A Study Of Legal Issues Related With The Exchange Of Fifth Air Traffic Rights Between China And ASEAN

With the development of the Belt and Road Initiative and Air Silk Road,together with the establishment of the Free Trade Zone between China and the Association of Southeast Asian Nations?hereinafter referred to as“ASEAN”?,the demands for air transport between China and ASEAN are growing rapidly.The vast air transport market between China and ASEAN needs a more open,convenient,liberal and integrated framework to support the movement of the people and goods.On 19 November 2010,China and ASEAN officially signed the Air Transport Agreement and its Protocol 1,under which both sides exchanged unlimited 3^rd and 4^thtraffic rights between any points in contracting parties.In order to further liberalize the regional air transport,both sides signed Protocol 2 to the agreement and exchanged limited 5^th traffic rights with each other on 20 December 2013.Nonetheless,there are some problems under the current arrangements regarding the exchange of 5^th traffic rights.The 5^th traffic rights are restricted so strictly by the designated cities that makes it too difficult for the airlines to exercise the rights entitled and to form competitive international flight routes.This frustrates the purpose of the protocol,which is to achieve the liberalization of the air transportation market.In addition,low cost carriers may develop“V”-shaped routes to operate short-range tourism services.It may in effect achieve the effects as if the 7^th traffic right were obtained by those air carriers,and thus the legitimacy of this kind of operation remains to be further clarified.How to deal with those problems and promote further air transport liberalization between China and ASEAN become quite urgent issues.This article puts focus on these issues and consists of four chapters:The first chapter illustrates the connotation and sovereignty attributes of air traffic rights.On that basis,this chapter then summarizes the main legal frameworks for the exchange of 5^th traffic rights.It emphasizes the key importance of the 5^th traffic rights in the transformation of international traffic rights exchange regimes from bilateralism to multilateralism against the backdrop of the liberalization of air transportation market.Afterwards,it introduces the basic information and specialty of the exchange of the 5^thtraffic rights between China and ASEAN in order to achieve the liberation of air transportation market,and also summarizes the current problems regarding the exchange.The second chapter looks through the practical effects of the 5^th traffic rights exchange.It first analyses relevant provisions under Protocol 2 and the specific restrictions on the exercise of the 5^th traffic rights.Through the analysis of the potential effects of the restrictions on the formation of international routes and carrier operations,it is concluded in this part that the purpose of the protocol cannot be well achieved.The third chapter deals with the legality of the“V”-shaped operation.It first introduces the background and reasons of such operations,and then shed light on its specialty.The“V”-shaped operation is disputed to have exceeded the scope of the 5^thtraffic right as it achieves the profits which are only achievable when the 7^th traffic rights have been bestowed to the relevant carriers.By comparison of the boundaries of the 5^th and the 7^th traffic rights,it is summarized that the legality of“V”-shaped operation has different functions towards the liberalization of aviation between China and ASEAN.The last chapter gives advice on the above issues as well as on the further exchange of traffic rights between China and ASEAN.It is suggested that both parties confirm the“V”-shaped operation as legal exercise of the 5^th traffic rights under Protocol 2.Meanwhile,the aviation authorities of both parties should observe and control such operations to secure the aviation resources and profits of national aviation economy.China could establish a trial program in Hainan Free Trade Zone to open its 7^th traffic rights step by step.It is recommended that both parties could consider a“negative list”model in newly amended protocols to increase the number of the cities with 5^th traffic rights,for designated carriers to effectively exercise the granted 5^th traffic rights.Faced with the fierce competition within the China-ASEAN area,China should adopt domestic low-cost-carriers-beneficial aviation policies to improve the competition ability of its own low cost air carriers.In summary,the exchange of the 5^th traffic rights has greatly promoted liberalization of air transport between China and ASEAN.But China and ASEAN should further exchange traffic rights with a new protocol adopting a“negative list”and confirming the“V”-shaped route operation and take other liberalization measures to achieve the“open skies”between China and ASEAN in the future.