On February 14, 1977, the U.S. Embassy in Tripoli submitted a note to the Ministry of Foreign Affairs of the Socialist People's Libyan Arab Jamahiriya responding to the Ministry's note of February 7, 1977, concerning an encounter between a U.S. military aircraft and Libyan Air Force planes on January 27. The Libyan note objected to the U.S. military aircraft entering an air space which the Libyan Air Force uses as a training area and which the Government of Libya considers prohibited to international flight.

Portions of the text of the U.S. note of protest read as follows:

The United States aircraft at no time approached closer than 53 nautical miles from the Libyan coast and at the time it was intercepted by the Libyan planes was 75 nautical miles off Libyan shores. The United States considers that the American aircraft in question was exercising the freedom to fly over the high seas in accordance with international law. The United States does not consider that any nation may validly purport to subject any part of the high seas, or the airspace over the high seas, to its sovereignty, nor to establish prohibited areas of the kind referred to in the Ministry's note. Moreover, the United States considers that the aircraft of the Libyan Air Force that flew dangerously close to the American aircraft failed to pay reasonable regard to the interests of all states in the exercise of the freedom of the high seas, in accordance with international law.

*

Dept. of State File No. P77 190-0038.

For further information concerning the subject of the U.S. position on air space claimed by the Libyan Government, see the 1973 Digest, Ch. 8, § 1, pp. 302-303.

82

Bilateral Agreements

Air Services Agreements

U.S.-Jordan

On March 14 and 16, 1977, the United States and Jordan entered into an Agreement on Scheduled and Nonscheduled Air Services

(TIAS 8553; entered into force on March 16, 1977) amending the Nonscheduled Air Service Agreement, with annexes, signed on September 21, 1974 (TIAS 7954; 25 UST 2911; entered into force on September 21, 1974). The new Agreement, which was entered into in an exchange of notes between Ambassador Thomas R. Pickering for the United States and Minister for Transportation Nadim Zarou for Jordan, accomplishes the following five purposes:

(1) amends the U.S.-Jordan Nonscheduled Air Service Agreement by removing the provisions which permitted Jordan to operate up to 20 charter flights per year originating in the United States without a reciprocal number of charter flights having to originate in Jordan; (2) extends the specified rights of the Nonscheduled Air Service Agreement beyond December 31, 1976, for an indefinite term; (3) adds "one-stop inclusive tour", "special event" and "advance booking" categories to the types of charters the U.S. airlines may operate to Jordan; (4) grants Jordan rights necessary for the Royal Jordanian Airline, Alia, in joint operations with the Syrian Arab Airlines, to operate between them two scheduled roundtrip flights per week between New York and Amman/Damascus; and (5) grants the U.S. airlines rights to operate scheduled air services from the U.S. via intermediate points to Amman and beyond in both directions.

Dept. of State File L/T.

The right of Jordan to engage in joint operations with Syria for two scheduled roundtrip flights each week between New York and Amman/Damascus may be exercised for 18 months from inauguration of the Agreement but no later than Dec. 31, 1978.

Dept. of State File L/T.

U.S.-Syria

In an exchange of notes on March 14 and 16, 1977 (TIAS 8552; entered into force March 16, 1977), between Julius L. Katz, Assistant Secretary of State for Economic and Business Affairs, and Ambassador Sabah Kabbani of the Syrian Arab Republic, the United States and Syria entered into an Agreement Amending and Implementing the Air Transport Agreement of April 28, 1947 (TIAS 3285; 6 UST 2163; 262 UNTS 121; entered into force definitively on June 21, 1955). The new Agreement authorizes Syrian Arab Airlines in a joint operation with Royal Jordanian Airlines to operate two scheduled roundtrip flights per week between Damascus/Amman and New York. This right may be exercised for 18 months from the start of operations or until December 31, 1978, whichever occurs first.

Pending negotiation of a nonscheduled air service agreement, Syria will permit U.S. airlines to operate nonscheduled flights under U.S. charter rules. The Agreement also gives reciprocal rights to overfly

without the requirement to land to make nontraffic stops. Each country may convert and remit to its country revenues earned in the other country in accordance with relevant exchange control regulations.

In response to indications that the U.S. Government would prefer to deal with Arab airlines on a regional rather than on a national basis, the Syrian and Jordanian Governments jointly requested in carly 1976 the right to begin scheduled air service to the United States from Damascus and Amman. On November 1 through 4, 1976, trilateral negotiations were held in Washington, and these negotiations led to agreement.

Dept. of State File L/T.

U.S.-United Kingdom

On July 23, 1977, the United States and the United Kingdom signed at Bermuda an Agreement Concerning Air Services, with annexes and exchange of notes (TIAS 8641; entered into force on July 23, 1977), setting forth the intergovernmental basis for airline services between the two countries. The Agreement was signed for the United States by Secretary of Transportation Brock Adams and Ambassador Alan Boyd and for the United Kingdom by Secretary of State for Trade Edmund Dell and Deputy Secretary Patrick Shovelton. The Agreement, which replaces the Air Services Agreement and Final Act of the Civil Aviation Conference signed by the two countries at Bermuda on February 11, 1946 (TIAS 1507; 60 Stat. 1499; 12 Bevans 726; 3 UNTS 253) (Bermuda 1), establishes the routes over which the airlines of each country may operate and contains provisions dealing with such matters as the establishment of offices and sales facilities in each territory, customs exemptions, and dispute settlement mechanisms. Unlike its predecessor, the new Agreement (Bermuda 2) also has provisions dealing with aviation security, airport user charges, and charter air services.

Bermuda 2 opens several new U.S. cities to nonstop services to points in the United Kingdom through the services of the airlines of both countries. The new Agreement provides traffic rights for U.S. airlines on these routes at intermediate and beyond points and makes one-stop, through plane services possible from any city in the United States to the United Kingdom and beyond.

Dept. of State File L/T.

Excerpts from the joint statement outlining the provisions of the new Agreement, issued by Secretary Dell and Ambassador Boyd, follow:

More American cities are being opened to nonstop flights to and from Great Britain. In the first three years of the agreement, United States airlines will be authorized to serve Atlanta and Dallas/Ft. Worth nonstop to London; a British airline will be authorized to serve Houston nonstop. After this three year period, airlines of both nations will be authorized nonstop service on these routes; one-stop services may be operated immediately. In addition, after three years the United States will be free to select a new gateway point for nonstop air services to London. British competition to the present United States flag service from Seattle to London will be permitted in the new agreement. In addition, the United States receives the rights to fly between Anchorage and London, a route that British Airways today operate en route to Tokyo. The present requirement that London-San Francisco flights by a United Kingdom airline operate via New York will be dropped. As a result, British Airways intend to inaugurate London-San Francisco nonstop flights on April 1, 1978.

As soon as appropriate designations have been made and operating permits issued, services between the relevant points may begin. In the case of Houston the selected British carrier, British Caledonia Airways Ltd, plans to start operations on October 23. In the case of new U.S. airline nonstop services, authorization must be first obtained from the U.S. Civil Aeronautics Board (CAB).

In addition to the new nonstop services, British airlines will be free to combine their U.S. points on each route as they choose. U.S. airlines will be permitted, subject to U.S. CAB approval, to operate direct flights to London from any U.S. city with an intermediate stop at one of the fourteen designated U.S. gateway cities. Moreover, U.S. flights may continue beyond London to any other city with transit and on-line connecting traffic rights; U.K. airlines will be permitted to operate flights from Europe through London to the United States and points beyond.

On the North Atlantic the problem of "excess capacity" will be of continuing concern to the two nations. The Agreement provides a consultative process to deal with cases of excess provision of capacity, while ensuring that the designated airlines retain adequate scope for managerial initiative in establishng schedules and that the overall market share achieved by each designated airline will depend upon passenger choice rather than the operation of any formula or limitation mechanism. It is also the objective of the two nations to avoid unduly frequent invocation of this consultative mechanism in order to avoid an undue burden of detailed supervision of airline scheduling by governments. The hope of the two nations is that these provisions will lead to the better use of resources and help to keep fares down.

New machinery has also been instituted to cope with problems of fares and rates on services between the territories of the two nations. A Tariff Working Group is being set up to review standards for ratesetting and make recommendations on pricing policy. The two governments hope these recommendations will lead to air fares that are more competitive and better attuned to the requirements of the public.

The United States and the United Kingdom will each have two passenger airlines authorized to operate the Transatlantic route. between London and New York-British Airways, Laker Airways, Pan American and TWA. The new Laker Airways Skytrain service is due to start on or about 26 September; competitive services by the other airlines on the New York-London route are proposed. Each side is permitted one other Transatlantic route of its choice on which it may designate two airlines for passenger services. On other transatlantic routes, each nation may designate only one airline for passenger services. For routes and services in other market areas there is no general limitation on the number of designated airlines.

In the Pacific a United Kingdom airline received additional rights between Hong Kong and the American West Coast via Japan. United States airlines have obtained certain new operating rights between Hong Kong and Singapore and between Osaka and Hong Kong.

All existing U.S. routes to Bermuda have been renewed. Atlanta, Miami and Philadelphia have been added as new U.S. gateways to Bermuda. U.K. airlines, should any wish to serve the U.S.-Bermuda market, will have their choice of three U.S. gateways. In addition, the United States gains rights from Atlanta, Baltimore, Miami and Washington through Bermuda to two points on the European Continent to be determined later.

New routes have also been granted between U.K. points in the Caribbean and the United States. U.K. airlines operating in this area will in the future have the choice of serving any two of the following U.S. mainland gateways Baltimore, Houston, Miami, New Orleans, Tampa, Washington.

All-cargo routes have been specified separately from passenger routes. There will be new and expanded opportunities in this field which should be of advantage to airlines and shippers alike.

Charter Services. For the first time in a bilateral air services agreement charter services have been covered. The two countries have agreed that it is desirable to work towards a multilateral arrangement for charter air services. They have also agreed as soon as possible and, in any event, before the end of the year to enter into negotiations towards a bilateral agreement covering all aspects of charter services. In the absence of agreement by March 31, 1978, the two countries agreed to consult further with a view to a continuation of liberal arrangements for charter air services.

Air Services Agreement between the Government of the United States and the Government of the United Kingdom and Great Britain and Northern Ireland: Bermuda 2, U.S. Dept. of Transportation, Washington, D.C. 20590, July 23, 1977, pp. 63-65.

The United States and the United Kingdom entered an Agreement concerning Air Services, with Annexes and Exchange of Letters at Bermuda on July 23, 1977 (TIAS 8641; entered into force on July 23, 1977) (Bermuda II), and this Agreement was amended on Sept. 19 and 23, 1977, with an exchange of notes concerning various low-fare innovations including Skytrain. The amending Sept. 19 and 23, 1977, Agreement (TIAS 8811) reads in part as follows: