Abstract
The International Air Transport Association (IATA) records that 35% of global trade by value can be ascribed to air cargo, and that, in the context of combined passenger and cargo airlines, the cargo business generates 9% of airline revenues on average. According to IATA, the value of international trade shipped by air in 2017 was forecast as amounting to USD 5.5 trillion, representing less than 1% of world trade by volume, but over 35% by value. This turns out to be the equivalent of USD18.6 billion worth of goods every day. Totally dependent on air carriers for the carriage of their goods with speed and efficiency that other modes of trade transport cannot provide are pharmaceutical industries (for the carriage of vaccines and essentially needed pharmaceutical products), producers of perishable goods, live animals, goods needing express delivery, electronic devices and products contracted through e-commerce that necessitate speedy delivery.
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- 1.
IATA Cargo Strategy July 2017, at 3. See http://www.iata.org/whatwedo/cargo/Documents/cargo-strategy.pdf.
- 2.
Id. 5.
- 3.
Randy Woods, European Commission re-imposes cartel fine against ten carriers, Air Cargo World, 17 March 2017. See https://aircargoworld.com/allposts/european-commission-re-imposes-cartel-fine-against-10-carriers/.
- 4.
Air Canada, Air France-KLM, British Airways, Cargolux, Cathay Pacific Airways, Japan Airlines, LAN Chile, Martinair, SAS and Singapore Airlines. An 11th carrier involved in the case, Qantas, had accepted the verdict and was not part of the challenge to the 2010 ruling. Ibid.
- 5.
China Airlines Price Fixing Law Suit Continues, Air Cargo World, May 9 2014. https://aircargoworld.com/allposts/china-airlines-price-fixing-lawsuit-continues-9777/. In separate criminal probes, 21 air cargo carriers have pleaded guilty to participation in the conspiracy and agreed to criminal fines in excess of US$1.8 billion (1.2 billion euros). Ibid.
- 6.
Both the EU and the United Kingdom uses the AKSO NV case as a benchmark where a Dutch chemical company, with a 65% market share of its flour bleach product was found to be abusing its dominant position. The European Court of Justice found that price below average variable cost by means of which dominant competitor seeks to eliminate its competition is regarded as an abusive practice. See AKZO Chemie BV v. EC (1991) ECR 1-3359 at paras. 71–72.
- 7.
Gesetz gegen Wettbewerbsbeschränkungen (GWB) Section 20(4).
- 8.
- 9.
Council Regulation (EC) No. 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, Article 7.1.
- 10.
See generally, Wils (2013), pp. 52–81.
- 11.
Id. Article 12.
- 12.
84/380/EEC [1984] OJ L 207/17.
- 13.
U.S. District Court, District of Kansas, 27 April 2001, 28 Avi 15, 204.
- 14.
166 U.S. 290 (1897).
- 15.
Id. 291.
- 16.
Id. 339.
- 17.
221 U.S. 1 (1911).
- 18.
Id. 83.
- 19.
Id. 94.
- 20.
Id. 97.
- 21.
See Nash v. United States , (1913) 229 U.S. 373.
- 22.
273 U.S. 392 (1927). See also, Connally v. General Construction Co. (1926) 269 U.S. 385 at 391.
- 23.
310 U.S. 150 (1940).
- 24.
See also, United States v. Addyston Pipe and Steel Co. 85 Fed. 271 at 291.
- 25.
Id. 211.
- 26.
Id. 220.
- 27.
Ethylene Propylene Diene Monomer (EPDM) Antitrust Litigation, 681 F Supp (2d) 141.
- 28.
In re Visa Check, 280 F.3d at 136.
- 29.
500 US 322 (1991).
- 30.
Cornell University Law School, Legal Information Institute, at https://www.law.cornell.edu/supct/html/89-1679.ZS.html.
- 31.
550 US 544 (2007).
- 32.
OECD defines “parallel conduct” in price fixing as: “Under conditions of oligopoly, the pricing and output actions of one firm have a significant impact upon that of its rivals. Firms may after some period of repeated actions become conscious or aware of this fact and without an explicit agreement coordinate their behaviour as if they were engaged in collusive behaviour or a cartel to fix prices and restrict output. The fear that departure from such behaviour may lead to costly price cutting, lower profits and market share instability may further create incentives for firms to maintain such an implicit arrangement amongst themselves”. See OECD Glossary of Statistical Terms at https://stats.oecd.org/glossary/detail.asp?ID=3172.
- 33.
Comcast Corporation v. Behrend, 655 F (3d) 182.
- 34.
Speech of 15 September 2005 at www.ec/europa/eu/competition .
- 35.
In re. Pavlov, Cases C-180/98 etc. [2000] 4 CMLR 306.
- 36.
The European Community was established in 1957 by the Treaty of Rome and initially comprised six Member States. Following the entry into force of the Treaty of Lisbon on 1 December 2009, the EC Treaty is called the Treaty on the Functioning of the European Union (TFEU) . The European Union comprises 27 Member States: Austria, Belgium, Bulgaria, Cyprus (Greek), the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, the Slovak Republic, Slovenia, Spain, Sweden, and the United Kingdom.
- 37.
Ioannis Leanos, Competition law in the European Union after the Treaty of Lisbon, Academia.edu at https://www.academia.edu/1294134/Competition_Law_in_the_European_Union_After_the_Treaty_of_Lisbon. Article 3.1 (g) provides that For the purposes set out in the preceding Article, the activities of the Community shall include, under the conditions and with the timing provided for in the Treaty the application of procedures which shall make it possible to co-ordinate the economic policies of Member States and to remedy disequilibria in their balances of payments.
- 38.
United Brands v. Commission, Case 27/76 [1978] ECR 207 [1978]1 CMLR 429.
- 39.
- 40.
AhalstromOsakeyhtio v. Commission (1988) ECR 5193.
- 41.
United States v. The Watchmakers of Switzerland Information Center Inc. et al. 133 F. Supp. 40.
- 42.
Id. at 41.
- 43.
731 F.2d 909 (1984).
- 44.
Id. 910.
- 45.
148 F. 2d 416 (2d Cir. 1945), cited at n. 136 of this article.
- 46.
731 F.2d 909 (1984) at 945-946.
- 47.
In re Uranium Antitrust Litigation, Westinghouse Electric Corporation v. Rio Algom Limited et al. 473 F.Supp.393 (1979).
- 48.
A tying arrangement is the sale of one item (the tying product) only on condition that the buyer would take the second item (the tied product) from the same source. Such arrangements are per se unreasonable and violative of antitrust laws if the tie-in involves two distinct products, and the party has sufficient economic power in the tying market to impose significant restraints in the tied product market.
- 49.
775 F (2d) 53.
- 50.
Id. 61.
- 51.
Air Transport Agreement between the Government of the United States of America and the Government of Malaysia 21 June 1997, TIAS No. 12871 and Air Transport Agreement between the Government of the United States of America and the Government of India 14 April 2005 TIAS No. 12871.
- 52.
Baruah (2016), p. 409.
- 53.
361 F (2d) 676.
- 54.
462 U.S. 611, 103 S.Ct. 2591, 77 L.Ed.2d 46 (1983).
- 55.
Supra, note 1.
- 56.
A State has been defined in Article 1 of the Montevideo Convention of 1933 as having the following characteristics: a permanent population; a defined geographic territory; a government; and the legal capacity to enter into relations with other States. See Montevideo Convention on the Rights and Duties of States, Signed at Montevideo, 26 December 1933. The Convention entered into Force, 26 December 1934. At http://www.taiwandocuments.org/montevideo01.htm.
- 57.
Vienna Convention on the Law of Treaties, 1969, Done at Vienna on 23c May 1969, United Nations General Assembly Document A/CONF.39/27, 23 May 1969, Article 2(a). The Convention entered into force on 27 January 1980. UNTS Vol. 1155, p. 331.
- 58.
Headquarters Agreement between Canada and ICAO of 14 April 1951, which paraphrased the 1947 Convention on the Privileges and Immunities of the Specialized Agencies. On 20 February 1992, the 1951 Agreement was terminated and superseded by a new Agreement that entered into force the same day. A new Supplementary Agreement was signed on 28 May 1999 superseding the Supplementary Agreement signed in 1980 in order to reflect the relocation of the Organization’s Headquarters to a new location on 999 University Street on November 1, 1996. See Supplementary Agreement Between the International Civil Aviation Organization and the Government of Canada Regarding the Headquarters of the International Civil Aviation Organization, Doc 9591.
- 59.
“Ratification”, “acceptance”, “approval” and “accession” mean in each case the international act so named whereby a State establishes on the international plane its consent to be bound by a treaty. See Vienna Convention , supra, note 6 at Article 2(b).
- 60.
“Reservation” means a unilateral statement, however phrased or named, made by a State, when signing, ratifying, accepting, approving or acceding to a treaty, whereby it purports to exclude or to modify the legal effect of certain provisions of the treaty in their application to that State. Id. 2(d).
- 61.
Statute of the International Court of Justice, Charter of the United Nations and Statute of the International Court of Justice, United Nations: New York, Article 38. 1.(a).
- 62.
Id. Article 36.2 (a).
- 63.
Supra. note 6.
- 64.
Vienna Convention , Preamble and Article 275.
- 65.
Id. Article 42. 1.
- 66.
Id. Article 57.
- 67.
Id. Article 59.
- 68.
Id. Article 60.
- 69.
Id. Article 61.
- 70.
Id. Article 62.
- 71.
Id. Article 46.
- 72.
Reuter (1989), p. 16.
- 73.
See von der Dunk (1992), pp. 223–224.
- 74.
Callum Paton, Saudi Arabia and UAE Close Airspace to Qatari Flights as Gulf Diplomatic Standoff Deepens, NEWSWEEK, 6/6/17, http://www.newsweek.com/saudi-arabia-and-ue-close-airspace-qatari-flights-gulf-diplomatic-standoff-621522. Accessed on 5 February 2018.
- 75.
Colin Nagy, Understanding the Qatar Ban and Its Implications for Qatar Airways—Jun 05, 2017 2:00 pm, SKIFT at https://skift.com/2017/06/05/understanding-the-qatar-ban-and-its-implications-for-qatar-airways/. The report quotes Ayham Kamel, Middle East and North Africa Director of Eurasia Group: “Qatar Airways will need to adjust its business strategy to face the fact that its routes to Europe can no longer fly over Saudi Arabia and Egypt. The airline’s profitability will take a direct hit as new routes through Iran and Turkey will include longer journeys and lower demand. The blockade entailed for Qatar Airways longer trip times, more inefficient routings, increased fuel costs and compromised ticket sales. Also, the lack of connecting flights into Doha will be suffocating for a nation that is trying to position itself as a business hub, as well as bolster tourism in advance of its World Cup in 2022”. Ibid.
- 76.
Qatar contacts UN chief to brief him on blockade, files ICAO complaint over aviation threats, The New Arab, 20 August 2017, https://www.alaraby.co.uk/english/news/2017/8/20/qatar-contacts-un-files-icao-complaint-over-aviation-threats. Accessed on 5 February 2018.
- 77.
Id. ICAO Doc 7300/9: 2008.
- 78.
Allison Lampert, Saudi: Gulf rift bigger than air rights, can’t be resolved at ICAO , Reuters, June 15, 2017, at https://www.reuters.com/article/us-gulf-qatar-icao/saudi-gulf-rift-bigger-than-air-rights-cant-be-resolved-at-icao-idUSKBN196243. Accessed on 5 February 2018.
- 79.
ICAO distances itself from Gulf rift, Egypt Today, Fri, Aug. 11, 2017 at https://www.egypttoday.com/Article/2/16697/ICAO-distances-itself-from-Gulf-rift. Accessed on 5 February 2018.
- 80.
ICAO directive a big victory for Qatar , Gulf Times, August 01, 2017 at http://www.gulf-times.com/story/558593/ICAO-directive-a-big-victory-for-Qatar. Accessed on 5 February 2018.
- 81.
ICAO rejects Qatar ’s request to condemn boycotting countries, Al Arabiya English, 1 August 2017, at http://english.alarabiya.net/en/business/economy/2017/08/01/ICAO-rejects-Qatar-s-request-to-condemn-boycotting-countries.html. Accessed on 5 February 2018.
- 82.
Ibid.
- 83.
See Abeyratne (2013), pp. 9–29.
- 84.
Article 63 provides: “The Economic and Social Council may enter into agreements with any of the agencies referred to in Article 57, defining the terms on which the agency concerned shall be brought into relationship with the United Nations. Such agreements shall be subject to approval by the General Assembly . It may co-ordinate the activities of the specialized agencies through consultation with and recommendations to such agencies and through recommendations to the General Assembly and to the Members of the United Nations”.
- 85.
Kotaite (2013), pp. 120–121.
- 86.
Mackenzie (2010), p. 108.
- 87.
Article 85 provides: “If any contracting State party to a dispute in which the decision of the Council is under appeal has not accepted the Statute of the Permanent Court of International Justice and the contracting States parties to the dispute cannot agree on the choice of the arbitral tribunal, each of the contracting States parties to the dispute shall name a single arbitrator who shall name an umpire. If either contracting State party to the dispute fails to name an arbitrator within a period of 3 months from the date of the appeal, an arbitrator shall be named on behalf of that State by the President of the Council from a list of qualified and available persons maintained by the Council. If, within 30 days, the arbitrators cannot agree on an umpire, the President of the Council shall designate an umpire from the list previously referred to. The arbitrators and the umpire shall then jointly constitute an arbitral tribunal. Any arbitral tribunal established under this or the preceding Article shall settle its own procedure and give its decisions by majority vote, provided that the Council may determine procedural questions in the event of any delay which in the opinion of the Council is excessive”.
- 88.
Kotaite (2013), pp. 174–175.
- 89.
Id. 100.
- 90.
Secretary-General Presents His Annual Report To General Assembly , Press Release SG/SM/7136, GA/9596. See https://www.un.org/press/en/1999/19990920.sgsm7136.html. Accessed on 6 February 2018.
- 91.
Letter dated 16 October 1949, reproduced I Annex A to Doc 6922-C/803 at 125.
- 92.
Hybrid Warfare: Shades of Grey, The New Battlegrounds, Special Report—The Future of War, The Economist, January 27th—February 2nd, 2018, at 8.
- 93.
9th Edition:2014.
- 94.
Pestritto and West (2007), p. 253.
- 95.
554 U.S. 570 (2008).
- 96.
H.R. 3162, United States Government Publishing Office, https://www.gpo.gov/fdsys/pkg/BILLS-107hr3162enr/pdf/BILLS-107hr3162enr.pdf.
- 97.
See Terry (2009), access date July 2, 2009.
- 98.
Burrows and Geetter (2016), https://www.mwe.com/en/thought-leadership/publications/2016/01/new.
- 99.
859 F. Supp. 2d 343.
- 100.
Article 19 of the Montreal Convention of 1999 provides that the carrier is liable for damage occasioned by delay in the carriage by air of passengers, baggage or cargo. Nevertheless, the carrier is not liable for damage occasioned by delay if it proves that it and its servants and agents took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures.
- 101.
Article 30 of the Montreal Convention stipulates that if an action is brought against a servant or agent of the carrier arising out of damage to which the Convention relates, such servant or agent, if they prove that they acted within the scope of their employment, shall be entitled to avail themselves of the conditions and limits of liability which the carrier itself is entitled to invoke.
- 102.
402 N.E.2d 1136 (1980).
- 103.
Id. 1138.
- 104.
Day v. Trans World Airlines Inc. 528 F 2d. 31 (2nd Circ. 1975); Evangelinos v. Trans World Airlines Inc. 550 F2d 152 (2d. Circ. 1977); Leppo v. Trans World Airlines Inc.392 NYS 2d 660 (AD 1977); Rolnick v. El Al Israel Airlines Ltd.551 Supp. 261 (EDNY 1982).
- 105.
Waldick v. Malcolm, [1991] 2 S.C.R. 456, File No.: 21781, 1991: February 26; 1991: June 27.
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Abeyratne, R. (2018). Price Fixing and Anti Competitive Conduct in Air Cargo Operations. In: Law and Regulation of Air Cargo. Springer, Cham. https://doi.org/10.1007/978-3-319-92489-2_5
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