Knowledge Gained on the Air Cargo Industry Essay

Bilateral Agreements

• Bilateral agreements on air cargo are international trade contracts between two states that regulate commercial provisions of air services
• They are regarded as treaties, inter-governmental or executive conventions, or exchanges of diplomatic notes
• According to Article 6 of the Chicago Convention of 1944, there is no transnational service required to operate in any contracting state (Abeyratne, 2018)
• Transnational service is established only under specific permission/agreement with the contracting state
• The transnational air services grant the rights for landing or flight without landing across a state’s territory
• United States/European Union (US/EU) and the Multilateral Agreement on Liberalization of International Air Transportation (MALIAT) are two main multilateral agreements
• EU uses Regulation 1008/2008 (Air Transport Regulations) as the primary document directing air cargo transportation within the Union
• MALIAT was signed in 2001 between partnering states of Chile, Fiji, Brunei, New Zealand, Tonga, Samoa, the US, and Singapore (Fu & Yang, 2017)

Five Freedoms and other Agreements

• First, Second, Third, Fourth and Fifth Freedoms make international air commerce possible
• They include the allowance to land with passengers or cargo taken on board in the state native to the airline
• They represent the right to perform transportation from and to the state native to the air company
• The rights are granted depending on bilateral agreements between states
• The Open Skies agreement is a bilateral contract between two nations that allows unlimited air travel between them
• The Open Skies agreements prohibit governmental interventions in the commercial decisions made by the air cargo management (Contreras, 2017)
• The US is pursuing Open Skies policy since 1992
• The US finalized Open Skies agreements with 126 partners by 2019 (Contreras, 2017)
• Chicago Convention regulates safety constraints
• It requires the customs warehouses or free zones to issue comprehensive rules on safety
• Federal Aviation Administration (FAA) also controls the safety issues
• Customs and Border Protection (CBP) agency imposes regulations concerning international and domestic air cargo security
• Transportation Security Administration (TSA) is another federal agency mandated with air transport security
• Article 37 of the Convention of International Civil Aviation (CICA) requires countries to apply the procedures to freights moving by air, sea, and land

References

Abeyratne, R. (2018). Competition in air transport and equality of opportunity. Estey Journal of International Law and Trade Policy, 19, 85-106.

Contreras, J. M. T. (2017). An analysis of the open skies policy and its effects on the tourism industry in Mexico. Journal of Spatial and Organizational Dynamics, 5(4), 376-399.

Fu, X., & Yang, H. (2017). Airport–airline arrangements: An interpretive review of industry practices and recent studies. The Economics of Airport Operations, 6, 1-19.