REPORT BY THE REPUBLIC OF KOREA TO THE STEERING COMMITTEE ON MORE COMPETITIVE TRANSPORTATION INDUSTRY ON IMPLEMENTATION OF AIR SERVICES GROUP RECOMMENDATIONS

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

Recommendation: Give consideration 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.

Most of Korea’s air services agreements contain the requirement that airlines be substantially owned and effectively controlled by nationals of the party designating an airline and control criteria require that the chairperson and at least half of the board members are Korean citizens.

Option 2. Tariffs

Recommendation: 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.

Korea’s standard draft air services agreement require tariffs to be filed for approval. However, we are trying to change this double-approval regime into disapproval system in its negotiations of air services agreements with other economies on a case-by case basis. It means that filing tariffs in new system is required for records only. The new tariff article has been tabled with USA and Australia already and will be agreed progressively with other APEC members.

Option 3. Doing business matters

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

Korea has adopted open policy on a non-discriminatory basis in almost all doing business matters, such as establishing offices, remittance of earnings and sales and marketing of air service products.

Option 4. Air freight

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

Korea seeks open freight arrangements in its air services agreements on the basis of reciprocity. Korea has open freight capacity in its air services agreements with USA and Australia.

Option 5. Multiple airline designation

Recommendation: Include, as appropriate, multiple airline designation in bilateral air services agreements. High priority.

Korea has multiple designation in all its air services agreements with APEC economies.

Option 6. Charter services

Recommendation: Allow and facilitate the operation of both passenger and freight ad hoc charter services which supplement scheduled services. Medium priority.

Korea has been considering favorably in permitting the operation of ad-hoc charter services to provide additional capacity for carriage of passenger and freight to meet seasonal or temporary needs which can not be easily met by scheduled services.

Option 7. Airlines’ cooperative arrangements

Recommendation: Facilitate cooperative arrangements such as code-sharing 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(s) and where there are no anti-competitive effects, and where fair and equitable opportunities for the economies involved can be ensured. High priority.

Korea has included airlines’ cooperative arrangements clause in its air services agreements negotiated with USA, Japan, Australia, New Zealand, and Singapore.

Option 8. Market access

Recommendation: 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.

As an approach to progressively achieve more liberalized market access, Korea seeks to negotiate capacity well ahead of demand with its bilateral partners.

This page was last updated on 1 Feb, 2008