainted with,they should be developed                                              on a
mu1 t i l a t e r a l b a s i s .
                    I n any c a s e , t h e p r i n c i p l e s under which non-scheduled f l i g h t s could be
operated should be so e s t a b l i s h e d a s t o provide ample and reasonable o p p o r t u n i t i e s t o t h e
t r a v e l l i n g public, through a sound development of t h e i n d u s t r y and a proper balance of t h e
i n t e r e s t s involved.

                   Switzerland       -       Capacity c o n t r o l l s u r v e i l l a n c e on North A t l a n t i c and i n t r o d u c t i o n
of more e f f i c i e n t enforcement procedures f o r c e r t a i n c a t e g o r i e s of non-scheduled f l i g h t s .
Government i n t e r v e n t i o n a g a i n s t t r a f f i c r i g h t r e s t r i c t i o n s and t h e payment of r o y a l t i e s ,
etc.
                   United Kingdom         -        Excess c a p a c i t y and excessive competition on c e r t a i n r o u t e s
has l e d t o low load f a c t o r s and high o p e r a t i n g c o s t s , which pushes up f a r e s and l e a d s t o
f i n a n c i a l d i f f i c u l t i e s f o r t h e a i r l i n e s concerned.




                                                                    -   END   -
                      ICAO P U B L I C A T I O N S
                IN T H E AIR T R A N S P O R T F I E L D                       .

  The following summary gives the status and also describes in general terms the contents
of the various series of publications in the air transport field issued by the International
Civil Aviation Organization:

  International Standards and Recommended Ptactices on Facilitation (designated as
Annex 9 to the Convention) which are adopted by the Council in accordance with
Articles 37, 54 and 90' of the Convention on International Civil Aviation. The uniform
observance of the specifications cont&ed in the International Standards on Facilitation
is recognized as practicable and as necessary to facilitate and improve some aspect of
international air navigation, while the observance of any specification contained in the
Recommended Practices is recognized as generally practicable and as highly desirable to
facilitate and improve - some aspect of international air navigation. Any differences
between the national regulations and practices of a State and those established by an
International Standard must be notified to the Council in accordance with Article 38 of
the Convention. The Council has also invited Contracting States to notify differences
from the provisions of the Recommended Practices;

  Council Statements on policy relating to air transport questions, such as the economics
of airports and en-route air navigation facilities, taxation and aims in the field of
facilitation;

  Digests o f Statistics which are issued on a regular basis, presenting the statistical
information received from Contracting States on their civil aviation activities;

  Circulars providing specialized information of interest to Contracting States. They
include regional studies on the development of international air passenger, freight and
mail traffic and specialized studies of a world-wide nature;

  Manuals providing information or guidance to Contracting States on such questions as
airports and air navigation facility tariffs, air traffic forecasting techniques and air
transport statistics.

  Also of interest to Contracting States are reports of meetings in the air transport field,
such as sessions of the Facilitation Division and the Statistics Division and conferences on
the economics of airports and air navigation facilities. Supplements to these reports are
issued, indicating the action taken by the Council on the meeting recommendations,
                                                       *
many of which are addressed to Contracting States.
PRICE: U.$.$2.25        .

(or equivalht in other currencies)
@ ICAO 1977 - 9/77. E/P1/2000

								
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