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Caution with 5th Freedom and Cabotage flights

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27th February 2014

Caution with 5th Freedom and Cabotage flights

Communications in our industry are becoming ever quicker and easier to use. The advent of the internet and e mail have meant that for the first time ever Operators can communicate instantly with the industry at large through specialist services such as Avinode and CharterX or directly to a large number of potential clients by e mail. This has been a terrific boost to the industry and has allowed the effective marketing and selling of empty legs and away from base aircraft availability. This has benefitted the charter broker, operator and importantly the environment (fuel savings made by the utilisation of empty legs etc.).

However a word of caution is needed when considering the use of empty legs or away from base aircraft.

To illustrate the dangers and caution needed consider the following scenario:

Broker A has a client wishing to travel from Milan to London. The broker realises that, via an e-mail he has received, a US operator has an N registered Gulfstream in Milan ready to position back to the USA empty. He contacts the operator who agrees a one-way price to stop off in London with the broker’s clients. The broker is happy because he has obtained a good price for his client allowing him a good margin. The client is happy because he has paid less than he would normally have expected to pay and the Operator is happy because he has gained extra revenue.

All parties agree and exchange contracts. In the meantime the operator contacts the UK Department for Transport (DfT) and requests 5th freedom permission to drop off passengers in London. As the aircraft is less than 19 seats the DfT pass the request on to the BBGA (British Business and General Aviation Association) for their non-objection to the flight. In the UK the DfT have delegated this responsibility to the BBGA. They in turn poll their members to seek non-objection. One BBGA member has a similar sized aircraft available and has in fact already sent a quote for the same flight and so he (rightfully) objects. A lot of wrangling then ensues ending with the US operator backing out of the flight because he is unable to obtain permission for it citing the clause in his contract ‘subject to all necessary permits’ and the broker is left with a client threatening to sue for breach of contract.

Whilst the above is not a true story something very similar has happened recently in the UK, leaving bad feelings in several places.

There are international rules governing international flights and the ones concerning cabotage and the ‘freedoms’ were set out in the Chicago Convention in 1944.

Generally speaking, in a European context, without permission a NON-European operator cannot operate commercially (i.e. pick up/drop off passengers) within Europe or between any European member country and another country other than their own.

In the same way a non-US registered aircraft cannot pickup/drop off passengers internally in the USA.

There are exceptions to this general rule, for instance passengers travelling on through flights can transit with stopovers through multiple countries, however each country seems to have its own interpretation of the rules for this type of flight!

The USA has always been diligent and unswerving in its application of these rules, even applying them to Diplomatic Charter flights. Commercial European carriers are not allowed to pick or drop off any passenger on an internal sector in the USA unless they are part of a through flight. Conversely it is difficult to police the similar situation in Europe due to the number of countries in the EU with differing Customs standards and hence the apparent ease with which some N registered aircraft conduct illegal charter within the area.

An explanation of the Freedoms

One of the main treaties that sets out the fundamental building blocks of air transportation regulation – the ‘rules of the road’ – is the Chicago Convention in 1944.

These ‘building blocks’ are widely referred to as the ‘freedoms of the air’, and they are fundamental to the international route network we have today. There are five basic freedoms that are, more or less, recognized by all countries, two others less widely accepted, and one hardly accepted at all.

Each is subject to specific conditions, such as establishing the frequency of flights that are determined through bilateral agreements between any two of the countries that are parties to the Convention.
First Freedom – The right to fly and carry traffic over the territory of another partner to the agreement, without landing. Almost all countries are partners to the Convention but some observe this freedom better than others.
Second Freedom – The right to land in those countries for technical reasons such as refuelling without boarding or deplaning passengers.
Third Freedom – The right of an airline from one country to land in a different country and deplane passengers coming from the airline’s own country.
Fourth Freedom – The right of an airline from one country to land in a different country and board passengers travelling to the airline’s own country.
Fifth Freedom – This freedom is also sometimes referred to as ‘beyond rights‘. It is the right of an airline from one country to land in a second country, to then pick up passengers and fly on to a third country where the passengers then deplane. An example would be a flight by American Airlines from the US to England that is going on to France. Traffic could be picked up in England and taken to France.
Sixth Freedom – The right to carry traffic from one state through the home country to a third state. Example: traffic from England coming to the US on a US airline and then going on to Canada on the same airline.
Seventh Freedom – The right to carry traffic from one state to another state without going through the home country. Example would be traffic from England going to Canada on a US airline flight that does not stop in the US on the way.
Eighth Freedom – This is also called cabotage and almost no country permits it. Airline cabotage is the carriage of air traffic that originates and terminates within the boundaries of a given country by an air carrier of another country. An example of this would be an airline like Virgin Atlantic Airways operating flights between Chicago and New Orleans.

Author.

Steve Wells – BACA Council