AIR TRANSPORT AND THE GATS AIR TRANSPORT AND THE GATS VOLUME 1 AUXILIARY SERVICES VOLUME 1 DOCUMENTATION FOR THE SECOND AIR TRANSPORT REVIEW UNDER THE GENERAL AGREEMENT ON TRADE IN SERVICES (GATS) 2000-2005 IN REVIEW VOLUME 1 AUXILIARY SERVICES 1 ISBN: 978-92-870-3384-0 Printed by the WTO Secretariat - 1168.07 S/C/W/270 WTO Publications World Trade Organization 154, rue de Lausanne CH-1211 Geneva 21 Tel: (41 22) 739 52 08 Fax: (41 22) 739 54 58 Email: [email protected] © World Trade Organization 2007 AIR TRANSPORT AND THE GATS DOCUMENTATION FOR THE SECOND AIR TRANSPORT REVIEW UNDER THE GENERAL AGREEMENT ON TRADE IN SERVICES (GATS) 2000-2005 IN REVIEW VOLUME 1 AUXILIARY SERVICES S/C/W/270 This volume constitutes the first part of the documentation produced by the WTO Secretariat for the second air transport review mandated by the General Agreement on Trade in Services. Originally contained in document S/C/W/270 dated 12 July 2006, this volume incorporates comments and corrections made by delegations orally at the meeting dedicated to the review held on 12 September 2006 and subsequently in writing, the text of the corrigenda contained in documents S/C/W/270/Corr.1 and Corr.2, as well as technical rectifications and typographical corrections. It deals with auxiliary services. July 2006 S/C/W/270 i Air Transport and the GATS - 2000-2005 in Review July 2006 ii S/C/W/270 Air Transport and the GATS - 2000-2005 in Review TABLE OF CONTENTS LIST OF TABLES, CHARTS AND FIGURES ....................................................................................................... ix LIST OF ACRONYMS ............................................................................................................................................ xv GENERAL INTRODUCTION .................................................................................................................................. 1 CHAPTER I. AIRCRAFT REPAIR AND MAINTENANCE (MRO) ........................................................................................... 4 A. ECONOMIC DEVELOPMENTS ................................................................................................................. 4 B. REGULATORY DEVELOPMENTS ........................................................................................................... 11 1. Developments concerning the regulation of Maintenance Repair and Overhaul (MRO) .... 12 (a) General evolution ................................................................................................................... 12 (b) Maintenance Steering Group (MSG) rules .............................................................................. 12 (c) WTO developments ................................................................................................................ 12 (d) European Communities ........................................................................................................... 12 2. Developments regarding safety regulations ............................................................................. 12 (a) ICAO ....................................................................................................................................... 13 (b) European Civil Aviation Commission (ECAC) ........................................................................... 13 (c) IATA ........................................................................................................................................ 15 (d) National developments ........................................................................................................... 16 (i) China ............................................................................................................................. 16 (ii) European Communities .................................................................................................. 16 (iii) United States ................................................................................................................. 17 CHAPTER II. AIRLINE TICKET DISTRIBUTION ...................................................................................................................... 18 A. COMPUTER RESERVATION SYSTEMS SERVICES............................................................................... 18 1. Business-to-Business Computer Reservation Systems (CRS) ................................................ 19 (a) Classical CRS .......................................................................................................................... 19 (i) Economic developments ................................................................................................ 19 Concentration ........................................................................................................... 19 Ownership developments .......................................................................................... 20 Erosion of direct market share .................................................................................. 20 Pricing ....................................................................................................................... 21 Diversification ........................................................................................................... 22 July 2006 S/C/W/270 iii Air Transport and the GATS - 2000-2005 in Review (ii) Regulatory developments .............................................................................................. 22 ICAO .......................................................................................................................... 22 WTO .......................................................................................................................... 24 European Civil Aviation Commission (ECAC) .............................................................. 24 Bilateral developments ............................................................................................. 24 National developments ............................................................................................. 25 United States ............................................................................................................ 25 Canada ...................................................................................................................... 27 European Communities .............................................................................................. 28 (b) Global new entrants ............................................................................................................... 28 (i) Economic developments ................................................................................................ 28 (ii) Regulatory developments .............................................................................................. 29 2. Business to Consumer (B-to-C) CRS .......................................................................................... 30 (a) Economic developments ......................................................................................................... 30 (b) Regulatory developments ...................................................................................................... 33 3. Possible implications for cargo traffic .................................................................................... 33 4. Other service providers linked to CRS activities ..................................................................... 33 B. SELLING AND MARKETING OF AIR TRANSPORT SERVICES............................................................. 34 1. Economic developments ............................................................................................................. 34 (a) General observations .............................................................................................................. 34 (b) Airport counters and city offices ............................................................................................. 34 (c) In-house call centres .............................................................................................................. 34 (d) Direct online sales .................................................................................................................. 35 (e) Selling and marketing activities undertaken by alliances, codesharing or simple commercial partnerships ........................................................................................................ 36 (f) General sales agents, third-party call centers and other outsourced sales and distribution functions ............................................................................................................. 37 (i) General observations ..................................................................................................... 37 (ii) General sales agents ..................................................................................................... 38 (iii) Third-party call centres .................................................................................................. 38 (iv) Other outsourced sales and distribution functions ......................................................... 38 (g) Aspects related to cargo traffic .............................................................................................. 38 2. Regulatory developments ............................................................................................................ 38 (a)