AMENDMENTS TO SECTION II OF THE ANNEX TO THE 1946 AGREEMENT
* Delete Section II of the Annex to the 1946 Agreement in itsentirety and replace it with the following :
Routes for the airlines of Australia :
The airlines of Australia designated under this Agreementshall, in accordance with the terms of their designations, beentitled to perform scheduled international air service on thefollowing routes : South Pacific Route :
1 . From Australia via New Zealand, New Caledonia, Fiji,American Samoa,' Canton Island, French Polynesia, Mexico, Canadato the gateway points of Honolulu, San Francisco, Los Angeles,New York and three points to be selected by the Government ofAustralia and to an additional 8 points (which may be changedfrom time to time) in the United States only via one or more ofthe specified and/or selected gateway points and beyond toCanada, Mexico, the United Kingdom and Europe and beyond .
North Pacific Route :
2 . From Australia via any two points in Asia (including HongKong, Japan, Korea, and Taipei and may be changed from time totime) to any three points in the United States to be chosen fromHonolulu, Los Angeles, San Francisco, and New York and one otherpoint selected by the Government of Australia .
Guam and the Commonwealth of the Northern Mariana Islands Route :
3 . From Australia to Guam and the Commonwealth of the Northern Mariana Islands and beyond to any two points to be chosen fromTokyo, Nagoya, Fukuoka, Seoul, Taipei, Beijing and oneadditional point to be specified. The beyond points may bechanged from time to time .
_1/ May be served as an intermediate or a turnaround point .'
AMENDMENTS TO THE MEMORANDUM OF UNDERSTANDING UNITED STATES-AUSTRALIA NORTH PACIFIC ROUTE 2 CAPACITY
(Annex B to the 1989 Capacity Agreement)
* Delete sub-paragraph (c) in its entirety and replace it withthe following :
'(c) The growth entitlements for designated carriers ofeach Contracting Party under sub-paragraphs (a)(i), (a)(ii) and (a)(iii) of this paragraph will apply if :
(i) the airline seeking the increase in capacity hasoperated over the preceding 12 months at an average revenuepassenger seat factor of 70% or more based on the totaltraffic onboard into/ex Australia ; and
(ii) not less than 55% of passenger traffic carried overthe preceding 12 months by the airline seeking the increasewas Australia-USA v.v. uplift/discharge(origin/destination) traffic .
' Paragraph 6
* Delete paragraph 6 in its entirety and replace it with thefollowing :
'6 . (a) Notwithstanding any other provision of thisMemorandum, each designated airline provided it has fullyused its entitlements granted under other paragraphs ofthis Memorandum will be entitled to :
(i) operate a minimum of 3 round trip frequencies per weekbetween the United States and Australia on route 2, without limitation as to aircraft type ;
(ii) subject to sub-paragraph(b), operate any level ofcapacity that had been operated by that airline on route 2at any time within the most recent 18 months ; except thatan airline shall always have the right to restore serviceto its level of minimum entitlements, as set forth in sub-paragraph 6 (a)(i) above; and
(iii) operate a level of capacity necessary to reduce itsaverage load factor to 70% on its regularly scheduled services on route 2 provided that an average of 55% or moreof the revenue passenger traffic onboard is U .S .-Australia uplift/discharge (origin/destination) passenger traffic .
2_/ Operating authorizations for the rights embodied in thissub-paragraph shall not contain conditions relating to trafficcomposition .
(b) A designated airline may only increase its capacity to the level referred to in sub-paragraph 6 (a)(ii) if : (i) the airline has operated over the preceding 12 months at an average revenue passenger seat factor of 70% or more based on the total traffic onboard into/ex Australia ; and (ii) not less than 55% of passenger traffic carried overthe preceding 12 months by the airline was Australia-USA v . v. uplift/discharge (origin/destination) traffic .
(c) The operation of a level of capacity necessary toreduce an airline's load factor to 70% on its regularlyscheduled services referred to in sub-paragraph (a)(iii) ofthis paragraph shall be calculated on the basis ofstatistics reported by that airline to its Government, withsuch statistics reflecting: (1) All revenue passengertraffic, irrespective of point of uplift/discharge (origin/destination) on route 2, and,
(2) U.S.-Australia uplift/discharge (origin/destination) revenue passenger traffic carried into and from the territory of the otherContracting Party on route 2 during the most recent12-month period for which statistics are available . Where the calculation of such capacity results in a residue ofseats upon conversion into weekly frequencies, the airlinemay operate an additional weekly frequency provided suchresidue is 50 percent or more of the seat capacity of theaircraft to be operated .'
* Delete paragraph 8 in its entirety and replace it with thefollowing :
'8 . (a) Subject to sub-paragraph (b) of this paragraph, andprovided that the 1946 Agreement remains in effect, thisMemorandum (as amended from time to time) will remain ineffect until 31 January 1997, and thereafter will remain ineffect unless either Contracting Party notifies the otherin writing of its intention to terminate this Memorandum ona date it specifies .
(b) At any time after 31 January 1997, either Party mayrequest consultations which will be held within 60 daysfrom the date of the request, to amend the Memorandum . Unless mutually arranged otherwise, if at the conclusion ofsuch consultations, agreement cannot be reached onamendments proposed by either Party, this Memorandum willterminate one month from the date of conclusion of the consultations .
(c) The arrangements in sub-paragraph (b) of thisparagraph will not preclude either Party from seekingamendments to this Memorandum before 31 January 1997 .'
AMENDMENTS TO THE UNDERSTANDINGS REACHED ON THE INTERPRETATION OF THE MEMORANDA OF UNDERSTANDING CONCERNING CAPACITY
(Annex D to the 1989 Capacity Agreement)
• Insert the following new paragraph :
•18. Unless the Contracting Parties agree otherwise no morethan two airline designations by each Contracting Party to operate combination services on North Pacific route 2 maybe in effect at any one time .' Paragraphs 3, 6, and 8
• Delete paragraphs 3, 6, and 8 in their entirety and replace them with the following :
'3. In calculating a load factor under sub-paragraphs 6(a)(iii) and 6 (b) of the South Pacific Memorandum ofUnderstanding and sub-paragraphs
4 (c)(i), 6 (a)(iii), 6(b)(i) and 6 (c) of the North Pacific Memorandum ofUnderstanding, services including extra capacity broughtabout by substituting larger for smaller aircraft will betreated as normal scheduled services irrespective ofwhether for other purposes the extra capacity is treated assupplementary services (extra sections) .' '
6 . Airlines must operate their capacity entitlements underthe South Pacific and North Pacific Memoranda of Understanding within an 18-month period from the time theentitlement takes effect, or the unused portion willlapse . This provision in no way limits an airline's rightto operate its capacity entitlements as set out insub-paragraph 6 (a)(i) of the South Pacific and North Pacific Memoranda of Understanding .'
• 8 . A reference in sub-paragraph 6(a)(ii) of the SouthPacific and North Pacific Memoranda of Understandings toany level of capacity that had been operated by adesignated airline at any time within the most recent 18months includes only capacity operated on scheduledservices and does not include supplementary servicesoperated by that airline . This provision in no way prevents an airline from operating supplementary servicesin accordance with sub-paragraphs 2 (c) of the SouthPacific and North Pacific Memoranda of Understanding .' J.