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S/C/W/270 18 July 2006 ORGANIZATION (06-3471) Council for Trade in Services

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S/C/W/270 18 July 2006 ORGANIZATION (06-3471) Council for Trade in Services WORLD TRADE RESTRICTED S/C/W/270 18 July 2006 ORGANIZATION (06-3471) Council for Trade in Services SECOND REVIEW OF THE AIR TRANSPORT ANNEX DEVELOPMENTS IN THE AIR TRANSPORT SECTOR (PART ONE) Note by the Secretariat1 TABLE OF CONTENTS LIST OF TABLES, CHARTS, FIGURES AND APPENDIXES......................................................vi LIST OF ACRONYMS ........................................................................................................................ix INTRODUCTION..................................................................................................................................1 I. AIRCRAFT REPAIR AND MAINTENANCE (MRO).........................................................4 A. ECONOMIC DEVELOPMENTS .......................................................................................................4 B. REGULATORY DEVELOPMENTS.................................................................................................13 1. Developments concerning the regulation of Maintenance Repair and Overhaul .........13 (a) General evolution ..............................................................................................................13 (b) Maintenance Steering Group (MSG) rules........................................................................13 (c) WTO developments...........................................................................................................13 (d) European Communities .....................................................................................................14 2. Developments regarding safety regulations.....................................................................14 (a) ICAO .................................................................................................................................15 (b) European Civil Aviation Commission (ECAC) ................................................................16 (c) IATA .................................................................................................................................18 (d) National developments ......................................................................................................18 (i) China.......................................................................................................................18 (ii) European Communities...........................................................................................19 (iii) United States...........................................................................................................20 1 This document has been prepared under the Secretariat's own responsibility and without prejudice to the positions of Members and to their rights and obligations under the WTO. S/C/W/270 Page ii II. AIRLINE TICKET DISTRIBUTION ..................................................................................20 A. COMPUTER RESERVATION SYSTEMS SERVICES........................................................................21 1. Business-to-Business Computer Reservation Systems (CRS) .........................................22 (a) Classical CRS....................................................................................................................22 (i) Economic developments..........................................................................................22 • Concentration..........................................................................................................23 • Ownership evolutions..............................................................................................24 • Erosion of direct market share................................................................................24 • Pricing.....................................................................................................................25 • Diversification.........................................................................................................26 (ii) Regulatory Developments .......................................................................................27 • ICAO .......................................................................................................................27 • WTO ........................................................................................................................29 • European Civil Aviation Commission (ECAC) .......................................................29 • Bilateral developments............................................................................................29 • National developments............................................................................................30 United States ............................................................................................................................... 30 Canada ........................................................................................................................................ 33 European Communities ............................................................................................................... 34 (b) Global new entrants...........................................................................................................35 (i) Economic developments..........................................................................................35 (ii) Regulatory developments........................................................................................36 2. Business to consumer (B-to-C) CRS..................................................................................36 (a) Economic developments....................................................................................................37 (b) Regulatory developments ..................................................................................................40 3. Possible implications for cargo traffic...............................................................................41 4. Other service providers linked to CRS activities .............................................................42 B. SELLING AND MARKETING OF AIR TRANSPORT SERVICES.........................................................42 1. Economic Developments.....................................................................................................42 (a) General observations .........................................................................................................42 (b) Airport counters and city offices .......................................................................................43 (c) In-house call centres..........................................................................................................44 (d) Direct online sales .............................................................................................................44 (e) Selling and marketing activities undertaken by alliances, codesharing or simple commercial partnerships ...........................................................................................................45 S/C/W/270 Page iii (f) General sales agents, third-party call centers and other outsourced sales and distribution functions ................................................................................................................46 (i) General observations ..............................................................................................46 (ii) General sales agents ...............................................................................................47 (iii) Third-party call centres...........................................................................................47 (iv) Other outsourced sales and distribution functions .................................................48 (g) Aspects related to cargo traffic..........................................................................................48 2. Regulatory Developments ..................................................................................................48 (a) ICAO Developments .........................................................................................................48 (b) WTO developments...........................................................................................................50 (c) Bilateral regulatory aspects ...............................................................................................50 (d) National developments ......................................................................................................51 C. TICKET EMISSION SERVICES......................................................................................................52 1. Passenger aspects ................................................................................................................52 (a) A major technological evolution: electronic ticketing .....................................................52 (b) Self emission of tickets by airlines....................................................................................53 (c) Billing Settlement Plans (BSPs)........................................................................................53 (i) IATA Billing Settlement Plans.................................................................................54 (ii) Airline Reporting Corporation (ARC) – United States ...........................................54 (iii) Local providers .......................................................................................................55 (iv) Project
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