Air-Rail Alliances in the Context of Liability and Environmental Protection Selected Legal Issues
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Abstract
Since the deregulation of airlines in the 1970s and 80s the aviation industry has constantly tried to find new ways to engage with the increasingly competitive aviation market by expanding their outreach through strategic partnerships and global alliances. Over the past 10 years airlines have strengthened their partnerships with railway companies to offer more convenient connections for passengers to their hubs and link remote areas to their route network. These Air-Rail Alliances have helped airlines to stay competitive in the modern aviation market. This short paper will briefly examine two legal issues pertaining to Air-Rail Alliance namely whether an airline can be held liable in case of an accident during the train leg of the journey and how Air-Rail Alliances help airlines to meet their carbon emission reduction goals under the European Union Emissions Trading Scheme (EU ETS) and the ICAO Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Especially during the COVID-19 pandemic, Air-Rail Alliances proved to be a good vehicle for airlines to replace specific flights in their network. The paper will first explain basic terminology relating to the airline’s business before explaining the structure of Air-Rail Alliances in more detail. Afterwards, it will address the question as to whether an airline can be held liable in the case of an accident during the train leg of the journey. The paper will answer this question by arguing that airlines cannot be held liable under international aviation law but rather the train operator under the lex loci of the state in which the accident occurred. Finally, the paper will discuss the structure of both the EU ETS and CORSIA and argue that Air-Rail Alliances are a valuable tool for airlines to meet their CO2 reduction goals. It will be highlighted that both regimes are flexible and adaptive enough to take the unprecedented consequences of the COVID-19 pandemic into account and underline how the law can be adaptive in such a changing environment.
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References
Convention on International Civil Aviation (07 December 1944) 15 UNTS 295 (entered into force 04 April 1947) [Chicago Convention].
Cf Paul Stephen Dempsey, Public International Air Law, 2nd ed (Montreal: Centre for Research in Air and Space Law, 2008) at 512; Benjamyn I Scott & Andrea Trimarchi, Fundamentals of International Aviation Law and Policy, 1st ed (New York: Routledge Taylor & Francis Group, 2019) at 101.
See also Pablo Mendes de Leon & Benjamin Ian Scott “An Analysis of Unmanned Aircraft Systems Under Air Law” in Aleš Završnik, ed, Drones and Unmanned Aerial Systems, (Ljubljana: Springer International Publishing AG, 2015) at 196.
See Juan Carlos Salazar & Peter van Fenema, “International Air Transport Agreements” in Paul Stephen Dempsey & Ram S Jakhu, eds, Routledge Handbook of Public Aviation Law, (New York: Routledge Taylor & Francis Group, 2017) 252 at 252. In recent history, a new form of ASAs has emerged. The so-called Open Skies Agreements allow for unlimited market access of air carriers between the signatories. This is different from older ASAs which limited the numbers of airlines that could be designated by the signatories. See e.g. U.S. Department of State, “Open Skies Agreements”, online: U.S. Department of State <2009-2017.state.gov/e/eb/tra/ata/index.htm>.
See International Air Services Transit Agreement, 07 December 1944, 84 UNTS 389, art 1 (entered into force 30 January 1945). The IASTA has currently 134 parties. See ICAO, “International Air Services Transit Agreement signed at Chicago on 7 December 1945”, online (pdf): ICAO .
Currently there are more than 5000 bilateral Air Service Agreements world-wide. For more details see European Union, “Competition in air transport – workshop proceedings” (25 April 2018), online: Publications Office of the European Union .
See Brian F Havel & Gabriel S Sanchez, The Principles and Practice of International Aviation Law, (New York: Cambridge University Press, 2013) at 123. See also Scott & Trimarchi, supra note 1 at 112.
Dempsey, supra note 1 at 593; Havel & Sanchez, supra note 6 at 123.
Ibid. See also EC, Air Transport Agreement between the United States and the European Community and its Member States (2007) OJ, L 134/4, art 4.
Havel & Sanchez, supra note 6 at 123.
Ibid.
Scott & Trimarchi, supra note 1 at 112.
IATA Definition cited in Benjamyn I Scott & Andrea Trimarchi, Fundamentals of International Aviation Law and Policy, 1st ed (New York: Routledge Taylor & Francis Group, 2020) at 112.
Scott & Trimarchi, supra note 1 at 113.
Ibid.
See e.g. CopaAirlines “Interline Agreements”, online: CopaAirlines .
IATA, “The Future of Interline: A new model for seamless customer journeys” (October 2019), online (pdf): IATA .
See e.g. Michael Milde, International Air Law and ICAO, 3rd ed (The Hague: Eleven International Publishing, 2016) at 123.
See also Havel & Sanchez, supra note 6 at 153; Scott & Trimarchi, supra note 1 at 113.
ICAO, Implications of Airlines Codesharing, Circular 269-AT/110, s 1.1.
Ibid.
Havel & Sanchez, supra note 6 at 153.
Ibid at 148.
Ibid; Scott & Trimarchi, supra note 1 at 113.
Havel & Sanchez, supra note 6 at 153.
Ibid. See also Dempsey, supra note 1 at 4.
The three alliances are, in decreasing order of number of member airlines, Star Alliance, One World and SkyTeam.
Scott & Trimarchi, supra note 5 at 115.
Ibid.
Havel & Sanchez, supra note 6 at 148.
Ibid at 150.
See Alex McWhiter, “Deutsche Bahn to join Star Alliance on August 1st” (04 July 2022), online: Business Traveller . This means that Deutsche Bahn became a rail partner of all Star Alliance member airlines. Usually Air-Rail Alliances are negotiated between the respective airline and railway company individually.
See e.g. Francesca Street “Why airlines want you to go by train” (3 December 2019), online: CNN travel .
See “Austrian AIRail”, online (pdf): OEBB .
Ibid. See also: Austrian Airlines, “AIRail Rail and Fly”, online: Austrian Airlines .
Example: Dorval near Montreal has the IATA Station code XAX, Vienna Airport Train Station VIE.
See United Airlines, “Amtrak”, online: United Airlines ; United and Amtrak downsized their partnership and United customers are no longer able to earn United MileagePlus Miles.
See Wang Ying, “China Eastern Airlines, China State Railway Group join hands to unveil new service” (25 August 2020), online: ChinaDaily
See Lufthansa “Rail&Fly”, online: Lufthansa ; American Airlines, “Rail & Fly”, online: American Airlines ; Emirates, “Codeshare partnership with Deutsche Bahn”, online: Emirates .
See Austrian Airlines, “AIRail Rail and Fly”, online: Austrian Airlines .
See Swiss, “Airtrain”, online: Swiss .
See AirFrance, “Air&Rail combined trips”, online: Air France .
See KLM “KLM, Thalys and NS Dutch Railways have joined forces to replace flights between Brussels and Amsterdam Airport Schiphol” (13 September 2019), online: KLM ; Delta, “Delta launches Air+Rail program offering convenient and seamless train service between Amsterdam and Brussels, Antwerp” (11 August 2021), online: Delta .
See VIA Rail Canada, “Our Partners”, online: ViaRail .
See Via Rail, “Montreal – Trudeau Airport Shuttle”, online: ViaRail ; Via Rail, “Via Rail and UP Express Partnership”, online: ViaRail .
See Hong Kong International Airport, “Airport Express”, online: Hong Kong International Airport ; OEBB, “Travelling to Vienna Airport”, online: OEBB < www.oebb.at/en/regionale-angebote/ueberregionale-angebote/anreise-zum-flughafen>.
See Vienna International Airport, ”City Airport Train / CAT”, online: Vienna International Airport .
See Narita Airport, “Rail”, online: Narita Airport .
The following may serve as an example: a passenger books a flight from the Austrian city Linz to New York via the website of Austrian Airlines (OS). OS would market and sell both legs of the journey under their own flight number. The first leg would get a specific flight number such as OS3528 (operated by OEBB) and the second leg would get OS84 (operated by Austrian Airlines).
Convention for the Unification of certain rules relating to international carriage by air, 12 October 1929 (entered into force 13 February 1933) [Warsaw Convention].
Convention for the Unification of Certain Rules for International Carriage by air, 28 May 1999, UNTS 39917 (entered into force 4 November 2003) [Montreal Convention].
Warsaw Convention, supra note 48, art 1; Montreal Convention, supra note 49, art 1.
Warsaw Convention, supra note 48 Art 1; Montreal Convention, supra note 49, art 1.
Ibid. Simply put: if I book a ticket from Munich to New York via Frankfurt, the Munich-Frankfurt leg still falls under the scope of the conventions although it is a purely national flight within Germany.
Warsaw Convention, supra note 48 art 1; Montreal Convention, supra note 49, art 1.
Warsaw Convention, supra note 48, art 31; Montreal Convention, supra note 49, art 38.
Cf P Paul Fitzgerald, "In Defense of the Nationality of Aircraft" (2011) 36 Ann Air & Sp L 81 at 85; Chicago Convention, supra note 1, art 17.
Fitzgerald, supra note 55 at 85.
Lex Loci is a latin term, which translated would mean “Law of the Place”. In legal literature it is used to describe the applicability of the national law of the country in which an incident occurred.
Ibid.
The European Union Emissions Trading Scheme was established by Directive 2003/87/EC. See DIRECTIVE 2003/87/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 13 October 2003
establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC [2003], OJ L 275/32.
If the industry were a country, it would be among the top ten CO2 producing countries. See European Commission,” Reducing emissions from aviation”, online: European Union .
See European Environment Agency, European Aviation Safety Agency, & Eurocontrol, "European aviation environmental report 2019" (2019), online (pdf): EASA .
See European Commission, “EU Emissions Trading Scheme (EU TS)”, online: European Commission .
See European Union, “EU ETS Handbook” (2015) at 16, online (pdf): European Commission [EU Handbook].
Ibid. See also Patrick Bayer & Michaël Aklin, “The European Union Emissions Trading System reduced CO2 emissions despite low prices” (2020) 117:16 Proc Natl Acad Sci USA 8804 at 8804.
EU Handbook, supra note 63 at 16.
An offset credit can be claimed by a company if they reduce carbon emissions in another country. Example: A company operates in the EU and Brazil. If it reduces its CO2 emissions in Brazil, it can claim offset credits for this undertaking and increase its permissible CO2 in the EU. The ‘offset credit” has been eliminated under Phase 4 that began in January 2021. All carbon emission reductions must be domestic. See European Commission, “Use of international credits”, online: European Union < ec.europa.eu/clima/policies/ets/credits_en>.
See Brian F Havel & John Q Mulligan, “The Triumph of Politics: Reflections on the Judgment of the Court of Justice of the European Union Validating the Inclusion of Non-EU Airlines in the Emissions Trading Scheme” Air & Space L 31:1 1 at 6.
Ibid; see also Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the Community, [2008], OJ L 8/3.
EU Handbook, supra note 63 at 89.
The Air Transport Association of America, American Airlines Inc., Continental Airlines Inc., United Airlines v the Secretary of State for Energy and Climate Change, C-366/10, [2011] ECR I-13755. The plaintiffs challenged the validity of Directive 2008/101 and argued that it stands in conflict with aviation related principles of international treaty law and customary international law, in particular the principle of customary international law that each State has complete and exclusive sovereignty over its airspace, the principle of customary international law that no State may validly purport to subject any part of the high seas to its sovereignty, the principle of customary international law of freedom to fly over the high seas, the principle of customary international law that aircraft overflying the high seas are subject to the exclusive jurisdiction of the country in which they are registered, save as expressly provided for by international treaty, the Chicago Convention (in particular Articles 1, 11, 12, 15 and 24), the Open Skies Agreement (in particular Articles 7, 11(2)(c) and 15(3)) and the Kyoto Protocol (in particular, Article 2(2)). The European Court of Justice rejected the arguments of the plaintiffs mainly on the following grounds: The European Union has not signed the Chicago Convention and can therefore not be bound by it, regardless of the fact that all Member States of the European Union are party to the Chicago Convention. Further, the EU ETS has no actual extraterritorial effect but is only based on the conduct that occurs within the European Union. This decision has been heavily criticised outside the European Union. In this author’s opinion, the court merely attempted to find a legally viable way to protect the institutions of the European Union and its legislation – with questionable outcomes. For an excellent detailed analysis of the decision. See Havel & Mulligan, supra note 67.
Havel & Mulligan, supra note 67 at 6.
Ibid.
Ibid.
EU Handbook, supra note 63 at 90. These parameters did not change in Phase 4. See European Commission, “Emissions cap and allowances”, online: European Union < ec.europa.eu/clima/policies/ets/cap_en >.
Havel & Mulligan, supra note 67 at 7. This prediction proved to be correct. Although, amid the first wave of pandemic lockdowns and the decrease in demand the allowance price fell from 25 to 17 Euros, it started to increase exponentially once airlines started to increase their flight activity. At the date of writing the price for one allowance crossed the 90 Euro threshold. For a detailed graph see .
The cost of an airline for compliance in 2017 was estimated to be 189 million Euro. See Carbon Market Watch, “Better pricing of aviation emissions in the EU is needed, and the Netherlands is championing it” (19 February 2019), online (pdf): Carbonmarketwatch .
See ICAO, “Resolution A39-3: Consolidated statement of continuing ICAO policies and practices related to environmental protection – Global Market-based Measure (MBM) scheme” (2016), online (pdf): ICAO .
See EASA, “Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)”, online: EASA .
Ibid.
Ibid.
Supra note 78.
Ibid.
See European Council, “Aviation emissions: EU confirms its participation in the CORSIA voluntary phase from 2021 and chooses more ambitious option to calculate its offsetting requirements” (25 June 2020), online: European Council .
See ICAO, “Resolution A40-19: Consolidated statement of continuing ICAO policies and practices related to environmental protection - Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)”, online (pdf): ICAO .
See European Environment Agency, “EU ETS emissions continued to decline during the Covid-19 pandemic” (12 January 2022), online: EEA .
See ICAO, “COVID-19 impacts and 2022 CORSIA periodic review”, online: ICAO ; The Economist, “Airlines blame covid-19 for rowing back climate commitments” (04 July 2020), online: The Economist .
The European Union is of the same opinion. The Council agreed to keep the ambitious emission reduction target of 61% unchanged, reduced the emissions value by 117 million tons and decided to increase the annual reduction rate of the cap by 4.2%. See European Council, “Fit for 55 package: Council reaches general approaches relating to emissions reductions and their social impacts” (29 June 2022), online: European Council .
It is estimated that a flight from Berlin to Frankfurt releases an average 105kg of CO2 per passenger while a train on the same route only generates 15kg per passenger. See European Court of Auditors, Special Report “The EU’s Emission Trading System: free allocation of allowances needed better targeting” at 36, online (pdf): ECA /www.eca.europa.eu/lists/ecadocuments/sr20_18/sr_eu-ets_en.pdf>.
See Alexander Michael Pearson, “Lufthansa Embraces Rail Alternative Amid Emissions Pressure” (08 March 2021), online: Bloomberg Quint ; see also Lufthansa “ Lufthansa Express Rail”, online: Lufthansa ; Global Rail Review, “DB and Lufthansa to introduce high-speed connections to Frankfurt Airport” (08 March 2021), online: Global Rail Review .
See KLM “KLM, Thalys and NS Dutch Railways have joined forces to replace flights between Brussels and Amsterdam Airport Schiphol” (13 September 2019), online: KLM .