1.

5 Governance
To distinguish the term governance from government: a government is a
formal body invested with the authority to make decisions in a given political
system. In this case the governance process, which includes all the actors
involved in influencing the decision-making process (such as lobbies, parties,
medias), is centered on the relevant "governing body".
In order to efficiently manage the sub-units of ICAO, it was divided into
seven regional headquarters and to the top of them the Headquarter of ICAO was
established. These regional offices, although nominally and theoretically
controlled by the Headquarters, operate quite autonomously.
In the following pages of the chapter, the writer makes emphasis on the
relationships between regional offices. It is claimed that there are some efforts
made by Secretary General of ICAO to enrich the relations between office to
office and offices to HQ.
Up to the end of the chapter, the writer gives plenty of details about
technical cooperation activities, economic regularity support, airlines of the
regions both liquidated and getting stronger. However the focus of the article is
on the current situation of Africa. In order to clarify todays atmosphere, the
writer starts the story from the beginning, from 1950s. The major events of
African aviation history, their causes and effects are given. It is stated that Treaty
on Air Transport in Africa (1961) and Yamoussoukro Declaration on a New African
Air Transport Policy (1988) were created modern Africas CTM and ATM model in
terms of market structure.
At the global level, the United Nations has made energetic efforts at
enhancing development in African States. United Nations addressed preparatory
issues regarding a high level plenary meeting of the General Assembly to
consider ways and means of supporting the New Partnership for Africas
Development (NEPAD), welcomed the NEPAD as a program of the African Union
that embodies the vision and commitment of all African Governments and
peoples for peace and development.
African aviation is clearly at the crossroads of progress, where years of
enthusiastic endeavor toward consistent cooperation between 53 States are now
seemingly giving rise to hope that a liberalized aviation environment will emerge
in the African Continent.
Given this scenario, ICAO has to concentrate on unity and integration in its
efforts in Africa. It has to come to an arrangement with the African Civil Aviation
Commission, which is the implementing organ of the Yamoussoukro Decision, 39
member states are on a concrete plan to help African States move towards
liberalization within their regionwhich is the fundamental aim of the decision.

Chapter 2
Competition in Air Transport
As it is understand from its name, the core of rivalry is basically because of
monetary reasons. So this chapter mainly deals with economic issues.
The basic aims and objectives for ICAO in the economic field are states as:
(a) Meet the needs of the peoples of the world for safe, regular, efficient
and economical air transport;
(b) Prevent economic waste caused by unreasonable competition;
(c) Insure that the rights of contracting States are fully respected and that
every contracting State has a fair opportunity to operate international air lines.
ICAO has to ensure reasonable competition between airlines by ensuring
that its member States have the ability to give their airlines a fair and equal
opportunity.
At ATConf/6 (6th Worldwide Air Transport Conference) a discussion ensued
as to whether a new Annex to the Chicago Convention should be introduced as a
way forward toward implementing a regulatory framework on economic issues of
air transport. The shortcoming of this discussion was that participating States
were asked to consider three aspects and their responses were sought to the
following:
(a) Whether ICAO should consider the definition of a modular strategy for
encouraging the harmonization and modernization of a global air transport
regulatory framework;
(b) Whether ICAO should develop a cost benefit analysis for consideration
by States regarding the added value of an Annex to achieve this goal; and
(c) Whether ICAO should provide States with further information on the
content and coverage of a possible Annex for wider implementation of ICAO
policies.
It is submitted that this effort would have proved more efficient if ICAO
complied with (c) before engaging in this discussion. The way things stand, it will
take another several years for ICAO to come up with further information on the
content and coverage of a new Annex.
As it can be understood from his/her comments, the writer probably
thought that even if there are some studies on to create a possible annex for

wider implementation of ICAO policies, the states are not able to create an annex
not only by their own selves but also in cooperation with other member states. It
is because neither states nor offices are able to pursue the concept of an Annex.
It was not clear that States have yet reached a consensus on the core substance
of such an Annex which is expected to secure the highest practicable degree of
harmonization in regulations, standards, procedures, and organization and to
help increase awareness and implementation of the existing ICAO policies and
guidance related to air transport matters.

2.1 The Safeguards Anomaly

In this section of the chapter the writer clearly and directly opposes the
safeguard measure policies of ICAO with the words of:
ICAO has been continuously adopting a confusing stance of insisting on
safeguard measures for air transport liberalization. This is an oxymoron by
itself as, if there has to be liberalization, why have safe guards that
would prove counterproductive to such liberalization? A repetition of this
ambivalent approach was once again seen in ATConf /6. In a paper put forward
by the ICAO Secretariat at the Conference ICAO claimed that safeguards needed
in the air transport liberalization process, covering four specific aspects: the
sustained and effective participation of all States in international air transport,
assurance of service and State subsidies, essential air services and the issue of
unilateral action. The writer is right about his hesitations up to that part of
article. There is a huge contradict between safe guards and liberalization
policies. However he continues his article with the paragraph below.
ICAO also claimed that the continuing trend of the past decade towards
liberalization has fostered an environment in which States have an increased
opportunity for participation in international air transport by allowing more
national airlines to operate services, using the services of foreign airlines, or by
embarking on joint venture operations with foreign or same community airlines.
This is called creative destruction. Although there are cases where national air
carriers have disappeared, the gap is often filled by other airlines. States have
adapted to the concept of liberalization and, while the right of participation is no
longer a major concern, ICAO guidance on safeguard measures continues to be
valid.
So there is a strong loop with starts with liberalization and then safe guard
measure. If there is no measure to take while the company deserves or the
measure taken is not enough for a company to survive, like the way the writer
explained above, the gap created is filled by other agents. And this is especially
with the help of subsidies. This is only one example. So according to my aspect,
just the title of the section Safeguards Anomaly clearly express the writers
ideas which opposes ICAO policies. So even create a liberalization environment in
the aviation market, there should be some safeguard measures as the
Secretariat of ICAO explained in ATConf /6.

This is only one part of his opposes. In the following paragraphs of the
chapter, he continues to provide examples of ICAO articles and speeches of
representatives who supports or only mentions about policies. However to
oppose the writer Id like to conclude the summary of the section with the text
provided below.
States may need safeguards to ensure continuity of air services to/from
their territories. Such a desire is particularly strong for countries experiencing
social or economic crisis or where there is an absence of a national air carrier to
perform the services, or withdrawal of services, provided by foreign air carriers.
Various measures are taken by States to address these concerns including the
provision of State aid/subsidies, assistance to national air carriers, particularly for
air services of a public service nature, and the conclusion of service assurance
arrangements with concerned air operators or parties. In some cases, this
support is essential, notably for developing countries and for islands and
landlocked countries.

2.2 Competition in Air Transport

A global industry, such as air transport, is one in which commercial entities offering
their services view competition as global and build strategies. It follows that competition
involves a coordinated worldwide pattern of market positions, facilities and investments.
Factors to be taken into account are overlap between competitors, geographic location of
carriers and defensive investments in particular markets and locations. Advantages that can
be factored into their overall global posture. Competition in the air transport industry is a
complex process, as there is no consensus among airline economists as to the exact nature
of the industry. The demand for air services, particularly in the context of the airline
passenger, is a contrived demand emerging from other demands based on activities such as
business and leisure. This calls for a certain segmentation in travel where, in business travel,
the passenger does not usually pay for the travel himself, whereas in leisure travel it comes
out of his own pocket. Therefore, the leisure market calls for a different kind of competition,
primarily based on the fare, whereas in business travel, although the fare is important. The
main consideration, leading up to efforts by the international aviation community to achieve a
deregulated global airline industry, is involved with the question as to whether free market
principles can be applied globally to air transport. The essential requisite for success in
trading relations is competition, which in turn leads to national prosperity. A free trade
agreement is merely the catalyst in the process.

2.3 Ownership and Control of Airlines

A stultifying influence on competition in air transport is the ownership and control
restriction on airlines. According to this practice, under their bilateral air services
agreements, States have traditionally retained the right to withhold, revoke, or impose
conditions on the operating permission of a foreign air carrier. growing and widespread
liberalization whatever the form and pace of liberalization, conditions for air carrier
designation and authorization should ensure that safety and security remain paramount, and

that clear lines of responsibility and accountability for safety and security are established for
the parties involved in liberalized arrangements; privatization and globalization call for
regulatory modernization in respect of conditions for air carrier designation and authorization
in order to enable carriers to adapt to the dynamic environment. The need to enable air
carriers to adapt to the dynamic global environment and to enable States to participate more
effectively in international air transport calls for a change in approach. One of the options to
promote competition and facilitate trade in air transport lies indisputably in combatting and
eliminating anti-competitive practices. State responsibility toward achieving this goal is a key
factor. One way of ensuring collective State action in this regard and enforcing the duties of
States toward the international community is to establish an international entity charged with
ensuring the implementation of a global competition code. States may also enter into
understandings or agreements toward combatting restrictive trade practices, either bilaterally
or plurilaterally. As for liberalization of air transport, there has so far been no indication
whatsoever that any State favors total liberalization calculated to open out its domestic
market. Strategic alliances between airlines, be they through mergers or other
arrangements, will be viewed with caution and objectivity by individual airlines and States so
as to preclude the total overrunning of local interests. It is this consideration that would make
liberalized ownership and control criteria less attractive to local entrepreneurs who would not
encourage foreign ownership to encroach local control airlines have of their own markets.
Although liberalization of air transport cannot be dismissed as a viable prospect for the
future, particularly in trading terms, the players concerned must necessarily view air
transport in its entirety, as a service composed of critical factors that are inherent in safe and
efficient air transport.

2.4 Existing Guidelines

With regard to the importance and use of ICAO guidance material by States, the
ICAO Secretariat often receives positive feedback from States through the ICAO Regional
Offices or at workshops and seminars. Some States have reported the incorporation of ICAO
model clauses in bilateral air services agreements. However, the extent of the reporting has
not been quantified in a systematic manner. Likewise, some industry organizations also
supported and promoted the use of ICAO policies and guidance. These events also provide
an excellent opportunity for States to exchange information on how to best implement the
policy guidance and how to overcome implementation difficulties. It should be noted,
however, that the reduced number of workshops/seminars may impact the ability of States to
implement ICAO policies and guidance material. The leadership role of ICAO in economic
regulation of international air transport, and in the development of comprehensive policy
guidance to assist States in the creation of a favorable regulatory environment for the
sustainable development of air transport and the benefit of all stakeholders, is indisputable.
ICAO policies and guidance material on the economic aspects of international air transport
regulation remain relevant but need to be kept current and responsive to changing situations
and the needs of States and aviation stakeholders. There is a need for ICAO, in cooperation
with the industry, to ensure widespread awareness and improved implementation of its
policies as well as use of its guidance material on economic regulation. For its part, ICAO
should encourage States to incorporate ICAO principles, policies and guidance in national
legislations, rules and regulations, and in air services agreements and continue to promote
its policy guidance on the economic regulation of international air transport, and encourage

States to use ICAO guidance in their regulatory practice. ICAO should also ensure that
policies, guidance and other material related to economic regulation remain relevant,
current, and responsive to changing situations and requirements of States and continue to
consider additional ways and means by which to enhance the status of its policies for the
sustained development of the air transport system.

2.5 A Compromise
To enable greater competition, along with the removal of route and tariffs restrictions,
the artificial distinction between third/fourth freedom and fifth/sixth freedom traffic should be
dropped. This should be accompanied by the removal of capacity limits to allow greater
competition for passenger and cargo traffic. Second, the threat that an airline might be
denied operating authorization on foreign ownership and control grounds should be removed
so that the financially risky airline industry has open access to global capital markets and
skilled management. The problem with this system would be that States may not feel
obligated to use such an instrument, which will be relegated to the filing cabinets of States
civil aviation archives. The compromise might lie in a formal interpretation of Article 6 of the
Chicago Convention which provides that no scheduled international air service may be
operated over or into the territory of a contracting State, except with the special permission
or other authorization of that State, and in accordance with the terms of such permission or
authorization. This provision speaks only of permission to operate over or into the territory of
a Contracting State.
Globalization of competition is one of the key messages of the modern age, which
brings with it the important message for governments to rethink their strategies with regard
to the air transport strategy as an integral part of their national competitiveness. Any
agreement to bring in an aspect of trade within a liberalized framework is generally a proactive measure, which brings to bear the willingness and ability of the governments to face
trading issues squarely in the eye. However, any agreement for trading benefits would be
ineffective without the element of competition. The essential requisite for success in trading
relations is competition, which in turn leads to national prosperity. A free trade agreement is
merely the catalyst in the process.