Fifth freedom rights of Gulf carriers face court challenge

Two recent cases of 'fifth freedom' rights granted by the Italian Civil Aviation Authority (ENAC) to foreign carriers have characterised the mood of the Italian air transport sector over the past few months. In both cases domestic competitors have challenged the relevant ENAC authorisations before the administrative courts.

The first case involved Emirates, which requested slots and traffic rights from ENAC to extend one of its three daily flights from Dubai to Milan Malpensa Airport onwards to New York John F Kennedy International Airport from October 1 2013. ENAC authorised the proposed services for 18 months on an extra-bilateral basis, thus granting the leading UAE airline the right to land in Italian territory, board passengers and take them to a third state where they would finally disembark (a permission known as 'beyond rights'). Such a long-haul route can be considered an exercise of the 'fifth freedom' (which the Chicago Convention 1944 leaves to international agreements between the states concerned), as it allows Emirates to operate scheduled flights from Dubai to New York while setting Italy as a stopover destination where new passengers may embark.

The traffic rights granted to Emirates were challenged by Assaereo, the Italian Air Carrier Association, and Alitalia CAI before the Lazio Administrative Court. The two parties argued that the authorisation at issue breached certain provisions of the bilateral agreement between Italy and the United Arab Emirates (signed in Abu Dhabi on April 3 1991). At the first hearing of the proceeding, the court resolved not to suspend ENAC's authorisation pending the challenge of Assaereo and Alitalia CAI. The hearing on the merits of the challenge is set for January 30 2014.

Another fast-growing Gulf airline, Qatar Airways, requested slots and traffic rights to expand its network of flights worldwide, using Italy as a stopover between the East/Far East and the United States. The airline's request to extend its three weekly cargo flights from Doha to Milan Malpensa Airport onwards to Chicago O'Hare International Airport received a positive response from ENAC, which granted fifth freedom rights.

The authorisation granted by ENAC to Qatar Airways was also challenged before the Lazio Administrative Court, in this case by Cargolux Italia, a carrier operating freight services. Cargolux Italia's main argument against the decision was based on the alleged breach of EU Regulation 847/2004 (regarding the negotiation and implementation of air service agreements between EU member states and third countries). At the first hearing, the court (in line with its prior resolution in the Emirates case) did not suspend the rights granted to Qatar Airways and deferred the proceeding to April 10 2014 to hear the merits of the parties' arguments, with consideration for the relevance to and prospective impact on national air transport.

For the time being, Emirates and Qatar Airways retain their authorisation to perform long-haul routes from their main hubs (respectively, Dubai and Doha) to the United States while using Milan Malpensa as a strategic European stopover. This has consequently strengthened Milan Malpensa's key role as a major Italian cargo airport. The attempts of the Italian players to limit the rise of the Gulf carriers have thus been thwarted until the respective hearings later this year, when the parties will discuss the merits of ENAC's authorisations before the courts.

For further information on this topic please contact Laura Pierallini at Studio Legale Pierallini e Associati by telephone (+39 06 88 41 713), fax (+39 06 88 40 249) or email (l.pierallini@pierallini.it). The Studio Legale Pierallini e Associati website can be accessed at www.studiopierallini.it.