Res Communis

H.R. 6355: To amend title 49, United States Code, to provide for improvements in the quality of airline services, and for other purposes

by P.J. Blount with the blog faculty
H.R. 6355: To amend title 49, United States Code, to provide for improvements in the quality of airline services, and for other purposes was introduced on June 24, 2008 by Rep. James Oberstar (D-MN). The bill addresses these issues:

TABLE OF CONTENTS.—
Sec. 1. Short title; table of contents.
Sec. 2. Amendments to title 49, United States Code.

TITLE I—AIR SERVICE IMPROVEMENTS
Sec. 101. Monthly air carrier reports.
Sec. 102. Air passenger service improvements.
Sec. 103. Review of air carrier flight delays, cancellations, and associatedcauses.
Sec. 104. European Union rules for passenger rights.
Sec. 105. Establishment of advisory committee for aviation consumer protection.
Sec. 106. Denied boarding compensation.
Sec. 107. Expansion of DOT airline consumer complaint investigations.

TITLE II—FAA EMPLOYEES
Sec. 201. Federal Aviation Administration personnel management system.

United States and Brazil Agree to Expand Air Services

by P.J. Blount with the blog faculty

From the State Department:

Media Note
Office of the Spokesman
Washington, DC
June 27, 2008

United States and Brazil Agree to Expand Air Services

The United States and Brazil have reached agreement on a package of significant liberalization measures in our air transportation relations, which will strengthen and expand our already strong trade and tourism links with this important Latin American partner. The agreement will provide for a nearly 50 percent increase in passenger flights between the two countries and eliminate a number of restrictions on U.S.-Brazil air service. The agreement was initialed on June 26, after three days of negotiations in Washington between a Brazilian delegation, led by Ronaldo Seroa da Motta, Director of the National Civil Aviation Agency of Brazil, and a U.S. delegation, led by the U.S. Department of State’s Bureau of Economic, Energy and Business Affairs, which included officials from the U.S. Department of Transportation and the U.S. Department of Commerce.

Any number of U.S. or Brazilian airlines may now serve the market. The agreement will permit additional weekly flights, phased in over the next four years, from 105 to 154 for each country’s carriers. Under the new accord, U.S. and Brazilian carriers for the first time will be able to provide some services on a code-share basis with their third-country partner airlines. The agreement also allows U.S. carriers to serve five new cities in Brazil, including Fortaleza and Curitiba.

The agreement will further expand air cargo services between our countries. The number of weekly cargo flights allowed will increase from 24 to 35 immediately and to 42 in the year 2010. In addition, both sides agreed to increase the number of cargo charter flights from 750 to 1000 immediately and to 1250 by 2010. Intermodal rights were also granted, which will permit U.S. cargo companies to provide door-to-door service in Brazil.

Both countries intend to meet again before the end of 2010 to discuss further expansion of air service opportunities and to continue to work on eliminating restrictions on carrier operations.

Questions concerning this agreement may be directed to Ms. Terri Robl, Director, Office of Aviation Negotiations, U.S. Department of State, telephone: 202-647-5843.

2008/528

H.R. 6426 & S. 3203: To prohibit the use of funds by the Department of Defense on the KC-X tanker contract . . .

by P.J. Blount with the blog faculty

Two bills were introduced on June 26, 2008 in connection to the Air Force KC-X tanker contract on which the GAO just released its decision. H.R. 6426: To prohibit the use of funds by the Department of Defense on the KC-X tanker contract, and for other purposes related to that contract was introduced by Rep. Todd Tiahrt (R-KS) and S. 3203: A bill to prohibit the use of funds by the Department of Defense on the KC-X tanker contract, and for other purposes related to that contract was introduced by Sen. Pat Roberts (R-KS). Neither available from Thomas yet.

Four More Carriers Caught In DOJ Probe

by P.J. Blount with the blog faculty
From Aviation Week:

Four More Carriers Caught In DOJ Probe

Jun 27, 2008

By Adrian Schofield/Aviation Daily

The U.S. Justice Dept. rolled out more than $500 million in fines for four international airlines accused of price-fixing on cargo services, as the list of major airlines implicated in the investigation continues to grow.

Air France-KLM accounts for the bulk of the penalties – $350 million – although the carriers were fined separately since the offenses date back to 2001. Cathay will pay $60 million, Martinair $42 million and SAS $52 million. All the airlines pleaded guilty, but the fines must still be accepted by U.S. courts. The Air France-KLM penalties will represent the second-largest criminal fine ever imposed by DOJ.

The fines result from a long-running investigation by the Justice Dept., FBI and other agencies into a “conspiracy involving a number of the world’s largest airlines to manipulate air cargo transportation costs through a multi-year price-fixing scheme,” said Associate Attorney General Kevin O’Connor. “This conspiracy, conservatively, has affected billions of dollars of shipments.” O’Connor believes the total harm to U.S. consumers and businesses runs into hundreds of millions of dollars.

The airlines conspired to fix cargo rates, including base rates, fuel surcharges, and security charges. Fuel surcharges imposed by some of the carriers rose 10-fold, much more than the fuel price increase. Airline officers and employees carried out the price fixing during various meetings and discussions, in the U.S. and elsewhere. “The companies also monitored and enforced adherence to the agreed-upon cargo rates,” O’Connor said.

These are far from the first carriers to be swept up in this investigation. British Airways and Korean were both fined $300 million by U.S. authorities in August 2007, and earlier this year Qantas paid a $61 million fine and JAL a $110 million fine. With the latest plea agreements, the U.S. fines total $1.2 billion. The European Union has also been pursuing antitrust action against carriers.

SAS said its own fine was reduced to reflect its cooperation in the investigation. The carrier said DOJ also “recognized SAS’s commitment to an improved corporate compliance program,” and the carrier has taken steps to strengthen its internal compliance policy. SAS said it is involved in the European Commission investigation, although the results of this will not be known until later this year.

Air France-KLM is also included in the EC action. The carrier has made a EUR530 million ($835.2 million) provision for its 2007/2008 financial year due to the U.S. and EC investigations. Air France CEO Jean-Cyril Spinetta says the carrier “has taken thorough steps across the organization to prevent recurrence” of the conspiracy.