OECD November 2010 Antonia Carzaniga and Pierre Latrille, WTO Secretariat

Transcription

1 Starting point FOG IN THE SKIES ASSESSING THE OPENNESS OF AVIATION POLICIES The Ptolemean vision of the academic/intergovernmental literature: The world is flat, it has two extremities, EU and US, one center, the Atlantic. OEC November 21 Antonia Carzaniga and Pierre Latrille, WTO Secretariat 2 Attempt to provide a consistent and universal assessment of the openness and volume of air transport exchanges Quantitative Air Services Agreements Review - QUASAR uilding on: 1. Regulatory information about bilateral Air Services Agreements 2. International passenger traffic data Regulatory information rawn from the International Civil Aviation Organisation s World Air Services Agreements atabase (WASA) WASA contains codified d summaries of the provisions of bilateral Air Services Agreements filed with or recorded by ICAO (around 2 agreements) Covers 184 ICAO Contracting States 3 4 1

2 Traffic data Scheduled air passenger traffic data by city- pair (provided by the International Air Transport Association - IATA) for 25 The data represent actual origin and destination of passengers, as determined by their ticket IATA data are not a perfect match for the underlying regulatory regimes, but are by far the most complete traffic data set QUASAR methodology 1. Assessment of the main market access features of bilateral Air Services Agreements (ASAs) and their level of openness to construct a synthetic index, the Air Liberalisation Index (ALI) 2. Weighting of the ALIs by traffic 3. Reality check through a comparison with commercial data 4. Categorisation of ASAs by type Air Liberalisation Index (1/3) Constructed in consultation with a group of aviation professionals, academics, air transport negotiators Selection of the WASA-coded features deemed most relevant for market access, i.e.: Grant of rights 5 th freedom traffic rights 7 th freedom traffic rights Cabotage (8 th +9 th freedoms) traffic rights Withholding Capacity Tariffs Exchange of statistics Cooperative arrangements Attribution of points to the various features (and their variants) 7 Air Liberalisation Index (2/3) The ALI of a given agreement corresponds to the sum of the points obtained for its market access features The value of the ALI ranges between zero, for very restrictive ti agreements, and, for very liberal l ones The valuing system was chosen, inter alia,, to allow for customisation by users and inclusion of additional or new features (e.g. routes, novel withholding clauses, cargo, etc.) 8 2

3 Air Liberalisation Index (3/3) Three additional, non-standard point systems have also been devised, to give more importance to specific features, i.e.: Granting of 5 th freedom traffic rights (limited scope for point-to to-point services, or remoteness from densely populated areas) Liberal withholding provisions (ownership structure of the domestic airline) Multiple designation (more than one scheduled airline operating internationally) 2. Traffic weighting of the ALIs ALIs have been combined with the relevant traffic data to compute a Weighted Air Liberalisation Index (WALI) For a given Contracting ti State, t the WALI provides an aggregate measure of the openness of its aviation policy Reality check Comparison of the ASA network with the commercial network, i.e. the one effectively operated by airlines 1, has led to the identification of: Unused rights i.e. ASAs concluded between two parties that have no corresponding direct air transportation service Orphan services i.e. existing direct services for which no corresponding bilateral ASA is recorded in WASA (due to absence of a bilateral, existence of a plurilateral, non-registration) 4. Types of bilateral ASAs (1/2) QUASAR has revealed recurrent combinations of market access features.. and permitted the identification of seven standard d types Over 7% of QUASAR bilaterals fall under one of these seven types Infinite diversity of ASAs? 1 As per the summer 26 IATA mileage data set

4 Types of bilateral ASAs (2/2) Type A Freedom Capacity WithWithholding Tariffs esignation 2 appr. Single QUASAR - A few global findings % of ASAs % traffic , 4 Pre Pre--det. 3, 4 Pre Pre--det. 2 appr. Multiple 9 6 C 3, 4, 5 PrePre-det. 2 appr. Single , 3 4 4, 5 ermudai 2 appr appr. Single 5 3 E 3, 4, 5 PrePre-det. 2 appr. Multiple F 3, 4, 5 ermudai 2 appr. Multiple 8 2 G 3, 4, 5 Free det., COI or PPO Free or Multiple double disapp N/A Other = Substantial ownership & effective control; 2 appr. = ouble approval 1. Traffic is highly concentrated concentrated:: agreements cover twotwo-thirds of total QUASAR traffic 2. High High--traffic bilaterals are only marginally more liberal than the others 3 Restrictive market access features are still largely 3. prevalent, e.g. ual tariff approval (85% of ASAs; 73% traffic) (9% of ASAs; 9% of traffic) No coop. agreements (94% of ASAs; 74% traffic) 4. ut an analysis by type reveals that one in six passengers travels under liberal conditions (i.e. type G open skies and more than open skies ) Profile of Albania (1/5) QUASAR - Profiles QUASAR results by region and by Contracting State have been presented through profiles Individual I di id l profiles fil provide id a systematic t ti analysis of the bilateral ASAs concluded by each Contracting State, as well as general economic, demographic, trade and air transport data 15 N. Air Services Agreements Projector (ASAP) has been recently posted online and is available at:

5 i Profile of Albania (2/5) Table 1 Selected indicators Profile of Albania (3/5) STATISTICAL ATA POLICY ATA General (24) Trade (24) Air transport (24) Trade (26) Air Transport (25) Population 3.11 Total trade 4,787 WASA traffic 226,538 Final bound MFN tariffs 7. Traffic weighted 9.5 (million) (passengers) average ALI (25) (Standard) Share in world.5 Share in world.2 Share of total.3 Services sectors committed 18 Traffic weighted 9.2 population trade WASA traffic (out of ~16) average ALI (5th+) (25) GP 7,59 Trade per capita 1,538 Number of planes 6 (5) Tourism and travel-related 3 Traffic weighted 8.1 (million current (US$) (of which, in services sectors committed average ALI US$) parenthesis, jets) (out of 3) (OWN+) (25) Share in world.2 Trade to GP ratio 63.1 Number of 1 Services auxiliary to all 4 Traffic weighted 11.4 GP international modes of transport average ALI airports committed (ES+) (25) (out of 4) GP per capita 2,439 Commercial 1,989 omestic traffic Air transport services sectors Maint ispersion of ALI 1-14 (current US$) services trade (passengers) committed (standard) (25) (out of 4) Size 27,4 Share in world.5 Air transport 68 MFN exemptions on air CRS; National... (km²) commercial services transport services Sell/Mark ownership regime services trade (24) ensity 114 Travel services 1,377 Passenger air 29 Number of bilateral FTAs 8 Number of 7 (pop. by km²) transport services bilateral ASAs recorded by ICAO Freight air 22 Number of regional FTAs Number of 1 transport services plurilateral ASAs recorded by ICAO (26) Chart 1 Share of traffic by ALI range (percentage, 25) -4 27% 5-9 1% % Chart 2 Share of traffic by type (percentage, 25) E 1% 16% 27% o 56% Chart 3 Share of traffic by region of partner (percentage, 25) 2 1% 4 99% 1 Africa; 2 Asia and Oceania; 3 Commonwealth of Independent States; 4 Europe; 5 Middle East; 6 North America; 7 South and Central America and the Caribbean passengers Profile of Albania (4/5) Chart 4 istribution of traffic by feature of bilateral Air Services Agreements (thousand passengers, 25) Profile of Albania (5/5) Freedom 7 Freedom Cabotage esignation Withholding Capacity Tariffs Cooperation Statistics 5 Freedom, 7 Freedom, Cabotage, Withholding Capacity Tariffs esignation, Cooperation, Statistics With Principal Place of usiness Free etermination Free Pricing Without Community of Interest ermuda I Zone Pricing Substantial Ownership Pre etermination ouble isapproval and Effective Control Undetermined Undetermined Country of Origin Table 2 ilateral Air Services Agreements recorded by ICAO, selected indicators (25) irect ALI ALI ALI ALI istance Traffic Range Party ate Type Services Standard 5th+ OWN+ ES+ (km) (passengers) TURKEY 26/5/23 Yes o SERIA AN MONTENEGRO 23/11/1956 No i UNITE KINGOM 3/3/1994 Yes o AUSTRIA 18/3/1993 Yes E SLOVENIA 1/11/1992 Yes CHINA 28/3/1972 No i CZECH REPULIC 2/5/1958 No i Table 3 irect air transportation services (passengers) not covered by a bilateral Air Services Agreement as recorded by ICAO (25) Countries or territories Traffic range Countries or territories Traffic range Italy 1- Switzerland 1- Greece 1- Hungary 1- Serbia and Montenegro 1- ulgaria 1- Germany 1- ouble Approval Undetermined

6 QUASAR Plurilaterals (1/2) QUASAR Plurilaterals (2/2) 149 Members involved, 3.6% of the traffic... on paper ig ones: EU-US (8.5% of traffic total), ECAA (3.6%), EU-CH (3%), ACAC (3.2%) Proportionally more relevant than bilaterals (less unused rights) On average twice more liberal than bilaterals: ALI 34.4 (average ALI of bilaterals: 14) Clear prevalence of open skies type ( Type G ) What else is in QUASAR? ata for a series of indicators pertinent to pairs of ASA partners, i.e.: istance between the two partners Contiguity Shared common official language Shared commonly spoken language Historic ties QUASAR methodology conceived as open source Aim: to facilitate further research: sar_researches_e.doc (e.g. Piermartini-Rousova: from ermuda II to open skies, traffic increases by 25%) 23 QUASAR, WHAT COUL E NEXT? TWO MAIN - AN FAIR - CRITICISMS The data and hence, the computations, do not reflect fully the reality The methodology does not reflect the subtle balance of reciprocal interests achieved by the bilateral negotiations 24 6

7 QUASAR, WHAT COUL E NEXT? ata Regulatory data: Members, agmar, UN Treaties, Web searches, more agreements, updated agreements, historical dimension (RITS) ut... Statistical data: IATA (RPK), OAG (Capacity), ICAO (Load factors), CRS... ut: costs, methodological limits 25 QUASAR, WHAT COUL E NEXT? Cargo (1/2) No WASA data for all-cargo flights (i.e. % of the cargo - traffic) ata base of agreements + adaptation of methodology + traffic statistics + possibly price data = QUASAR - CARGO Expected results: Wide liberalization of 5th and 7th Freedoms, free capacity, free pricing, numerous waivers on ownership 26 Cargo (2/2) 5 th resulting from the combination of agreements A- and A-C 7 th resulting from the combination of agreement A- and A- 7 th resulting from the combination of agreement A- C and A- QUASAR, WHAT COUL E NEXT? Freedoms A C Is there a point? Agreement A- Agreement A-C Agreement A- 5 th outdated and marginal 7 th, 8 th and 9 th inexistent, except in common markets Statistical problem Indicate the flag of the carrier A Stop over 1 to unload cargo Stop over 2 C to unload X X to pick up cargo X to pick up X eparture point A Final destination

8 QUASAR, WHAT COUL E NEXT? Ownership The ermuda triangle National investment/ establishment regime QUASAR, WHAT COUL E NEXT? Code-share/Cooperation Clauses Code share module Identification of code share as a substitute for 5 th, 7 th, 8 th 9 th freedoms th, esignation Withholding Real mapping of bilateral and third country code sharing from a legal point of view (until now totally deficient) and from a commercial point of view (until now absent) Analysis by region, level of development, types of airlines, symmetric agreements vs asymmetric ones QUASAR, WHAT COUL E NEXT? Routes Pattern analysis possible Expected results: large similarity of network for comparable bilateral partners (e.g. France-China, UK-China, Germany-China) though with a time lag/ chain reaction effect Scoring impossible: only a handful of experts know if a capacity/ frequency allowed on a route is restrictive or not (e.g. 2 Paris-Cheng Cheng-u flights a week) 31 QUASAR, WHAT NEXT? ROUTES and CAPACITY: QUASAR+ Rating of routes via ARIC matrixes (Airport Relative Importance Coefficients) Comparison of capacity allowed on a comparable country pair /city pair «Aero policy comparator» software project 32 8

9 QUASAR:WHAT NEXT Identify through cross panel regressions and systematic comparisons the best policy mix Incorporate price data to investigate if there is a true quantity versus price dilemma, as the airlines think Assess on a country basis the costs and benefits of liberalization for all stakeholders (incumbent airlines, start- ups, airports, local communities, business, consumers) Assess the developmental impact of liberalization («air for trade») and its environmental impact Tariffs face QUASAR, WHAT NEXT? Freedoms face SIMULATION THE QUASAR RUIK S CUE: Withholding face esignation face Capacity face Cooperative arrangements and statistics face A C E F G H I J K A C E F G H I J K

10 A C E G I J F H K A C E G I J F H K 38 A C E G I J H F K A C E G I J H F K 39 A C E G I J H F K A C E G I J H F K 4 1

11 QUASAR, WHAT COUL E NEXT? The forget it items Passenger and cargo charter data (regulatory and statistical) Express cargo data (regulatory and statistical) 5 th, 7 th, 8 th and 9 th freedoms (statistical data) Thank you for flying with us 41 11