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U.S.-U.K. Bermuda II of July 23, 1977


July 23, 1977

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CONSOLIDATED AIR SERVICES AGREEEMENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND

BERMUDA II

The Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland;

Resolved to provide safe, adequate and efficient international air transportation responsive to the present and future needs of the public and to the continued development of international commerce;

Desiring the continuing growth of adequate, economical and efficient air transportation by airlines at reasonable charges, without unjust discrimination or unfair or destructive competitive practices;

Resolved to provide fair and equal opportunity for their designated airlines to compete in the provision of international air services;

Desiring to ensure the highest degree of safety and security in international air transportation;

Seeking to encourage the efficient use of available resources, including petroleum, and to minimize the impact of air services on the environment;

Believing that both scheduled and charter air transportation are important to the consumer interest and are essential elements of a healthy international air transport system;

Reaffirming their adherence to the Convention on International Civil Aviation opened for signature at Chicago on 7 December 1944; and

Desiring to conclude a new agreement complementary to that Convention for the purpose of replacing the Final Act of the Civil Aviation Conference held at Bermuda, from 15 January to 11 February 1946, and the annexed Agreement between the Government of the United States of America and the Government of the United Kingdom relating to Air Services between their Respective Territories, as subsequently amended ("the 1946 Bermuda Agreement");

Have agreed as follows:

 

ARTICLE 1 

DEFINITIONS

For the purposes of this Agreement unless otherwise stated, the term:

(a) "Aeronautical authorities" means, in the case of the United States, the Department of Transportation, the Civil Aeronautics Board, or their successor agencies; and in the case of the United Kingdom, the Secretary of State for Trade, and Civil Aviation Authority, or their successors;

(b) "Agreement" means this Agreement, its Annexes, and any amendments thereto;

(c) "Air service" means scheduled air service or charter air service or both, as the context requires, performed by aircraft for the public transport of passengers, cargo or mail, separately or in combination, for compensation;

(d) "Airport" means a landing area, terminals and related facilities used by aircraft;

(e) "All‑cargo air service" means air service performed by aircraft on which cargo or mail (with ancillary attendants) is carried, separately or in combination, but on which revenue passengers are not carried;

(f) "Combination air service" means air service performed by aircraft on which passengers are carried and on which cargo or mail may also be carried if authorized by the relevant national license or certificate;

(g) "Convention" means the Convention on International Civil Aviation, opened for signature at Chicago on 7 December 1944, and includes: (i) any amendment thereto which has entered into force under Article 94(a) thereof and has been ratified by both Contracting Parties; and (ii) any Annex or any amendment thereto adopted under Article 90 of that Conven­tion, insofar as such amendment or Annex is at any given time effective for both Contracting Parties;

(h) "Designated airline" means an airline designated and authorized in accordance with Article 3 of this Agreement;

(i) "Gateway route segment" means that part of a route described in Annex I which lies between the point of last departure or first arrival served by a designated airline in its homeland and the point or points served by that airline in the territory of the other Contracting Party;

(j) "International air service" means an air service which passes through the air space over the territory of the other Contracting Party;

(k) "Revenue passenger" means a passenger paying 25 percent or more of the normal applicable fare;

(l) "Stop for non-traffic purposes" means a landing for any purpose other than taking on or discharging passengers, cargo or mail carried for compensation;

(m) "Tariff" means the price to be charged for the public transport of passengers, baggage and cargo (excluding mail) on scheduled air services including the conditions governing the availability or applicability of such price and the charges and conditions for services ancillary to such transport but excluding the commissions to be paid to air transportation intermediaries;

(n) "Territory" means the land areas under the sovereignty, jurisdiction, protection, or trusteeship of a Contracting Party, and the territorial waters adjacent thereto; and

[The definition of "user charge" was amended pursuant to the March 11, 1994 Exchange of Notes/Heathrow Arbitration Settlement.]

(o) "User charge" means a charge imposed by a competent charging authority on airlines for airport or air navigation property or facilities, including related services and facilities.

 

ARTICLE 2

GRANT OF RIGHTS

(1) Each Contracting Party grants to the other Contracting Party the following rights for the conduct of international air services by its airlines:

(a) the right to fly across its territory without landing; and

(b) the right to make stops in its territory for non-­traffic purposes.

(2) Each Contracting Party grants to the other Contracting Party the rights specified in this Agreement for the purposes of operating scheduled international air services on the routes specified in Annex 1. Such services and routes are hereafter called "the agreed services" and "the specified routes" respectively. The airlines designated by each Con­tracting Party may make stops in the territory of the other Contracting Party at the points specified and to the extent specified for each route in Annex 1 for the purpose of taking on board and discharging passengers, cargo or mail, separately or in combination, in scheduled international air service.

(3) Each Contracting Party grants to the other Contracting Party the rights specified in Article 14 for the purposes of operating charter international air services.

(4) Nothing in paragraphs (2) or (3) of this Article shall be deemed to confer on the airline or airlines of one Contracting Party the rights to take on board, in the territory of the other Contracting Party, passengers, cargo or mail carried for compensation and destined for another point in the territory of that other Contracting Party except to the extent such rights are authorized in Article 14 or Annex 1.

(5) If because of armed conflict, political disturbances or developments, or special and unusual circumstances, a designated airline of one Contracting Party is unable to operate a service on its normal routing, the other Contracting Party shall use its best efforts to facilitate the continued opera­tion of such service through appropriate rearrangements of such routes, including the grant of rights for such time as may be necessary to facilitate viable operations.

ARTICLE 3

DESIGNATION AND AUTHORIZATION OF AIRLINES

(1) (a) Each Contracting Party shall have the right to designate an airline or airlines for the purpose of operating the agreed services on each of the routes specified in Annex 1 and to withdraw or alter such designations. Such designations shall be made in writing and shall be transmitted to the other Contracting Party through diplomatic channels.

(b) A Contracting Party may request consultations with regard to the designation of an airline or airlines under subparagraph (a) of this paragraph. If, however, agreement is not reached within 60 days from the date of the designation, the designation shall be regarded as a proper designation under this Article.

(2) Notwithstanding paragraph (1) of this Article, for the purpose of operating the agreed combination air services on US Routes 1 and 2, and UK Routes 1, 2, 3, 4 and 5, each Contracting Party shall have the right to designate not more than:

(a) two airlines on each of two gateway route segments of its own choosing;

(b) one airline on each gateway route segment other than those selected under subparagraph (a) of this paragraph, except that each Contracting Party may designate not more than:

(i) two airlines on any gateway route segment other than those selected under subparagraph (a) of this paragraph, provided: (A) the total on-board passenger traffic carried by the designated airlines of both Contracting Parties in scheduled air service on a gateway route segment exceeds 600,000 one-way revenue passengers in each of two consecutive twelve month periods; or (B) the total on-board passenger traffic carried by its designated airline in scheduled air service on the gateway route segment exceeds 450,000 one-way revenue passengers in each of two consecutive twelve month periods. For the purpose of this subparagraph, the revenue passenger levels specified must be reached for the first time after the entry into force of this Agreement; and

(ii) two airlines on any gateway route segment other than those selected under subparagraph (a) or permitted under subparagraph (b)(i) of this paragraph, where either the other Contracting Party has not made a designation three years after the right to operate that gateway route segment becomes effective or the airline designated by it does not by then operate (either nonstop or in combination with another gateway route segment) or operates fewer than 100 round trip combination flights within a twelve month period. An additional designation under this subparagraph shall continue in force notwithstanding subsequent regular operation by an airline of the other Contracting Party.

If coincident gateway route segments appear on more than one route, the limitations set forth in this paragraph apply to the coincident segments taken together. A Contracting Party making designations under this paragraph shall specify which subparagraph applies.

(3) Notwithstanding paragraph (1) of this Article, for the purpose of operating the agreed all-cargo air services on US Route 7 and UK Routes 10, 11 and 12 (taken together), each Contracting Party shall have the right to designate not more than a total of three airlines,*/ except that, if the airline or airlines designated by one Contracting Party are licensed or certificated by their own aeronautical authorities and authorized by the other Contracting Party to offer all-cargo air services on a gateway route segment on which the airline or airlines designated by the other Contracting Party are not licensed or certificated by their own aeronautical authorities to offer such services, that other Contracting Party may designate an additional airline on the relevant route or routes to operate all-cargo air services only on that gateway route segment, notwithstanding the fact that such designation will result in the designation of more than three airlines on the relevant route or routes.

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*/ Ed Note: See Annex 5 for provisions governing the designation of airlines for the operation of scheduled all-cargo services on these routes from January 1, 1983 (Part III, sub-paragraph (3)(a)) (p. 72, infra).
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(4) Notwithstanding paragraph (1) of this Article, a Contracting Party receiving a designation of an airline which is authorized by that airline's own aeronautical authorities only to operate aircraft having a maximum passenger capacity of 30 seats or less and a maximum payload capacity of 7,500 pounds or less and which was not designated under the 1946 Bermuda Agreement may refuse to regard such designation as a proper designation under this Article if it would result in more than three such airlines or more than the number designated under 1946 Bermuda Agreement (whichever is greater), operating at any point in the territory of the Contracting Party receiving the designation.

(5) If either Contracting Party wishes to designate an airline or airlines for the routes set forth in paragraphs (2) or (3) of this Article, in addition to the designations specifically permitted by those paragraphs, it shall notify the other Contracting Party. The second Contracting Party may either: (i) accept such further designation; or (ii) request consultations. After consultations the second Contracting Party may decline to accept the designation.*/
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*/ Ed Note: The following designations have been authorized pursuant to paragraph (5): 1980 (Boston and Miami for the U.S. and Miami for the U.K.); 1990 (Boston for the U.K.); 1991 (4 points for the U.K. – 2 stand alone (Orlando and San Francisco) and 2 new gateway turn ins); 1995 (Chicago for the U.S.)
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(6) On receipt of a designation made by one Contracting Party under the terms of paragraphs (1), (2) or (3) of this Article, or accepted under the terms of paragraph (5) of this Article, and on receipt of an application or applications from the airline so designated for operating authorizations and technical permissions in the form and manner prescribed for such applications, the other Contracting Party shall grant the appropriate operating authorizations and technical permissions, provided:

(a) substantial ownership and effective control of that airline are vested in the Contracting Party designating the airline or in its nationals;

(b) the designated airline is qualified to meet the conditions prescribed under the laws and regulations normally applied to the operation of international air services by the Contracting Party considering the application or applications; and

(c) the other Contracting Party is maintaining and administering the standards set forth in Article 6 (Airworthiness).

If the aeronautical authorities of the Contracting Party considering the application or applications are not satisfied that these conditions are met at the end of a 90-day period from receipt of the application or applications from the designated airlines, either Contracting Party may request consultations, which shall be held within 30 days of the request.*/
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*/ Ed Note: Citizenship and ownership determinations are also subject to the 1989 Fitness/Citizenship Agreement, attached hereto as Appendix A (p. 76, infra), as well as the paragraphs 1 and 2 of Part II of the 1991 MOC (regarding third country investments), attached hereto as Appendix B (p. 78, infra).
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(7) When an airline has been designated and authorized in accordance with the terms of this Article, it may operate the relevant agreed services on the specified routes in Annex 1, provided, however, that the airline complies with the applicable provisions of this Agreement.

 

ARTICLE 4

APPLICATION OF LAWS

(1) The laws and regulations of one Contracting Party relating to the admission to or departure from its territory of aircraft engaged in international air navigation, or to the operation and navigation of such aircraft while within its territory, shall be applied to the aircraft of the airline or airlines designated by the other Contracting Party and shall be complied with by such aircraft upon entrance into or departure from and while within the territory of the first Contracting Party.

(2) The laws and regulations of one Contracting Party relating to the admission to or departure from its territory of passengers, crew, cargo or mail of aircraft, including regulations relating to entry, clearance, immigration, passports, customs and quarantine, shall be complied with by or on behalf of such passengers, crew, cargo or mail of the airlines of the other Contracting Party upon entrance into or departure from and while within the territory of the first Contracting Party.

ARTICLE 5
REVOCATION OR SUSPENSION OF OPERATING AUTHORIZATION

(1) Each Contracting Party shall have the right to revoke, suspend, limit or impose conditions on the operating authorizations or technical permissions of an airline designated by the other Contracting Party where:

(a) substantial ownership and effective control of that airline are not vested in the Contracting Party designating the airline or in nationals of such Contracting Party; or

(b) that airline has failed to comply with the laws or regulations of the first Contracting Party; or

(c) the other Contracting Party is not maintaining and administering safety standards as set forth in Article 6 (Airworthiness).

(2) Unless immediate revocation, suspension or imposition of the conditions mentioned in paragraph (1) of this Article is essential to prevent further noncompliance with subparagraphs (b) or (c) of paragraph (1) of this Article, such rights shall be exercised only after consultation with the other Contracting Party.

 

ARTICLE 6

AIRWORTHINESS

(1) Certificates of airworthiness, certificates of competency, and licenses issued or rendered valid by one Contracting Party, and still in force, shall be recognized as valid by the other Contracting Party for the purpose of operating the air services provided for in this Agreement, provided that the requirements under which such certificates or licenses were issued or rendered valid are equal to or above the minimum standards which may be established pursuant to the Convention. Each Contracting Party reserves the right, however, to refuse to recognize as valid for the purpose of flights above its own territory, certificates of competency and licenses granted to its own nationals by the other Con­tracting Party.

(2) The competent aeronautical authorities of each Contracting Party may request consultations concerning the safety and security standards and requirements maintained and administered by the other Contracting Party relating to aeronautical facilities, aircrew, aircraft, and the operation of the designated airlines. If, following such consultations, the competent aeronautical authorities of either Contracting Party find that the other Contracting Party does not effec­tively maintain and administer safety and security standards and requirements in these areas that are equal to or above the minimum standards which may be established pursuant to the Convention, they will notify the other Contracting Party of such findings and the steps considered necessary to bring the safety and security standards and requirements of the other Contracting Party to standards at least equal to the minimum standards which may be established pursuant to the Convention, and the other Contracting Party shall take appropriate cor­rective action. Each Contracting Party reserves the right to withhold, revoke or limit, pursuant to Articles 2 (Grant of Rights), 3 (Designation and Authorization of Airlines), and 5 (Revocation or Suspension of Operating Authorization), the operating authorization or technical permission of an airline or airlines designated by the other Contracting Party, in the event the other Contracting Party does not take such appro­priate action within a reasonable time.

 

Revised ARTICLE 7

AVIATION SECURITY

[Revised Article 7 Reflects amendments which entered into force on May 25, 1989, pursuant to the Exchange of Notes dated the same day.]

(1) The assurance of safety for civil aircraft, their passengers and crew being a fundamental precondition for the operation of international air services, the Contracting Parties reaffirm that their obligations to each other to provide for the security of civil aviation against acts of unlawful interference (and in particular their obligations under the Convention on International Civil Aviation, opened for signature at Chicago on December 7, 1944, 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) form an integral part of this agreement.

(2) The Contracting 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, their passengers and crew, airports and air navigation facilities, and any other threat to the security of civil aviation.

(3) The Contracting Parties shall, in their mutual relations, act in conformity with the aviation security Standards and, so far as they are applied by them, the Recommended Practices established by the International Civil Aviation Organization and designated as Annexes to the Convention on International Civil Aviation; and shall require that operators of aircraft of their registry, operators 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. In this paragraph the reference to aviation security Standards includes any difference notified by the Contracting Party concerned. Each Contracting Party shall give advance information to the other of its intention to notify any difference.

(4) Each Contracting Party shall ensure that effective measures are taken within its territory to protect aircraft, to screen passengers and their carry‑on items, and to carry out appropriate checks on crew, cargo (including hold baggage) and aircraft stores prior to and during boarding or loading; and that those measures are adjusted to meet increased threats to the security of civil aviation. Each Contracting Party shall also act favorably upon any request from the other Contracting Party for reasonable special security measures to meet a particular threat. Each Contracting Party agrees that its airlines may be required to observe the aviation security provisions referred to in paragraph (3) required by the other Contracting Party, pursuant to Article 4 of this Agreement, for entrance into, departure from, or while within, the territory of that other Contracting Party.

(5) When an incident or threat of an incident of unlawful seizure of civil aircraft or other unlawful acts against the safety of such aircraft, their passengers and crew, airports or air navigation facilities occurs, the Contracting Parties shall assist each other by facilitating communications and other appropriate measures intended to terminate such incident or threat as rapidly as possible commensurate with minimum risk to life.

(6) When a Contracting Party has reasonable grounds to believe that the other Contracting Party has departed from the provisions of this Article, the first Contracting Party may request immediate consultations with the other Contracting Party. Failure by the Contracting Parties to reach a satisfactory resolution of the matter within 15 days from the date of receipt of such request shall constitute grounds for with­holding, revoking, limiting or imposing conditions on the operating authorizations or technical permissions of an airline or airlines of the other Contracting Party. When justified by an emergency, a Contracting Party may take interim action prior to the expiry of 15 days.

 

ARTICLE 8

COMMERCIAL OPERATIONS

(1) The designated airline or airlines of one Contracting Party shall be entitled, in accordance with the laws and regulations relating to entry, residence and employment of the other Contracting Party, to bring in and maintain in the territory of the other Contracting Party those of their own managerial, technical, operational and other specialist staff who are required for the provision of air services.

(2) Each Contracting Party agrees to use its best efforts to ensure that the designated airlines of the other Contract­ing Party are offered the choice, subject to reasonable limitations which may be imposed by airport authorities, of providing their own services for ground handling operations; of having such operations performed entirely or in part by another airline, an organization controlled by another airline, or a servicing agent, as authorized by the airport authority; or of having such operations performed by the airport authority.

(3) Each Contracting Party grants to each designated airline of the other Contracting Party the right to engage in the sale of air transportation in its territory directly and, at the airline's discretion, through its agents. 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 of other countries.

(4) Each designated 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 without restrictions at the rate of exchange applicable to current transactions which is in effect at the time such revenues are presented for conversion and remitt­ance. Both Contracting Parties have accepted the obligations set out in Article VIII of the Articles of Agreement of the International Monetary Fund.

(5) Each Contracting Party shall use its best efforts to secure for the designated airlines of the other Contracting Party on a reciprocal basis an exemption from taxes, charges and fees imposed by State, regional and local authorities on the items listed in paragraphs (1) and (2) of Article 9 (Customs Duties), as well as from fuel through‑put charges, in the circumstances described under those paragraphs, except to the extent that the charges are based on the actual cost of providing the service.

 

ARTICLE 9

CUSTOMS DUTIES

(1) Aircraft operated in international air services by the designated airlines of either Contracting Party, their regular equipment, fuel, lubricants, consumable technical supplies, spare parts including engines, and aircraft stores including but not limited to such items as food, beverages and tobacco, which are on board such aircraft, shall be relieved on the basis of reciprocity from all customs duties, national excise taxes, and similar national fees and charges not based on the cost of services provided, on arriving in the territory of the other Contracting Party, provided such equipment and supplies remain on board the aircraft.

(2) There shall also be relieved from the 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 Contracting Party, and taken on board, within reasonable limits, for use on outbound aircraft engaged in an international air service of a designated airline of the other Contracting Party;

(b) spare parts including engines introduced into the territory of a Contracting Party for the maintenance or repair of aircraft used in an international air service of a designated airline of the other Contracting Party; and

(c) fuel, lubricants and consumable technical supplies introduced into or supplied in the territory of a Contracting Party for use in an aircraft engaged in an international air service of a designated airline of the other Contracting Party, even when these supplies 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 reliefs provided for by this Article shall also be available in situations where the designated airlines of one Contracting Party have entered into arrangements with another airline or airlines for the loan or transfer in the territory of the other Contracting Party of the items specified in para­graphs (1) and (2) of this Article provided such other airline or airlines similarly enjoy such reliefs from such other Con­tracting Party.

 

ARTICLE 10*/

USER CHARGES

[The following Article 10 replaced the original Article 10 pursuant to the March 11, 1994 Exchange of Notes, otherwise known as the Heathrow Arbitration Settlement.]

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*/ Ed Note: For user charge information related specifically to operations at London Heathrow, see the March 11, 1994 Exchange of Notes, otherwise known as the Heathrow Arbitration Settlement, attached hereto, in relevant part, as Appendix C (p. 79, infra). 
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1. User charges shall be just and reasonable, as defined in paragraphs (2) and (3) of this Article, and equitably apportioned among categories of users.

2. User charges shall not be unjustly discriminatory. In particular and without limiting the generality of the preceding sentence, neither Contracting Party shall impose or permit to be imposed on the designated airlines of the other Contracting Party user charges higher than those imposed on the first Contracting Party's designated airlines operating similar international air services at the same airport.

3. The user charges referred to in paragraph (1) are just and reasonable only if they do not exceed by more than a reasonable margin, over a reasonable period of time, the full cost to the competent charging authorities of providing the appropriate airport, air navigation, and aviation security facilities and services at the airport or within the airport system. Such full costs may include a reasonable return on assets, after depreciation. In the provision of facilities and services, the competent charging authorities shall have regard to such factors as efficiency, economy, environmental impact and safety of operation.

4. The Contracting Parties recognize the benefits of reducing undue intervention and detailed supervision of the setting and monitoring of user charges at individual airports. The Contracting Parties shall each maintain a system to safeguard users from charges that do not meet the criteria of this Article. The system shall include a process for resolving complaints which the Contracting Parties in principle expect to be used in the first instance.

5. A Contracting Party shall not be held to be in breach of a provision of this Article unless: (i) it fails to undertake a review of the charging practice that is the subject of a complaint by the other Contracting Party within a reasonable time; or (ii) 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.

6. Each Contracting Party shall encourage consultations in the first instance directly between the competent charging authorities in its territory and airlines using the services and facilities, or through the airlines representative organizations if the airlines agree. Each Contracting Party shall encourage them to exchange such information as may be necessary to permit an accurate review of the reasonableness of the charges in accordance with the principles set out in this Article. Each Contracting Party shall encourage the competent charging authorities to provide users with reasonable notice of any proposals for changes in user charges to enable users to express their views before changes are made.

ARTICLE 11 */

FAIR COMPETITION

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*/ Ed Note: See Annex 5, Part IV, paragraph (7), for provisions relating to the applicability of Article 11 to scheduled all-cargo air service over the North Atlantic (p. 73, infra).
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(1) The designated airline or airlines of one Contracting Party shall have a fair and equal opportunity to compete with the designated airline or airlines of the other Contracting Party.

(2) The designated airline or airlines of one Contracting Party shall take into consideration the interests of the designated airline or airlines of the other Contracting Party so as not to affect unduly that airline's or those airlines' services on all or part of the same routes. In particular, when a designated airline of one Contracting Party proposes to inaugurate services on a gateway route segment already served by a designated airline or airlines of the other Contracting Party, the incumbent airline or airlines shall each refrain from increasing the frequency of their services to the extent and for the time necessary to ensure that the airline inaugurating service may fairly exercise its rights under paragraph (1) of this Article. Such obligation to refrain from increasing frequency shall not last longer than two years or beyond the point when the inaugurating airline matches the frequencies of any incumbent airline, whichever occurs first, and shall not apply if the services to be inaugurated are limited as to their capacity by the license or certificate granted by the designating Contracting Party.

(3) Services provided by a designated airline under this Agreement shall retain as their primary objective the provision of capacity adequate to the traffic demands between the country of which such airline is a national and the country of ultimate destination of the traffic. The right to embark or disembark on such services international traffic destined for and coming from third countries at a point or points on the routes specified in this Agreement shall be exercised in accordance with the general principles of orderly development of international air transport to which both Contracting Parties subscribe and shall be subject to the general principle that capacity should be related to:

(a) the traffic requirements between the country of origin and the countries of ultimate destination of the traffic;

(b) the requirements of through airline operations; and

(c) the traffic requirements of the area through which the airline passes, after taking account of local and regional services.

(4) The frequency and capacity of services to be provided by the designated airlines of the Contracting Parties shall be closely related to the requirements of all categories of public demand for the carriage of passengers and cargo including mail in such a way as to provided adequate service to the public and to permit the reasonable development of routes and viable airline operations. Due regard shall be paid to efficiency of operation so that frequency and capacity are provided at levels appropriate to accommodate the traffic at load factors consistent with tariffs based on the criteria set forth in paragraph (2) of Article 12 (Tariffs).

(5) The Contracting Parties recognize that airline actions leading to excess capacity or to the underprovision of capacity can both run counter to the interests of the travelling public. Accordingly, in the particular case of combination air services on the North Atlantic routes specified in paragraph (1) of Annex 2, they have agreed to establish the procedures set forth in Annex 2. With respect to other routes and services, if one Contracting Party believes that the operations of a designated airline or airlines of the other Contracting Party have been inconsistent with the principles set forth in this Article, it may request consultations pursuant to Article 16 (Consultations) for the purpose of reviewing the operations in question to determine whether they are in conformity with these principles. If such consultations there shall be taken into consideration the operations of all airlines serving the market in question and designated by the Contracting Party whose airline or airlines are under review. In the Contracting Parties conclude that the operations under review are not in conformity with the principles set forth in the Article, they may decide upon appropriate corrective or remedial measures, except that, where frequency or capacity limitations are already provided for a route specified in Annex 1, the Contracting Parties may not vary those limitations or impose additional limitations except by amendment of this Agreement.

(6) Neither Contracting Party shall unilaterally restrict the operations of the designated airlines of the other except according to the terms of this Agreement or by such uniform conditions as may be contemplated by the Convention.

 

ARTICLE 12*/

 TARIFFS

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*/ Ed Note: See Annex 5, Part IV, paragraph (8), for provisions relating to the applicability of Article 12 on scheduled combination and all-cargo air service over the North Atlantic (p. 73, infra); tariff determinations are also subject to the North Atlantic Tariff Procedure, established pursuant to the September 11, 1986 Memorandum of Consultations and appended hereto as Appendix D (p. 85, infra).
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(1) Tariffs of the designated airlines of the Contracting Parties for carriage between their territories shall be established in accordance with the procedures set out in this Article.

(2) The tariffs charged by the designated airlines of one Contracting Party for public transport to or from the terri­tory of the other Contracting Party shall be established at the lowest level consistent with a high standard of safety and an adequate return to efficient airlines operating on the agreed routes. Each

tariff shall, to the extent feasible, be based on the costs of providing such service assuming reason­able load factors. Additional relevant factors shall include among others the need of the airline to meet competition from scheduled or charter air services, taking into account differ­ences in cost and quality of service, and the prevention of unjust discrimination and undue preferences or advantages. To further the reasonable interests of users of air transport services, and to encourage the further development of civil aviation, individual airlines should be encouraged to initiate innovative, cost‑based tariffs.

(3) The tariffs charged by the designated airlines of one Contracting Party for public transport between the territory of the other Contracting Party and the territory of a third State shall be subject to the approval of the other Contrac­ting Party and such third State; provided, however, that a Contracting Party shall not require a different tariff from the tariff of its own airlines for comparable service between the same points. The designated airlines of each Contracting Party shall file such tariffs with the other Contracting Party, in accordance with its requirements.

(4) Any tariff agreements with respect to public transport between the territories of the Contracting Parties concluded as a result of intercarrier discussions, including those held under the traffic conference procedures of the International Air Transport Association, or any other association of international airlines, and involving the airlines of the Contracting Parties will be subject to the approval of the aeronautical authorities of those Contracting Parties, and may be disapproved at any time whether or not previously approved. The submission of such agreements is not the filing of a tariff for the purposes of the provisions of paragraph (5) of this Article. Such agreements shall be submitted to the aeronautical authorities of both Contracting Parties for approval at least 105 days before the proposed date of effec­tiveness, accompanied by such justification as each Contrac­ting Party may require of its own designated airlines. The period of 105 days may be reduced with the consent of the aeronautical authorities of the Contracting Party with whom a filing is made. The aeronautical authorities of each Contrac­ting Party shall use their best efforts to approve or disapprove (in whole or in part) each agreement submitted in accordance with this paragraph on or before the 60th day after its submission. Each Contracting Party may require the tariffs reflecting agreements approved by it be filed and published in accordance with its laws.

(5) Any tariff of a designated airline of one Contracting Party for public transport between the territories of the Contracting Parties shall, if so required, be filed with the aeronautical authorities of the other Contracting Party at least 75 days prior to the proposed effective date unless the aeronautical authorities of that Contracting Party permit the filing to be made on shorter notice. Such tariff shall become effective unless action is taken to continue in force the existing tariff as provided in paragraph (7) of this Article.

(6) If the aeronautical authorities of one Contracting Party, on receipt of any filing referred to in paragraph (5) of this Article, are dissatisfied with the tariff proposed or desire to discuss the tariff with the other Contracting Party, the first Contracting Party shall so notify the other Contrac­ting Party through diplomatic channels within 30 days of the filing of such tariff, but in no event less than 15 days prior to the proposed effective date of such tariff. The Contrac­ting Party receiving the notification may request consulta­tions and, if so requested, such consultations shall be held at the earliest possible date for the purpose of attempting to reach agreement on the appropriate tariff. If notification of dissatisfaction is not given as provided in this paragraph, the tariff shall be deemed to be approved by the aeronautical authorities of the Party receiving the filing and shall become effective on the proposed date.

(7) If agreement is reached on the appropriate tariff under paragraph (6) of this Article, each Contracting Party shall exercise its best efforts to put such tariff into effect. If an agreement is not reached prior to the proposed effective date of the tariff, or if consultations are not requested, the aeronautical authorities of the Contracting Party expressing dissatisfaction with that tariff may take action to continue in force the existing tariffs beyond the date on which they would otherwise have expired at the levels and under the conditions (including seasonal variations) set forth therein. In this event the other Contracting Party shall similarly take any action necessary to continue the existing tariffs in effect. In no circumstances, however, shall a Contracting Party require a different tariff from the tariff of its own designated airlines for comparable service between the same points.

(8) The aeronautical authorities of each Contracting Party shall exercise their best efforts to ensure that the desig­nated airlines conform to the agreed tariffs filed with the aeronautical authorities of the Contracting Parties, and that no airline rebates any portion of such tariffs by any means, directly or indirectly.

(9) In order to avoid tariff disputes to the greatest extent possible:

(a) a continuing Tariff Working Group shall be established to make recommendations on tariff‑making standards, as provided in Annex 3;

(b) the aeronautical authorities will keep one another informed of such guidance as they may give to their own airlines in advance of or during traffic conferen­ces of the International Air Transport Association; and

(c) during the period that the aeronautical authorities of either Contracting Party have agreements under consideration pursuant to paragraph (4) of this Article, the Contracting Parties may exchange views and recommendations, orally or in writing. Such views and recommendations shall, if requested by either Contracting Party, be presented to the aeronautical authorities of the other Contracting Party, who will take them into account in reaching their decision.

 

ARTICLE 13 */

 COMMISSIONS

__________
*/ Ed Note: Pursuant to Annex 5, Part IV, paragraph (8), this article is not applicable with regard to cargo car­riage on scheduled combination and all‑cargo services over the North Atlantic (p. 73, infra).
_________

The airlines of each Contracting Party may be required to file with the aeronautical authorities of both Contracting Parties the level or levels of commissions and all other forms of compensation to be paid or provided by such airline in any manner or by any device, directly or indirectly, to or for the benefit of any person (other than its own bona fide employees) for the sale of air transportation between the territories of the Contracting Parties. The aeronautical authorities of each Contracting Party hall exercise their best efforts to ensure that the commissions and compensation paid by the airlines of each Contracting Party conform to the level or levels of commissions and compensation filed with the aeronautical authorities.

 

(2) The level of commissions and other forms of compensation paid with respect to the sale, within the territory of a Contracting Party, of air transportation, shall be subject to the laws and regulations of such Contracting Party, which shall be applied in a nondiscriminatory fashion.

 

ARTICLE 14*/

CHARTER AIR SERVICE

[The original Article 14 was replaced in its entirety by the following Article 14 pursuant to an Exchange of Notes dated April 25, 1978. Please note that all footnotes for this article are placed at the end of the article (p. 26, infra).]

(1) Principles

The Contracting Parties recognize the need to further the maintenance and development, where a substan­tial demand exists or may be expected, of a viable network of scheduled air services, consistently and readily available, which caters for all segments of demand and particularly for those needing a wide and flexible range of air services. The Contracting Parties also recognize the substantial and growing demand from that section of the travelling public which is price rather than time sensitive for air services at the lowest possible level of fares and rates. The Contracting Parties, therefore, taking into account the relationship of scheduled and charter air services and the need for a total air service system, shall further the maintenance and develop­ment of efficient and economic charter air services so as to meet that demand. They shall, accordingly, while continuing their efforts to achieve a multilateral arrangement for charter air services in the North Atlantic market, apply the following bilateral provisions to charter air services.

(2) Application of Articles

Articles 1, 2 (paragraphs (1), (3) and (4)), 4, 5, 6, 7, 8 (except that paragraph (3) shall apply only to the extent authorized by the aeronautical authorities in the relevant territory), 9 and 10 of this

Agreement shall apply to international charter air services conducted by airlines of the Contracting Parties between the territories of the Contracting Parties.

(3) Grant of Rights

(a) Each Contracting Party, in addition to the rights granted in paragraph (1) of Article 2, grants to the other Contracting Party the right for its airlines designated and authorized under the provisions of paragraph (4) of this Article (hereinafter referred to as "charter‑designated airlines") to uplift and discharge international charter traffic in passengers (and their accompanying baggage) and international charter traffic in cargo between:

(i) on the one hand, any point or points in the United States; and

(ii) on the other hand, any point or points in the United Kingdom of Great Britain and Northern Ireland (hereinafter referred to as "the United Kingdom").

Such traffic may be carried either directly or via intermediate or beyond points in other countries with or without stopovers.

(b) Charter air services:

(i) having their origin outside the United States and the United Kingdom; or

(ii) operated by an airline of the United Kingdom, having their origin in the United States and a traffic stop or stops outside the United States without a stopover in the United Kingdom lasting for at least two consecutive nights; or

(iii) operated by an airline of the United States, having their origin in the United Kingdom and a traffic stop or stops outside the United Kingdom without a stopover in the United States for at least two consecutive nights shall not be covered by this Article.

(4) Designation and Authorization

(a) Each Contracting Party shall have the right to desig­nate an airline or airlines for the purpose of operating the international charter air services covered by paragraph (3)(a) of this Article and to withdraw or alter such designations. Such designations shall be made in writing and shall be trans­mitted to the other Contracting Party through diplomatic channels.

(b) On receipt of such a designation made by one Contract­ing Party, and on receipt from the airline so designated of an application or applications in the form and manner prescribed, the other Contracting Party shall, with the minimum of formality and administrative burden upon the airline so desig­nated, grant the appropriate operating authorizations and technical permissions, provided:

(i) substantial ownership and effective control of that airline are vested in the first Contracting Party or in its nationals;

(ii) the airline is qualified to meet the conditions prescribed under the laws and regulations normally applied to the operation of inter­national air services by the Contracting Party considering the application or applications; and

(iii) the other Contracting Party is maintaining and administering the standards set forth in Article 6 (Airworthiness) of this Agreement.

(c) If the aeronautical authorities of the Contracting Party considering the application or applications are not satisfied that these conditions are met at the end of a 60‑day period from receipt of the application or applications, either Contracting Party may request consultations, which shall be held within 30 days of the receipt of the request.

(d) When an airline has been designated and authorized in accordance with the above terms, it may operate the charter air services described in paragraph (3)(a) of this Article provided that the airline complies with the applicable provisions of this Agreement.

(5) Fair Competition

(a) There shall be a fair opportunity for the designated and charter‑designated airlines of both Contracting Parties to compete in international air services.

(b) Each Contracting Party shall afford the charter-designated airlines of the other Contracting Party an equal opportunity to compete with its charter‑designated airlines.

(c) Each Contracting Party shall take into consideration the interest of the airlines of the other Contracting Party so as not to affect unduly their opportunity to offer the services covered by this Agreement.

(d) Each Contracting Party shall apply, on a nondiscriminatory basis as between the charter‑designated airlines of the two Contracting Parties and as among different charter-designated airlines of the other Contracting Party:

(i) its own charterworthiness rules, administered and enforced by its own aeronautical authorities (hereinafter referred to as "charterworthiness rules");

(ii) such agreed charterworthiness requirements as may be set forth in Annex 4 **/ (hereinafter referred to as "charter‑worthiness require­ments") and

(iii) the provisions of paragraph (7) of this Article.

(e) Neither Contracting Party shall unilaterally restrict the charter operations of the charter‑designated airlines of the other Contracting Party or impose limitations on the volume, frequency or regularity of charter air services of charter‑designated airlines of the other Contracting Party, except according to the terms of this Agreement or under uniform conditions consistent with Article 15 of the Convention.

(f) The charterworthiness rules of each Contracting Party and the charterworthiness requirements of Annex 4 **/ shall preserve opportunities for charter air services to compete with scheduled air services. Where the Contracting Parties approve adjustments in scheduled fares or rates or tariff conditions which adversely affect the ability of charter air services to compete with scheduled air services, either Contracting Party may request consultations, which shall be held within 60 days, with a view toward adjust­ing charter rules and requirements to preserve fair competitive opportunities for charter air services.

(g) The Contracting Parties individually shall preserve opportunities for scheduled air services to compete with charter air services. Where charterworthiness rules or requirements of charter prices or rates adversely affect the ability of scheduled air services to compete with charter air services, either Contracting Party may request consultations, which shall be held within 60 days, with a view toward preserving fair competitive opportunities for scheduled air services.

(6) Charterworthiness

Except as otherwise provided in Annex 4 **/, each Contracting Party shall accept as charterworthy traffic originating in the country of the other Contracting Party and complying with the charterworthiness rules of the other Contracting Party in effect on the date of outbound departure of the flight.

(7) Flight or Program Approvals

(a) Each Contracting Party shall minimize the administra­tive burdens of filing requirements and procedures on charterers and charter‑designated airlines of the other Contracting Party.

(b) A charter‑designated airline of one Contracting Party proposing to carry charter traffic originating in the country of the other Contracting Party may be required by the other Contracting Party to file charter programs in advance, so that the other Contracting Party may determine whether the programs meet its charterworthiness rules.

(c) Subject to the limitations on information about traffic originating in the country of the other Contracting Party set forth in subparagraph (d) of this paragraph, a charter‑desig­nated airline of one Contracting Party proposing to carry charter traffic originating in either country may be required by the other Contracting Party to file information about charter programs in advance, so that the other Contracting Party may determine whether the programs meet such charter­worthiness requirements as Annex 4 **/ may contain.

(d) Except as may be otherwise provided in Annex 4 **/, neither Contracting Party shall require a charter‑designated airline of the other Contracting Party, which plans to carry charter air traffic originating in the country of the other Contracting Party, to submit more than the following informa­tion with regard to such traffic:

(i) a declaration of conformity with paragraph (6) of this Article and, if applicable, Annex 4 **/;

(ii) the itinerary (dates, times, and points to be served) plus charter categories of each flight;

(iii) the identity of the charterer or charterers;

(iv) the number of seats, volume or tonnage contracted for by each charterer, by charter category;

(v) a description of any tours where there is a mandatory tour package; and

(vi) the price or rate charged by the airline to each charterer.

(e) Notwithstanding subparagraph (d) of this paragraph, each Contracting Party may require that a charter‑designated airline of the other Contracting Party provide such advance information with regard to charter flights as is essential for customs, airport, and air traffic control purposes.

(f) Charter‑designated airlines shall comply with established and non‑discriminatory procedures in regard to airport slotting and shall provide prior notification of flights or series of flights to the relevant authorities if so required.

(g) Neither Contracting Party shall require prior approval of charter flights by charter‑designated airlines of the other Contracting Party except as provided in subparagraph (b) of this paragraph.

(h) Neither Contracting Party shall require prior notifications of information by charter‑designated airlines of the other Contracting Party except as provided in subparagraphs (c), (d), (e) and (f) of this paragraph.

(8) Prices and Rates ***/

(a) Each Contracting Party may require the filing with its aeronautical authorities of prices or rates to be charged by charter‑designated airlines of the other Contracting Party. If it is dissatisfied with the prices or rates so filed, it shall so notify the other Contracting Party as soon as possible, and in any event within 30 days of receiving notification of the price or rate. The other Contracting Party may request consultations which shall be held as soon as possible, and in no event later than 30 days of the receipt of the request. If the matter cannot be resolved by consulta­tion, the Contracting Party objecting to the price or rate may take appropriate action to prevent use or charging of such price or rate, but only insofar as the price or rate applies to traffic originating in its country.

(b) A Contracting Party shall not regulate the prices or rates charged by charterers to the public for charter traffic originating in the country of the other Contracting Party.

(9) Enforcement

(a) Pursuant to paragraph (6) of this Article, the Contracting Party in whose country the charter air traffic originates shall have exclusive responsibility for the enforcement of its charterworthiness rules.

(b) The Contracting Party in whose country the charter traffic originates shall have primary responsibility for the enforcement of such charterworthiness requirements as Annex 4 **/ may contain.

(c) The Contracting Parties shall cooperate with each other on enforcement matters:

(i) Where evidence is obtained of a possible violation of the charterworthiness rules of the other Contracting Party with regard to traffic originating in the country of the other Contracting Party, a Contracting Party shall transmit such evidence to the other Contracting Party for investigation and appropriate enforce­ment action, instead of interrupting the return flight or inconveniencing traffic which originated in the country of the other Contracting Party.

(ii) Where evidence is obtained of a possible viola­tion of the charterworthiness requirements with regard to traffic originating in the country of the other Contracting Party, a Contracting Party shall transmit such evidence to the other Contracting Party for investigation and appropriate enforcement action, instead of interrupting the return flight or inconvenienc­ing traffic which originated in the country of the other Contracting Party. In exceptional circumstances, however, where the first Contracting Party is not satisfied that investigation or appropriate enforcement action has been carried out by the other Contracting Party, it may take appropriate enforcement action itself.

(d) Each Contracting Party may take such steps as it considers necessary to regulate the conduct of its own charterers organizing services covered by this Article. Such regulations shall, however, not preclude or limit the power of the other Contracting Party to regulate within its country and pursuant to its domestic laws, the conduct of charterers of either Contracting Party.

__________

*/ Ed Note: For provisions relating to all-cargo services over the North Atlantic, see Annex 5 (p. 73, infra); see also, Annex 4 (p. 67, infra).

**/ Ed Note: Terminated March 1980, although the charterworthiness requirements still apply in both directions pursuant to the U.K. invocation of Annex 4 paragraph 6.

***/ Ed Note: Not applicable to cargo carriage on charter service over the North Atlantic.
_________

 

 

ARTICLE 15

 TRANSITIONAL PROVISIONS

 [No longer applicable]

 

ARTICLE 16

 CONSULTATIONS

Either Contracting Party may at any time request consultations on the implementation, interpretation, application or amendment of this Agreement or compliance with this Agreement. Such consultations shall begin within a period of 60 days from the date the other Contracting Party receives the request, unless otherwise agreed by the Contracting Parties.

 

ARTICLE 17

SETTLEMENT OF DISPUTES

(1) Any dispute arising under this Agreement, other than disputes where self‑executing mechanisms are provided in Article 12 (Tariffs) and Annex 2, which is not resolved by a first round of formal consultations, may be referred by agree­ment of the Contracting Parties for decision to some person or body. If the Contracting Parties do not so agree, the dispute shall at the request of either Contracting 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 Contracting Party shall name one arbitra­tor. Within 60 days after these two arbitrators have been nominated, they shall by agreement appoint a third arbitrator, who shall act as President of the arbitral tribunal;

(b) if either Contracting Party fails to name an arbi­trator, or if the third arbitrator is not appointed in accor­dance with subparagraph (a) of this paragraph, either Con­tracting Party may request the President of the International Court of Justice to appoint the necessary arbitrator or arbi­trators within 30 days. If the President 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 by the Contracting Parties, the arbitral tribunal shall determine the limits of its jurisdiction in accordance with this Agreement, and shall establish its own procedure. At the direction of the tribunal or at the request of either of the Contracting Parties, a conference to determine the precise issues to be arbitrated and the specific procedures to be followed shall be held no later than 15 days after the tribunal is fully constituted.

(4) Except as otherwise agreed by the Contracting Parties or prescribed 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 at its discretion 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, which­ever is sooner. The decision of the majority of the tribunal shall prevail.

(6) The Contracting 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 Contracting Party shall, consistent with its national law, give full effect to any decision or award of the arbitral tribunal. In the event that one Contracting Party does not give effect to any decision or award, the other Con­tracting Party may take such proportionate steps as may be appropriate.

(8) The expenses of the arbitral tribunal, including the fees and expenses of the arbitrators, shall be shared equally by the Contracting Parties. Any expenses incurred by the President of the International Court of Justice 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 18

AMENDMENT

Any amendments or modifications of this Agreement agreed by the Contracting Parties shall come into effect when confirmed by an Exchange of Notes.

 

ARTICLE 19

TERMINATION

Either Contracting Party may at any time give notice in writing to the other Contracting 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) immediately before the first anniversary of the date of receipt of the notice by the other Contracting Party, unless the notice is withdrawn by agreement before the end of this period.

 

ARTICLE 20

REGISTRATION WITH ICAO

This Agreement and all amendments thereto shall be registered with the International Civil Aviation Organization.

 

ARTICLE 21

ENTRY INTO FORCE

This Agreement shall enter into force on the date of signature [July 23, 1977].

IN WITNESS WHEREOF the undersigned, being duly authorized thereto by their respective Governments, have signed the present agreement.

DONE in duplicate at Bermuda this 23rd day of July, Nineteen Hundred and Seventy-Seven.

ANNEX 1 – Route Schedule

Section 1: Scheduled Combination Air Service Routes for the United States

1. Atlantic Combination Air Service

1A. Atlantic Regional Combination Air Service */

2. Round the World Combination Service

3. [deleted pursuant to 04/07/97 agreement with Hong Kong]

4. Bermuda Combination Air Service

5. Bermuda Combination Air Service – Beyond

6. Caribbean Combination Air Service

Section 2: Scheduled All-Cargo Air Service Routes for the United States

7. Atlantic All-Cargo Air Service

8. [deleted pursuant to 04/07/97 agreement with Hong Kong]

9. Bermuda All-Cargo Air Service

10. Bermuda All-Cargo Air Service – Beyond

11. Caribbean All-Cargo Air Service

Section 3: Scheduled Combination Air Service Routes for the United Kingdom

1. Atlantic Combination Air Service

1A. Atlantic Regional Combination Air Service */

2. Atlantic Combination Air Service via Canada

3. Atlantic Combination Air Service Beyond to Mexico City

4. Atlantic Combination Air Service Beyond to South America

5. Atlantic Combination Air Service Beyond to Japan

5A. Atlantic Combination Air Service Beyond to the Pacific **/

5B. Atlantic Combination Air Service Beyond to Australia **/

6. [deleted pursuant to 04/07/97 agreement with Hong Kong]

7. [not available – Tarawa no longer a UK point]

8. Bermuda Combination Air Service

9. Caribbean Combination Air Service

9A. Caribbean Combination Air Services ***/

Section 4: Scheduled All-Cargo Air Service Routes for the United Kingdom

10. Atlantic All-Cargo Air Service

11. Atlantic All-Cargo Air Service Beyond to South America

12. Atlantic All-Cargo Air Service Beyond to Mexico

13. [deleted pursuant to 04/07/97 agreement with Hong Kong]

14. [not available – Tarawa no longer a UK point]

15. Bermuda All-Cargo Air Service

16. Caribbean All-Cargo Air Service

16A. Caribbean All-Cargo Air Service

 

Section 5: Notes Applicable to All Routes

 

Section 6: Notes on New Gateway Points ****/

 

Section 7: London Airports ****/

 

*/ Ed Note: added pursuant to the June 5, 1995 Memorandum of Consultations

**/ Ed Note: added pursuant to the March 11, 1991 Memorandum of Consultations

***/ Ed Note: created pursuant to rights contained in exchange of letters dated October 17 and November 10, 1986, and November 13, 1991

****/ Ed Note: added pursuant to the December 4, 1980 Exchange of Notes; amended by March 11, 1991 Memorandum of Consultations

[Note: The font size for US Routes 1-11 and UK Routes 1-16 has been reduced to preserve the format used in the original agreement. Also, bracketed alphabetical footnotes reference language agreed upon by the parties, but not specifically intended to be inserted in a footnote format.]
Section 1: Scheduled Combination Air Service Routes for the United States

US Route 1: Atlantic Combination Air Service

[Pursuant to 1977 Agreement, as amended on December 4, 1980, February 20, 1985 and July 27, 1990 (provisional).]

(A) (B) (C) (D)

US Gateway Points */ Intermediate Points Points in UK Territory Points Beyond 5/

Anchorage Shannon 4/ London Berlin

Atlanta Prestwick/Glasgow Frankfurt

Boston 2/ Any UK point Hamburg

Charlotte 1/ excluding Munich

Chicago [a/] London 3/**/ Oslo 6/

Cincinnati 1/ One point in

Cleveland 1/ Western Europe

Dallas/Ft. Worth to be

Detroit selected 6/7/

Houston

Los Angeles

Miami 2/

Minneapolis/St. Paul

Newark 1/

New York

Philadelphia

Pittsburgh [c/]

Raleigh-Durham 1/

San Francisco

Seattle

St. Louis 1/

Washington/Baltimore

Up to 3 points to be

selected and notified

to the United Kingdom 3/**/

1/ On services from/to these gateway points (which were selected under Section 6 of this Annex) full traffic rights between points in Column (C) and Column (D) are available only at: (a) Frankfurt; (b) Oslo (when served through Prestwick/Glasgow); and (c) the point to be selected in Western Europe by the United States pursuant to Footnote 7 below.

2/ Footnote 1 shall apply to operations of any airline designated pursuant to paragraph (5) of Article 3.

3/ Limited to 3 gateway route segments between any US gateway point or points and any point or points in the UK excluding London. The United States may change its selection of any or all of these gateway route segments on 60 days' notice to the UK authorities through diplomatic channels.

__________

*/ Ed Note: Points selected under Section 6 as of the date of publication are: Charlotte; Cincinnati; Cleveland; Newark; Raleigh-Durham; and St. Louis.

**/ Ed Note: Gateway route segments established pursuant to Footnote 3 are: Atlanta-Manchester; Chicago-Manchester; and New York-Manchester.

4/ May be served by only one US designated airline, with full traffic rights between Shannon and Prestwick/Glasgow, on up to seven round trip flights per week.

5/ Only one US designated airline may be designated to serve, with full traffic rights, each point in Column (D) on this route except for Frankfurt for which two designated airlines may provide such service on US Routes 1 and 2 taken together. If a point named in Column (D) is also selected pursuant to Footnote 7 below, two designated airlines may provide service with full traffic rights, except for Frankfurt for which three designated airlines may provide such service on US Routes 1 and 2 taken together.

6/ Limited to services through Prestwick/Glasgow.

7/ To be selected by the United States which may change the selection on six months' notice. Only one US airline may be designated to serve this point with full traffic rights on up to seven round trip flights per week.

[Footnote [a/] below is in effect provisionally pursuant to the June 5, 1995 Memorandum of Consultations. While not specifically intended as a footnote to this route schedule, the information is directly applicable to the item footnoted.]

[a/] If the Government of the United States designates a second airline for the gateway route segment Chicago-London as set forth in US Route 1 in Section 1 of Annex 1 to the Agreement, the Government of the United Kingdom shall, pursuant to paragraph (5) of Article 3 of the Agreement, accept such further designation.

[Footnote [b/] below is in effect pursuant to the December 4, 1980 Exchange of Notes. While not specifically intended as a footnote to this route schedule, the information is directly applicable to the items footnoted.]

[b/] If the Government of the United States designates a second airline for the gateway route segment Boston-London or a second airline for the gateway route segment Miami-London as set forth in U.S Route 1 in Section 1 of Annex 1 to the Agreement, the Government of the United Kingdom shall, pursuant to paragraph (5) of Article 3 of the Agreement, accept such further designation or designations.

[Footnote [c/] is in effect pursuant to an exchange of correspondence between Mr. Thomas White and Mr. Anthony Baker, dated March 31, 2000 and April 3, 2000, respectively. In exchange for Pittsburgh, the U.K. received one additional U.S. gateway point or the ability to add an additional airline to an existing U.S. gateway point for service to London’s Gatwick Airport (See page 40 herein, U.K. Route 1, column C, footnote d/).]

[c/] The United States can select Pittsburgh as an additional U.S. gateway point for service to London’s Gatwick Airport. For the purposes of applying the provisions of the U.S.-U.K. Air Services Agreement, Pittsburgh shall be considered as a point in column (A) of US Route 1.

Each Party can change its selected opportunity, with 60 days’ notice to the other Party.

 

 

US Route 1A: Atlantic Regional Combination Air Service 1/ 2/

[US Route 1A was added on a provisional basis pursuant to the June 5, 1995 MOC.]

(A) (B) (C) (D)

US Gateway Points Intermediate Points Points in UK Territory Points Beyond

Any point or points Any point or points in

In the United States the United Kingdom

excluding London's

Heathrow and Gatwick

Airports

1/ For the purposes of this Agreement and of the Exchange of Notes dated 25 May 1989 concerning the licensing of airlines to operate international air services, and Attachment 5 to the Memorandum of Consultations dated 11 September 1986 concerning North Atlantic passenger tariff procedures, references to US Route 1 shall apply to US Route 1A, except for the purposes of Article 3 paragraph (2), Annex 1, Section 1 (Footnotes), Section 6, Section 7 and Annex 2.

2/ An airline otherwise authorized to operate to Heathrow and Gatwick may carry transit and online connecting traffic between those airports and points in Column (C).

 

US Route 2: Round the World Combination Air Service 1/

(A) (B) (C) (D)

US Gateway Points Intermediate Points Points in UK Territory Points Beyond

Segment (a): London Frankfurt 2/

New York Turkey

Washington/Baltimore Lebanon

Syria

Iran

Pakistan

New Delhi

Calcutta

Points on

Segment (b) 3/

Segment (b)

Honolulu Japan */ Thailand

Los Angeles

San Francisco Points on

Segment (a) 3/

1/ Not more than seven flights per week may operate in each direction on each segment.

2/ Not more than two US airlines may be designated to serve Frankfurt on US Routes 1 and 2, taken together.

__________

*/ Ed. Note: References to Hong Kong have been deleted from this route description pursuant to the US-Hong Kong Air Service Agreement and related Memorandum of Understanding, signed and entered into force on April 7, 1997.

3/ Segments (a) and (b) shall be combined, except as may be agreed pursuant to Article 2, paragraph (5).

 

US Route 3: Pacific Combination Air Service */

__________

*/ Ed. Note: This route schedule was deleted pursuant to the US-Hong Kong Air Service Agreement and related Memorandum of Understanding signed and entered into force on April 7, 1997.

 

US Route 4: Bermuda Combination Air Service

 

(A) (B) (C) (D)

US Gateway Points */ Intermediate Points Points in UK Territory Points Beyond

Atlanta Bermuda

Baltimore

Boston

Chicago

Detroit

Miami

New York

Philadelphia

Atlantic City 1/

Washington

1/ Changeable on 90 days' notice [exchange of letters dated March 28, 1989].

__________

*/ Ed. Note: The November 13, 1991 exchange of letters provides as follows:

USAir wishes to begin Charlotte-Bermuda service and based on our discussions, we understand the UK authorities are prepared to allow USAir to provide such service for at least one year commencing on 1 March 1992. This operation, which is to be permitted on the basis of comity and reciprocity is to be in addition to those rights available on US Route 4 to the Bermuda Agreement. On the basis of comity and reciprocity, US authorities are prepared to allow a UK-designated airline operate between Bermuda and a US gateway selected by UK authorities in addition to those rights available on UK Route 8 for a period coextensive with the period for which USAir's Charlotte-Bermuda operation is permitted.

It is our understanding that the arrangement in the foregoing paragraph may be terminated at any time after March 1, 1993, by either side giving notice of termination to the other. The arrangement would then terminate either at the end of the traffic season in which the notice was given or after 90 days, whichever is later.

 

 

US Route 5: Bermuda Combination Air Service - Beyond

(A) (B) (C) (D)

US Gateway Points Intermediate Points Points in UK Territory Points Beyond

Atlanta Bermuda Azores

Two points in

Baltimore Europe other

than the UK

Miami to be agreed

between the

Washington Contracting

Parties)*/

__________

*/ Ed. Note: Points selected as of the date of publication: Brussels and Dusseldorf (March 5, 1981).

 

US Route 6: Caribbean Combination Air Service

(A) (B) (C) (D)

US Gateway Points Intermediate Points Points in UK Territory Points Beyond

Any point or points Antigua */ Anguilla

In US Territory Aruba British Virgin Islands

Bahamas Cayman Islands

Barbados Montserrat

Belize */ Turks & Caicos Islands

Bonaire

Cuba

Curacao

Dominica */

Dominican Republic

Grenada

Guadeloupe

Guyana

Haiti

Jamaica

Martinique

St. Christopher (St. Kitts) and Nevis */ Nevis ×, St. Lucia ×,

St. Lucia */

St. Maarten

St. Martin

St. Vincent and the Grenadines */

Trinidad & Tobago

US points in the Caribbean area

Venezuela

__________

*/ Ed Note: Pursuant to an exchange of letters on October 17 and November 10, 1986, in effect provisionally, these former UK gateways were transferred to Column B from Column C upon independence from the UK.

[Paragraphs 1-3 and the unnumbered paragraph below are in effect on a provisional basis pursuant to the April 7, 1994 exchange of letters. This arrangement has been continued on an annual basis through exchanges of letters and is currently valid through March 31, 2001.]

1. Airlines of the United States shall be limited, in aggregate, to four round trips a day between Miami-Fort Lauderdale and Grand Cayman. Cayman Airways shall also be limited to a maximum of four round trips a day between Miami-Fort Lauderdale and Grand Cayman.

2. United States-designated airlines shall have the right to operate, in aggregate, to each of the points in the United States that Cayman Airways serves, excluding Miami-Fort Lauderdale, as many gateway route segment frequencies as Cayman Airways operates to each of those points. Notwithstanding the foregoing, United States-designated airlines shall have the right to operate, in aggregate, on the Tampa-Grand Cayman gateway route segment the same number of gateway route segment frequencies that Cayman Airways operates to Tampa or one round-trip frequency per day, whichever is the greater.

3. A United States-designated airline operating between Grand Cayman and Miami-Fort Lauderdale shall have the right to exceed the frequencies to a United States point or points referred to in subparagraph (2) above, provided that it shall reduce its frequencies between Grand Cayman and Miami-Fort Lauderdale correspondingly. These frequencies shall not be replaced while they are being used at the alternative gateway; however, the United States-designated airline shall have the right to transfer the frequencies back to the Grand Cayman and Miami-Fort Lauderdale route, provided that the frequencies on the routes between the other United States point or points and Grand Cayman are correspondingly reduced.

 

In addition, it is the understanding of the Government of the United States of America that there shall be no limitation placed on the frequencies operated by United States-designated airlines between any US gateway point and Grand Cayman which is not served by Cayman Airways.

 

Section 2: Scheduled All-Cargo Air Service Routes for the United States

 

US Route 7: Atlantic All-Cargo Air Service */

(A) (B) (C) (D)

US Gateway Points Intermediate Points Points in UK Territory Points Beyond

Boston London Belgium

Chicago Manchester Netherlands

Detroit Prestwick/Glasgow Federal Republic

Houston of Germany

Los Angeles Turkey

New York Lebanon

Philadelphia Syria

Jordan

Iran

India

_________

*/ Ed Note: See Annex 5 for amendments of this route which took effect from January 1, 1982 (Part IV, subparagraph (10)(c)), and from January 1, 1983 (Part III, subparagraph (3)(b))(pp. 72-75, infra).

 

US Route 8: Pacific All-Cargo Air Service */

_________

*/ Ed. Note: This route schedule was deleted pursuant to the US-Hong Kong Air Service Agreement and related Memorandum of Understanding, signed and entered into force on April 7, 1997.

 

US Route 9: Bermuda All-Cargo Air Service

(A) (B) (C) (D)

US Gateway Points Intermediate Points Points in UK Territory Points Beyond

Atlanta Bermuda

Baltimore

Boston

Chicago

Detroit

Miami

New York

Philadelphia

Washington

 

US Route 10: Bermuda All-Cargo Air Service - Beyond

 

(A) (B) (C) (D)

US Gateway Points Intermediate Points Points in UK Territory Points Beyond

 

Atlanta Bermuda Azores

Baltimore Two points in

Miami Europe (other

Washington than the United Kingdom) to be agreed between the Contracting Parties

 

US Route 11: Caribbean All-Cargo Air Service

(A) (B) (C) (D)

US Gateway Points Intermediate Points Points in UK Territory Points Beyond

Any point or points Antigua */ Anguilla

in US Territory Aruba British Virgin Islands

Bahamas Cayman Islands

Barbados Montserrat

Belize */ Turks and Caicos Islands

Bonaire

Cuba

Curacao

Dominica */

Dominican Republic

Grenada

Guadeloupe

Guyana

Haiti

Jamaica

Martinique

St. Christopher

(St. Kitts)-Nevis */

St. Lucia */

St. Martin

St. Maarten

St. Vincent and the

Grenadines */

Trinidad & Tobago

US points in

the Caribbean area

Venezuela

__________

*/ Ed Note: Pursuant to an exchange of letters on October 17 and November 10, 1986, in effect provisionally, these former UK gateways were transferred to Column B from Column C upon independence from the UK.

 

 

Section 3: Scheduled Combination Air Service Routes for the United Kingdom

 

UK Route 1: Atlantic Combination Air Service

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory 7/[c/] Points Beyond

[d/]

London Points in Luxembourg, Atlanta

Manchester The Netherlands, and Boston [a/]

Prestwick/ the Republic of Charlotte 8/

Glasgow Ireland 4/5/ Chicago

Belfast 1/ Dallas/Ft. Worth

Points in Denver 8/

Any UK point Belgium, France Detroit

excluding and Germany 4/6/ Houston

London 2/3/[*/] Las Vegas 8/

Los Angeles

Miami [c/]

New Orleans

New York

Orlando 8/

Philadelphia

Phoenix 8/

San Diego 8/

San Francisco

Seattle

Tampa 8/

Washington/Baltimore

Up to two points to

be selected and notified

to the United States 2/3/[*/]

 

1/ May be served nonstop if selected under Section 6 of this Annex.

2/ Article 3(2) and Paragraphs 1 to 3, 5 and 6 of Section 5 of Annex 1 shall not apply [July 27, 1990 exchange of letters].

3/ Limited to 2 gateway route segment opportunities between any point or points in the UK excluding London and any point or points in the US; and may be exercised on a new or existing gateway route segment or segments. The United Kingdom may change its selection of either or both of these gateway route segments on 60 days' notice to the US authorities through diplomatic channels [July 27, 1990 exchange of letters].

4/ Article 11 (3) and subparagraphs (a) through (d) of paragraph (6) of Section 5 of Annex 1 shall not apply to any service on which one or more of these points is served as an intermediate point [March 11, 1991 MOC].

5/ Not more than 21 round trip combination flights per week may serve the United States from points in Luxembourg, the Netherlands, and the Republic of Ireland with full traffic rights between those points and the United States [March 11, 1991 MOC].

__________

*/ Ed. Note: Gateway route segments established pursuant to Footnote 3 as of the date of publication: Birmingham-New York.

6/ Not more than 42 round trip combination flights per week may serve the United States from points in Belgium, France, and Germany with full traffic rights between those points and the United States, provided that not more than 21 round trip combination flights per week may serve the United States from points in any one country. Berlin shall be available from 1 April 1993, but shall be available before that date if the Government of the United States of America so notifies the Government of the United Kingdom [March 11, 1991 MOC].

7/ Notwithstanding the provisions of Note 2 in Section 5 of this Annex, one UK designated airline may carry on that service its own stopover passengers between two points in column (C), provided the service begins or ends in a point in column (A) [February 20, 1985 Exchange of Notes].

8/ Selected under Section 6 of this Annex

[Paragraph [a/] below is in effect provisionally pursuant to the July 27, 1990 exchange of letters. While not specifically intended as footnotes to this route schedule, paragraph [a/] is directly applicable to the items footnoted.]

[a/] The Government of the United Kingdom shall have the right to designate a second airline for the gateway route segment London-Boston as set forth in UK route 1 Section 3 of Annex 1 of the Agreement. The Government of the United States shall accept such designated under paragraph 5 of Article 3 of the Agreement. All provisions of the Agreement shall apply. Traffic carried by airlines designated under paragraph 5 of Article 3 of the Agreement on Boston-London gateway route segment by the Government of the United States and on the London-Boston gateway route segment by the Government of the United Kingdom shall not count towards the passenger traffic levels specified under Article 3(2)(b)(i) of the Agreement.

[Footnote [b/] below is added pursuant to the December 4, 1980 exchange of letters. While not specifically intended as a footnote to this route schedule, the information in footnote [b/] is directly applicable to the item footnoted.]

[b/] If the Government of the United Kingdom designates a second airline for the gateway route segment London-Miami as forth in UK Route 1 in Section 3 of Annex 1 to the Agreement, the Government of the United States shall, pursuant to paragraph (5) of Article 3 of the Agreement, accept such further designation.

[c/] See paragraph 10 of Section 6 of this Annex for additional designation opportunities. Points selected pursuant to paragraph 10 as of the date of publication: San Francisco and Orlando.

[Footnote [d/] below is added pursuant to an exchange of correspondence between Mr. Thomas White and Mr. Anthony Baker, dated March 31, 2000 and April 3, 2000, respectively.]

[d/] The United Kingdom can select one additional U.S. gateway point or add an additional airline to an existing U.S. gateway for service to London’s Gatwick Airport. For the purposes of applying the provisions of the U.S.-U.K. Air Services Agreement if an additional U.S. point is selected, it shall be considered as a point in column (C) of UK Route 1.

Each Party can change its selected opportunity, with 60 days’ notice to the other Party.

 

 

UK Route 1A: Atlantic Regional Combination Air Service

[UK Route 1A was added on a provisional basis pursuant to the June 5, 1995 MOC.]

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

Any point or points Any point or points in

In the United Kingdom the United States

excluding London's

Heathrow and Gatwick

Airports

1/ For the purposes of this Agreement and of the Exchange of Notes dated 25 May 1989 concerning the licensing of airlines to operate international air services, and Attachment 5 to the Memorandum of Consultations dated 11 September 1986 concerning North Atlantic passenger tariff procedures, references to UK Route 1 shall apply to UK Route 1A, except for the purposes of Article 3 paragraph (2), Annex 1, Section 3 (Footnotes), Section 6, Section 7 and Annex 2.

 

UK Route 2: Atlantic Combination Air Service via Canada

 

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

London Canada Boston

Manchester Chicago

Prestwick/Glasgow Dallas/Ft. Worth

Detroit

New York

Philadelphia

Washington/Baltimore

Five points to be selected

from UK route 1 1/*/

[Footnote 1 and related text added on a provisional basis pursuant to the March 11, 1991 MOC.]

1/ These points are available on UK Route 2 so long as they also appear on UK Route 1. Only gateway route segments that are also available on UK Route 1 may be operated.

__________

*/ Ed Note: Seattle selected pursuant to footnote 1.

 

UK Route 3: Atlantic Combination Air Service Beyond to Mexico City

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

London Boston Mexico City

Manchester Detroit

Prestwick/Glasgow New York

Philadelphia

Washington/Baltimore

Five points to be selected

From UK Route 1 1/

[Footnote 1/ and related text added on a provisional basis pursuant to the March 11, 1991 MOC.]

1/ These points are available on UK Route 3 so long as they also appear on UK Route 1. Only gateway route segments that are also available on UK Route 1 may be operated.

 

 

UK Route 4: Atlantic Combination Air Service Beyond to South America */

 

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

London Atlanta 2/ Bolivia

Manchester San Juan **/ Chile

Prestwick/Glasgow Three Points to Colombia

Other Points in the be selected from UK Ecuador

United Kingdom 1/ Route 1 3/ Peru

Venezuela

Other Points

in South

America 4/**/

1/ These points must also be UK gateway points on UK Route 1.

2/ Full traffic rights may be exercised from Atlanta only to Colombia, Peru and Venezuela, unless Atlanta is also selected as a US point from UK Route 1.

3/ These points are available on UK Route 4 so long as they also appear on UK Route 1. Only gateway route segments that are also available on UK Route 1 may be operated.

4/ These points may be served with full traffic rights only from San Juan. [See footnote **/ below]

__________

*/ Ed Note: Footnotes 1-4 and accompanying text replaced footnotes 1 and 2, on a provisional basis, pursuant to the March 11, 1991 MOC, which also added Bolivia, Chile and Ecuador, on a provisional basis, to Column D.

**/ Ed Note: San Juan replaced Houston in column (C)and footnote 4/ and accompanying text were added to column (D) pursuant to the February 20, 1985 Exchange of Notes, which incorporated the November 11, 1982 Memorandum of Consultations.

 
 
UK Route 5: Atlantic Combination Air Service Beyond to Japan

 

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

London Anchorage Japan

 

 

UK Route 5A: Atlantic Combination Air Service Beyond to the Pacific 1/

 

[UK Route 5A added, on a provisional basis, pursuant to the March 11, 1991 MOC.]

 

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

London Three Points to be Indonesia

Manchester selected from UK Korea

Prestwick/Glasgow Route 1 3/*/ Malaysia

Other Points in the New Zealand

United Kingdom 2/ Singapore

Taiwan

1/ For purposes of this Agreement and of the Exchange of Notes dated 25 May 1989 concerning licensing of airlines to operate international air services, references to UK Route 5 shall be deemed to include UK Route 5A.

2/ These points must also be UK gateway points on UK Route 1.

3/ These points are available on UK Route 5A so long as they also appear on UK Route 1. Only gateway route segments that are also available on UK Route 1 may be operated.

__________

*/ Ed Note: Los Angeles selected pursuant to footnote 3.

 

 

UK Route 5B: Atlantic Combination Air Service Beyond to the Australia 1/

 

[UK Route 5B added, on a provisional basis, pursuant to the March 11, 1991 MOC.]

 

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

London Seattle Australia 3/

Manchester

Prestwick/Glasgow

Other Points in the

United Kingdom 2/

1/ For purposes of this Agreement and of the Exchange of Notes dated 25 May 1989 concerning licensing of airlines to operate international air services, references to UK Route 5 shall be deemed to include UK Route 5B.

2/ These points must also be UK gateway points on UK Route 1. Only gateway route segments that are also available on UK Route 1 may be operated.

3/ Only one UK airline may operate up to seven weekly round trip combination flights with full traffic rights between Seattle and one point in Australia. The United Kingdom will notify the United States of its selection in writing through diplomatic channels. The selection may be changed on 30 days' notice.

 

UK Route 6: Pacific Combination Air Service */

__________

*/ Ed. Note: This route schedule was deleted upon entry into force of the US-Hong Kong Air Service Agreement and related Memorandum of Understanding signed on April 7, 1997.

 

UK Route 7: Pacific Combination Air Service via Tarawa */

__________

*/ Ed. Note: Not available – Tarawa no longer a UK point.

 

UK Route 8: Bermuda Combination Air Service

 

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

 

Bermuda San Juan 1/

Four points to be

selected and notified

to the United States [a/] */

1/ This selection may be changed on 90 days' notice to the US authorities through diplomatic channels.

[a/] See also, footnote [1/] to US Route 4, allowing for an additional US point for UK carriers on this route on a basis of comity and reciprocity coextensive with USAir's authority on the Charlotte-Bermuda route segment.

__________

*/ Ed Note: Baltimore, Orlando and Tampa selected.

 

 

UK Route 9: Caribbean Combination Air Service 1/

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

Anguilla Antigua */ Baltimore 2/

British Virgin Bahamas Houston 2/

Islands Barbados Miami 2/

Cayman Islands Belize */ New Orleans 2/

Montserrat Cuba Puerto Rico

Turks & Caicos Dominica */ Tampa 2/

Islands Dominican Republic US Virgin Islands

Grenada Washington 2/

Guadeloupe

Guyana

Haiti

Jamaica

Martinique

St. Christopher (St.

Kitts) and Nevis */

St. Lucia */

St. Maarten

St. Martin

St. Vincent and

the Grenadines */

Trinidad and Tobago

Any point or

points in Column (A)

 

1/ Cayman Airways or its successor airline based in the Cayman Islands will operate on UK Route 9A unless footnote 2 to Route 9A applies.

2/ Each UK designated airline may not during a traffic season serve more than two of the following US points: Baltimore, Houston, Miami, New Orleans, Tampa or Washington. Each designated UK airline may, in its discretion, and with not less than 90 days notice, change from one of these points to another each season.

*/ Pursuant to an exchange of letters on October 17 and November 10, 1986, in effect provisionally, these former UK gateways were transferred to Column B from Column A upon independence from the UK.

 

UK Route 9A: Caribbean Combination Air Service 1/2/

[Route 9A was created pursuant to provisional rights contained in the exchange of letters dated October 16 and November 10, 1986. The November 13, 1991 exchange of letters added a new US gateway point, on a provisional basis, for a total of five US gateway points to be selected by the UK in Column C.]

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

Anguilla Antigua */ Houston

British Virgin Bahamas Miami

Islands Barbados Five points to be

Cayman Islands Belize */ selected by the UK

Montserrat Cuba and notified to the US 3/

Turk & Caicos Dominica */

Islands Dominican Republic

Grenada

Guadeloupe

Guyana

Haiti

Jamaica

Martinique

St. Christopher (St.

Kitts)and Nevis */

St. Lucia */

St. Maarten

St. Martin

St. Vincent and

the Grenadines */

Trinidad and Tobago

Any point or

points in Column (A)

1/ For purposes of this Agreement, references to Route 9 shall be deemed to include Route 9A, except for purposes of footnote 2 to Route 9A.

2/ Only Cayman Airways or its successor airline based in the Cayman Islands can operate on UK Route 9A. This route is available provided that the operations of US airlines to the Cayman Islands are not restricted pursuant to either paragraph (4) of Article 3 of the Agreement or the July 23, 1977 exchange of letters between Alan S. Boyd and W. Patrick Shovelton on Statements of Interpretation of the Agreement. [See, Agreement, "Article 3 (Designation and Authorization of Airlines) –- Multiple Designation in Respect of Dependent Territories" -- for relevant portion of above-mentioned letters.] Otherwise, Route 9 is available to Cayman Airways or its successor airline based in the Cayman Islands.

3/ These selections may be changed on 60 days' notice to the US authorities through diplomatic channels. [Points selected pursuant to this footnote as of the date of publication: Atlanta; Orlando (1985); New York; Tampa; and Fort Lauderdale.]

__________

*/ Ed Note: Pursuant to an exchange of letters on October 17 and November 10, 1986, in effect provisionally, these former UK gateways were transferred to Column B from Column A upon independence from the UK.

Section 4: Scheduled All-Cargo Air Service Routes for the United Kingdom

 

UK Route 10: Atlantic All-Cargo Air Service */

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

London Canada 1/ Boston Panama 1/

Manchester Chicago

Prestwick/Glasgow Detroit

Los Angeles 1/

New York

Washington/Baltimore

1/ Without rights to carry local traffic between Los Angeles and Canada and between Los Angeles and Panama.

_________

*/ Ed Note: See Annex 5 for amendments of this route which took effect from January 1, 1982 (Part IV, subparagraph (10)(c)), and from January 1, 1983 (Part III, subparagraph (3)(b)(pp. 72-75, infra).

 

UK Route 11: Atlantic All-Cargo Air Service Beyond to South America */

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

London Atlanta Venezuela

Manchester Houston Colombia

Prestwick/Glasgow Manaus

Peru 1/

1/ Without rights to carry local traffic between Houston and Peru.

_________

*/ Ed Note: See Annex 5, Part III, subparagraph (3)(b), for amendments of this route which took effect from January 1, 1983 (pp. 72-75, infra).

 

UK Route 12: Atlantic All-Cargo Air Service Beyond to Mexico */

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

London Miami Mexico City

Manchester

Prestwick/Glasgow

_________

*/ Ed Note: See Annex 5, Part III, subparagraph (3)(b), for amendments of this route which took effect from January 1, 1983 (p. 72, infra).

 

UK Route 13: Pacific All-Cargo Air Service */

__________

*/ Ed. Note: This route schedule was deleted upon entry into force of the US-Hong Kong Air Service Agreement and related Memorandum of Understanding signed on April 7, 1997.

 

UK Route 14: Pacific All-Cargo Air Service via Tarawa */

__________

*/ Ed. Note: Not available – Tarawa no longer a UK point.

 

UK Route 15: Bermuda All-Cargo Air Service

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

Bermuda Three points to be

selected by the UK

and notified to the US

 

 

UK Route 16: Caribbean All-Cargo Air Service 1/

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

Anguilla Antigua */ Baltimore 2/

British Virgin Bahamas Houston 2/

Islands Barbados Miami 2/

Cayman Islands Belize */ New Orleans 2/

Montserrat Cuba Puerto Rico

Turks and Caicos Dominica */ Tampa 2/

Islands Dominican Republic US Virgin Islands

Grenada Washington 2/

Guadeloupe

Guyana

Haiti

Jamaica

Martinique

St. Christopher (St.

Kitts) and Nevis */

St. Lucia */

St. Maarten

St. Martin

St. Vincent and

the Grenadines */

Trinidad & Tobago

Any point or

points in Column (A)

1/ Cayman Airways or its successor airline based in Cayman Islands will operate on UK Route 16A unless footnote 2 to UK Route 16A applies.

2/ Each UK designated airline may not during a traffic season serve more than two of the following US points: Baltimore, Houston, Miami, New Orleans, Tampa or Washington. Each designated UK airline may, at its discretion, and with not less than 90 days' notice, change from one of these points to another each season.

__________

*/ Ed Note: Pursuant to an exchange of letters on October 17 and November 10, 1986, in effect provisionally, these former UK gateways were transferred to Column B from Column C upon independence from the UK.

 

 

UK Route 16A: Caribbean All-Cargo Air Service 1/2/

[Route 16A was created pursuant to provisional rights contained in exchange of letters dated October 16 and November 10, 1986, and November 13, 1991.]

(A) (B) (C) (D)

UK Gateway Points Intermediate Points Points in US Territory Points Beyond

Anguilla Antigua */ Houston

British Virgin Bahamas Miami

Islands Barbados Three points to be

Cayman Islands Belize */ selected by the UK

Montserrat Cuba and notified

Turks and Caicos Dominica */ to the US 3/

Islands Dominican Republic

Grenada

Guadeloupe

Guyana

Haiti

Jamaica

Martinique

St. Christopher (St.

Kitts) and Nevis */

St. Lucia */

St. Maarten

St. Martin

St. Vincent and

the Grenadines */

Trinidad & Tobago

Any point or

points in Column (A)

 

1/ For purposes of this Agreement, references to Route 16 shall be deemed to include Route 16A, except for purposes of footnote 2 to Route 16A.

2/ Only Cayman Airways or to its successor airline based in the Cayman Islands can operate on UK Route 16A. This route is available provided that the operations of US airlines to the Cayman Islands are not restricted pursuant to either paragraph (4) of Article 3 of the Agreement or the July 23, 1977 exchange of letters between Alan S. Boyd and W. Patrick Shovelton on Statements of Interpretation of the Agreement. [See, Agreement, "Article 3 (Designation and Authorization of Airlines) –- Multiple Designation in Respect of Dependent Territories" -- for relevant portions of above-mentioned letters, attached hereto as Appendix E.] Otherwise, Route 16 is available to Cayman Airways or its successor airline based in the Cayman Islands.

3/ These selections may be changed on giving 60 days' notice to the US authorities through diplomatic channels. [Points selected pursuant to this footnote as of the date of publication: Atlanta (1987) and New York (1989).]

__________

*/ Ed Note: Pursuant to an exchange of letters on October 17 and November 10, 1986, in effect provisionally, these former UK gateways were transferred to Column B from Column A upon independence from the UK.

SECTION 5

 

NOTES APPLICABLE TO ALL ROUTES*/

 

1. In addition to the right to carry transit, connecting, and local traffic between points in column B and points in column C and between points in column C and points in column D, designated airlines may carry transit and on‑line connecting traffic between points in column C and points in other countries, including countries not listed in columns B or D. Such on‑line connecting traffic may be connected at any points in columns A, B, C, or D at any points in countries not listed in such columns.

2. Each designated airline may carry transit and on‑line connecting traffic between any two points in the territory of the other Contracting Party which appear in either column C or column D on any route for which that airline is designated.

3. Except as may be otherwise specifically provided, a designated airline may, on any or all flights, and at its option, serve points on a route and operate via points not listed in columns A, B, C, or D in any order, operate flights in either or both directions, and omit stops at any point or points, without loss of any right to uplift or discharge traffic otherwise permissible under the relevant routes or notes applicable thereto, provided that the service begins or terminates in the territory of the Contracting Party designating the airline. Unless specifically restricted, a point on a route appearing in column B shall be considered as also appearing in column D, and a point in column D shall be considered as also appearing in column B.

4. A designated airline may carry traffic between points in column A and points in column C, on the same flight or otherwise, via points in other countries, including countries not listed in columns B or D.

5. A designated airline may serve points behind any homeland gateway point shown in column A with or without change of aircraft or flight number and may hold out and advertise such services to the public as through services.

__________

*/ Ed Note: See Annex 5 (Part III, subparagraph (3)(c) and Part IV, subparagraph (10)(d) for additional provisions related to scheduled all-cargo traffic services over the North Atlantic (p. 72, infra).

6. A designated airline of one Contracting Party may make a change of gauge in the territory of the other Contracting Party or at points in column B or column D or at points in other countries, provided that:

(a) operations beyond the point of change of gauge shall be performed by an aircraft having capacity less, for outbound services, or more, for inbound services, than that of the arriving aircraft;

(b) aircraft for such operations shall be scheduled in coincidence with the inbound or outbound aircraft, as the case may be, and shall have the same flight number;

(c) in the case of combination air services only, the onward flight, inbound or outbound as the case may be, shall be scheduled to depart within three hours of the scheduled arrival of the incoming aircraft, unless airport curfews, airport slots, or other operational constraints, at the point where change of gauge occurs or at the next point or points of destination of the flight, prevent such scheduling; and

(d) if a flight is delayed by unforeseen operational or mechanical problems, the onward flight may operate without regard to the conditions in paragraphs (b) and (c) of this Note.

7. Stops for non‑traffic purposes may be made at any point in connection with the operations on any route.

8. Notwithstanding the terms of Notes 1, 4, and 7 of this Section, US designated airlines serving Hong Kong shall not make stops for traffic or non‑traffic purposes at any point or points in the mainland territory of the People's Republic of China.

9. In these Notes:

"Transit traffic" means that traffic which is carried on a flight through a point. Flight, for the purpose of this definition, means either:

(a) The arrival and onward operation of an aircraft by an airline whether or not under the same flight identification number, or

(b) the arrival of one aircraft and next onward oper­ation of another aircraft under the same flight identification number, as otherwise allowable under this Agreement, including Note 6 of this Section; and

"On‑line connecting traffic" means that traffic which is carried on an incoming flight of an airline and is transferred to an onward flight of the same airline under a different flight identification number. For passengers only, the onward transfer shall be ticketed on the first available onward flight of that airline for the point to which a passenger is connecting, provided that the time between the scheduled arrival of the incoming flight and the scheduled departure of the onward flight does not exceed 24 hours.

[Paragraphs 10 and 11 were added on a provisional basis pursuant to the June 5, 1995 MOC, replacing paragraphs 10 and 11 that were added with the March 11, 1991 MOC.]

10. United States and United Kingdom designated airlines may enter into commercial arrangements with any other airline whereby services under this Agreement on any route or sector of a route may carry the airline designator code of the US or UK designated airline, in addition to that of the carrier operating the flight, and may be held out by the US or UK airline as though those services were its own, provided that the US or UK designated airline has authority to exercise traffic rights (whether under this Agreement or otherwise) over the whole of the route and the other airline has authority to exercise traffic rights (under this Agreement or otherwise) over the sector or sectors it operates. Notwithstanding the preceding sentence, airlines designated on and serving the same gateway route segment cannot enter into such arrangements with each other for service on that gateway route segment.

11. (a) Any United Kingdom designated airline may enter into a commercial arrangement with any US airline or airlines on a sector between a US gateway point for which the UK airline is designated and another point in US territory under which arrangement the US airline's flights carry the airline designator code of both airlines and may be held out by the UK designated airline as services from or over a point in the territory of the UK to a point in US territory as though those services were its own.

(b) Notwithstanding the above, US and UK airlines designated, under this Agreement, on and serving the same gateway route segment cannot enter into such arrangements with each other for service on that gateway route segment.

[Paragraphs 12 and 13 were added on a provisional basis pursuant to the June 5, 1995 MOC.]

12. Without prejudice to any arrangements otherwise permitted (including those allowed under this Agreement), any United Kingdom designated airline may enter into a commercial arrangement with any United States airline or airlines under which services between points in the UK and Washington, Baltimore, Philadelphia, Tampa, and San Francisco operated by the United Kingdom designated airline under this Agreement may carry the airline designator codes of both the United Kingdom designated airline and the United States airline for the purpose of ensuring that such services shall be eligible under any applicable United States laws or regulations to provide transportation by air of traffic (excluding mail) that is referred to in 49 United States Code §40118. The US aeronautical authorities shall grant all economic authorizations necessary to permit the above arrangements.

13. (a) The rights in paragraphs 10-12 of this section may be exercised without regard to the restrictions in paragraph 6 of this section.

(b) In considering applications to exercise rights available under paragraphs 10, 11, and 12 of this section, the Contracting Parties shall act on any necessary economic authorizations promptly. In the case of the United States, new applications for economic authority to permit a UK airline to implement a code-sharing arrangement shall be acted on within 28 calendar days after the applicant has filed all documents necessary for obtaining said economic authority. In the event that the competent US authorities fail to act on such an application within 28 calendar days, for the purpose of this agreement only, the application shall be deemed to have been disapproved unless the operations are covered by any automatic extension provisions under applicable US laws and regulations. The foregoing time limits shall not apply to an application for economic authority from (1) an airline that requires new or additional FAA operating authority; (2) a US airline for which the application requires an initial fitness determination; or (3) a US airline for which the requested service would involve a substantial change in operations, ownership or management under DOT regulations. In the event that the US authorities consider that the 28-day time limit does not apply to an application for any of the reasons set out in the preceding sentence, they shall inform the UK airline involved accordingly within 28 calendar days after the application has been made. Any applications approved in accordance with this paragraph shall be for a period of no less than two years.

 

[Section 6 was added pursuant to the December 4, 1980 Exchange of Notes.]

SECTION 6

 

NOTES ON NEW GATEWAY POINTS

 

1. In accordance with the provisions of this section, a Contracting Party may select new gateway points from among the following:

(a) Cleveland, Denver, Ft. Lauderdale, Honolulu, Kansas City, Las Vegas, Minneapolis/St. Paul, New Orleans, Orlando, Phoenix, Pittsburgh, Portland, St. Louis, San Diego and Tampa.

(b) Any other point in United States territory whose international airport is located more than 100 direct air miles from the international airport of a point already served or selected for service under this Agreement.

(c) Any other point in the United States territory whose international airport is located less than 100 direct air miles from the international airport of a point already served or selected for service under this Agreement, provided that the other Contracting Party does not object to its selection. In deciding whether to object, the other Contracting Party shall have regard to whether the proposed point is generally considered to be a separate metropolitan area from the proximate gateway point.

(d) Notwithstanding subparagraph (c) above, Newark and Baltimore. Services at these points may be held out, promoted and sold as services at New York and Washington, respectively, as well as Newark and Baltimore. Such selections and services shall not derogate from the rights of airlines designated for services at New York and Washington/Baltimore on North Atlantic routes to use any or all New York or Washington/Baltimore area airports and hold out, promote and sell their flights as Newark and Baltimore services as well as New York and Washington services without regard to the airport used. The traffic carried on gateway route segments to/from New York and to/from Washington/Baltimore by airlines designated for these gateway route segments (including their services, if any, to and from Newark and Baltimore airports) shall, for the purposes of Article 3(2)(b)(i) of this Agreement, be counted separately from traffic carried on gateway route segments to/from Newark and to/from Baltimore, respectively, by airlines designated for Newark or Baltimore gateway route segments subsequent to gateway selection pursuant to this Section.

(e) Belfast, solely by the United Kingdom.

2. (a) At the time of selecting a new gateway point in accordance with the provisions of this Section, a Contracting Party may notify the other Contracting Party that it wishes the services of its designated airline at that gateway to receive market development protection for a period not to exceed three years from the date on which the service is permitted in accordance with paragraphs 2 to 6 of this Section or such later date as all necessary authorizations and technical permissions have been granted by the other Contracting Party (provided that reasonable efforts have been made to obtain them). During a period of invoked market development protection, no nonstop North Atlantic service under this Agreement may be commenced at that gateway point by an airline of the other Contracting Party, unless the designated airline of the Contracting Party invoking such protection operates fewer than 100 non-stop round trip combination flights within the first twelve-month period after the start of the market development period, or fewer than 150 such flights within any subsequent twelve-month period.

(b) Such market development protection shall be accorded to the United Kingdom designated airline or airlines serving St. Louis and New Orleans and shall commence on 14 April 1980 and 1 April 1981, respectively, or on such later dates as all necessary authorizations and technical permissions have been granted by the United States (provided that reasonable efforts have been made to obtain them). It may be invoked by the United States for its designated airline serving Denver, and if so shall commence on 14 April 1980, or on such later date as all necessary authorizations and technical permissions have been granted by the United Kingdom (provided reasonable efforts have been made to obtain them), and provided that the United States gives notification to the United Kingdom of its wish to invoke such protection at the time of or before signature of the Exchange of Notes incorporating this Section into this Agreement.

[Paragraph 3 amended pursuant to February 20, 1985 Exchange of Notes.]

3. A gateway point shall be selected by written notification to the other Contracting Party through diplomatic channels and such notification shall take place in accordance with the following timetable regarding sequence, timing and, subject to the provisions of paragraph 2 above, commencement of services at the gateway point. For services permitted to start as set out in column (A), the Contracting Parties shall select new gateway points in the sequence set out in column (B) and shall observe the latest dates for delivery of notification set out in column (C).

 

[The timetable contained in the February 20, 1985 Exchange of Notes and notes 4-6 are no longer relevant. However, the following paragraphs are still applicable:]

7. Either Contracting Party may change a previous selection of a gateway point during any period when it is entitled to make a selection pursuant to paragraphs 3, 4, or 6 of this Section or at any time after 1 December 1984 (and in the same manner as for a selection). In such an event, services from the new point shall be permitted to start on the first date of the traffic season immediately after the notification of the change or three months after the date of such notification (whichever is later). Services from the point renounced shall cease no later than the permitted start of services at the new point. Market development protection may not be invoked or continued at either the new point or the point renounced.

8. In their selection of gateway points as set out above, the Contracting Parties shall have regard to the availability and quality of service from nearby gateways and the need to develop an attractive pattern of frequent service at gateways which are in the early years of operation.

9. Both Contracting Parties shall use their best efforts to grant necessary authorizations and technical permissions in the shortest possible time, and the periods set forth in Article 12 (Tariffs) and Annex 2 (Capacity on the North Atlantic) shall be reduced to the extent necessary to permit airline planning, marketing and start of services on the permitted date.

 

[Paragraph 10 was added on a provisional basis pursuant to the March 11, 1991 MOC.]

10. Notwithstanding Article 3(2) of this Agreement:

(a) The Government of the United Kingdom may forgo up to two of the points which were selected or which could have been selected by the United Kingdom in accordance with the provisions of this Section. To the extent to which it has forgone such points, it shall have the option to designate an airline or airlines on UK Route 1 for an existing gateway route segment that is being served by any designated UK airline[s] on UK Routes 1, 2, 3, 4, or 5; provided that, not more than three UK airlines may be designated on any gateway route segment. The Government of the United Kingdom may exercise, or change its selection of, this opportunity upon sixty days' written notification to the Government of the United States of America through diplomatic channels.

(b) The Government of the United Kingdom shall have two opportunities to designate an additional UK airline or airlines on UK Route 1 for an existing gateway route segment that is being served by any designated UK airline on UK Routes 1, 2, 3, 4, or 5; provided that, not more than three UK airlines are designated on any gateway route segment. The Government of the United Kingdom may exercise, or change its selection of, this opportunity upon sixty days' notification to the Government of the United States through diplomatic channels.

(c) The Government of the United States of America shall accept such designations pursuant to paragraph (5) of Article 3.

(d) If coincident gateway route segments appear on more than one route, the limitations set forth in this paragraph apply to the coincident segments taken together.

 

 

[Section 7 was added pursuant to the December 4, 1980 Exchange of Notes.]

SECTION 7

 

LONDON AIRPORTS

[Pursuant to the March 11, 1991 MOC, paragraphs 1-4 replaced, on a provisional basis, the original Section 7 added in the December 4, 1980 Exchange of Notes.]

1. Any London airport (including Heathrow) may be served by two US and two UK airlines nominated by their respective governments on US Routes 1 and 2 and UK Routes 1, 2, 3, 4, and 5 if the first point of arrival in US territory or the last point of departure from US territory is one of the following gateways, served as a traffic point: Anchorage, Boston, Chicago, Detroit, Los Angeles, Miami, Minneapolis/St. Paul (US designee only), New York, Philadelphia, San Francisco, Seattle, or Washington/Baltimore. The above nominations may be changed through written notification through diplomatic channels. United Kingdom authorities may add additional US gateways to the preceding list for Heathrow service, if the gateway is not available on US Route 1. The Government of the United Kingdom will notify the Government of the United States in writing through diplomatic channels of its decision to exercise the above opportunities. Nonstop service between the newly selected US gateways and Heathrow Airport may commence at the UK authorities' discretion.

2. Notwithstanding the provisions of paragraph 1, any airline designated by the United States pursuant to paragraph (5) of Article 3 and serving the gateway route segment Miami-London and any airline designated by either Contracting Party pursuant to paragraph (5) of Article 3 and serving the gateway route segment Boston-London may use any London airport except Heathrow.

3. Notwithstanding the provisions of this section, any London airport (including Heathrow) may be served by the UK carriers nominated for Heathrow service on UK Routes 1, 2, 3, 4, and 5 on flights operated via third-country intermediate points served as traffic points.

4. All other services on US routes 1 and 2 and UK Routes 1, 2, 3, 4, and 5 may use any London airport except Heathrow.

 

 

 

[The original Annex 2 was replaced pursuant to an Exchange of Notes dated May 25, 1989.]

 

ANNEX 2 ‑ CAPACITY ON THE NORTH ATLANTIC

(1) In order to ensure the sound application of the principles in Article 11 (Fair Competition) of this Agreement and in view of the special circumstances of North Atlantic air transport, the Contracting Parties have agreed to the following procedures with respect to combination air services on US Routes 1 and 2 and UK Routes 1, 2, 3, 4 and 5 specified in Annex 1.

(2) The purpose of this Annex is to provide a consultative process to deal with cases of excess provision of capacity, while ensuring that designated airlines retain adequate scope for managerial initiative in establishing schedules and that the overall market share achieved by each designated airline will depend upon passenger choice rather than the operation of any formula or limitation mechanism. In keeping with these objectives, the Contracting Parties desire to avoid unduly frequent invocation of the consultative mechanism or limitation provision in order to avoid undue burden of detailed supervision of airline scheduling for the Contracting Parties.

(3) Not later than 130 days before each summer and winter traffic season, each designated airline shall file with both Contracting Parties its proposed schedules for services on each relevant gateway route segment for that season. Such schedules shall specify the frequency of service, type of aircraft and all points to be served. In the event that increases in frequencies are later required, such increases shall be filed with both Contracting Parties on a timely basis. Any such late‑filed increases in frequencies by an airline on any gateway route segment shall be subject to the approval of the other Contracting Party only if the increase could have been the subject of consultations under paragraph (4) of this Annex if it had been filed by the deadline specified in this paragraph.

(4) If a Contracting Party (the "Receiving Party") believes that an increase in frequencies on a gateway route segment contained in any of the schedules so filed with it by a designated airline of the other Contracting Party (the "Requesting Party") may be inconsistent with the principles set forth in Article 11 of this Agreement, it may, not later than 105 days before the next traffic season, request consultations, notifying the Requesting Party of the reasons for its belief and, in its discretion, indicating the increase, if any, in frequencies on the gateway route segment which it considers consistent with the Agreement. Such request shall not, however, be permitted in respect of a schedule for a summer traffic season which specifies a total of 214 or fewer round trip frequencies on any gateway route segment or for a winter traffic season which specifies 151 or fewer such frequencies.

(5) Consultations shall be held as soon as possible and in any event not later than 90 days before the traffic season in question.

(6) If, 75 days before the traffic season begins, agreement has not been reached, each designated airline whose proposed schedule was the subject of consultations shall be entitled to operate during that season, on the gateway route segment in question, the total number of round trip frequencies which it was authorized to operate on that gateway route segment during the previous corresponding season, plus an additional 30 round trip frequencies during a summer traffic season or 22 during a winter traffic season. However, if the authorized frequencies for the previous corresponding season were also determined under this paragraph, such authorized frequencies shall be deemed not to include such 30 or 22 additional frequencies except to the extent they were actually operated in that season.

(7) A designated airline of one Contracting Party which inaugurates service on a gateway route segment already served by a designated airline or airlines of the other Contracting Party shall not be bound by the limitations set forth in paragraph (6) of this Annex for a period of two years or until it matches the frequencies of any incumbent airline of that other Contracting Party, whichever occurs first.

(8) In no event, except when sub‑paragraph (b) of paragraph (9) of this Annex applies, shall the designated airline(s) of one Contracting Party be required, in aggregate, to operate on any gateway route segment fewer than either (a) the total number of authorized frequencies of the airline(s) of the other Contracting Party including Concorde frequencies or (b) 150 percent of the total number of authorized subsonic frequencies of the designated airline(s) of the other Contracting Party.

(9) (a) For the purpose of applying the provisions of this Annex to a designated airline which replaces a designated airline of the same Contracting Party, the replacement airline, in so far as it begins to operate the same agreed services on a regular basis within 12 months of the previous airline ceasing to operate them, shall, in respect of the previous corresponding season, be deemed to have been authorized to operate the frequencies authorized for the previous airline, and to have operated the frequencies actually operated by that airline.

(b) Where the replacement airline begins operations after the start of a traffic season, it shall be entitled to operate for the remaining part of that season on a pro‑rata basis the frequencies authorized for the previous airline.

(c) A replacement airline shall file schedules with the other Contracting Party as soon as it has been designated, or in accordance with paragraph (3) of this Annex, whichever is the later.

(10) If a newly designated airline that is not a replace­ment airline is unable, because of the date of its designa­tion, to file schedules with the other Contracting Party in accordance with the provisions of paragraph (3) of this Annex, it shall file its proposed schedules as soon as it has been designated. Schedules filed may be operated unless the Receiving Party objects within 15 days of the schedules being filed. If there is an objection, the level of operations may not be held to a level less than a total of 214 round‑trip frequencies, if it is a summer‑traffic season, and 151, if it is a winter traffic season. Where such airline begins oper­ations after the start of a traffic season, it shall be entitled to operate such frequencies for the remaining part of that season on a pro‑rata basis.

(11) Each Contracting Party shall allow filed schedules which have not been the subject of a request for consultations under paragraph (4) of this Annex to become effective on their proposed commencement dates. Each Contracting Party shall allow schedules which have been determined by agreement or as provided in paragraphs (6), (8), (9) or (10) of this Annex to become effective on their proposed commencement dates. Each Contracting Party may take such steps as it considers necessary to prevent the operation of schedules which include frequencies greater than those permitted or agreed to under this Annex.

(12) Each designated airline shall be entitled to operate extra sections on any gateway route segment, provided they are operated as duplicate flights to meet unforeseen short term demand for additional seats; are not sold, advertised or held out or shown in any reservations system (except in an airline's internal system for inventory control purposes) as separate flights; and are operated as close to the time of the flights which they duplicate as airport conditions allow.

(13) In the event that either Contracting Party believes that this Annex is not achieving the objectives set forth in paragraph (2) of this Annex, it may at any time request consultations, pursuant to Article 16 of this Agreement, to consider alterations to the procedures or numerical limitations.

(14) Subject to Article 19 (Termination) of this Agreement, this Annex shall remain in force for an initial period of 3 years from November 1986. A Contracting Party may give notice in writing to the other Contracting Party of its intention to terminate this Annex. If such notice is given, this Annex shall terminate twelve months later, but in no event before October 31, 1989.

(15) For the purpose of this Annex, "summer and winter traffic season" mean, respectively, the periods from April 1 through October 31 and from November 1 through March 31.

 

 

ANNEX 3 – TARIFFS */

 

(1) A Tariff Working Group shall be established and shall consist of experts from each Contracting Party in areas such as accounting, statistics, financial analysis, economics, pricing and marketing.

(2) The Tariff Working Group shall meet within 90 days of the entry into force of this Agreement and thereafter as necessary to accomplish the objectives of this Agreement.

(3) The Tariff Working Group shall develop procedures for the exchange, on a recurrent basis, of verified financial and tariff statistics in order to assist each Contracting Party in assessing tariff proposals.

(4) The Tariff Working Group shall, by 23 July 1978, make recommendations to the Contracting Parties on load factor standards and evaluation and review criteria for North Atlantic tariffs.

(5) The Contracting Parties shall review the recommendations of the Tariff Working Group and, subject to the outcome of this review, shall give due consideration to these recommendations in reviewing tariffs and agreements reached under the auspices of the International Air Transport Association.

(6) Either Contracting Party may from time to time request that the Tariff Working Group be convened to consider specific issues.

__________

*/ Ed Note: See also, Article 12 (Tariffs)(p. 17, supra) and Appendix D (North Atlantic Passenger Tariff Procedures) (p. 85, infra).

 

ANNEX 4 – CHARTER AIR SERVICE PROVISIONS*/

(1) Passenger Charterworthiness Requirements

(a) Each Contracting Party may require conformity of passenger charter air traffic originating in the country of the other Contracting Party with the provisions and criteria of this paragraph. Although a Contracting Party may not require prior approval of flights in order to enforce the provisions and criteria of this paragraph, it may, as a condition upon the exercise of the rights granted under paragraph (3)(a) of Article 14 of this Agreement, proscribe the operation of charters unless the information set forth in paragraph (7)(d) of Article 14 has been received in sufficient time prior to the flight arrival to judge conformity with this paragraph. Its aeronautical authorities may also notify a charter-designated airline that they have determined that a particular flight or series of flights is not in conformity with this Annex for a specified detailed reason or reasons, and further that such flight or flights may not be operated unless such authorities subsequently inform the airline that the flight or flights so conform. Both Contracting Parties anticipate that such challenges will be exceptional and agree to consult should they become frequent.

(b) Each Contracting Party may require that all passenger charter air traffic referred to in subparagraph (a) of this paragraph conforms to the following criteria:

(i) Each charterer shall have purchased not less than 20 seats per charter category in subparagraph (c) of this paragraph; and

(ii) No more than three charter categories as set forth in subparagraph (c) of this paragraph shall be commingled in the same aircraft.

_________

*/ Ed Note: See paragraph (6) of this Annex (Termination) and exchange of letters dated December 4, 1980, regarding the operation of passenger charter air services following termination of Annex IV (p. 71, infra). See also Annex 5 for provisions relating to all-cargo and combination services over the North Atlantic (pp. 72-75, infra).

 

(c) Each Contracting Party may require that all passenger charter air traffic referred to in subparagraph (a) of this paragraph also conforms to the requirements of one of the

following categories (to be selected by the relevant charter-designated airline):

(i) Category A. Travel is offered for sale to the general public or a selected segment of the public without a mandatory tour package. All passengers shall be named on an advance list at least 21 days before the planned date of flight departure, except that 10 percent of the seats of the category contracted for by each charterer on each flight may be occupied by unlisted passengers substituted for those on the advance list referred to above. No substitute passengers shall be accepted in the five days immediately preceding the planned date of flight departure. All passengers shall be sold a return (round-trip) charter journey, the minimum duration of which shall be seven days counting the day on which the originating flight is scheduled to take off and the day on which the returning flight is scheduled to land.

(ii) Category B. Travel is offered for sale to the general public or a selected segment of the public with a mandatory tour package which includes charter air transportation and sleeping accommodation for at least three nights. All passengers shall be named on an advance list at least 15 days before the planned date of flight departure, except that in each group contracted for, two seats may be occupied by passengers who are substituted for persons on the advance list up to the five days immediately preceding flight departure. All passengers shall be sold a return (round-trip) charter journey, the minimum duration of which shall be seven days counting the day on which the originating flight is scheduled to take off and the day on which the returning flight is scheduled to land.

(iii) Category C. The entire cost of the charter air transportation is borne by the charterer and not by individual passengers, directly or indirectly.

(iv) Category D. Travel is offered for sale by specially authorized charterers solely to military personnel and civilian employees of military departments, and their immediate families.

(v) Category E. Travel is provided to and from an event which at least one Contracting Party considers to be a "special event," where the charterer demonstrates that the date or place of the event were not known and could not have been known in time for the charter to be operated as a Category A charter.

(vi) Category F. The charter is a "Buy In" Sales Incentive charter which would be in Category C but for the charterer allowing some or all passengers to pay in whole or in part in sales credit script.

(d) Notwithstanding paragraph (7)(d) of Article 14, advance lists and lists showing substituted passengers (alphabetically arranged so far as possible) for both Category A and Category B charters originating in the country of one Contracting Party may be required by the aeronautical authorities of the other Contracting Party as follows:

(i) Advance lists may be required with proof of dispatch 21 days (for Category A) and 15 days (for Category B) prior to the day on which the originating flight is scheduled to land;

(ii) Receipts of lists showing substituted passengers for Category A and Category B charters (containing the names of both substitute and substituted passengers) may be required by the aeronautical authorities of the other Contracting Party five days prior to the day n which the originating flight is scheduled to land. Such lists may be transmitted by telex or other suitable means;

(iii) On flights where advance listed and non-advance listed charter categories are commingled, receipt of a list of the passengers of non-advance listed charter categories may be required by the aeronautical authorities of the other Contracting Party five days prior to the day on which the originating flight is scheduled to land.

(2) Cargo Charters

(a) The Contracting Parties agree that international charter traffic in cargo constitutes an important transportation service and that liberal provisions concerning cargo charters should be included in this Agreement. For this purpose the Contracting Parties agree to continue negotiations concerning cargo charters with objective of concluding a more liberal and comprehensive agreement on this matter by 31 March 1979. In this interim period the Contracting Parties agree to permit international cargo charter operations between their two countries in accordance with the terms of this paragraph, and with all other terms of this Agreement not inconsistent with this paragraph.

(b) Each Contracting Party shall permit the following categories of cargo charters:

(i) Sole use/single entity cargo flights. The sole purpose of each flight shall be the carriage of cargo consigned by a single person (other than a forwarder, consolidator, or shipper's association) who has contracted for the exclusive use of the carrying capacity of the aircraft.

(ii) Specialist cargo flights. The sole purpose of each flight shall be the carriage (separately or in combination) of livestock, bloodstock, or out-of-gauge (outsize) cargo.

(iii) Other cargo flights. For traffic originating in the United States, other cargo charters shall be permitted to the extent that the carrying capacity of the aircraft is exclusively purchased for cargo carriage by a single person. The term "person" for this purpose shall include a forwarder, consolidator, or shippers' association. For traffic originating in the United Kingdom, other cargo charters shall be permitted to the extent that the sole of each flight is the carriage of cargo in which each of the individual consignments exceeds either 1,000 kilograms in weight or 7 cubic meters in volume.

(c) Each Contracting Party may limit carriage prior to 31 March 1979 by each charter-designated airline under category (iii) of subparagraph (b) to no more than 1,000 tonnes of cargo in each direction between the United States and the United Kingdom, of which no more than 250 tonnes may be carried in each direction between any point in column A and any point in column C as shown in the United Kingdom routes 10, 11, and 23 of Section 4 of Annex 1 except for the gateway route segment London-New York. There shall be no weight limitation on flights in category (I) or category (ii) of subparagraph (b).

(d) No passengers shall be carried for compensation on any cargo charter flights other than ancillary attendants responsible for care or protection of cargo.

(e) In accordance with paragraph (5)(g) of Article 14 of this Agreement, the Contracting Parties agree that designated airlines shall have the opportunity to meet, on a timely basis, prices or rates charged or proposed to be charged by charterers or by charter-designated airlines for carriage of cargo. Similarly, in accordance with paragraph (5)(f) of Article 14, charter-designated airlines shall have comparable opportunity to respond to competitive offers by designated airlines for such carriage. The Contracting Parties shall therefore administer their tariff requirements and the provisions of Article 12 and paragraph (8) of Article 14 of this Agreement in a liberal and flexible manner so as to ensure compliance with the above obligations.

(f) The Contracting Parties agree to consider amendments to or exemptions from the provisions of this paragraph in the course of the negotiations referred to in subparagraph (a of this paragraph.

(3) Modification and Waivers

(a) If either Contracting Party wishes to propose any modification of the agreed charterworthiness requirements set forth above, it shall inform the other, and the other Contracting Party may accept or reject such proposal. If accepted, the modification shall take effect for the purposes of this Annex on an agreed date. If rejected, either Contracting Party may request consultations which shall be held within 60 days. Modification of the agreed charterworthiness requirements shall not come into effect for the purposes of this Annex unless accepted or agreed between the Contracting Parties by an Exchange of Notes.

(b) In any twelve-month period beginning 1 April, each Contracting Party may, in respect of its own originating traffic within the scope of this Annex, grant waivers of the charterworthiness requirements up to three percent of the number of charter flights operated between the United Kingdom and the United States during the immediately preceding twelve-month period and the other Contracting Party shall accept as charterworthy traffic carried pursuant to such waivers duly notified to it.

(4) Directional Balance. Neither Contracting Party shall require that charter-designated airlines of the other Contracting Party balance the volume of charter traffic they originate in the country of the first Contracting Party with the volume of charter traffic they originate in their home country.

(5) Amendment. If a multilateral agreement or arrangement concerning charter air transportation accepted by both Contracting Parties enters into force, Article 14 of this Agreement and this Annex shall be amended so as to conform with the provisions of the multilateral agreement.

(6) Termination. Subject to Article 19 (Termination) of this Agreement, this Annex shall remain in force until 31 March 1980. Upon the request of either Contracting Party, consultations shall be held within 30 days to review the operation of this Annex and to decide as to its revision or modification. In any event, the Contracting Parties shall for these purposes enter into consultations not later than 31 December 1979. If the Contracting Parties do not agree on revision or modification, paragraphs (1) to (5) inclusive of this Annex shall terminate on 31 March 1980. If such paragraphs terminate and are not revised or modified, each Contracting Party shall thereupon be entitled, for the purposes of Article 14 of this Agreement, to impose on charter air traffic covered by paragraph (3) of Article 14 such charterworthiness rules and such conditions in regard to prices and rates as it considers necessary.

[The following language on charters was added pursuant to the December 4, 1980 exchange of letters.]

2. Passenger Charters

Since the Contracting Parties were unable to reach agreement on the passenger charter regime to replace the arrangements embodied in Annex 4 to the Agreement, which expired under paragraph (6) of that Annex [above], on 31 March 1980, they decided that:

(a) Annex 4 should not be replaced on its expiry;

(b) each Contracting Party would thereafter continue to regulate charter traffic in a responsible manner and on a basis of comity and reciprocity; and

(c) the two Contracting Parties would meet in due course when they had gained further experience of the way in which passenger charter operations were developing, to consider a new passenger charter regime.

 

ANNEX 5 – NORTH ATLANTIC AIR CARGO OPERATIONS

[Annex 5 was added pursuant to the December 4, 1980 Exchange of Notes.]

Part I Scope and Applicability

(1) The Contracting Parties adopt the following provisions concerning international traffic in cargo (excluding mail) transported by designated airlines and charter‑designated air­lines (and, in regard to pricing, by airlines of other coun­tries) in scheduled combination air service, scheduled all‑cargo air service, and charter air service over the North Atlantic between:

(a) on the one hand, any point or points in the United States of America (hereinafter referred to as "the United States") and

(b) on the other hand, any points or points in the United Kingdom of Great Britain and Northern Ireland (hereinafter referred to as "the United Kingdom").

Part II Transitional Period

[Part II is not reproduced here because it expired on December 31, 1982.]

Part III Liberalized Cargo Air Services

(3) From 1 January 1983, the Contracting Parties shall cease to apply the limitations set out in Part II of this Annex, and thereafter shall apply the following provisions to international traffic in cargo as defined in Part I of this Annex:

(a) Scheduled All‑Cargo Designations Notwithstand­ing paragraph (3) of Article 3, the United States may by reference to this sub‑paragraph designate for U.S. Route 7, and the United Kingdom may be reference to this sub-paragraph designate for UK Routes 10, 11, and 12, any number of airlines to operate scheduled all‑cargo air services. The procedures and requirements in paragraphs (1), (6), and (7) of Article 3 shall apply.

(b) Scheduled All‑Cargo Routes All airlines desig­nated by either Contracting Party for scheduled all‑cargo air services may operate such services between any point or points in the United States and any point or points in the United Kingdom. Consequently, for the purposes of the application of this Part, "United States" shall be considered as appearing in Column (A) of US Route 7 and Column (C) of UK Routes 10, 11, and 12, and "United Kingdom" shall be considered as appearing in Column (C) of US Route 7 and Column (A) of UK Routes 10, 11, and 12.

(c) Scheduled All‑Cargo Traffic Rights Airlines designated with reference to sub‑paragraph (a) above may claim the rights and shall be subject to the obligations set out in Section 5 of Annex 1. However, only airlines now or hereafter designated under paragraph (3) of Article 3 (without reference to sub‑paragraph (a) above) may pick up and discharge traffic (in addition to transit and on‑line connecting traffic) at points in Column (C) for transport between points in Column (B) and points in Column (C) and between points in Column (C) and points in Column (D) in the Route Schedules set out in Annex 1.

(d) Cargo Charter Operations International charter traffic in cargo shall continue to be governed by the perti­nent provisions of Article 14 of this Agreement, except as those provisions are modified or suspended by this Annex.

Part IV General Provisions for Both Periods

(4) From 1 January 1980 the Contracting Parties shall apply the following general provisions to international traffic in cargo as defined in Part I of this Annex.

(5) Surface Transportation Notwithstanding any other provision of this Agreement, the airlines and indirect providers of cargo air transportation of each Contracting Party shall be permitted by the other Contracting Party and its aeronautical authorities, to the extent the matter is within their juris­diction, to employ in connection with the carriage of cargo by international air transportation any surface transport in the territories of the Contracting Parties or to or from third countries, provided that shippers are not misled as to the facts concerning such transportation. Such joint services may be offered at a single price filing (made under paragraph (8) of this Annex) provided that all applicable laws governing surface transportation are complied with.

(6) Authorizations The aeronautical authorities of each Contracting Party shall issue, subject to paragraph (6) of Article 3, sub‑paragraphs (b) and (c) of paragraph (4) of Article 14 of this Agreement, and paragraph (3) of this Annex upon timely and proper request by designated and charter-­designated airlines of the other Contracting Party, all neces­sary licenses, permits, and authorizations, expeditiously and with a minimum of administrative complexity.

(7) Fair Competition The Contracting Parties suspend the operation of paragraphs (2), (3) (United States‑United Kingdom gateway route segments only), (4), and (5) of Article 11 of this Agreement in regard to scheduled all‑cargo air service.

(8) Pricing Subject to sub‑paragraph (e) of this para­graph the Contracting Parties suspend the operation of para­graphs (4), (5), (6) and (7) of Article 12 of this Agreement and Article 13 of this Agreement in regard to the pricing of cargo carriage on scheduled combination and all‑cargo air ser­vices, and paragraph (8) of Article 14 of this Agreement in regard to the pricing of cargo carriage on charter air ser­vices, and shall instead apply the following provisions to tariffs, prices, and rates charged for the carriage of cargo by designated and charter‑designated airlines:

(a) Each Contracting Party may require notification of or filing with its aeronautical authorities of tariffs, prices, and rates charged, but such notification or filing may not be required before the proposed effective date.

(b) Subject to the provisions of sub‑paragraph (e) of this paragraph, neither Contracting Party shall take unilateral action to prevent the initiation, continuation, or termination of a tariff, price, or rate charged by an airline designated by either Contracting Party. If either Contracting Party considers that a tariff, price, or rate proposed or in effect is predatory as regards other airlines, discriminatory as between shippers in similar circumstances, or unduly high or restrictive in such a way as to constitute abuse of a dominant market position, it may notify the other Contracting Party of the reasons for its dissatisfaction and request consultations. If so requested, such consultations shall com­mence not later than 30 days after the receipt of the request. If agreement is reached through such consultations on an appropriate tariff, price, or rate, each Contracting Party shall use its best efforts to put such agreement into effect. In the absence of agreement the tariff, price, or rate originally proposed or charged shall come into effect or continue in effect.

(c) In regard to tariffs, prices, or rates proposed or charged by airlines of third countries in the market defined in Part I of this Annex, the Contracting Parties shall seek to promote and fully maintain competition for cargo transport and shall consult before taking any action to disallow a tariff, price, or rate proposed or charged by an airline of a third country.

(d) Neither Contracting Party shall regulate the tariffs, prices, or rates proposed or charged by indirect providers of cargo air transportation for international traffic in cargo originating in the country of the other Contracting Party.

(e) [Paragraph (e) is not reproduced here because due to its expiry on January 1, 1983.]

(9) Combination Charters

(a) [Paragraph (a) is not reproduced here because due to its expiry on January 1, 1985.]

(b) From 1 January 1985 or such earlier date as may be agreed, passengers may be carried in combination with cargo on charter flights operated by charter‑designated airlines provided that such passengers are carried in accordance with any agreement between the Contracting Parties regulating the carriage of charter passengers including any requirements imposed by either Party in accordance with paragraph (6) of Annex 4 and Article 14 of this Agreement, other than require­ments which discriminate against combination charters. Cargo may be carried both above and below the main floor of the aircraft.

 

 

 

 

 

[Part V was amended pursuant to the May 25, 1989 Exchange of Notes.]

PART V Termination

(12) Subject to Article 19 (Termination) of this Agreement, this Annex shall remain in force until terminated by either Contracting Party. A Contracting Party wishing to terminate this Annex may give notice in writing to the other Contracting Party of its intention to do so. If such notice is given, the Annex shall terminate twelve months later, but in no event before 31 October 1989. Each Contracting Party shall thereupon be entitled, for the purpose of Article 14 of this Agreement, to impose on cargo charter traffic covered by paragraph (3) of Article 14 such charterworthiness conditions and such conditions in regard to prices and rates as it considers necessary.

 

APPENDIX A

 

 

[The following Procedural Agreement was entered into pursuant to an Exchange of Notes dated May 25, 1989.]

Procedural Agreement

1. Scope of the Agreement

This Agreement specifies procedures for implementing the obligations of each Contracting Party under Bermuda 2 to grant certain operating authorizations and technical permissions to airlines designated by the other Contracting Party, and does not effect any change in those obligations. This Agreement shall apply to airlines designated under Bermuda 2 for services on US Routes 1, 2 and 7; UK Routes 1, 2, 3, 4, 5, 10, 11 and 12; and for transatlantic charter air services.

2. Definitions

For the purposes of this Agreement:

(a) "Bermuda 2" means the Air Services Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the United States of America, signed at Bermuda on 23 July 1977, as amended;

(b) "Fitness criteria" means those factors by which each of the aeronautical authorities determine in accordance with their respective national laws whether an airline is fit to operate the international air services for which it has applied to those authorities for a license, that it to say, whether it has satisfactory financial capability, adequate managerial expertise and is disposed to comply with the laws, regulations and requirements which govern the operation of such services;

(c) "Citizenship criteria" means those factors by which the aeronautical authorities of each Contracting Party determine whether an airline is substantially owned and effectively controlled by that Contracting Party or by its nationals;

(d) "Fitness determination" means a finding by the aeronautical authorities of a Contracting Party that an airline has met their fitness criteria;

(e) "Citizenship determination" means a finding by the aeronautical authorities of a Contracting Party that an airline has met their citizenship criteria;

(f) "Aeronautical authorities” has the same meaning as in Bermuda 2;

(g) "Operating authorizations and technical permissions" means, in the case of the United States, permits or exemptions issued under Title IV of the Federal Aviation Act, and, in the case of the United Kingdom, permits issued under Article 83 of the Air Navigation Order 1985.

 

3. Reciprocal Recognition of Determinations

(a) This Agreement shall apply whenever an airline which has been designated under Bermuda 2 by one Contracting Party applies to the other Contracting Party for appropriate operating authorizations and technical permissions. When considering such application, the aeronautical authorities of the latter Contracting Party shall give the same validity to any fitness or citizenship determination made by the aeronautical authorities of the other Contracting Party as if the determination has been made by its own aeronautical authorities, and shall not inquire further into the question of fitness or citizenship, except as provided in sub-paragraph (b) of this paragraph.

(b) If after receipt of such an application the aeronautical authorities have a specific reasons for believing that, despite the determinations made by the aeronautical authorities of the other Contracting Party, the conditions prescribed in Bermuda 2 for the grant of the appropriate operating authorizations or technical permissions have not been met, the aeronautical authorities which received the application shall promptly inform the aeronautical authorities of the other Contracting Party, giving reasons, so that the latter can, if they so desire, request consultations pursuant to Article 3(6) or Article 14(4) of Bermuda 2, as the case may be.

4. Procedure

(a) If necessary, procedures for implementing the provisions of this Agreement may be agreed from time to time between the aeronautical authorities.

(b) The Contracting Parties shall encourage cooperation and assistance between their respective aeronautical authorities in developing, as necessary, their fitness and citizenship criteria.

(c) Each of the aeronautical authorities shall inform the other of any proposals for any material change to the fitness or citizenship criteria which it applies.

(d) If a Contracting Party intends to effect any such change it shall give the other Contracting Party at least 90 days notice of such intention. If the other Contracting Party requests consultations they shall be held within 30 days of such request.

(e) If, following such consultations, the Contracting Party requesting them considers that the fitness or citizenship criteria, if so changed, would no longer be satisfactory for the purposes of this Agreement, it may notify the other Contracting Party of this and that, if the changes come into effect, it will regard the Agreement to have terminated on the date they come into effect.

5. Termination

Without prejudice to the provisions of paragraph 4(e), either Contracting Party may terminate this Agreement at any time by giving not less than 60 days written notice to the effect to the other.

 

APPENDIX B

 

[Paragraphs 1 and 2 below are in effect on a provisional basis pursuant to the March 11, 1991 Memorandum of Consultations.]

1. Where nationals of the United Kingdom hold an ownership interest of less than 50 per cent of an airline incorporated and having its principal place of business in another Member State of the European Community, the Government of the United States will not object to that airline's entitlement to provide air services under the bilateral agreement between the United States and that other Member State solely on the basis of that UK ownership interest or on the basis that the UK ownership interest constitutes control or effective control.

2. (a) Notwithstanding Articles 3(6)(a) and 5(1)(a) of the Agreement, the agreed services on UK Routes 1, 2, 3, 4, and 5 in Annex 1 to the Agreement may be operated to a point or point in Luxembourg, the Netherlands, Belgium and/or the Republic of Ireland behind or as an intermediate point to any gateway point shown in Column A of those Routes under a joint venture arrangement between that designated airline and an airline incorporated and having its principal place of business in the country concerned.

(b) The Government of the United States of America agrees to approve requests from the Government of the United Kingdom that a designated airline of the United Kingdom be permitted to enter into a joint venture arrangement with an airline incorporated and having its principal place of business in the Republic of France or in the Federal Republic of Germany to provide service to gateway points in the United States which are available under both the U.S-UK Air Services Agreement and under the air services arrangements between the United States and France or Germany, as the case may be.

(c) The Government of the United States of America agrees that it is willing to consider sympathetically any request from the Government of the United Kingdom that a designated airline of the United Kingdom be permitted to enter into a joint venture arrangement with an airline incorporated and having its principal place of business in any other country to provide service to gateway points in the United States which are available under both the US-UK Air Services Agreement and under the air services arrangements between the United States and the country concerned. In considering such requests, the Government of the United States will consider the overall aviation relationship between the United States and the country whose airline would participate in the joint venture.

(d) In instances in which a joint venture arrangement of the kind referred to in sub-paragraph (a) has been entered into, the designated airline of the United Kingdom and/or the airline with which it has that arrangement may serve any point behind any gateway point shown in Column A of UK Routes 1, 2, 3, 4, and 5 in Annex 1 to the Agreement with or without change of aircraft of flight number and may hold out and advertise such services to the public as through services.

APPENDIX C

 

[The following items were agreed upon pursuant to the March 11, 1994 Exchange of Notes, otherwise known as the Heathrow Arbitration Settlement.]

(b) The Memorandum of Understanding between the two Governments on airport user charges, signed at Washington on 6 April 1983, will cease to have effect.

(f) In relation to the charges imposed upon US airlines at Heathrow Airport in the future:

(i) the current differential between the peak and off-peak international passenger charges shall be phased out in four substantially proportionate installments over the period 1 April 1995 to 1 April 1998, so that this differential is entirely eliminated as from 1 April 1998;

(ii) a peak international passenger charge shall not be re-introduced before 1 April 2003 or, provided that the planning permission for Heathrow Airport's Terminal 5 is granted before 1 April 2003 and construction has begun before that date, the date on which the first phase of Terminal 5 is opened for commercial use, whichever is the later;

(iii) there is no current intention to re-introduce a peak international passenger charge after the date established in sub-paragraph (ii) above, and in any event the present policy is to introduce changes to the pricing structure at Heathrow Airport on a gradual basis after consultation with users;

(iv) there shall be no change in the relative levels of landing, passenger and parking charges at Heathrow Airport, whilst the peak international passenger charge is being phased out in accordance with sub-paragraph (i) above;

(v) there is no current intention to change the relative levels referred to in sub-paragraph (iv) above, after the peak international passenger charge is phased out;

(vi) the level of charges for parking shall not be increased relative to the level of total user charges, at least until the date established in sub-paragraph (ii) above;

(vii) a weight-related element in peak period landing charges shall not be re-introduced, and that part of off-peak landing charges attributable to aircraft weight shall not be raised relative to the overall level of off-peak landing charges, at least until the date set out in sub-paragraph (ii) above;

(viii) there is no current intention to depart at any time in the future from the principle that no distinction shall be made as to sources of revenue, including duty-free sales and other commercial revenues, in computing revenues that contribute to the rate of return on assets at Heathrow Airport; and

(ix) there shall be made available to US airlines designated under the Agreement (or any successor air services agreement) and operating to Heathrow Airport at least the information set out at Attachment 2 hereto. [This information is added at the end of this section.]

(g) The Government of the United Kingdom shall issue such directions as may be necessary under section 30(3) of the Airports Act 1986 (or any successor law or regulation) to require that, in relation to the user charges imposed at Heathrow Airport, BAA plc (or any successor operator of Heathrow Airport) shall carry out the commitments set out at (i), (ii), (iv), (vi), (vii), and (ix) of paragraph (f) above.

(h) The Government of the United Kingdom shall institute a system whereby the United Kingdom Civil Aviation Authority ("CAA") shall report annually, before 31 December, to the UK's Department of Transport on the user charges imposed and financial performance at each of BAA's South-East airports. The Department of Transport shall, for each of the three years 1994-1996 inclusive, and to the extent possible given the confidential nature of some of the information likely to be given to CAA by BAA plc, report on those matters to the United States Government.

(i) The Government of the United Kingdom shall, where necessary to comply with its obligations under Article 10 of the Agreement [referenced attachment included herein in Article 1 as “(o), user charges”] use its powers under the Airports Act 1986 or any successor law or regulation.

(j) In relation to user charges at US airports imposed upon UK airlines operating under the Agreement (or any successor air services agreement):

(i) The Government of the United Kingdom notes that the Government of the United States operates a system whereby airport sponsors in the United States must give certain assurances if they receive grants from the Federal Government. Before giving approval for an airport sponsor to use funds from the Airport and Airway Trust Fund for the purposes of airport of airway development, the US Secretary of Transportation must obtain specific written assurances from the airport sponsor. These assurances include the obligation to make the airport available for public use on fair and reasonable terms and without unjust discrimination.

(ii) The Government of the United Kingdom notes that any such assurances remain in force for the useful life of the approved project, regardless of whether the airport operator thereafter receives further grants from the Federal Government, and that all airports to which United Kingdom designated airlines currently operate scheduled services under the Agreement are currently subject to such assurances.

(iii) The Government of the United Kingdom notes that, on 10 December 1993, the United States Secretary of Transportation wrote, inter alia, to the Chairman of the Airports Council International - North America [referenced letter from Secretary of Transportation Frederico Pena to George F. Doughty, Chairman, Airport Council International, on airport user charges is not included herein] setting out the policy of his Department to take a more active role in the airport-airline relationship, where needed. This letter provided for the Department, inter alia:

- to offer its good offices to facilitate resolution of dispute that airports and airlines, despite all reasonable efforts, have been unable to resolve between themselves;

- where reasonable grounds are shown, to commence an investigation in response to a complaint, and if warranted by the facts following the investigation of a complaint, to suspend payment of existing or future grants to the airport concerned and/or to issue cease and desist orders and obtain the assistance of the US District Court to enforce such orders;

- to reserve its authority to begin proceedings without waiting for a formal complaint if an airport rate increase appears unreasonable. These proceedings may range from conducting informal inquiries and issuing information requests to instituting formal investigations, including compelling testimony and issuing document subpoenas.

(iv) The Government of the United Kingdom notes that, as part of the policy enunciated in the letter [referenced letter from Secretary of Transportation Frederico Pena to George F. Doughty, Chairman, Airport Council International, on airport user charges is not included herein] the existing administrative regulations governing investigation and enforcement of airport compliance are to be reviewed. In this review, the Government of the United Kingdom expects the Government of the United States to have regard to its international obligations in determining whether it is necessary to propose any revisions to streamline that process and enhance its effectiveness.

(v) The Government of the United Kingdom notes that airports in the United States are required to give an assurance that all revenues generated by the airport are used for the purposes allowed in Section 511(a)(12) of the Airport and Airway Improvement Act of 1982, as amended. The Government of the United Kingdom expects the Government of the United States to have regard to its international obligations in any review of this requirement.

(vi) The Government of the United Kingdom notes the undertaking of the Government of the United States of America regarding United States Government encouragement of airport-airline consultations set forth in Attachment 4. [This information is added at the end of this section.]

(vii) The Government of the United States believes its current system enables it to discharge its obligations to the Government of the United Kingdom under Article 10. The Government of the United States recognizes that, under Article 10(4), this or another system must be in effect to safeguard users from charges that do not meet the criteria of Article 10.

(k) The Government of the United States shall give a report to the Government of the United Kingdom on each occasion on which any material change is made in the policies described in paragraphs (i), (ii), (iii), and (v) of paragraph (j) above within three years of the date of this Note.

(l) The mechanisms provided for in Articles 16 and 17 of the Agreement (or the consultations and arbitration provisions in any successor air services agreement between our Governments) shall apply to any dispute concerning the implementation, interpretation or application of, or compliance with, the provisions of the agreement between the Government of the United States and the Government of the United Kingdom brought into force by this Note and Your Excellency's affirmative Note in reply.

[The information below is referenced above in paragraph (f)(ix) and relates to user charges at London-Heathrow.]

 

1. FINANCIAL INFORMATION

(a) Full statutory accounts for BAA plc and Heathrow Airport Limited and each other South-East airport, including a profit and loss statement, balance sheet and cash flow, identifying the main components of income and expenditure, categories of assets and sources and use of funds. These accounts will also contain notes setting out the accounting policies adopted, and explaining individual entries where appropriate.

(b) Detailed analysis of income and expenditure for each South East airport from the management accounts, itemizing the results by the following categories:

Income Expenditure

Landing charges Wages and salaries

Passenger charges Social Security costs

Aircraft parking charges Pension costs

Retail outlets Other staff costs

Catering Property related costs

Car hire Maintenance and equipment

Public car parks General expenses

Other concessions Intra-Group charges

Rents Depreciation

Services Corporate office costs

This analysis also includes staff members, historical cost accounts (in addition to the modified historical cost accounts), a separate analysis of security costs and a listing of monthly changes in Retail prices.

2. TRAFFIC INFORMATION

(a) Details of annual numbers of terminal passengers and air transport movements, for domestic and international services separately.

(b) Details of hourly, monthly and annual passenger flows, arriving and departing, by terminal. Terminal capacities, busy hour rates and other reference hour rates.

(c) Details of hourly, monthly and annual aircraft movements, separately for aircraft landings and take-offs.

(d) Details of aircraft parking patterns by time of day and season, separately for pier and remote stands, and separated by aircraft size category.

(e) If requested, further, more detailed traffic and capacity information can be provided on specific areas, time periods, or markets from BAA's traffic date base.

3. SERVICE QUALITY INFORMATION

Regular information on the service quality performance of individual airports in a number of key areas, such as mechanical equipment availability, and passenger satisfaction with facilities.

4. PLANNING AND FORECASTING INFORMATION

(a) An annual airport strategy setting out traffic forecasts, major capital projects and capital expenditure, and particular areas requiring strategic action.

(b) Date on those elements of the traffic mix significantly affecting the airport charges yield per passenger for the most recent relevant accounting period, together with a forecast of the yield for the current year and the following year at Heathrow and the South East airports system. In addition, any assumptions as to changes in the traffic mix used in generating such forecasts. This information to be extended to future years if desired.

(c) Details of the forecast capital and operating costs associated with any increases or decreases in security standards required or allowed by the UK Department of Transport.

(d) If desired, a commentary on key factors expected to affect commercial revenues and operating costs in the current and following years.

(e) A paper each year, setting out and explaining for consultation, the reasoning behind any proposals for changes in the level or structure of airport charges at Heathrow Airport.

(f) A paper each year, setting out and explaining the reasoning behind any decision by BAA, following consultations, to change the level or structure of airport charges at Heathrow Airport.

(g) Material provided for public inquiries into major airport developments, including analyses of demand and capacity and expenditure estimates.

 

5. ADDITIONAL INFORMATION

Special material for specific and general user charges studies agreed with airlines. Recent examples include detailed analysis of traffic in individual hours in individual terminals, and disaggregated cost forecasts for major capital projects.

[The information below is referenced above in paragraph (j)(vi) and relates to user charges at London-Heathrow.]

UNDERTAKING OF THE UNITED STATES GOVERNMENT

The owners or operators of major US airports ("sponsors") receive federal grants for airport development projects. As a condition of receiving those grants, the sponsors have assured the Secretary of Transportation that the airports for which grants are given will be available for public use on fair and reasonable terms and without unjust discrimination. Further, US law requires those sponsors to undertake reasonable consultations with affected parties using the airport in making a decision to undertake any airport development project for which federal funds are being used. Grant recipients are also required to permit the Secretary access to the sponsor's records to enforce the grant assurances.

US policy is to recognize that the local parties (i.e., the sponsors and their users), having a direct financial interest in achieving agreement on fees, are clearly best suited to resolve any differences promptly and directly, in light of local considerations and future needs. US policy also recognizes that the books and records of sponsors are typically subject to numerous public audit requirements, often imposed by airport-airline contracts. Moreover, as sponsors, US airport records are subject to various federal and state laws requiring openness. The United States considers that these laws and contractual obligations offer abundant assurances that airport charges will be established in an open, public and transparent manner.

Nevertheless, at the request of the Government of the United Kingdom in the context of discussions leading to termination and settlement, within 90 days of March 11, 1994, US aeronautical authorities will communicate in writing to US Airports to which UK airlines currently operate to encourage them to consult with their airline users directly, and to provide users with reasonable notice of any proposals for changes in user charges to enable them to express their views before changes are made. US aeronautical authorities will also encourage those airports to provide the information necessary to permit an accurate view of the reasonableness of the user charges imposed on airlines in accordance with the principles set out in Article 10 of the Agreement. At the request of the Government of the United Kingdom, the Government of the United States of America will also send such written encouragement to any additional US airport to which UK airlines operate in the future.

 

APPENDIX D

 

[The following procedures were established pursuant to the September 11, 1986 MOC.]

NORTH ATLANTIC PASSENGER TARIFF PROCEDURES (l986)

The following procedures l/ regarding filing of and decisions on passenger tariffs will be applied by the aeronautical authorities of the Contracting Parties, without prejudice to the right of either to revert, after giving written notice, to the procedures set forth in Article l2 of the Air Services Agreement.

(1) The filing period referred to in paragraphs (5) and (6) of Article l2 of the Air Services Agreement is reduced to 30 days, and notices of dissatisfaction referred to in paragraph (6) of Article l2 will be delivered within l5 days of the date of receipt of the tariff filing.

(2) (a) Tariff filings (hereinafter referred to as "filings") or applications for short‑notice approval (hereinafter referred to as "applications") will be lodged with the aeronautical authorities of both Contracting Parties at the same time (within two working days), and neither Contracting Party's aeronautical authorities will approve, or permit to become effective, filings or applications of designated airlines of either Contracting Party which do not state that a comparable filing or application is being lodged with the aeronautical authorities of the other Contracting Party.

(b) Proposed tariffs may not be sold, advertised or listed in computer reservations and fare quote systems until a filing or application has been lodged with the aeronautical authorities of both Contracting Parties.

(3) The aeronautical authorities of each Contracting Party will provide a notification in writing of their decision on each filing or application, together with their reasons therefor in the case of a disapproval, to the airline which has submitted the filing or application, or to the airline's tariff agent, within l5 days of receipt of such filing or application. Notification of disapproval will be provided to the aeronautical authorities of the other Contracting Party within l5 days of receipt of the filing or application by a designated airline of the other Contracting Party. If the aeronautical authorities of either Contracting Party disapprove a filing or application, all sales of proposed tariffs covered by such filing or application shall cease by 2359 hours local time on the second business day following receipt of such disapproval.

(4) Filings or applications in the following categories will be approved expeditiously, and the aeronautical authorities will use their best efforts to act on such filings or applications within three business days of receipt:

(i) matching tariffs (i.e., tariffs with the same, closely equivalent or more restrictive

conditions); and

(ii) tariffs which qualify for "automatic approval" under the terms of the US‑ECAC MOU.

(5) Neither Contracting Party's aeronautical authorities will impose more restrictive tariff filing or application procedures on designated airlines of the other Contracting Party than they impose on their own designated airlines.

(6) Within 28 days of a filing or application being disapproved, the aeronautical authorities of either Contracting Party may refuse to accept a refiling or reapplication that includes one or more of the elements identified as the reason(s) for the initial disapproval. In so doing, they will promptly notify the aeronautical authorities of the other Contracting Party of the action they have taken.

(7) The aeronautical authorities of each Contracting Party will provide the aeronautical authorities of the other Contracting Party and the designated airlines of the other Contracting Party with reasonable notice, in writing, at the same time notice is provided to their own airlines, of any proposed changes in their policy, guidelines or procedures regarding tariffs.

l/ These procedures apply to services on US Routes l and 2 and UK Routes l, 2, 3, 4, and 5.

 

APPENDIX E

 

[The following section was included in the statements of interpretation to the July 23, 1977 Agreement, which is contained in an exchange of letters date the same day.]

 

Article 3 (Designation and Authorization of Airlines) – Multiple Designation in respect of Dependent Territories

The United Kingdom Government has expressed concern over the situation which could arise under Article 3 of the Agreement if the United States were to designate more airlines to serve Bermuda, Hong Kong, and United Kingdom points in the Caribbean area than were designated under the 1946 Bermuda Agreement without the United Kingdom and its dependencies having the opportunity to do more than consult with the United States. While the terms of the Agreement do not impose any general limitations on the number of United States airlines which may be designated to serve those points, the wishes of the United Kingdom and it dependencies are relevant to the decision of the United States Government concerning such designations. Should the United Kingdom transmit to the United States its views or those of its dependencies concerning United States Civil Aeronautics Board proceeding which might result in designations believed to be excessive by the United Kingdom or its dependencies, those views would be transmitted to the Department of State to the Civil Aeronautics Board for consideration during the Board's proceedings, and would also be transmitted to the President for consideration in his review of Civil Aeronautics Board proposals.



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