Synopsis of Responses on Questionnaire for Air Freight (Option 4)

Coordinating Economies : Indonesia and Japan

Fifteen economies responded to questionnaire for the review of implementation of Option 4 (Air Freight). The responses are summarized as follows;

A. Market Access Aspect

1. Separate Provision for Freight Capacity

It is observed that most of the economies generally have the provisions for freight capacity separated from those for passenger capacity in their bilateral air services arrangements on a case-by-case and reciprocity basis. Some of them make it a policy not to separate the provisions for cargo capacity from those for passenger capacity for the purpose of providing unrestricted capacity for both passenger and cargo services unless their bilateral partner insists on the separation, while others prefer making dedicated provisions for freight capacity based on the consideration that it better meets the specific needs of freighter operations.
It was pointed out by some economies that, as the benefits or the necessity of separating the provisions, the separation help ensure that the rights necessary for the economy's airlines would be better tailored, that the needs for air cargo services would not be subordinated to those for passenger services or that expansion of cargo capacity entitlement would not be bogged down to the rather restricted passenger capacity entitlements. On the other hand, those economies adopting the open skies policy generally admit no necessity to seek for provisions distinguishing between freight and cargo services unless it leads to less restrictions.

2. Unrestricted Capacity, Routing, Traffic Rights at Intermediate or Beyond Points, Aircraft Type, Designation and 7th Freedom Services

Between each of the economies adopting the open skies policy, capacity on the 3rd and 4th freedom traffic and the 5th freedom traffic are already made unlimited and, in some cases, the 7th traffic rights are also made available on an unlimited basis.
Most of other economies, by contrast, have been gradually easing the restrictions on cargo services based on the specific needs of the respective bilateral markets as well as the balanced interests of the airlines, and none of them have intention to accept the 7th freedom traffic rights for the foreseeable future. One of these economies suggested that at first stage the 3rd and 4th freedom traffic be liberalized on a reciprocity basis and then the liberalization expand to the 5th freedom traffic.

B. Doing Business Aspect

3. Business Friendly Procedures for Handling Air Freight

Most of the economies claimed to have business friendly procedures for handling air freight. Some economies have introduced such measures as a pre-clearance system, post-audit system and paperless procedures, in order to make customs procedures more timely, more efficient or less burdensome. A few economies emphasized that there is no discrimination in terms of nationality of airlines when air cargo is processed.

4. Category of Procedures Necessary to Be Business Friendly

The vast majority of economies responded that the procedures, which should be business friendly, should not be limited to those under the jurisdiction of aeronautical authorities and should include, in particular, the custom procedures. Some economies further claimed that all procedures affecting the delivery of air cargo should be business friendly.
One economy proposed the harmonization of rules on air freight procedures. Another economy pointed out that its airline experienced difficulties with some other economies in terms of, namely, operation of health inspection and wet-leasing of freighter aircraft.

5. Restrictions for Foreign Enterprises to Own or Operate Such Freight Related Businesses as Freight Forwarding Business, Ground Transport Business, Warehousing Business and Custom Brokerage Business

The degree of restrictions on investments in freight related services by foreign airlines varies significantly from economy to economy. Some economies have no restrictions at all, while a number of other economies keep restrictions on one or more related businesses by means of the number of directors with foreign nationality, requirements of joint ventures, those on the rate of equity-holding by foreigners or reciprocal restrictions. Three economies reported the possibility of liberalization in the future.

6. Physical Infrastructure for Air Freight

Half of the economies responded that their infrastructure meet the demand. Another half of the economies, which found insufficiency especially at peak hours, have been making efforts to improve their infrastructure and some of them expect the fulfillment within one to five years.

7. Flexibility in Inter-modal Operations for Air Freight

Most of the economies responded that they provide sufficient flexibility in inter-modal operations to meet current and future demands for air freight. One economy has specific provisions for inter-modal operations in its bilateral air services arrangement. Some economies are facilitating inter-modal operations by setting up customs procedures designed to accommodate them or by developing related facilities. Furthermore, ASEAN member economies are working on development of the ASEAN Framework Agreement on Multi-modal Transport.

8. Relationship between "Market Access" Aspect and "Doing Business Matters" Aspect

Four economies find no relationship whereas three economies find some relationship to exist. One of the reasons suggested is that inadequacies in either of "Market Access" aspect or of "Doing Business Matters" aspect can nullify the positive results achieved in the other aspect.