26
REGULATION AND TAXATION
Greater convergence on global
passenger rights principles
More than 60 countries have instituted independent
passenger rights regimes. The result is that passengers
often start a journey in one jurisdiction and end in another.
Such inharmonious global regulation hurts connectivity. The
absence of coordination among the various regimes causes
confusion for passengers and difficulties for airlines. And
the proliferation of independent passenger rights regimes
could cost airlines up to $12 billion by 2017. Many of these
regimes even have unintended consequences for consumers,
including, in extreme cases, incentives for airlines to cancel
flights, reduce services, or limit convenient interline offerings.
In 2013, IATA member airlines unanimously endorsed core
principles on consumer protection. Those principles are
based on lessons learned from various passenger rights
regimes and strike a balance between protecting passengers
and preserving industry competitiveness. Key provisions
include ensuring access to information for passengers,
aligning rights with such international conventions as
Montreal Convention 1999 (MC99), underlining the role
of the marketplace in allowing customers to choose an
air travel experience that meets their price and service
expectations, and offering rights comparable to those of
other modes of transport. Based on these core principles,
IATA is seeking greater coordination among governments
in the area of consumer protection.
ICAO, too, recognizes the threat a patchwork approach
poses for consumer protection. So it is also engaged
in constructing policy guidance aimed at a greater
convergence of passenger rights regimes.
A single airline liability regime
globally through MC99
MC99 governs airline liability for passengers, baggage, and
cargo during international carriage by air. It was designed to
replace a number of earlier liability regimes with a modern,
fair, and global approach.
MC99 is also a prerequisite for airlines’ use of the electronic
air waybill (e-AWB) in place of paper. It is therefore essential
for the local implementation of cargo transformation
projects, such as e-freight. IATA is promoting the ratification
of this convention for this and the wide range of additional
benefits it delivers for airlines, passengers, and shippers.
The consequence of a lack of harmony among airline liability
regimes was highlighted by the tragedy of Air Asia 8051 in
December 2014. That sad event demonstrated the complexity
and unfairness that occurs when the origin and destination
countries are not parties to MC99. Families of the victims faced
further, needless distress and uncertainty over compensation
for their lost loved ones because Indonesia is not a signatory to
any international agreement on airline liability.
By year-end 2014, 110 countries had ratified MC99. The rate
of ratification in 2014 was higher than in several previous
years combined, and Ethiopia’s ratification was a particularly
notable success. Fully 81 countries, however, have yet to ratify
MC99, including such nations as Bangladesh, Indonesia, the
Philippines, Russia, Sri Lanka, Thailand, and Vietnam. And
until they do so, their patchwork of regimes will continue
to render airlines, passengers, and shippers unable to avail
themselves of MC99’s benefits.
Ratification campaigns are in place in the top 20 markets,
selected by volume of cargo shipments, where MC99 is
not yet in force. They involve coalitions of industry-leading
stakeholders: airlines, shipper and forwarder associations,
chambers of commerce, and tourism authorities.
Significant progress toward ratification is expected in 2015.
In the wake of the Air Asia 8051 tragedy, Indonesia has
announced that it will expedite the ratification of MC99.
In May 2015, Thailand will enact into law its International
Carriage by Air Act and is expected immediately thereafter
to ratify MC99. It is hoped, too, that the Philippines Senate
Committee on Foreign Relations will endorse a report
signaling that country’s final step to MC99 ratification. In
Russia, MC99-related legislation is before the Duma.
International deterrents to
unruly passenger behavior
Thousands of incidents of unruly passenger behavior on
aircraft are reported annually. The impact of such behavior
on passengers and crew can be significant, especially if an
aircraft is forced to divert.
The 1963 Tokyo Convention continues to provide the
international legal framework for dealing with unruly
passengers. In its original form, however, it suffered from gaps
in defining unruly behavior and jurisdictional parameters.
A diplomatic conference in Montreal, Canada, in March 2014
closed these gaps with what has become known as the
Montreal Protocol 2014 (MP14) of the Tokyo Convention.
IATA is urging countries to ratify MP14 as soon as possible
and is working with stakeholders to that effect.
MP14 bears signatures from 28 countries. But for it to
enter into force, at least 22 nations must ratify it. This often
requires that nations pass national implementing legislation.
IATA has identified 36 nations as potential early adopters.
These countries are known to either strongly support MP14
or to have legislative systems that would facilitate its rapid
ratification. In February 2015, the Republic of Congo became
the first to ratify MP14, only 11 months after MP14 was agreed
to. It is expected that a significant number of nations will
ratify MP14 in the short term.
Promoting the ratification of MP14 is part of a wider
strategy to tackle unruly behavior that contains a set of
core principles. Unanimously agreed on by airline members
at the 2014 IATA AGM in Doha, these principles set out a
comprehensive approach that encompasses prevention,
management, and deterrence. Airlines and airports are
working together to identify potential unruly passengers
before they board aircraft and to prevent them from
boarding.