News in brief from around the world… While the UK this week published further guidance on its aviation policies should the country fail to strike a Brexit deal with Brussels, the US FAA has been busy forging closer ties with its own neighbours in the Americas. Elsewhere, the Australian competition authority has issued a call to action to the country’s airports.

UK

⇒ The UK government said this week that it would continue to allow EU airlines to operate in the country in the event of a “no-deal” Brexit, and “would expect EU countries to reciprocate in turn”.

As a current member of the European Union, the UK is part of the internal market for air services, meaning that any EU airline adhering to common regulations can operate any route within the EU without the advance permission of individual national authorities.

If the UK fails to strike a deal with the EU before it leaves the bloc on 29 March 2019, both UK and EU-licensed airlines could be grounded unless they reached individual agreements with regulators.

“It would not be in the interest of any EU country or the UK to restrict the choice of destinations that could be served,” the government said on Tuesday. “Though, if such permissions are not granted, there could be disruption to some flights.”

Some air services with certain non-EU countries are only provided for the UK by its membership of the EU, but the government has stated that “replacement arrangements” for these will be in place before exit day.

Air traffic control would not be disrupted, as this is covered separately under the Chicago Convention and EUROCONTROL, which is an entity independent of the EU. Current EU passenger rights would also be retained by the UK, under its EU Withdrawal Act.

“While we still hope for a comprehensive EU-UK deal, an assumption that ‘it will be all right on the night’ is far too risky to accept,” IATA’s director general Alexandre de Juniac said in a statement following the announcement. “Every contingency should be prepared for, and we call upon both the EU and the UK to be far more transparent with the state of the discussions.”

In its own push for transparency, the UK Civil Aviation Authority meanwhile launched a dedicated microsite offering advice to airlines and other aerospace players on the steps they would need to take were there to be no deal.

Australia

⇒ The Australian Competition and Consumer Commission (ACCC) has stated that Australia’s airports need an “effective regulatory regime”.

The announcement, made in a submission to the Productivity Commission’s inquiry into the economic regulation of airports, states that “effective monitoring regimes” can help to tackle “undesirable behaviour”, such as high prices and declining service quality.

Currently, only the airports of Sydney, Melbourne, Brisbane and Perth operate under a limited monitoring regime, which the ACCC “does not consider effective”.

“Providers of key monopoly infrastructure such as the major airports are typically regulated to ensure that they will not exploit their market power to the detriment of consumers and the broader economy,” ACCC Chair Rod Sims said in the submission. “This is not currently the case with Australia’s major airports.”

Specific recommendations from the ACCC to the Productivity Commission include providing airlines with more information when negotiating with airports, allowing airports and airlines access to arbitration if they cannot reach agreements on terms and conditions, and informing consumers of the range of alternatives for travelling to and from the airport.

The Productivity Commission began its inquiry into Australian airport regulation in June 2018, releasing its issues paper on 9 July 2018. The ACCC, meanwhile, has been directed by the Australian government to monitor the performance of the country’s four largest airports until 2020.

Americas

⇒ The US Federal Aviation Administration (FAA) has signed separate new recognition agreements with its Brazilian and Canadian counterparts.

The FAA and Transport Canada Civil Aviation (TCCA) signed a Shared Surveillance Management Plan, which facilitates mutual recognition of each other’s surveillance of manufacturers and suppliers.

It also requires manufacturers and their subcontractors and suppliers to comply with an approved quality standards system.

The FAA stated that fewer FAA and TCCA aviation inspectors will be needed to carry out surveillance on each other’s facilities.

The FAA and Brazil’s Agência Nacional de Aviaçao Civil (ANAC) have meanwhile revised their 2006 Implementation Procedures Agreement (IPA) to provide risk-based decision criteria for the US and Brazil to validate each other’s aviation products.

The revision also reduces redundant validation activities and resources and aligns the IPA more closely with the bilateral agreements of the European Union and Canada.

The IPA revision has a three-month implementation period, to enable stakeholders time to familiarise themselves with it.

⇒ A Canadian construction company that won an arbitration award against Algeria’s national airline over the termination of a US$100 million contract has failed to overturn some of the arbitrators’ findings on damages.

In an anonymised judgment on 9 August, the Swiss Federal Tribunal dismissed a request by Montreal-based Groupe SM International (SMI) for the partial annulment of the US$13 million award against Air Algérie.

SMI entered into an Algerian-law contract with Air Algérie in 2011 for the construction of the airline’s new headquarters in a suburb of Algiers, which was scheduled for completion in 2013.

After a number of disputes arose, SMI filed an arbitration claim shortly before suspending work on the project in May 2013. The airline declared the contract terminated in the following month and ordered SMI to vacate the premises, but the company refused to leave for a further three-and-a-half years.

The arbitral tribunal awarded SMI a net sum of 1.5 billion Algerian dinars (US$12.7 million). The company is understood to have claimed US$120 million in the case.

The Canadian company argued that the tribunal violated its right to be heard by basing its decision on unpredictable legal reasoning; however, the Swiss court threw the challenge out after considering submissions from the airline and the arbitrators.

The full story can be accessed via ALN’s sister publication Global Arbitration Review.