I am by no means an expert, so take this post as b
Post# of 41413
Posted On: 05/06/2014 4:57:26 PM
Re: starchaser #3634
I am by no means an expert, so take this post as being from someone who is relying upon my background and research that I've conducted. A couple aviation law classes in college helped as well. For CuseTrader, this post is subject to typos as I am using a smartphone with a finicky autocorrect feature. Also, every reference that I post will bore everyone to tears.
First off, there really isn't any "exclusivity" to the process of awarding international routes. The first thing that the DOT must reference is the aviation agreement that we have with the proposed nation. Here is a link to the most recent "consultation" that the Department of State had with Russia:
http://www.state.gov/documents/organization/205385.pdf
In Appx 1, Section 4, you can see that per the original agreement, U.S. Flag carriers are limited to 63 round trips per week. That means that the DOT essentially has to split that between all carriers requesting to fly to Russia.
Many countries (mainly EU countries) are "open skies partners" which liberalizes the routing a great deal, making it almost like American carriers operating domestically - the airline has a lot of say on where they operate based on what makes them money. It's not nearly as big of a deal as trying to fly to a non open skies country. In a nutshell, based on DOT documents posted to date, Baltia is the only one with that route. That doesn't mean that they own that route, but if Delta or AA wanted to also fly that route, the DOT would have to do a comparative analysis. Info on that can be found here:
http://www.dot.gov/policy/aviation-policy/int...-authority
Info regarding the open skies agreement can be found here:
http://m.state.gov/md114805.htm
If another U.S. Flag carrier wanted the JFK - St. Petersburg route, the DOT would make its comparative analysis and make the determination then. It would be open for comments and ultimately posted on regulations.gov. Even if they awarded the route to another carrier, it does not mean that Baltia is up the creek. Two airlines can fly to the same place, it mainly relies on the frequency restriction that the current bilateral agreement has at this time. In the latest consultation it was noted that the countries want to INCREASE the frequency limitation. Additionally, the original agreement dated 1994 specifically states that the countries will not discourage competition, which means that Baltia needs to get in the air sooner than later so they can actually be viewed as viable competition in the event that another carrier wants to make a move.
As of now I don't think we have much to worry about as I believe that speculative Delta/AA post lacks credibility. But then again, so do I.
First off, there really isn't any "exclusivity" to the process of awarding international routes. The first thing that the DOT must reference is the aviation agreement that we have with the proposed nation. Here is a link to the most recent "consultation" that the Department of State had with Russia:
http://www.state.gov/documents/organization/205385.pdf
In Appx 1, Section 4, you can see that per the original agreement, U.S. Flag carriers are limited to 63 round trips per week. That means that the DOT essentially has to split that between all carriers requesting to fly to Russia.
Many countries (mainly EU countries) are "open skies partners" which liberalizes the routing a great deal, making it almost like American carriers operating domestically - the airline has a lot of say on where they operate based on what makes them money. It's not nearly as big of a deal as trying to fly to a non open skies country. In a nutshell, based on DOT documents posted to date, Baltia is the only one with that route. That doesn't mean that they own that route, but if Delta or AA wanted to also fly that route, the DOT would have to do a comparative analysis. Info on that can be found here:
http://www.dot.gov/policy/aviation-policy/int...-authority
Info regarding the open skies agreement can be found here:
http://m.state.gov/md114805.htm
If another U.S. Flag carrier wanted the JFK - St. Petersburg route, the DOT would make its comparative analysis and make the determination then. It would be open for comments and ultimately posted on regulations.gov. Even if they awarded the route to another carrier, it does not mean that Baltia is up the creek. Two airlines can fly to the same place, it mainly relies on the frequency restriction that the current bilateral agreement has at this time. In the latest consultation it was noted that the countries want to INCREASE the frequency limitation. Additionally, the original agreement dated 1994 specifically states that the countries will not discourage competition, which means that Baltia needs to get in the air sooner than later so they can actually be viewed as viable competition in the event that another carrier wants to make a move.
As of now I don't think we have much to worry about as I believe that speculative Delta/AA post lacks credibility. But then again, so do I.
(0)
(0)Baltia Air Lines Inc (BLTA) Stock Research Links
Scroll down for more posts ▼