ICAO's Worldwide Air Transport Conference (Montreal, 1994), which examined the present and future regulation of international air transport, recommended that ICAO proceeded with studies and develop recommendations on a number of important issues, including the development and refinement of a safeguard mechanism for fair and effective competition in international air transport. ICAO's Air Transport Regulation Panel produced the following introductory explanatory notes and recommendations, which were approved by the Council on 30 May 1997 for the guidance of and optional use by States:
Safeguard mechanism
In addressing a safeguard mechanism for fair competition when two or more States have agreed to move toward a less controlled regime, the Panel decided it was impractical to develop a code of conduct which would define with any precision actions which would constitute unfair competition in all situations. Consequently, it suggested that States would be better able to agree mutually, with respect to the bilateral or multilateral relationship concerned, what would be regarded as unfair competition, using as a guide for that purpose one or more of six examples provided.
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THE PANEL RECOMMENDS: |
that States wishing to move towards liberalization of air services in their bilateral and multilateral relationships might consider mutually agreeing on the kinds of competitive practices by a carrier or carriers which would be regarded as unfair, including using some or all of the following as signals of possible unfair competitive behaviour meriting closer examination: charging fares and rates on routes at levels which are, in the aggregate, insufficient to cover the costs of providing the services to which they relate; the addition of excessive capacity or frequency of service; the practices in question are sustained rather than temporary; the practices in question have a serious economic effect on, or cause significant economic damage to, another carrier; the practices in question reflect an apparent intent or have the probable effect, of crippling, excluding or driving another carrier from the market; and - behaviour indicating an abuse of dominant position on a route.
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