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U.S. Department of State

Diplomacy in Action

U.S.-Pakistan Air Transport Agreement of April 10, 1997


April 10, 1997

   
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AIR TRANSPORT AGREEMENT
BETWEEN THE GOVERNMENT OF THE
UNITED STATES OF AMERICA
AND
THE GOVERNMENT OF THE
ISLAMIC REPUBLIC OF PAKISTAN
The Government of the United States of America and the
Government of the Islamic Republic of Pakistan (hereinafter,
"the Parties") ;
Desiring to promote an international aviation system based on
competition among airlines in the marketplace with minimum
government interference and regulation ;
Desiring to facilitate the expansion of international air
transport opportunities ;
Desiring to make it possible for airlines to offer the
traveling and shipping public a variety of service options at
the lowest prices that are not predatory or discriminatory and
do not represent abuse of a dominant position, and wishing to
encourage individual airlines to develop and implement
innovative and competitive prices ;
Desiring to ensure the highest degree of safety and security in
international air transport and reaffirming their grave concern
about acts or threats against the security of aircraft, which
jeopardize the safety of persons or property, adversely affect
the operation of air transportation, and undermine public
confidence in the safety of civil aviation ; and
Being Parties to the Convention on International Civil
Aviation, opened for signature at Chicago on December 7, 1944 ;
Have agreed as follows :
Article 1
Definitions
For the purposes of this Agreement, unless otherwise stated,
the term :
1 . "Aeronautical authorities" means, in the case of the United
States, the Department of Transportation, or its successor, and
in the case of the Islamic Republic of Pakistan, the Aviation
-2-
Division, or its successor, and any person or agency authorized
to perform the functions exercised by the said aeronautical
authorities ;
2 . "Agreement" means this Agreement, its Annexes, and any
amendments thereto ;
.3 . "Air transportation" means the public carriage by aircraft
of passengers, baggage, cargo, and mail, separately or in
combination, for remuneration or hire ;
4 . "Convention" means the Convention on International Civil
Aviation, opened for signature at Chicago on December 7, 1944,
and includes :
(1) any amendment that has entered into force under
Article 94(a) of the Convention and has been ratified by
both Parties, and
(2) any Annex or any amendment thereto adopted under
Article 90 of the Convention, insofar as such Annex or
amendment is at any given time effective for both Parties ;
5 . "Designated airline" means an airline designated and
authorized in accordance with Article 3 of this Agreement ;
6 . "Full cost" means the cost of providing service plus a
reasonable charge for administrative overhead ;
7 . "International air transportation" means air transportation
that passes through the airspace over the territory of more
than one State ;
8 . "Price" means any fare, rate or charge for the carriage of
passengers (and their baggage) and/or cargo (excluding mail) in
air transportation charged by airlines, including their agents,
and the conditions governing the availability of such fare,
rate or charge ;
9 . "Stop for non-traffic purposes" means a landing for any
purpose other than taking on or discharging passengers,
baggage, cargo and/or mail in air transportation ;
10 . "Territory" means the land areas under the sovereignty,
jurisdiction, protection, or trusteeship of a Party, and the
territorial waters adjacent thereto ; and

11 . "User charge" means a charge imposed on airlines for the
provision of airport, air navigation, or aviation security
facilities or services including related services and
facilities .
Article 2
Grant of Riqhts
1 . Each Party grants to the other Party the following rights
for the conduct of international air transportation by the
airlines of the other Party :
a . the right to fly across its territory without landing ;
b . the right to make stops in its territory for non-traffic
purposes ; and
c . the rights otherwise specified in this Agreement .
2 . Nothing in this Article shall be deemed to confer on the
airline or airlines of one Party the rights to take on board,
in the territory of the other Party, passengers, their baggage,
cargo, or mail carried for compensation and destined for
another point in the territory of that other Party .
Article 3
Desiqnation and Authorization
1 . Each Party shall have the right to designate any number of
airlines to conduct international air transportation in
accordance with this Agreement and to withdraw or alter such
designations . Such designations shall be transmitted to the
other Party in writing through diplomatic channels, and shall
identify whether the airline is authorized to conduct the type
of air transportation specified in Annex I or in Annex II or
both .
2 . On receipt of such a designation, and of applications from
the designated airline, in the form and manner prescribed for
operating authorizations and technical permissions, the other
Party shall grant appropriate authorizations and permissions
with minimum procedural delay, provided :

a . substantial ownership and effective control of that
airline are vested in the Party designating the airline,
nationals of that party, or both ;
b . the designated airline is qualified to meet the
conditions prescribed under the laws and regulations
normally applied to the operation of international air
transportation by the Party considering the application or
applications ; and
c . the Party designating the airline is maintaining and
administering the standards set forth in Article 6 (Safety)
and Article 7 (Aviation Security) .
Article 4
Revocation of Authorization
1 . Either Party may revoke, suspend or limit the operating
authorizations or technical permissions of an airline
designated by the other Party where :
a . substantial ownership and effective control of that
airline are not vested in the other Party, the other
Party's nationals, or,-both ;
b . that airline has failed to comply with the laws and
regulations referred to in Article 5 (Application of Laws)
of this Agreement ; or
c . the other Party is not maintaining and administering
the standards as set forth in Article 6 (Safety) .
2 . Unless immediate action is essential to prevent further
noncompliance with subparagraphs lb or lc of this Article, the
rights established by this Article shall be exercised only
after consultation with the other Party .
3 . This Article does not limit the rights of either Party to
withhold, revoke, limit or impose conditions on the operating
authorization or technical permission of an airline or airlines
of the other Party in accordance with the provisions of Article
7 (Aviation Security) .

Article 5
Application of Laws
1 . While entering, within, or leaving the territory of one
Party, its laws and regulations relating to the operation and
navigation of aircraft shall be complied with by the other
Party's airlines .
2 . While entering, within, or leaving the territory of one
Party, its laws and regulations relating to the admission to or
departure from its territory of passengers, crew or cargo on
aircraft (including regulations relating to entry, clearance,
aviation security, immigration, passports, customs and
quarantine or, in the case of mail, postal regulations) shall
be complied with by, or on behalf of, such passengers, crew or
cargo of the other Party's airlines .
Article 6
Safety
1 . Each Party shall recognize as valid, for the purpose of
operating the air transportation provided for in this
Agreement, certificates of airworthiness, certificates of
competency, and licenses issued or validated by the other Party
and still in force, provided that the requirements for such
certificates or licenses at -least equal the minimum standards
that may be established pursuant to the Convention . Each Party
may, however, refuse to recognize as valid for the purpose of
flight above its own territory, certificates of competency and
licenses granted to or validated for its own nationals by the
other Party .
2 . Either Party may request consultations concerning the
safety standards maintained by the other Party relating to
aeronautical facilities, aircrews, aircraft, and operation of
the designated airlines . If, following such consultations, one
Party finds that the other Party does not effectively maintain
and administer safety standards and requirements in these areas
that at least equal the minimum standards that may be
established pursuant to the Convention, the other Party shall
be notified of such findings and the steps considered necessary
to conform with these minimum standards, and the other Party
shall take appropriate corrective action . Each Party reserves
the right to withhold, revoke, or limit the operating
authorization or technical permission of an airline or airlines
designated by the other Party in the event the other Party does
not take such appropriate corrective action, conforming to
minimum standards that may be established pursuant to the
Convention, within a reasonable time .
Article 7
Aviation Security
1 . In accordance with their rights and obligations under
international law, the Parties reaffirm that their obligation
to each other to protect the security of civil aviation against
acts of unlawful interference forms-- an integral part of this
Agreement . Without limiting the generality of their rights and
obligations under international law, the Parties shall in
particular act in conformity with the provisions of the
Convention on Offenses and Certain Other Acts Committed on
Board Aircraft, signed at Tokyo on September 14, 1963, the
Convention for the Suppression of Unlawful Seizure of Aircraft,
signed at The Hague on December 16, 1970, and the Convention
for the Suppression of Unlawful Acts against the Safety of
Civil Aviation, signed at Montreal on September 23, 1971 .
2 . The Parties shall provide upon request all necessary
assistance to each other to prevent acts of unlawful seizure of
civil aircraft and other unlawful acts against the safety of
such aircraft, of their passengers and crew, and of airports
and air navigation facilities, and to address any other threat
to the security of civil air navigation .
3 . The Parties shall, in their mutual relations, act in
conformity with all aviation security standards and appropriate
recommended practices established by the International Civil
Aviation Organization and designated as Annexes to the
Convention ; they shall require that operators of aircraft of
their registry, operators of aircraft who have their principal
place of business or permanent residence in their territory,
and the operators of airports in their territory act in
conformity with such aviation security provisions .

4 . Each Party agrees to observe the security provisions
required by the other Party for entry into the territory of
that other Party and to take adequate measures to protect
aircraft and to inspect passengers, crew, and their baggage and
carry-on items, as well as cargo and aircraft stores, prior to
and during boarding or loading . Each Party shall also give
positive consideration to any request from the other Party for
special security measures to meet a particular threat .
.5 . When an incident or threat of an incident of unlawful
seizure of aircraft or other unlawful acts against the safety
of passengers, crew, aircraft, airports or air navigation
facilities occurs, the Parties shall assist each other by,
facilitating communications and other appropriate measures
intended to terminate rapidly and safely such incident or
threat .
6 . When a Party has reasonable grounds to believe that the
other Party has departed from the aviation security provisions
of this Article, the aeronautical authorities of that Party may
request immediate consultations with the aeronautical
authorities of the other Party . Failure to reach a
satisfactory agreement within 30 days from the date of such
request shall constitute grounds to withhold, revoke, limit, or
impose conditions on the operating authorization and technical
permissions of an airline or airlines of that Party . When
required by an emergency, a Party may take interim action prior
to the expiry of 30 days . Any action taken in accordance with
this paragraph shall be discontinued upon compliance by the
other Party with the provisions of this Article .
Article 8
Commercial Opportunities
1 . The airlines of each Party shall have the right to
establish offices in the territory of the other Party for the
promotion and sale of air transportation .
2 . The designated airlines of each Party shall be entitled, in
accordance with the laws and regulations of the other Party
relating to entry, residence, and employment, to bring in and
maintain in the territory of the other Party managerial, sales,
technical, operational, and other specialist staff required for
the provision of air transportation .
WW
3 . Each designated airline shall have the right to perform its
own ground-handling in the territory of the other Party
("self-handling") or, at its option, select among competing
agents for such services in whole or in part . These rights
shall be subject only to physical constraints resulting from
considerations of airport safety . Where such considerations
preclude self-handling, ground services shall be available on
an equal basis to all airlines ; charges shall be based on the
costs of services provided ; and such services shall be
comparable to the kind and quality of services as if
self-handling were possible .
4 . Any airline of each Party may engage in the sale of air
transportation in the territory of the other Party directly
and, at the airline's discretion, through its agents, except as
may be specifically provided by the charter regulations of the
country in which the charter originates that relate to the
protection of passenger funds, and passenger cancellation and
refund rights . Each airline shall have the right to sell such
transportation, and any person shall be free to purchase such
transportation, in the currency of that territory or in freely
convertible currencies .
5 . Each airline shall have the right to convert and remit to
its country, on demand, loccal revenues in excess of sums
locally disbursed . Conversion and remittance shall be
permitted promptly without restrictions or taxation in respect
thereof at the rate of exchange applicable to current
transactions and remittance on the date the carrier makes the
initial application for remittance .
6 . The airlines of each Party shall be permitted to pay for
local expenses, including purchases of fuel, in the territory
of the other Party in local currency . At their discretion, the
airlines of each Party may pay for such expenses in the
territory of the other Party in freely convertible currencies
according to local currency regulation .
7 . In operating or holding out the authorized services on the
agreed routes, provided that all airlines in such arrangements
1) hold the appropriate authority and 2) meet the requirements
normally applied to such arrangements, any designated airline
of one Party may enter into cooperative marketing arrangements
such as blocked-space, code-sharing or leasing arrangements,
with
i) an airline or airlines of either Party ; and
ii) an airline or airlines of a third country, provided
that such third country authorizes or allows comparable
arrangements between the airlines of the other Party and
other airlines on services to, from and via such third
country .
Article 9
Customs Duties and Charqes
1 . On arriving in the territory of one Party, aircraft
operated in international air transportation by the designated
airlines of the other Party, their regular equipment, ground
equipment, fuel, lubricants, consumable technical supplies,
spare parts (including engines), aircraft stores (including but
not limited to such items of food, beverages and liquor,
tobacco and other products destined for sale to or use by
passengers in limited quantities during flight), and other
items intended for or used solely in connection with the
operation or servicing of aircraft engaged in international air
transportation shall be exempt, on the basis of reciprocity,
from all import restrictions, property taxes and capital
levies, customs duties, excise taxes, and similar fees and
charges that are (1) imposed by the national authorities, and
(2) not based on the cost of services provided, provided that
such equipment and supplies 'remain on board the aircraft .
2 . There shall also be exempt, on the basis of reciprocity,
from the taxes, levies, duties, fees and charges referred to in
paragraph 1 of this Article, with the exception of charges
based on the cost of the service provided :
a . aircraft stores introduced into or supplied in the
territory of a Party and taken on board, within reasonable
limits, for use on outbound aircraft of an airline of the
other Party engaged in international air transportation,
even when these stores are to be used on a part of the
journey performed over the territory of the Party in which
they are taken on board ;
b . ground equipment and spare parts (including engines)
introduced into the territory of a Party for the servicing,
maintenance, or repair of aircraft of an airline of the
other Party used in international air transportation ;
41e

c . fuel, lubricants and consumable technical supplies
introduced into or supplied in the territory of a Party for
use in an aircraft of an airline of the other Party engaged
in international air transportation, even when these
supplies are to be used on a part of the journey performed
over the territory of the Party in which they are taken on
board ; and
d . promotional and advertising materials introduced into
or supplied in the territory of one Contracting Party and
taken on board, within reasonable limits, for use on
outbound aircraft of an airline of the other Contracting
Party engaged in international air transportation, even
wilen these stores are to be used on a part of the journey
performed over the territory of the Contracting Party in
which they are taken on board .
3 . Equipment and supplies referred to in paragraphs 1 and 2 of
this Article may be required to be kept under the supervision
or control of the appropriate authorities .
4 . The exemptions provided by this Article shall also be
available where the designated airlines of one Party have
contracted with another airline, which similarly enjoys such
exemptions from the other Party, for the loan or transfer in
the territory of the other`'Party of the items specified in
paragraphs 1 and 2 of this Article .
Article 10
User Charges
1 . User charges that may be imposed by the competent charging
authorities or bodies of each Party on the airlines of the
other Party shall be just, reasonable, not unjustly
discriminatory, and equitably apportioned among categories of
users . In any event, any such user charges shall be assessed
on the airlines of the other Party on terms not less favorable
than the most favorable terms available to any other airline at
the time the charges are assessed .
2 . User charges imposed on the airlines of the other Party may
reflect, but shall not exceed, the full cost to the competent
charging authorities or bodies of providing the appropriate
airport, airport environmental, air navigation, and aviation
security facilities and services at the airport or within the
airport system . Such full cost may include a reasonable return
on assets, after depreciation . Facilities and services for
which charges are made shall be provided on an efficient and
economic basis .
3 . Each Party shall encourage consultations between the
competent charging authorities or bodies in its territory and
the airlines using the services and facilities, and shall
encourage the competent charging authorities or bodies and the
airlines to exchange such information as may be necessary to
permit an accurate review of the reasonableness of the charges
in accordance with the principles of paragraphs (1) and (2) of
this Article . Each Party shall encourage the competent
charging authorities to provide users with reasonable notice of
any proposal for changes in user charges to enable users to
express their views before changes are made .
4 . Neither party shall be held, in dispute resolution
procedures pursuant to Article 14, to be in breach of a
provision of this Article, unless (i) it fails to undertake a
review of the charge or practice that is the subject of
complaint by the other Party within a reasonable amount of
time ; or (ii) following such a review it fails to take all
steps within its power to remedy any charge of practice that is
inconsistent with this Article .
Article 11
Fair Competition
1 . Each Party shall allow a fair and equal opportunity for the
designated airlines of both Parties to compete in providing the
international air transportation governed by this Agreement .
2 . Each party shall allow each designated airline to determine
the frequency and capacity of the international air
transportation it offers based upon commercial considerations
in the marketplace . Consistent with this right, neither Party
shall unilaterally limit the volume of traffic, frequency or
regularity of service, or the aircraft type or types operated
by the designated airlines of the other Party, except as may be
required for customs, technical, operational, or environmental
reasons under uniform conditions consistent with Article 15 of
the Convention .

3 . Neither Party shall impose on the other Party's designated
airlines a first-refusal requirement, uplift ratio,
no-objection fee, or any other requirement with respect to
capacity, frequency or traffic that would be inconsistent with
the purposes of this Agreement .
4 . Neither Party shall require the filing of schedules,
programs for charter flights, or operational plans by airlines
of the other Party for approval, except as may be required on a
non-discriminatory basis to enforce the uniform conditions
foreseen by paragraph 2 of this Article or as may be
specifically authorized in an Annex to this Agreement . If a
Party requires filings for information purposes, it shall
minimize the administrative burdens of filing requirements and
procedures on air transportation intermediaries and on
designated airlines of the other Party .
Article 12
Pricing
1 . Each Party shall allow prices for air transportation to be
established by each designated airline based upon commercial
considerations in the marketplace . Intervention by the Parties
shall be limited to :
a . prevention of unreasonably discriminatory prices or
practices ;
b . protection of consumers from prices that are
unreasonably high or restrictive due to the abuse of a
dominant position ; and
c . protection of airlines from prices that are
artificially low due to direct or indirect governmental
subsidy or support .
2 . Each Party may require notification to or filing with its
aeronautical authorities of prices to be charged to or from its
territory by airlines of the other Party . Notification or
filing by the airlines of both Parties may be required no more
than 30 days before the proposed date of effectiveness . In
individual cases, notification or filing may be permitted on
shorter notice than normally required . Neither Party shall
require the notification or filing by airlines of the other
Party of prices charged by charterers to the public, except as
may be required on a non-discriminatory basis for information
purposes .

3 . Neither Party shall take unilateral action to prevent the
inauguration or continuation of a price proposed to be charged
or charged by (a) an airline of either Party for international
air transportation between the territories of the parties, or
(b) an airline of one Party for international air
transportation between the territory of the other Party and any
other country, . including in both cases transportation on an
interline or intraline basis . If either Party believes that
any such price is inconsistent with the considerations set
forth in paragraph (1) of this Article, it shall request
consultations and notify the other Party of the reasons for its
dissatisfaction as soon as possible . These consultations shall
be held not later than 30 days after receipt of the request,
and the Parties shall cooperate in securing information
necessary for reasoned resolution of the issue . If the Parties
reach agreement with respect to a price for which a notice of
dissatisfaction has been given, each Party shall use its best
efforts to put that agreement into effect . Without such mutual
agreement, the price shall go into effect or continue in effect .
Article 13
Intermodal Services
Notwithstanding any other-'provision of this Agreement, airlines
and indirect providers of cargo transportation of both Parties
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, including
transport to and from all airports with customs facilities, and
including, where applicable, the right to transport cargo in
bond under applicable laws and regulations . Such cargo,
whether moving by surface or by air, shall have access to
airport customs processing and facilities . Airlines may elect
to perform their own surface transportation or to provide it
through arrangements with other surface carriers, including
surface transportation operated by other airlines and indirect
providers of cargo air transportation . Such intermodal cargo
services may be offered at a single, through price for the air
and surface transportation combined, provided that shippers are
not misled as to the facts concerning such transportation .

Article 14
Consultations
Either Party may, at any time, request consultations relating
to this Agreement . Such consultations shall begin at the
earliest possible date, but not later than 60 days from the
date the other Party receives the request unless otherwise
agreed .
Article 15
Settlement of Disputes
1 . Any dispute arising under this agreement, except those that
may arise under paragraph 3 of Article 12 (Pricing), that is
not resolved by a first round of formal consultations may be
referred by agreement of the Parties for decision to some
person or body . If the Parties do not so agree, the dispute
shall, at the request of either Party, be submitted to
arbitration in accordance with the procedures set forth below .
2 . Arbitration shall be by a tribunal of three arbitrators to
be constituted as follows :.
a . Within 30 days after the receipt of a request for
arbitration, each Party shall name one arbitrator . Within
60 days after these two arbitrators have been named, they
shall by agreement appoint a third arbitrator, who shall
act as President of the arbitral tribunal ;
b . If either Party fails to name an arbitrator, or if the
third arbitrator is not appointed in accordance with
subparagraph a of this paragraph, either Party may request
the President of the Council of the International Civil
Aviation Organization to appoint the necessary arbitrator
or arbitrators within 30 days . If the President of the
Council is of the same nationality as one of the Parties,
the most senior Vice President who is not disqualified on
that ground shall make the appointment .
3 . Except as otherwise agreed, the arbitral tribunal shall
determine the limits of its jurisdiction in accordance with
this Agreement and shall establish its own procedural rules .
The tribunal, once formed, may recommend interim relief
measures pending its final determination . At the direction of
the tribunal or at the request of either of the Parties, a
conference to determine the precise issues to be arbitrated and
the specific procedures to be followed shall be held not later
than 15 days after the tribunal is fully constituted .
4 . Except as otherwise agreed or as directed by the tribunal,
each Party shall submit a memorandum within 45 days of the time
the tribunal is fully constituted . Replies shall be due 60
days later . The tribunal shall hold a hearing at the request
of either Party or on its'own initiative within 15 days after
replies are due .
5 . The tribunal shall attempt to render a written decision
within 30 days after completion of the hearing or, if no
hearing is held, after the date both replies are submitted .
The decision of the majority of the tribunal shall prevail .
6 . The Parties may submit requests for clarification of the
decision within 15 days after it is rendered and any
clarification given shall be issued within 15 days of such
request .
7 . Each Party shall, to the-degree consistent with its
national law, give full effect to any decision or award of the
arbitral tribunal .
8 . The expenses of the arbitral tribunal, including the fees
and expenses of the arbitrators, shall be shared equally by the
Parties . Any expenses incurred by the President of the Council
of the International Civil Aviation Organization in connection
with the procedures of paragraph 2 .b . of this Article shall be
considered to be part of the expenses of the arbitral tribunal .
Article 16
Termination
Either Party may, at any time, give notice in writing to the
other Party of its decision to terminate this Agreement . Such
notice shall be sent simultaneously to the International Civil
Aviation Organization . This Agreement shall terminate at
midnight (at the place of receipt of the notice to the other
Party) immediately before the first anniversary of the date of
receipt of the notice by the other Party, unless the notice is
withdrawn by . agreement of the Parties before the end of this
period .
Article 17
Registration with ICAO
This Agreement and all amendments thereto shall be registered
with the International Civil Aviation Organization .
Article 18
Entry into Force
This Agreement and its Annexes shall enter into force on the
date of signature .
IN WITNESS WHEREOF the undersigned, being duly authorized by
their respective Governments, have signed this Agreement .
aV Dv1~~~ DONE at
this 1 0 day of
1997, in
duplicate in thi English language .
FOR THE GOVERNMENT OF THE
UNITED STATES OF AME CA :
M • A-• P,,'0^
FOR THE GOVERNMENT OF THE
ISLAMIC REPUBLIC OF PAKISTAN :
ANNEX I
Scheduled Air Transportation
Section 1
Routes
Airlines of each Party designated under this Annex shall, in
accordance with the terms of their designation, be entitled to
perform scheduled international air transportation between
points on the following routes :
A .
Routes for the airline . or airlines designated by the
Government of the United States :
From the United States via intermediate points to a
point or points in Pakistan and beyond .
B .
Routes for the airline or airlines desiqnated by the
Government of Pakistan :
1 . For combination services :
From Pakistan via intermediate points : Kazakhstan,
Kyrgyzstan, Tajik4stan, Uzbekistan, and Turkmenistan ;
the Middle East, and North Africa ; Rome, Amsterdam,
Frankfurt, Geneva, Zurich, Paris, London 1/, Montreal,
Toronto and three additional intermediate points on a
transatlantic routing to be selected by the Government
of Pakistan 2/ ; and three intermediate points on a
transpacific routing to be selected by the Government
of Pakistan 2/3/ ; to New York and five additional U .S .
points to be selected by the Government of Pakistan
2/, and two additional U .S . points to be selected by
1/ There are no local traffic rights between the United States
and London, except between New York and London .
2/ The Government of Pakistan will notify the Government of
the United States of its choices through diplomatic note .
These selections may be changed by the Government of Pakistan,
following 30 days' notice to the Government of the United
States .

the Government of Pakistan 2/ for services operated through
cooperative services arrangements only ; and beyond to the
points listed above .
2 . For all-cargo services :
From Pakistan via intermediate points to a point or
points in the United States and beyond . 3/
Section 2
Operational Flexibility
Each designated airline may, on any or all flights and at its
option :
l .
operate flights in either or both directions ;
2 .
combine different flight numbers within one aircraft
operation ;
3 .
serve points on the routes in any combination and in
any order (which may include serving intermediate
points as beyond points and beyond points as
intermediate points-) ;
4 .
omit stops at any point or points ; and
5 .
transfer traffic from any of its aircraft to any of
its other aircraft at any point on the routes ;
without directional or geographic limitation and without loss
of any right to carry traffic otherwise permissible under this
Agreement ; provided that the service begins and/or terminates
at a point in the territory of the Party designating the
airline .
2/ The Government of Pakistan will notify the Government of
the United States of its choices through diplomatic note .
These selections may be changed by the Government of Pakistan,
following 30 days' notice to the Government of the United
States .
3/ If points in Japan are selected, there are no local traffic
rights between Japan and the United States .

Section 3
Chanqe of Gauge
On any segment or segments of the routes above, any designated
airline may perform international air transportation without
any limitation as to change, at any point on the route, in type
or number of aircraft operated ; provided that, in the outbound
direction, the transportation beyond such point is a
continuation of the transportation from the territory of the
Party that has designated the airline and, in the inbound
direction, the transportation to the territory of the Party
that has designated the airline is a continuation of the
transportation from beyond such point.
ANNEX II
Charter Air Transportation
Section1
Airlines of each Party designated under this Annex shall, in
accordance with the terms of their designation, have the right
to carry international charter traffic of passengers (and their
accompanying baggage) and/or cargo (including, but not limited
to, freight forwarder, split, and combination (passenger/cargo)
charters) :
Between any point or points in the territory of the Party
that has designated the airline and any point or points in
the territory of the other Party ; and
Between any point or points in the territory of the other
Party and any point or points in a third country or
countries, provided that such service constitutes part of a
continuous operation, with or without a change of aircraft,
that includes service to the homeland for the purpose of
carrying local traffic between the homeland and the
territory of the other Party .
In the performance of services covered by this Annex, airlines
of each Party designated under this Annex shall also have the
right : (1) to make stopovers at any points whether within or
outside of the territory,pf either Party ; (2) to carry transit
traffic through the other Party's territory ; and (3) to combine
on the same aircraft traffic originating in one Party's
territory, originating in the other Party's territory, and
traffic originating in third countries .
Each Party shall extend favorable consideration to applications
by airlines of the other Party to carry traffic not covered by
this Annex on the basis of comity and reciprocity .
Section 2
Any airline designated by either Party performing international
charter air transportation originating in the territory of
either Party, whether on a one-way or round-trip basis, shall
have the option of complying with the charter laws,
regulations, and rules either of its homeland .or of the other
Party . If a Party applies different rules, regulations, terms,
conditions, or limitations to one or more of its airlines, or
to airlines of different countries, each designated airline
shall be subject to the least restrictive of such criteria .
However, nothing contained in the above paragraph shall limit
the rights of either Party to require airlines designated under
this Annex by either Party to adhere to requirements relating
to the protection of passenger funds and passenger cancellation
and refund rights .
Section 3
Except with respect to the consumer protection rules referred
to in the preceding paragraph above, neither Party shall
require an airline designated under this Annex by the other
Party, in respect of the carriage of traffic from the territory
of that other Party or of a third country on a one-way or
round-trip basis, to submit more than a declaration of
conformity with the applicable laws, regulations and rules
referred to under section 2 of this Annex or of a waiver of
these laws, regulations, or rules granted by the applicable
aeronautical authorities .,
Vffv
ANNEX III
PrinciplesofNon-Discrimination Within
and Competition among Computer Reservations Systems
Recognizing that Article 11 (Fair Competition) of the
U .S .-Pakistan Agreement guarantees the airlines of both Parties
"a fair and equal opportunity to compete,"
Considering that one of the most important aspects of the
ability of an airline to compete is its ability to inform the
public of its services in a fair and impartial manner, and
that, therefore, the quality of information about airline
services available to travel agents who directly distribute
such information to the traveling public and the ability of an
airline to offer those agents competitive computer reservations
systems (CRSs) represent the foundation for an airline's
competitive opportunities, and
Considering that it . is equally necessary to ensure that the
interests of the consumers of air transport products are
protected from any misuse of such information and its
misleading presentation and that airlines and travel agents
have access to effectively competitive computer reservations
systems :
1 . The Parties agree that CRSs will have integrated primary
displays for which :
a . Information regarding-international air services,
including the construction of connections on those
services, shall be edited and displayed based on
non-discriminatory and objective criteria that are not
influenced, directly or indirectly, by airline or market
identity . Such criteria shall apply uniformly to all
participating airlines .
b . CRS data bases shall be as comprehensive as possible .
c . CRS vendors shall not delete information submitted by
participating airlines ; such information shall be accurate
and transparent ; for example, code-shared and
change-of-gauge flights and flights with stops should be
clearly identified as having those characteristics .
I

d . All CRSs that are available to travel agents who
directly distribute information about airline services to
the traveling public in either Party's territory shall not
only be obligated to, but shall also be entitled to,
operate in conformance with the CRS rules that apply in the
territory where the CRS is being operated .
e . Travel agents shall be allowed to use any of the
secondary displays available through the CRS so long as the
travel agent makes a specific request for that display .
2 . A Party shall require that each CRS vendor operating in its
territory allow all airlines willing to pay any applicable
non-discriminatory fee to participate in its CRS . A Party
shall require that all distribution facilities that a system
vendor provides shall be offered on a non-discriminatory basis
to participating airlines . A Party shall require that CRS
vendors display, on a non-discriminatory, objective,
carrier-neutral and market-neutral basis, the international air
services of participating airlines in all markets in which they
wish to sell those services . Upon request, a CRS vendor shall
disclose details of its data base update and storage
procedures, its criteria for editing and ranking information,
the weight given to such criteria, and the criteria used for
selection of connect points and inclusion of connecting flights .
3 . CRS vendors operating in the territory of one Party shall
be entitled to bring in, maintain, and make freely available
their CRSs to travel agencies or travel companies whose
principal business is the distribution of travel-related
products in the territory of the other Party if the CRS
complies with these principles .
4 . Neither Party shall, in its territory, impose or permit to
be imposed on the CRS vendors of the other Party more stringent
requirements with respect to access to and use of communication
facilities, selection and use of technical CRS hardware and
software, and the technical installation of CRS hardware, than
those imposed on its own CRS vendors .
5 . Neither Party shall, in its territory, impose or permit to
be imposed on the CRS vendors of the other Party more
restrictive requirements with respect to CRS displays
(including edit and display parameters), operation, or sale
than those imposed on its own CRS vendors .
- 2 -
6 . CRSs in use in the territory of one Party that comply with
these principles and other relevant non-discriminatory
regulatory, technical, and security standards shall be entitled
to effective and unimpaired access in the territory of the
other Party . One aspect of this is that a designated airline
shall participate in such a system as fully in its homeland
territory as it does in any system offered to travel agents in
the territory of the other Party . Owners/operators of CRSs of
one Party shall have the same opportunity to own/operate CRSs
that conform to these principles within the territory of the
other Party as do owners/operators of that Party . Each Party
shall ensure that its airlines and its CRS vendors do not
discriminate against travel agents in their homeland territory
because of their use or possession of a CRS also operated in
the territory of the other Party .
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