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U.S. Department of State - Great Seal

U.S. Department of State

Diplomacy in Action

U.S.-Thailand Air Transport Agreement


September 19, 2005

   
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The Government of the United States of America and the Government of the Kingdom of Thailand (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 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 I
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 Thailand, the
Minister of Transport, and any person or agency authorized to perform functions
exercised by the said Minister of Transport;
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:
a. any amendment that has entered into force under Article 94(a) of the
Convention and has been ratified by both Parties, and
b. 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 Rights
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
Designation and Authorization
1. Each Party shall have the right to designate as many airlines as it wishes 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 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 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, done at Tokyo September 14, 1963, the Convention for the
Suppression of Unlawful Seizure of Aircraft, done at The Hague December 16,
1970, the Convention for the Suppression of Unlawful Acts against the Safety of
Civil Aviation, done at Montreal September 23, 1971, and the Protocol for the
Suppression of Unlawful Acts of Violence at Airports Serving International Civil
Aviation, done at Montreal February 24, 1988.
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 the 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, for departure from, and while within 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 15
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 15 days.

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.
3. Each designated airline shall have the right, on the basis of reciprocity, to
perform its own ground-handling in the territory of the other Party ("selfhandling")
or, at its option, select among competing agents for such services in
whole or in part. The rights shall be subject only to physical constraints resulting
from considerations of airport safety. Where such considerations preclude selfhandling,
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,
local 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, any
designated airline of one Party may enter into cooperative marketing arrangements
such as blocked-space, code-sharing or leasing arrangements, with
a) an airline or airlines of either Party;
b) an airline or airlines of a third country;
provided that all participants in such arrangements (i) hold the appropriate
authority and (ii) meet the requirements normally applied to such arrangements.
8. 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 9
Customs Duties and Charges
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 (a) imposed by the national authorities, and
(b) 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; and
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.
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 charges 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 (a) 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 (b) following such a
review it fails to take all steps within its power to remedy any charge or 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. Prices for international air transportation between the territories of the Parties
shall not be required to be filed. Notwithstanding the foregoing, the designated
airlines of the Parties shall continue to provide immediate access, on request, to
information on historical, existing, and proposed prices to the aeronautical
authorities of the Parties in a manner and format acceptable to those aeronautical
authorities.
3. Neither Party shall take unilateral action to prevent the inauguration or
continuation of a price proposed to be charged or charged by (i) an airline of either
Party for international air transportation between the territories of the Parties, or
(ii) 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 45 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
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 14
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 60 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 2b of this Article shall be considered
to be part of the expenses of the arbitral tribunal.

Article 15
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 16
Registration with ICAO
This Agreement and all amendments thereto shall be registered with the
International Civil Aviation Organization.

Article 17
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.

DONE at Washington, this nineteenth day of September, 2005, in duplicate, in the
English language, which shall be an authentic text. A text of the Agreement in the
Thai language shall be prepared which shall be considered equally authentic upon
an exchange of diplomatic notes by the Parties confirming that the English and
Thai language texts of the Agreement are in conformity.

FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA:
Norman Y. Mineta
U.S. Secretary of Transportation

FOR THE GOVERNMENT OF THE KINGDOM OF THAILAND:
Dr. Kantathi Suphamongkhon
Minister of Foreign Affairs of Thailand

ANNEX I
Scheduled Air Transportation

Section I
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:
1. From points behind the United States via the United States and intermediate
points to a point or points in Thailand and beyond.
2. For all-cargo service or services, between Thailand and any point or points.
B. Routes for the airline or airlines designated by the Government of the Kingdom
of Thailand:
1. From points behind Thailand via Thailand and intermediate points to a point or
points in the United States and beyond.
2. For all-cargo service or services, between the United States and any point or
points.

Section 2
Operational Flexibility
Each designated airline may, on any or all flights and at its option:
1. operate flights in either or both directions;
2. combine different flight numbers within one aircraft operation;
3. serve behind, intermediate, and beyond points and points in the territories of the
Parties on the routes in any combination and in any order;
4. omit stops at any point or points;
5. transfer traffic from any of its aircraft to any of its other aircraft at any point on
the routes; and
6. serve points behind any point in its territory with or without change of aircraft
or flight number and may hold out and advertise such services to the public as
through services;
without directional or geographic limitation and without loss of any right to carry
traffic otherwise permissible under this Agreement; provided that, with the
exception of all-cargo services, the service serves a point in the territory of the
Party designating the airline.

Section 3
Change 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, with the
exception of all-cargo services, 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
Section 1
A. 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):
1. 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
2. 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, except with respect to cargo
charters, 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.
B. 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 of either Party; (2) to carry transit
traffic through the other Party's territory; (3) to combine on the same aircraft traffic
originating in one Party's territory, traffic originating in the other Party's territory,
and traffic originating in third countries; and (4) to 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, except with respect to cargo charters,
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.
C. 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
A. 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.
B. 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, 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.

Annex III
Transitional Provisions
Section 1
Fifth Freedom Traffic
A. Notwithstanding Annex I, Section 1 of this Agreement, airlines designated by
each Party may operate scheduled, combination air transportation with traffic
rights as follows:
Effective with the IATA winter traffic season 2005, no more than a total of 31
weekly round-trip combination frequencies, of which no more than 14 are between
any single intermediate and/or beyond point and the territory of the other Party.
Effective with the IATA winter traffic season 2006, no more than a total of 35
weekly round-trip combination frequencies, of which no more than 14 are between
any single intermediate and/or beyond point and the territory of the other Party.
Effective with the IATA winter traffic season 2007, no more than a total of 42
weekly round-trip combination frequencies, of which no more than 28 are between
any single intermediate and/or beyond point and the territory of the other Party.
Effective with the IATA winter traffic season 2009 and through the 2010 IATA
summer traffic season, no more than a total of 49 weekly round-trip combination
frequencies, of which no more than 35 are between any single intermediate and/or
beyond point and the territory of the other Party.
In the case of a change of gauge en route to the territory of a Party, each flight that
enters into the territory of that Party shall count as one frequency.
B. This Section shall expire at the end of the 2010 IATA summer traffic season.

Section 2
Pricing
Notwithstanding Article 12 of this Agreement, the following provisions shall
govern pricing with respect to combination service:
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.
If a Party believes that a price warrants intervention under the specific criteria
described above, then it shall notify the other Party pursuant to the provisions set
forth in paragraph (3). After compliance with the notification provisions of
paragraph (3), a Party may take unilateral action to prevent the inauguration of
such price, but only with respect to traffic where the first point on the itinerary (as
evidenced by the document authorizing transportation by air) is in its own territory.
2. Each Party may require filing with its aeronautical authorities for approval of
prices charged or proposed to be charged to or from its territory by designated
airlines. Filing by the airlines of both Parties may be required no more than 60
days before the proposed date of effectiveness. In individual cases, a Party may
permit a filing on shorter notice than normally required. If a Party permits an
airline to file a price on short notice, the prices shall become effective on the
proposed date for traffic originating in the territory of that Party.
3. If either Party believes that a price proposed by a designated airline of the other
Party for international transportation between the territories of the Parties, or by an
airline of the other Party for international air transportation between the territory of
the first Party and a third country, including in both cases transportation on an
interline or intraline basis, is inconsistent with the considerations set forth in
paragraph I of this Article, it shall notify the other party of the reasons for its
dissatisfaction as soon as possible, but in no event later than 45 days after the filing
date. Either Party may then request consultations, which shall be held as soon as
possible, and in no event later than 30 days after receipt of a notice of
dissatisfaction. The Parties shall cooperate in securing information necessary for
reasoned resolution of the issue. If notification is not given as provided in this
paragraph, the Party receiving the filing of the price shall approve it, or otherwise
permit it to enter into effect, on the proposed date of effectiveness.
4. 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. If a Party prevents a proposed price from becoming
effective in accordance with the provisions of paragraphs 1 and 3, the comparable
price previously in effect shall remain in effect.
5. Notwithstanding paragraphs 1 and 3 of this Article, each Party shall allow:
a. any airline of either Party or of a third country to meet any price,
including combinations of prices, charged in the marketplace for international air
transportation between the territories of the Parties, and
b. any airline of one Party to meet any price, including combinations of
prices, charged in the marketplace for international air transportation between the
territory of the other Party and a third country.
As used herein, the term "meet" means the right to continue or institute, on a
timely basis, using such expedited procedures as may be necessary, an identical or
similar price or such price through a combination of prices on a direct, interline or
intraline basis, notwithstanding differences in conditions including, but not limited
to, those relating to airports, routing, distance, timing, connections, aircraft type,
aircraft configuration, or change of aircraft.
This Section shall expire on October 31, 2010, or such earlier date as is agreed
upon by the Parties. Thereafter, all provisions of Article 12 of this Agreement
shall apply without modification.



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