Open skies

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For the 2008 EU-US aviation pact, see EU-US Open Skies Agreement.

For the 1992 military treaty, see Treaty on Open Skies.

For the British Airways subsidiary OpenSkies, see OpenSkies.

For the reconnaissance aircraft utilized by the U.S. Air Force, see OC-135B Open Skies.

Open skies refers to a bilateral (and sometimes multilateral) Air Transport Agreement which:

liberalizes the rules for international aviation markets and minimizes government intervention — the provisions apply to passenger, all-cargo and combination air transportation and encompass both scheduled and charter services; or
adjusts the regime under which military and other state-based flights may be permitted.

1 Background
2 First step towards a civil transport regime
3 Civil transport open skies
4 Key open skies provisions
5 Military regulation
6 References
7 See also
8 Related Links

[edit] Background

To achieve sovereignty, a state must be recognised as having both de facto and de jure control over all the land, sea and air space within defined territorial boundaries. Once a state comes into being, the concept of trespass applies to any part of the state entered without permission. Hence, whether it is an individual wishing to cross a land border, a ship aiming to enter or pass through territorial waters, or an aircraft seeking to overfly, prior consent is required. Those who do not seek permission will, at the very least, be liable to arrest and prosecution by the offended state. At worst, entry may be considered an act of war. For example, in 1983, Korean Air Flight 007 strayed into Soviet air space and was shot down. Fortunately, such misunderstandings are rare.

Since World War II, most states have invested national pride in the creation and defence of airlines (sometimes called flag carriers or legacy airlines). Air transportation differs from many other forms of commerce, not only because it has a major international component, but also because many of these airlines were wholly or partly government owned. Thus, as international competition grew, various degrees of protectionism were imposed.

[edit] First step towards a civil transport regime

The Convention on International Civil Aviation (1944), signed at Chicago, was intended to prepare a framework within which civil air transport could develop (not military or other state activities whether in a piloted or drone craft). It introduced nine freedoms of the air for those states that have adopted the Convention and enter into bilateral treaties that may grant any of the following rights or privileges for scheduled international air services:

To fly across the territory of either state without landing.
To land in either state for non-traffic purposes, e.g. refueling without boarding or disembarking passengers.
To land in the territory of the first state and disembark passengers coming from the home state of the airline.
To land in the territory of the first state and board passengers travelling to the home state of the airline.
To land in the territory of the first state and board passengers travelling on to a third state where the passengers disembark, e.g. a scheduled flight from the U.S. to France could pick up traffic in England and take all to France (sometimes termed beyond rights).
To transport passengers moving between two other states via the home state of the airline, e.g. a scheduled flight on an American airline from the United Kingdom lands in the U.S. and then goes on to Canada on the same aircraft.
To transport passengers between the territory of the granting State and any third State state without going through the home state of the airline, e.g. a scheduled flight on an American airline from England to Canada that does not connect to or extend any service to/from the U.S..
To transport cabotage traffic between two points in the territory of the granting State on a service which originates or terminates in the home state of the foreign carrier or (in connection with the so-called Seventh Freedom) outside the territory of the granting State (also known as consecutive cabotage), e.g. an American airline flies from the U.S., lands passengers in London and then boards passengers to fly to Manchester.
To transport cabotage traffic of the granting State on a service performed entirely within the territory of the granting State (also known as stand alone cabotage), e.g. an English airline operates a service between Perth and Sydney in Australia).

Because only the first five "freedoms" have been officially recognised by international treaties, the ICAO considers the remaining "freedoms" "so-called".

[edit] Civil transport open skies

The last twenty-five years have seen significant changes in airline regulation. The U.S. began pursuing Open Skies agreements in 1979 and, by 1982, it had signed twenty-three bilateral air service agreements worldwide, mainly with smaller nations. That was followed in the 1990s by agreements with some individual European states.

A huge step was taken in 1992 when The Netherlands signed the first open skies agreement with the United States, in spite of objections uttered by the European Union authorities. This gave both countries unrestricted landing rights on each others' soil. Normally landing rights are granted for a fixed number of flights per week to a fixed destination. Each adjustment takes a lot of negotiating, often between governments rather than between the companies involved. The United States was so pleased with the independent position that the Dutch took versus the E.U. that it granted anti-trust immunity to the alliance between Northwest Airlines and KLM Royal Dutch Airlines which started in 1989 (when Northwest and KLM agreed to code sharing on a large scale) and which actually is the first large alliance still functioning. Other alliances would struggle for years to overcome transnational barriers or still do so.

In 2001 the United States signed the Multilateral Agreement on the Liberalization of International Air Transportation (MALIAT) with Brunei, Chile, New Zealand and Singapore. The U.S. has enjoyed a powerful negotiating position but the European Commission, as a supranational body, negotiated with the United States government on a community Air Service Agreement. These negotiations led to the text of an agreement being initialled on 2 March 2007. Contending issues are

cabotage — opening up the hub and spoke networks on both sides of the Atlantic would be contentious;
the U.S. rules on foreign ownership. These are partly designed to protect their own carriers but also to satisfy the U.S. military which maintains the Civil Reserve Air Fleet by drawing on commercial fleets for airlift during national emergencies. The airlines, as a quid pro quo, benefit through a priority over the carriage of military and government personnel.
(tackling of) the tax free position of EU-US aviation.
the provisions of the Fly America Act.
there might also be problems in harmonising the framework of antitrust policy (e.g. to protect against predatory behavior).

The EU-US Open Skies Agreement was amongst one of the most significant open skies agreements concluded in recent years, covering civil aviation traffic between two of the world's three biggest markets. The Asian market, considered one of the fastest growing, remains relatively regulated at present^[1], although the phased introduction of the ASEAN open skies agreement covering ten countries in Southeast Asia from 2008 has prompted major Asian markets (including Japan^[2], China and India^[3]) to consider similar initiatives.

[edit] Key open skies provisions

Most of the existing civil agreements include:

Free Market Competition:

No restrictions on international route rights; number of designated airlines; capacity; frequencies; and types of aircraft.
Pricing Determined by Market Forces:

A fare can be disallowed only if both governments concur -- "double-disapproval pricing" -- and only for certain, specified reasons intended to ensure competition.
Fair and Equal Opportunity to Compete:
For example:
- All carriers — designated and non-designated — of both countries may establish sales offices in the other country, and convert earnings and remit them in hard currency promptly and without restrictions. Designated carriers are free to provide their own ground-handling services — "self handling" — or choose among competing providers. Airlines and cargo consolidators may arrange ground transport of air cargo and are guaranteed access to customs services.
- User charges are non-discriminatory and based on costs; computer reservation system displays are transparent and non-discriminatory.
Cooperative Marketing Arrangements

Designated airlines may enter into code-sharing or leasing arrangements with airlines of either country, or with those of third countries, subject to usual regulations. An optional provision authorizes code-sharing between airlines and surface transportation companies.
Provisions for Dispute Settlement and Consultation

Model text includes procedures for resolving differences that arise under the agreement.
Liberal Charter Arrangements

Carriers may choose to operate under the charter regulations of either country.
Safety and Security

Each government agrees to observe high standards of aviation safety and security, and to render assistance to the other in certain circumstances.
Optional 7th Freedom All-Cargo Rights

Provide authority for an airline of one country to operate all-cargo services between the other country and a third country, via flights that are not linked to its homeland.

[edit] Military regulation

The Treaty on Open Skies, signed in Helsinki (1992), is a multinational sacrifice of air sovereignty to enhance military transparency and build confidence by permitting observation flights over almost the full territory of each signatory state:

except for areas of hazardous airspace and a ten kilometer zone along the state borders of non-state parties; and
subject to a maximum flight distance.
Each aircraft is fitted with a sensor suite including optical panoramic and framing cameras, video cameras with real-time display, thermal infrared imaging sensors, and imaging radar (SAR). To ensure that each suite conforms to the Treaty specifications, there is an initial seven-day certification of each Open Skies aircraft by a short demonstration flight, and by analysis of the imagery recorded during that flight.
Each state to be overflown has the choice of either certifying the aircraft of the observing state or of providing an aircraft with full sensor equipment of its own for the observing state (the so-called taxi option);
the flights are undertaken by joint teams; and
the image data can be shared among all signatories to support the monitoring of compliance with existing or future arms control treaties.

To illustrate the scope of the Treaty, Germany and Italy have to accept 12 overflights per year, while Russia (including Belarus) and the U.S. must permit 42 overflights each.

There is also a bilateral Open Skies Agreement between Hungary and Romania. In a tacit but persistent way, the United States has been promoting the idea of bilateral or trilateral Open Skies arrangements between states in South America. Similarly, there are many bilateral treaties and Memoranda of Understanding that permit military aircraft mutually to train in or transit through their airspace. For example, Singapore has such arrangements with the U.S., France and Australia.