REPORT ON IMPLEMENTATION OF AIR SERVICES GROUP RECOMMENDATIONS, AND FURTHER STEPS TO LIBERALISE AIR SERVICES (REPORT BY KOREA)

The Steering Committee on More Competitive Transportation Industry (Including Infrastructure), at its meeting during the 13^th Transportation Working Group Meeting, endorsed the Comprehensive Report on the Options submitted by the APEC Air Services Group on More Competitive Air Services with Fair and Equitable Opportunity. The Steering Committee recommended that Economies could provide progress reports to the Steering Committee, on a voluntary basis, on their implementation of the recommendations.

The Republic of Korea in its negotiations of air services agreements with other economies has made efforts in implementing the Air Services Group's recommendations on a case-by-case basis.

Followings are Korea's progress towards the implementation of the Air Services Group's recommendations.

Option 1: Air carrier ownership and control

Give rconsideration to relaxing the ownership and control requirements when considering designation made by partners under bilateral air services arrangements on a case-by-case basis. (Medium priority)

Korea has increased the limit of foreign investment in scheduled/unscheduled air transport businesses from 20 to 50 percent through the amendment of Article 6 (Restriction on Registration of Aircraft) of the Aviation Act in February 1999, while still maintaining basic principle of substantial ownership and effective control.

Option 2: Tariffs

Support the removal or progressive easing of tariff regulations through the bilateral air services arrangements where this promotes competitive pricing to the benefit of consumers. (Medium priority)

According to the amendment of Aviation Act, Article 117 (Authorization, etc. on Tariffs and Charges) in February 1999, double-approval system of international air transport tariffs was changed to double-approval system or filing/notification in accordance with air services agreement with other economies on bilateral basis. (The filing system has been already adopted via air talks with the USA, Australia, New Zealand, and Luxembourg.)

Option 3: Doing business matters

Work towards removing impediments to doing business matters whether under bilateral agreements or in domestic laws and by-laws. (High priority)

Korean government guarantees foreign carriers freedom in doing business matters, for example, remittance of profit, exchange of money, etc. And aircraft ground handling services have been already opened. In regard to CRS system, we have opened CRS market to the US via Korea/US open skies agreement. (At present, CRS is only opened to the US according to the WTO Agreement but further openings will be considered in future negotiations.)

Wet lease has been opened since August 1999 with the amendment of the Enforcement Decree of the Aviation Act under the pricinple of reciprocity.

Option 4: Air freight

Progressively remove restrictions in the operations of air freight services while ensuring fair and equitable opportunity for the economies involved. (High/medium priority)

For, route structures and frequencies in air cargo transport are regulated more freely compared to passenger transportation, but it is decided on case-by-case basis at bilateral air talks.(e.g. Australia, Indonesia, etc.)

Option 5: Multiple airline designation

Include, as appropriate, multiple airline designation in bilateral air services agreements. (High priority)

Korea set multiple airline designation as the basic direction at bilateral air talks and multilateral air conferences, as well as pursuing multiple airline designation at future air services negotiations with countries (France, Italy, Mexico, Turkey, etc.) that only have single airline designation.

Option 6: Charter services

Allow and facilitate the operation of both passengers and freight ad hoc charter services which supplement scheduled services. (Medium priority)

Charter services are permitted on the condition that they do not interfere with scheduled services. In particular, charter services will be fully permitted at regional airports like Cheju and Cheongjoo in absence of any special circumstances.

Option 7: Airline's cooperative arrangements

Facilitate cooperative arrangements such as code-shariing including third country code-share and code-share over domestic sectors, joint operations and block space arrangements, where it can be shown to be of benefit to consumers and airlines and where there are no anti-competitive effects, and where fair and equitable opportunities for te economies involved can be ensured. (High priority)

Korea will fully support cooperation among airlines in areas like block spacing, code sharing, and sharing of ground services. However, in cases of 3^rd party code sharing, it is adopted on the basis of reciprocity.

Option 8: Market access

Take an approach to progressively achieve more liberalized market access under their bilateral air services arrangements, while ensuring fair and equitable opportunity for the economies involved. (Medium priority)

The market will be made more accessible by foreigners through mitigation of commercial requirements and other business or industry requirements.

This page was last updated on 17 May 2000