Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/50881
respect of competition law issues and advises airlines, freight forwarders, and national and international corporations and associations. "I get quite passionate about my files. I come into work every day very excited to see what's going on. And that's been the case for most of the lawyers I've met over the years who practise in this field." So you can imagine how exciting things are for them these days as the airline industry in Canada and else- where slog through the most turbulent times in the brief history of commercial aviation. Forced to operate under dec- ades-old regulatory and safety regimes that hamper their ability to meet myr- iad modern-day business challenges, virtually every big-name carrier here and abroad has been forced into bank- ruptcy or creditor protection in recent years. Now that fight to survive is driv- ing highly complex mergers and con- solidations and sparking unseemly wars of words between national rivals over access to each other's air space. "It's not a healthy economic model," says Laura Safran, one-time vice president, law and corporate secretary of now-defunct Canadian Airlines International Ltd., who now represents clients from air carriers and leasing companies to charterers and aviation underwriters since returning. "The industry is struggling to find a new one." The roots of the industry's woes, legal experts in the field say, lie in the laws that govern competition and restrict foreign ownership in countries around the world. And though they vary in degree and scope, those laws invariably respect and reflect the international ground rules on airspace, safety, and aircraft registration that were set in 1947 with the signing of the Convention on International Civil Aviation. Also known as the Chicago Convention, it established the International Civil Aviation Organization, the Montreal- based United Nations agency that is charged with co-ordinating and regulat- ing international air travel. Supported by 18 regularly updated annexes that contain standards and recommended practices for everything from air traffic control and airport design to naviga- tional aids and aircraft accident investi- gation, the convention also grants every state "complete and exclusive sover- eignty over the airspace above its ter- ritory." At the same time, countries around the world put laws in place to block foreigners from owning and control- ling aviation companies and, ultim- ately, their aircraft, which were deemed essential for dealing with national mil- itary and civil emergencies. In Canada and the United States, for example, for- eign ownership in airline companies — from national carriers like Air Canada to regional one-plane operations — is capped at 25 per cent of voting equity (although under Canada's Open Skies policy, which the Conservatives have re-baptized Blue Sky, the rate is in the process of being raised to 49 per cent Untitled-3 1 INHOUSE JUNE 2010 • 4/30/10 12:42:52 PM 39