15^th TRANSPORTATION WORKING GROUP
Santiago de Chile, April 19 - 23,1999

TPT/WG/15/CT/SC/4.3

Third Meeting of Steering Committee on
More Competitive Transportation Industry (including Infrastructure)

Report on Air Services

CHILE

MATTER : CHILEAN REPORT REGARDING THE IMPLEMENTATION OF THE RECOMMENDATIONS OF THE AIR SERVICES GROUP - APEC

In relation to the Recommendation from the Transport Group of APEC (TPT-WG in terms of providing reports on the progress attained by each economy in the implementation of the said Recommendations, I am pleased to forward the "Progress Report" requested by you, and which is to be submitted to the Plenary Meeting of the Fifteenth Meeting of the TPT - WG, following the guideline of the eight Recommendations which it contains:

1. Ownership and control of air freighter

To date, all bilateral agreements that are in force in Chile contain the requirement that the substantive ownership and effective control of the airline should be in the hands of nationals of the assigning State.

In the recent agreement with New Zealand a step forward has been given, as the designation of the airline by a State only requires that the main seat of its business activities and the control should be in the territory of the assigning party, the only requirements to accredit the acceptance of the assignment. Efforts will be made to follow the same criteria in the next agreements to be made.

2. Tariffs

In Chile there exists tariff freedom since 1979 and, therefore, the country encourages this precept in its bilateral agreements. In those agreements in which the counterpart should set prices, the rule of the country of origin is applied. However, the right to require prior registration of the tariffs is required, though only for informational purposes.

3. Doing business

On an unrestricted basis, the standing framework permits: establishing offices; maintaining foreign personnel, required for the provision of services; land services; selling air transport; remitting surpluses to parent companies; paying expenditures in the currency of the country, etc..

4. Air cargo

The Chilean policy promotes unrestricted freedom of passengers and cargo, on the basis of reciprocity, and therefore, freedom of cargo is understood within the frame of a global liberalization, both of passengers and cargo.

5. Multiple designation of airlines

The Chilean air policy promotes the multiple assignment of airlines, both regular and otherwise, essential to the operation of free competition.

6. Charter services

These services are open in Chile, both for passengers and cargo, and they enjoy, to the extent possible, the privileges of regular services and are subject to criteria of reciprocity.

7. Agreements of Assistance between airlines

The trend in air negotiations is to foment, to the greatest extent possible, this type of inter-company cooperation, creating the greatest number of opportunities to ensure the most adequate marketing of the services agreed on with airlines owned by any of the Parties and/or a third country (shared codes, blocking space, etc.).

These clauses will be gradually included in the agreements to be negotiated within the frame of APEC and, also, in future amendments to standing agreements.

8. Free access to market

The Chilean air policy of free access to the market foments, in general, a wide coverage of rights of traffic of 3rd, 4th, 5th and 6th freedoms, and are especially aimed at, within the frame of APEC, to lift obstacles that constrain the agreements that are being entered into and in the revision of existing ones on a reciprocal basis in terms of routes, capacity and traffic rights, within a global analysis of real access to markets on a given route. With respect to coastal traffic, though not prohibited within our legal framework, we maintain a policy of reserve, which varies depending on the cases. As regards granting traffic rights of 7th freedom it is necessary to examine their concession, on a case by case basis.

Sincerely yours,
JUAN PABLO LANGLOIS V.
Secretary General

Santiago, January 28, 1999.

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