This chapter examines the Protocol to Amend and Supplement the Agreement between the Government of Australia and the Government of the State of Bahrain relating to Air Services (the Protocol). The Protocol amends Article 15 and the Route Annex of the Australia-Bahrain Air Services Agreement done at Bahrain on 29 April 1995 (herein referred to as the ‘Head Agreement’).
Reasons for Australia to take the proposed treaty action
According to the National Interest Analysis (NIA), the Protocol removes the Head Agreement’s requirements for tariff approval, and replaces them with simplified provisions allowing for designated airlines to determine their own tariffs. These changes will lower the regulatory burden on airlines of Australia and Bahrain in serving the Australia-Bahrain market.
The Protocol increases the commercial flexibility available to Australian airlines in the Bahrain aviation market by removing the requirement to secure prior tariff approvals from Bahrain’s aeronautical authorities. The amended Route Annex provides increased commercial opportunities for Australian airlines, allowing airlines to serve all points in Australia and Bahrain and unrestricted intermediate and beyond points.
The Department of Infrastructure and Regional Development (DIRD) assured the Committee that the changes carried no additional obligations:
The provisions around tariffs that were included in that protocol are consistent with what we usually look to negotiate, and they provide for free pricing for airlines to determine their own airfares for carriage of passengers and cargo, which is consistent with our standard approach.
At Bahrain’s request, Australia has agreed to replace all references in the Head Agreement to ‘the State of Bahrain’ with ‘the Kingdom of Bahrain’, and this change in terminology will support the broader bilateral relationship between Australia and Bahrain.
The obligations as set out in the NIA are provided below.
The Protocol was made in accordance with the Chicago Convention to which Australia and Bahrain are both Parties.
The Head Agreement obliges Australia and Bahrain to allow the designated airlines of each country to operate scheduled air services carrying passengers, cargo and mail between the two countries on the specified routes in accordance with the provisions of the Head Agreement. To facilitate these services, the Head Agreement also includes reciprocal clauses on a range of aviation-related matters such as customs regulation, aviation safety, aviation security and the commercial aspects of airline operations. These clauses are supported by more detailed provisions in associated instruments of less-than-treaty status. The proposed Protocol makes certain amendments to the text of the Head Agreement.
Article 1 of the Protocol replaces all references to the ‘State of Bahrain’ in the Head Agreement with ‘Kingdom of Bahrain’.
Article 2 of the Protocol wholly replaces Article 15 (Tariffs) of the Head Agreement and provides for designated airlines to determine their own tariffs for the services provided under the Head Agreement. Under Article 2(2) of the Protocol, designated airlines will not be required to file tariffs with the aeronautical authorities of either Party, unless required under domestic law. Article 2(3) provides that tariffs charged by designated airlines will be subject to the competition and consumer laws of each Party.
The Route Annex attached to the Head Agreement specifies the routes that may be operated by designated airlines of each Party under the Head Agreement. The amended Route Annex referred to in Article 3 and attached to the Protocol allows airlines to offer services on any routing between all points in Australia and Bahrain. These airline route rights are supplemented by capacity entitlements and traffic rights settled in an associated instrument of less-than-treaty status.
The Protocol will be implemented through existing legislation, including the Air Navigation Act 1920 and the Civil Aviation Act 1988. The International Air Services Commission Act 1992 provides for the allocation of capacity to Australian airlines. No amendments to these Acts or any other legislation are required for the implementation of the proposed Protocol.
Costs of the treaty action
No direct financial costs to the Australian Government are anticipated in the implementation of the Protocol. There are no financial implications for any State or Territory Governments.
The Committee supports the Protocol and recommends that binding treaty action be taken.
The Committee supports the Protocol to Amend and Supplement the Agreement between the Government of Australia and the Government of the State of Bahrain relating to Air Services and recommends that binding treaty action be taken.