Things are changing for the better in the skies as our Exclusive report in today’s CargoForwarder Global shows with regards to the “Fifth Freedom Rights” deal reached between the German and Hong Kong aviation authorities.
Is this deal for Hong Kong’s Cathay Pacific and Germany’s Aerologic the start of something new?
But, what are “Fifth Freedom Rights” and how could this new development affect airline operating schedules and results in the future if it were to be expanded further?
In 1944 an International Convention was held in Chicago aimed at setting up a framework for future aviation bi-lateral and multi-lateral agreements. Today’s International Civil Aviation
Organization (ICAO) stems from this meeting.
The basic agreement determined that an airline needs the approval of the governments of the various countries involved before it can fly in or out or across without landing in the country.
The so called “Freedom Rights.”
Although they are shown as being freedoms, are however officially seen as being a privilege and are not automatically granted to an airline as their right.
The 1944 Convention has been extended somewhat since then, but there are seen to be a total of nine “Freedoms of the Air” in effect today.
The first four of these relate basically to bi-lateral rights between countries and their aviation authorities regarding so called normal point to point operations for overfly and landing
rights.
Freedoms six to nine, although important, are in comparison to the rest, seldom a point of discussion or negotiation between the relevant authorities.
The Fifth Freedom has for some years become a more important issue for carriers.
The official ICAO clarification of Fifth Freedom Rights is seen as: - “the right or privilege, in respect of scheduled international air services, granted by one State to another State to
put down and take on, in the territory of the first State, traffic coming from or destined to a third State.”
This applies to either passenger or cargo transportation.
And this, although it seems quite complicated, is exactly what the Aerologic / Cathay agreement refers to:
The Transpacific routes have been hard fought for many years for both cargo and passenger traffic. The deal reached last week can be seen as a “door-opener” for future worldwide traffic
flows.
But, will Cathay and Aerologic have to consider deploying part of their freighter fleets to areas outside of their own home bases, or will they consider joining with other carriers who already
operate on these routes?
Basically, this can in the long run give carriers, who obtain such rights, a far better fleet and crew utilization as well as the chance of enhancing revenues.
However, will carriers be able to generate more profit out of such deals?
One could argue that more competition on such routes will dilute rates and that the U.S. and China-based carriers who have seen the Pacific as their own back yard for many years, may have to
rethink their commercial strategies there.
We’ve also witnessed a couple of weeks ago the deal reached between Russia and Germany on Siberian overflight rights and Russian rights out of Germany to the USA.
Is this also a chance for carriers with “all freighter fleets” who are still suffering under decreasing volumes from Europe to Far East and v.v., to look at being able to deploy their fleets more
profitability elsewhere?
One thing is sure!
This is a development which only a year or two ago seemed so very far away and is now fast becoming reality. There are surely still many questions to be answered and calculations to be made by
the carriers, but it seems that the world’s aviation authorities are bringing us into a new era.
"There’s no Freedom like Fifth Freedom” - is that how it’s going to be?
It would be good to see reader’s reactions to all of this!
John Mc Donagh