Delegations representing the Governments of the United States of America and the
People's Republic of China met in Washington, D.C., on June 9-11, 2004, to negotiate
amendments to the 1980 U .S.-China Air Transport Agreement, as amended .
Negotiations proceeded in the same productive and cordial atmosphere that had
characterized the prior three negotiating sessions between the two countries . Delegation
lists appear as Appendix 1 .
The delegations initialed the attached Terms of Agreement (Appendix 2), and intend to
complete the text of a draft Protocol that will reflect the Terms of Agreement at the
earliest date possible .
|
For the delegation of |
For the delegation of |
|
Mr. Wang Ronghua |
Ms. Marianne Myle |
U.S. China Aviation Negotiations
June 9-11 2004
Washington D.C.
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1 . Ms. Marianne Myles
3. Mr. Ed Wilbur 4. Mr. Richard Gaffin
7. Mr. Eugene Alford
11. Mr. Russ Bailey
12. Mr. Richard Carlson
13. Ms. Sandra Chiu 14. Mr. Robert Cohn/Mr. Jonathan Echmalian* 15. Mr. Paul Doell/ Ms. Jennifer Winter* 16. Mr. David Eiselsberg 17. Ms. Roz Ellingsworth 18. Mr. Dan Elwell 19. Mr. Richard Finn 20. Mr. Stephen Gelband
21. Mr. Mike Goldman 27. Mr. David Mishkin 28. Mr. Greg Moix 29. Mr. Kevin Montgomery 30. Mr. Steve Okun/Mr. Ted Lytle* 31. Mr. Genaro Pena 32. Mr. Bradley Rubinstein 33. Mr. Carlos Salas
34. Ms. Nancy Sparks/Mr. Bailey Leopard* Chinese Delegation |
Head of Delegation Deputy Director Office of International Aviation Office of China
Kalitta Airlines Air Line Pilots Association International Air Transport Association (ATA) United Airlines Kansas City Aviation Department National Air Carrier Association Miami International Airport Independent Pilots Association American Airlines Portland International Airport Las Vegas McCarran International Airport Continental Airlines Northwest Airlines San Francisco Airport Commission Polar Air Cargo United Parcel Service UPS
Houston Airport System Port Authority of New York and New Jersey Commonwealth of the Northern Mariana Islands Federal Express FedEx |
|
1 . Mr. Wang Ronghua
4. Ms. Tao Yehong
5 . Ms. Sun Ying
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Director General Division Director Division Director Official Official First Secretary Industry Vice President Assistant General Manager Staff Member Deputy General Manager Vice President Director Assistant Manager Senior Vice President Manager Business Manager Executive Director of the Board Deputy Manager Regional Manager |
U.S. China Aviation Negotiations
Terms of Agreement
June 11 2004
Appendix 2
A. One additional designation for U .S. Route B effective August 1 2004. One additional designation for China Route A or Route B effective August 1 2004.
B. One additional designation for U .S. Route A effective 2005 IATA summer season . One additional designation for China Route A or Route B effective 2005 IATA summer season .
C. One additional designation for each side for Route A or Route B effective 2006 IATA summer season .
D. One additional designation for each side for Route A or Route B effective 2008 IATA summer season .
E. One additional designation for each side for Route A or Route B effective 2010 IATA summer season.
2. Frequencies
In addition to the frequencies available under the current agreement the frequencies available to operate additional combination and all cargo flights will be increased as discussed in this Part . Frequencies will apply to different geographical areas of China as defined by Zones .
Zone 1 : Beijing Shanghai and Guangzhou
Zone 2 : Anhui Fujian Guangdong except for Guangzhou Hebei Henan Hubei Hunan Jiangsu Jiangxi Shandong Shanxi Tianjin and Zhejiang
Zone 3 : Chongqing Gansu Guangxi Guizhou Hainan Island Heilongjiang Inner Mongolia Jilin Liaoning Ningxia Qinghai Shaanxi Sichuan Tibet Xinjiang and Yunnan .
A. The frequencies in this section will be available for services to Zones 1 and 2.
Combination Frequencies for Zones 1 and 2
All Cargo Frequencies for Zones 1 and 2
Appendix 2
Note 1 : For the U .S. side : Any Route A carrier that obtains new all cargo frequencies made available by this agreement must use such frequencies for all cargo services only . Any Route A carrier that obtains new combination frequencies made available by this agreement must use such frequencies for combination services only .
Note 2: For the Chinese side : The capacity entitlement may be converted between Route B cargo carriers and Route A combination carriers.
Note 3 : For both sides : The current agreement limits the number of weekly flights to 54 for each side . Currently these frequencies may be used for combination and/or all cargo service by carriers designated on Route A and for all cargo service on Route B by carriers designated on Route B and may be reallocated between carriers on Route A and carriers on Route B . When this agreement comes into effect this flexibility will continue for the Chinese side but shall be limited for the U .S . side to 18 frequencies . The remaining 36 U.S. frequencies will be restricted to the Route and type of service either all cargo or combination for which they are currently used . Currently U .S. carriers operate 37 frequencies on Route A of which 34 are combination and 3 are all cargo and 17 frequencies on Route B .
B. In addition to the frequencies made available in 2A above the designated carriers may use frequencies made available by this paragraph for Zone 2 only.
August 1 2004 : +14
2005 IATA summer season : + 7
2006 IATA summer season : + 7
2007 IATA summer season : + 7
2008 IATA summer season : + 7
2009 IATA summer season : + 7
2010 IATA summer season : + 7
August 1 2004 : +21
2005 IATA summer season : +18
2006 IATA summer season : +12
2007 IATA summer season : +15
2008 IATA summer season : +15
2009 IATA summer season : +15
2010 IATA summer season : +15
3 . Special Aviation Area Zone 3 :
All designated and non designated U .S . and Chinese carriers shall be permitted to operate third and fourth freedom services between the United States and points in Zone 3 without frequency limitations . At five points in Zone 3 to be selected by each Party all designated and non designated U .S. and Chinese carriers shall be permitted to operate fifth freedom services on the authorized routes without frequency limitations . In the case of combination carriers such fifth freedom services shall not count against the fifth freedom cap described in paragraph 4D below . Service to/from a point in Zone 1 or 2 that also serves a point in Zone 3 would still be subject to the limitations applicable to service to/from Zone 1 or Zone 2 .
4. Route Rights for Combination Carriers
A. For the Chinese side
B. For the U.S. side
C. For both sides
D. Limitation on Japan China Flights
All Car o/Combination Fre uencies for Zone 2
1 . No limitation on the points that may be served in the United States effective immediately .
2. One additional intermediate or beyond point with full traffic rights may be selected by China each year 2005 to 2010.
1 . No limitation on the points that may be served in China effective immediately .
2. One additional intermediate point with full traffic rights may be selected by the United States effective 2009 IATA summer season .
Route A carriers when operating all cargo flights shall enjoy the same route flexibility as Route B carriers .
The limitation applicable to combination services only that no more than 39 frequencies may be operated with fifth freedom rights between Japan and China
Appendix 2
2007 IATA summer season : +7
2008 IATA summer season : +7
2009 IATA summer season : +7
2010 IATA summer season : +7
5. Code Sharing
A. Bilateral Code Sharing
Code sharing between any U .S . and Chinese airlines including non designated airlines shall be permitted without limitations as to the points that may be served in either country or a third country on a code share basis. Such code share arrangements may also involve additional airlines of each Party and/or airlines of third countries . U.S. and Chinese airlines may market code share services on routes that are open i.e. that include points in the territories of the parties and also may include any behind intermediate and beyond points .
B. Same Country Carrier Code Sharing
Same country code sharing shall be permitted for one pair 1+1 or 1+2 of airlines including non designated airlines in 2006 and another pair including non designated airlines 1+1 in 2008 . If the opportunity used in 2006 is 1+1 then the opportunity available in 2008 will be 1+1 or 1+2 . If U.S . same country carrier code share arrangements include participation by a carrier or carriers of the other Party they shall be treated as bilateral code sharing arrangements to which no limitations apply .
6. Charters shall apply only to flights serving points in Zone 1 Zone 2 and all but five points selected in Zone 3 per the rights granted in Section 3 .
A. Each side agrees to permit up to 75 one way charter flights per year between points in Zone 1 and U .S. points on city pairs served by Chinese carriers' scheduled services of the same type combination or all cargo as the charter applicant.
B. Each side agrees to permit up to 75 one way charter flights per year between points in Zone 2 and U .S. points on city pairs served by Chinese carriers' scheduled services of the same type combination or all cargo as the charter applicant.
C. Each side agrees to permit unlimited charters between points in Zone 3 and any US points.
D. Each side agrees to permit unlimited charters on U .S. China city pairs not served by Chinese carriers' scheduled service of the same type combination or all cargo as the charter applicant.
Appendix 2
7. Change of Gauge for Cargo Services
Appendix 2
E. Applications to operate fifth freedom charters and charters on U .S . China city pairs served by Chinese carriers' scheduled services that exceed the limits specified in A and B above shall be considered on the basis of comity and reciprocity.
F. Carriers shall operate charters in accordance with the charter rules of the country from which the charter originates .
G. Each Party shall process charter applications expeditiously and act on charter applications without undue delay.
A. Beginning with the 2005 IATA summer season for all cargo services carriers may change gauge at any point in the other Party's territory with the limitation that no more than two flights with aircraft of any size or type may operate beyond the point of change of gauge for each incoming aircraft . Only one aircraft of those two may operate to another point in that Party's territory from the point of change of gauge .
B. Beginning with the 2007 IATA summer season for all cargo services carriers may change gauge at any point in the other Party's territory with the limitation that no more than two flights with aircraft of any size or type may operate beyond the point of change of gauge for each incoming aircraft . Both of those aircraft may operate to another point in that Party's territory from the point of change of gauge.
C. Beginning with the 2009 IATA summer season for all cargo services carriers may change gauge at any point in the other Party's territory with the limitation that no more than three flights with aircraft of any size or type may operate beyond the point of change of gauge for each incoming aircraft . Only two aircraft of those three may operate to another point in that Party's territory from the point of change of gauge .
D. Beginning with the 2011 IATA summer season for all cargo services carriers may change gauge at any point in the other Party's territory with the limitation that no more than three flights with aircraft of any size or type may operate beyond the point of change of gauge for each incoming aircraft . All three of those aircraft may operate to another point in that Party's territory from the point of change of gauge .
Note : Aircraft for operations under paragraphs 7 .A D shall be scheduled in coincidence with the outbound or inbound aircraft as the case may be and may have the same flight number . A clarification will be made that equal or smaller size aircraft will normally provide service beyond the change of gauge point .
8. Pricing
9. Cargo Hubs
Appendix 2
Effective immediately a country of origin pricing regime will replace the current regime for pricing. Effective 2008 IATA summer season a double disapproval regime shall take effect .
A. Effective in 2007 designated airlines that have established a cargo hub will immediately have the following operational rights at the hub : unlimited capacity unlimited "starburst" change of gauge with the limitation that only four aircraft may operate to another point in that Party's territory from the point of change of gauge unrestricted fifth freedom rights seventh freedom rights coterminalization self handling intermodal and unlimited code sharing.
B. For purposes of paragraph A a hub shall be defined as a point in the territory of the other Party at which :
1 A designated airline serves with at least 72 all cargo aircraft movements per week to multiple points . An aircraft movement is a landing or a takeoff at the hub point and
2 A designated airline employs personnel at the hub point to facilitate the movement of the cargo and
3 A designated airline utilizes airport facilities at the hub point for the movement of cargo .
4 A designated airline must utilize a bonded facility under the supervision of customs authorities for the movement of transit traffic at the hub point.
C. If a designated airline serves its cargo hub in the territory of the other Party with a traffic stop at a non hub point in the other Party's territory such a flight would count against the frequency entitlement applicable to the non hub point under this agreement :
1 From 2007 through 2008 when serving a city in Zone 1 or Zone 2
2 From 2009 through 2010 when serving a city in Zone 1
3 From 2011 no flights will count against the frequency entitlement
D. A designated airline that consistently meets the definition of a hub as defined in this Part for a continuous six month period shall retain the full operating flexibility held by that airline at its hub point even if that airline temporarily fails to operate 72 aircraft movements per week at the hub . In the event such an airline fails to operate an average of at least 72 aircraft movements per week at its hub
10. Intermodal Rights
11. Self Handling
12. Doing Business
A. Hiring of Third Country Nationals
Appendix 2
over a period of nine months the two sides shall consult to review the circumstances that led to the reduced level of operations and the likelihood that hub operations will be restored . Effective 2007 airlines of both countries shall be permitted without restriction to employ in connection with international air transportation any surface transportation for cargo to or from any points in the territories of the Parties or in third countries . Intermodal cargo services may be offered at a single through price for air and surface transportation combined.
Effective 2008 airlines of both countries shall be permitted to perform their own ground handling in the territory of the other Party directly and/or to select ground handling agents. Each Party will permit carriers of the other Party to hire third country managerial sales technical operational and other specialist staff required for the provision of air transportation.
B . Rights for Non designated Carriers
1 . Right to open independent sales offices whether or not the carrier has a Chinese code share partner including the ability to lease own office space and to hire office employees .
2. Right to market and sell services both for international and U.S. domestic segments to include sales on an online interline code share or blocked space basis.
3 . Right to issue own tickets or airway bills for the sale of services .
4. Right to participate in the Bank Settlement Plan .
5. Right to select and appoint General Sales Agents .
6. Right to open offices in airports .
13 . Future Negotiations
Appendix 2
Both sides agree that the ultimate objective for the bilateral civil aviation relationship is full liberalization . To that end negotiations shall be held in 2006 for the purposes of 1 conducting a comprehensive review of the implementation of their bilateral civil aviation agreement to date and 2 establishing the next steps that the sides will take to further liberalize their bilateral civil aviation relationship .
