The introduction of Colombia to new markets through Bilateral Air Transport Agreements

By Juan Felipe Reyes

Posted: 22nd August 2011 09:01

Since 1947, Colombia acceded to the Convention on International Civil Aviation, commonly known as “The Chicago Convention” which has been in force for more than 50 years.

Since  that  time, Colombia started to build a body of rules that governed our local aviation issues taking in to account the principles set by the Chicago Convention being important to mention the principle that establish that all states shall be able to participate in air transportation on a basis of equality. 

As a result, and taking into account this pointer of direction, our aviation law body of rules is conformed nowadays by:  (i) Multilateral Conventions, (ii) Bilateral Agreements and (iii) National Law, being the latter the place where the Colombian Air Regulations are located in conformity to the International Civil Aviation organization Standards and Recommended Practices.

During the last 10 years Colombian commercial aviation is facing a significant growth in its domestic and international market due in part to the appearance of new models of consolidation of airlines, new operators interested in entering the market on a diverse air transport modalities, fleet renewal to put it up with the latest aviation standards;   all of this in accordance with globalization tendency.

Given the above, Colombia by means of the Civil Aviation Authority, in order to facilitate and promote the access of Colombian airlines as well as the mentioned new airline consolidations, has been intervening in the establishing of new Air Transport Agreements, celebrating Air Traffic Rights bilateral negotiations, setting the framework under which should be conducted, dealing with aspects such as access to market, airfares, routes, flight frequencies, aircraft capacity, in general  all aspects in connection with the freedoms of the air.

In order to face the new market panorama, Air Transport Agreements are being negotiated under the concept of flexibilization and taking in to account the specific characteristics of every market, which implies the operation of multiple companies with the significant increase in the number of flights. 

In this way, as an example we have nowadays a policy of freedom regarding the number of flights within the Andean Region (Bolivia, Colombia, Ecuador, Peru and Venezuela), creating a multilateral system of air traffic rights.

In addition, Colombia has addressed and Open –Skies Agreement with the United States of America, nevertheless it is worth noting that the latter is pending of legal proceedings to be adopted officially.

This Open Skies agreement, due to its intrinsic liberalization tendency, will generate opportunities for airlines from both countries to expand their presence in the market. 

Regarding air cargo, it is governed under the principle of market liberalization which implies the free access of cargo operators, promoting the development and extension of this sector.

In this connection, Colombia has formalized air transport relations with 37 countries and recently has agreed Memorandums of Understanding with distant countries like Iceland, Israel, Qatar, Singapore, and Turkey, including rights of fifth freedom of the air with Qatar and Singapore agreements; opening the doors to a significant increase of the market. 

According with official statics issued by the Colombian Aviation Authority, in connection with international traffic growth by passengers, 2010 shows an increase of 11.5% in comparison with 2009.  It is worth noting that North America and South America are the main markets. 

On the other part, regarding occupancy factor taking the same sector and period of time shown above reflects an increase of 1.5%. 

The Colombian aviation market is expected to growth significantly taking in to account the effects of this regulatory basis in addition of these new factors facilitating and promoting its materialization.  However big challenges are expected to be taken in terms of infrastructure to be consistent with this upcoming scenario but it is certain that will increase the opportunities for investment.  Colombia shows a positive relation in the scale of the economical growth and the behavior of the air transport sector.

In this sense, The Colombian Air Authority announced an investment estimated in USD 840 millions on air navigation systems and airport infrastructure in order to improve the levels of safety, efficiency, use of airspace and airport operations.

In view of the above, by means of the International agreements and the policy of deregulation of the air market in terms of liberalization in addition to economical factors such as the new aviation model business scenario, Colombia has enhanced its aviation legal structure consistent with the standards of the international air transport.

Lastly, this is a regulatory basis that is expected to facilitate the growth of the Colombian economy and in turn promotes the participation of airlines from other states in our country therefore introducing Colombia to new markets and improving conditions to customers in terms of better offers and different options of choice in air transport. 

 

Parra, Rodríguez & Cavelier has 5 partners and 19 associates.  The firm advises transnational and national clients in matters related to business law and business transactions, seeking the protection of the clients’ rights and the furtherance of their business interests. The culture of the Firm is characterised by the ethical values shared by its members, including loyalty, a strong work ethic, a challenging work environment, and excellence in performance. Team work is encouraged by promoting collective success for individual and team work activities. The Firm enjoys the unconditional commitment of its members for timely and ethical performance of the services it renders, cultivating devotion to its clients and belief in the opportunities Colombia provides.

Parra, Rodríguez & Cavelier’s Practice Areas are:

Administrative and Regulatory Law; Agency and Distributorships; Alternative Dispute Resolution; Antitrust and Trade Regulation; Aviation and Aircraft Financing; Bankruptcy Banking and Finance Law; International Business Law and Trade; Communications and Media Construction Law; Consumer Law; Contracts; Corporate Law; Energy and Natural Resources; Entertainment and the Media; Environmental Law; Finance, Foreign Investment and Exchange Law; Government Contracts; Intellectual Property, Copyrights, Patents and Trademarks; International Business Law and Trade; Internet Law; Investments; Labor and Employment; Litigation; Mergers, Acquisitions and Divestitures; Nonprofit and Charitable Organizations; Project Financing and Leasing; Public Finance and Privatizations; Real Estate; Securities; Taxation; Transfer of Technology; Transportation; Trusts and Estates; Utilities Law.  Juan Felipe Reyes can be contacted on +57) (1) 3764200 or by email at juan.reyes@prc-laws.com
 

 

 

 


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