Major Developments and

Regulatoty Body

Suthi Suthiphan Ph.D.

Deregulation and Liberalilization Worldwide
• The Federal Aviation Act of 1958 in US.
• The public interest and in accordance with public convenience
and necessity.
• The deregulation of US airlines in 1978 need the Government to
reduce its involvement in the economics of airline competition
• Deregulation is perceived as a success by most countries
because of benefits to air travellers clearly demonstrated.
• Air travel grew significantly and and average air fares declined
significantly and remained less than half of 1978 levels.
The Unified European Union Market (1987)
• The global significance of the EU agreement is comparable to that of the
1978 deregulation of the domestic US market.
• The liberalization and unification of the air transport market within the
European Union marks a regulatory breakthrough that goes well beyond
the content of any existing multilateral ASA.
• The most important provisions went into effect, and ending in 1997 with
activation of Ninth Freedom right for EU airlines.
• All community carriers were granted full Seventh Freedom rights (Fifth and
Sixth as well) for flights within the EU.
• There are no capacity restriction offered by an airline on any market.
• International airfare: no restrictions exist. Strict enforcement against fare
fixing or capacity fixing, anticompetitive joint venture by airlines.
• The Act deal with controls over exit and entry, fares, and routes.
• By virtue of a “grandfather clause” in the 1938 Act, the existing
trunk carriers received certificates of public convenience and
necessity automatically.
• The major concerns about allowing price competition is a
reduction in airline safety.
• There will be a rush to enter the profitable markets, resulting in
excess capacity and charge the higher fares on less competitive
routes.
• time limits on consideration of route cases, liberalized entry
requirement and price flexibility.
• The CAB was required to eliminate all route restrictions by 1981.
The Unified European Union Market and other
Major Development
• Three important examples of increasingly relaxed regulation of
international markets

– First, the liberalization and unification of the air transport market

within the European Union marks a regulartory breakthrough.
– Second, recent development in internationalization has been the
multi-lateral open skies Asia-Pacific Economic Community (APEC)
Agreement, signed in May 2001.
– Third, international regulartory breakthrough, a new multi-lateral
agreement with the USA. Concluded in April 2007 with a provisional
open skies agreement between EU as a whole and the USA that
took effect in March 2008
 The Unified European Union Market (1987)
• The global significance of the EU agreement is comparable to that of the
1978 deregulation of the domestic US market.
• The liberalization and unification of the air transport market within the
European Union marks a regulatory breakthrough that goes well beyond
the content of any existing multilateral ASA.
• The most important provisions went into effect, and ending in 1997 with
activation of Ninth Freedom right for EU airlines.
• All community carriers were granted full Seventh Freedom rights (Fifth and
Sixth as well) for flights within the EU.
• There are no capacity restriction offered by an airline on any market.
• International airfare: no restrictions exist. Strict enforcement against fare
fixing or capacity fixing, anticompetitive joint venture by airlines.
The Unified European Union Market (1987)
• The global significance of the EU agreement is comparable to that of the
1978 deregulation of the domestic US market.
• The liberalization and unification of the air transport market within the
European Union marks a regulatory breakthrough that goes well beyond
the content of any existing multilateral ASA.
• The most important provisions went into effect, and ending in 1997 with
activation of Ninth Freedom right for EU airlines.
• All community carriers were granted full Seventh Freedom rights (Fifth
and Sixth as well) for flights within the EU.
• There are no capacity restriction offered by an airline on any market.
• International airfare: no restrictions exist. Strict enforcement against fare
fixing or capacity fixing, anticompetitive joint venture by airlines.
Open skies Asia-Pacific Economic Community
(APECs), 2001
• The parties to the agreement were the USA and five APEC States
(Singapore, Brunei, Chile, New Zealand and Peru, now 21
members)
• The APEC Agreement provide for first through Sixth Freedom
rights for all signatory States.There are no approval requirements
for airfares.
• All-cargo flights also enjoy Seventh Freedom rights within this
group of nations.
• Each party to the APEC ASA is free to negotiate independent
bilateral or multilateral agreement with third parties.
 Open skies agreement between the EU
and the USA (2008)
• In 2002, the European Court of Justice found that nationality
clauses guiding airline designation that were contained in-then
existing bilateral agreements between individual EU Member
States and the USA were in violation of EU legislation which
mandates that all community carriers should receive equal
treatment in all Member States.
• At the time, all open skies agreement were declared invalid.
• The Court authorized the European Commission to negotiate a
new multilateral agreement with the USA on behalf of all EU
Member States.
Open skies agreement between the EU
and the USA (2008)
• Negotiations began in Nov. and concluded in
Apr.2007 with open skies agreement between the EU
and the USA that took effect in Mar. 2008.
• Landmark clauses:
– US airline can serve any city pair between the USA and
the EU.
– Fifth freedom rights were granted to both sides, for
continuation of flights between The EU and the USA to
third countries which can be performed by an alliance
partner of the airline that flew the US-EU part.
Open skies agreement between the EU
and the USA (2008)

– Community air carriers also obtained Seventh Freedom rights

for services between cities in the USA and certain non-EU
European States.
– Seventh Freedom rights were also granted to all-cargo flights.
– US-EU will indeed stimulate passenger and cargo traffic growth
in the North Atlantic market through more competition, lower
fares and a significant in crease in the number of city pairs
served.
– The US-EU Agreement offers a model for other similar future
agreements.
Regulatory Body
• World organization : ICAO, International Civil Aviation Organization
• USA
– FAA : Federal Aviation Administration
– DOT : Department of Transportation
– NTSB : National Transportation Safty Board
• Europe
– JAA: Joint Aviation Authorities
– EASA: European Aviation Safty Agency
– EUROCONTROL
• Japan : JCAB, Japan Civil Aviation Bureau
• Thailand
– CAAT: The Civil Aviation Authority of Thailand
– DOA : Department of Airports
ICAO: International Civil Aviation Organization

– It is not global regulator.

– A specialized agency of the UN. Its function include the
development, approval and updating of international
Standard and Recommended Practices (18 Annex) for
airport and air traffic control (ATC).
– Regulations for aviation safty, security, efficiency and
regularity and environmental protection
– Operataing practices and procedures covering the
technical field of aviation
– Bilateral and multilateral ASAs must be registered with
ICAO.
IATA: International Civil Aviation Organization

• IATA is the trade association of most of the international

airlines in the world. (230 airlines and more)
• Founded in 1945, primarily in response to the perceived need
to coordinate international airfares.
• Organizing twice a year airport schedule coordination
conferences.
• Offering various technical, legal and financial services.
• IATA operates as a “tariff coordination” organization, assisting
in the setting of passenger airfares and cargo rates,
commissions for travel agent.
• A semi-official international body.
United States
– DOT : Department of Transportation
• Established in 1966
• Responsible for domestic and economic policy and
regulation
• Monitors the domestic airline industry for indications of
anticompetitive practices such as price gouging to take
advantage of market dominance at certain hub airports
or predatory pricing.
• Preventing deceptive advertising of airfares,ensuring
fairness in the listing of flights.
• 1946 Federal Airport Act
• 1958 Federal Aviation Act
• 1978 Airline Deregulation Act
• 2001 Aviation and Transportaion Security Act
United States
– FAA : Federal Aviation Administration
• FAA, established in 1958, plays an important role in US
aviation.
• Responsible for regulating all aspects of civil aviation in the
nation
• An independent government agency, a part of the US DOT.
• Regulations and certification, airports, air traffic services etc.
– Air Carriers & Operators
– Pilots, Flight & Ground Instruction
– Commercial Space Transportation
– NTSB : National Transportation Safty Board

• Independent U.S. governmentinvestigative agency

• It has primary authority to investigate every civil aviation
accident in the U.S.
• in charge of investigating civil aviation accident and
incidents and all major transportation accidents.
• investigating cases of hazadous materials releases
occur during transportation
• Case: Boeing 737 MAX groundings
– review certificate shortcomings
– recommend FAA to update the long-accepted but inadequate
assumptions about pilots’reaction in failure scenarios.
Europe
– JAA (Joint Aviation Authorities)
• Represent the civil aviation regulatory authorities of a number of
European States.
• It was not a regulartory body, regulating being achieved through the
member authorities.
• States agree to cooperate in developing and implementing common
safty regulatory standards and procedures.
• Issue the Joint Aviation Requirements (JAR), to establish minimum
requirement for air safety.
– EASA :European Aviation Safty Agency
• An agency of the EU to take over some of the functions of the
European Joint Aviation Authorities - JAA.
 – Its main tasks include inspections, trainning and
standardization program to ensure uniform
implementation of EU aviation safety legistlation in all
member states. ; safty and environmental certification of
aircraft, engines and parts; and the safety assessment of
foreign aircraft using EU airports.

EUROCONTROL
– Principal mission is to “harmonize and integrate air
navigation services in Europe” and create a uniform ATM
system for civil and military users.
– It has 38 Members States and acts as the coordinator and
central planner of ATM services in Europe.
JCAB : Japan Civil Aviation Bureau

• The division of the Ministry of land, Infrastructure,

Transport & Tourism (MLITT)
• JCAB oversees the Ministry’s air navigation services
department, aviation safety and security department,
aviation network department and international affairs.
• Planning of aviation network policies, establishment /
administration of airports, international agreements on
aviation and comprehensive coordination of
department
• Establishment of safety standard for aircraft, issuing
type certificates/ airworthiness certificates
Thailand

– CAAT : Civil Aviation Authority of Thailand

• To take action to systemize civil aviation, and stipulate rules,
procedures, and conditions concerning airspace utilization to
optimize safety and efficiency.
• To inspect, monitor, control and encourage those involved in
aviation industry and civil aviation activities to comply with laws,
rules, procedures, and International Standards.
• To regulate aerodrome activities and licensed aerodrome
established under the law on air navigation or other laws to
ensure safety and meet International Standard.

– DOA : Department of Airports

• Control the operations of airports i.e.Lampang, Mae Sot,
Phitsanulok, Buri Ram, Sakon Nakhon, Nakhon Panom, Roi Et,
KhonKaen, Ubon Ratchthani, Udon Thani, Trang, Nakhon Si
Thammarat, Surat Thani and Krabi