draft in progress - university of chicago law school · 2017-08-11 · draft – in progress...

Draft – in progress

Behavioral International Air Law and Economics

Laura Wanlu ZHANG1

Abstract

Whereas the rational choice approach to international law has been accepted in legal

scholarship and international law analysis, challenges to the rational choice paradigm in

economic analysis of international air law have hitherto not been explored. Nevertheless,

behavioral law and economics have been successfully applied to national law corpus.

Building on all those understandings, this Article explores the potential and challenges of

extending the behavioral law and economics approach to international air law and thus to

further refine our understanding of airspace management. It looks specifically at the Chicago

Convention and compliance questions. This hinges with increased use of empirical research

in international law, a clear desideratum for evidence-based air law.

Introduction

Since its inception, aviation is correlated to inherent risks – natural or human-made threats and

related technical hazards. To mitigate risks, States and airlines have to make ‘rational choices’ all

the time. While the behavioral law and economics has been widely applied to national law, it has

not been extensively used in international air law.

Traditionally, international air law only addresses to States and presumes that States take

of individuals/airlines. However, activities from non-State actors have been growing and

presented increasing threats to overflown flights. In a non-international armed conflict, the

territorial government may have lost the control of part of its territory and people. Now then, for

the downing of civil aircraft over conflict zones, who is to blame, the territorial government, the

air traffic management service, rebels, or airlines? How to account for their behaviors? How to

balance the economic incentives of airlines and private air traffic management service against

aviation safety and security?

The rational-choice (RC) paradigm is the methodological foundation of this study.

Analyzing international law air through the RC perspective is a process to scrutinize and apply

economic, legal, and political in a holistic way. Unfortunately, there has been no systematic

analysis of international air law using behavioral economics. The purpose of this article is to take

a first step in exploring how the law and economics approach can be fruitfully applied in air law.

I shall proceed as follows. First, I will present an overview of economic analysis of

international air law. Second, I will highlight some conundrums in applying the economic

1 PhD candidate, Leiden University, International Institute of Air & Space Law. Comments can be addressed to

[email protected]. The author is thankful to Chrys Wanjiru for her assistance in collecting data from South

Africa civil aviation authority.


analysis with the comparative empirical analysis of various national aviation warning systems.

Third, the possible application of behavior international law and economics will be illustrated,

including the law-making design centered upon ‘cooperation’.

I. Economic Analysis of International Air law

The downing of civil aircraft over conflict zones present serious challenges for the current

international air law, especially regarding powers and responsibilities of public and private

entities. Considering the extensiveness of areas experiencing current hostilities, the question of

whether public or private entities should take responsibility following such accidents has become

a highly topical issue. Under Article 9 of the Chicago Convention, States exercising complete and

exclusive sovereignty over their territory are allowed the right to close their flight-paths.

Consequently, a critical question has been brought to light regarding whether States are obliged

to close their airspace during times when their territories endure ongoing armed conflicts. In this

author’s view, the problem results from the varying perceptions concerning fragmentation within

the international law system. To protect the safety of civilians in the sky, this article scrutinizes

the legality of allowing open airspace over conflict zones.

1. The Chicago Convention2

Put simply, the most specific and relevant rules relating to the present problem can be found in

the Chicago Convention.

a. Article 1

Article 1 of the Chicago Convention recognizes that every State has “complete and exclusive”

sovereignty over the airspace above its territory. Therefore, this denotes that the State is the only

legitimate and competent entity to collect safety intelligence regarding conflicts on its territory; in

contrast, airspace users can only relay national authorities’ information to make decisions.

Notably, in terms of privatized Air Traffic Control, it is necessary to clarify that they be-

long to the domain of public power because their conduct can be attributed to the State. Firstly,

according to Article 28 of Chicago Convention, States have the obligation to provide an air

navigation service, meaning it is an inherently public function. Secondly, according to customary

international law enshrined in ASIWA (Articles on Responsibility of States for Internationally

Wrongful Acts), the conduct of an individual shall be considered an act of a State if the person in

fact acts on the instructions of, or under the control of, that State.3 Air traffic control agencies

2 Convention on Civil Aviation (adopted 7 December 1944, entered into force 4 April 1947) 15 UNTS 295 (Chicago

Convention). Its Annexes can be found on http://www.icao.int/safety/safetymanagement/pages/sarps.aspx. 3 International Law Commission, ‘Draft Articles on Responsibility of States for Internationally Wrongful Acts, with

commentaries’ the Yearbook of the International Law Commission, 2001, vol. II, Part II, 38. It refers to the Case

concerning the difference between New Zealand and France concerning the interpretation or application of two

agreements concluded on 9 July 1986 and which related to the problems arising from the Rainbow Warrior (New


performing these public functions are exercising government power, therefore, their conduct shall

be attributed to the State. The jurisprudence of the Überlingen collision case has effectively con-

firmed this point. In this particular case, the accident occurred in German airspace and the air

navigation services were provided by a Swiss-based company. The court ruled that responsibility

exclusively rested upon Germany on the ground that air traffic control is a sovereign task and it

must be performed by State authorities.4

b. Article 9

Article 9 of Chicago Convention declares that States may, “for reasons of military necessity or

public safety, restrict or prohibit uniformly the aircraft of other States from flying over certain

areas of its territory.” The permissive language of Article 9 is in line with a State’s sovereignty

over its airspace as specified in Article 1 of the Chicago Convention.5 States have the right to

decide whether or not to use certain airspace at their own discretion.6

Until now, the legality of allowing open airspace over conflict zones has not been ad-

dressed by the Chicago Convention. The paper now then turns to the economic analysis

perspective.

2. Behavior Economics

The standard economic models assume routinely that self-regarding interest (often material self-

interest) is the sole motivation of all actors.7 But plenty of experimental research has shown that

individuals are strongly motivated by other-regarding/altruistic and social preferences.8 Concerns

Zealand v France) (Arbitration Tribunal) (1990) 82 ILR 215. See also Ruwantissa Abeyratne, ‘State Liability for

Negligent Acts of Autonomous Air Navigation Service Provider’(2006) 22 Professional Negligence 176, 183-192. 4 The orginal text is: “Flugsicherung und Luftaufsicht gem. §§ 27c, 29 Abs. 1 LuftVG obliegen, wie oben aus-

geführt, der Beklagten innerhalb ihres Staatsgebietes als hoheitliche Aufgabe.” Landgericht Konstanz 4. Zivilkam-

mer, Im Namen des Volkes Grund- und Teilurteil, Bashkirian Airlines v Bundesrepublik Deutschland, 27 Juli 2006,

48. 5 During ICAO Special Group’s Meeting on Reviewing the Application of ICAO Treaties Relating to Conflict Zones

in Montreal from 13 to 15 July 2015, one delegation recalled the permissive language of Article 9 and pro-posed to

replace the word “may” with “shall” in order to clearly establish the responsibility of States with regard to the risks

posed by military or other hazardous activities. But other delegations remarked that the permissive language of the

Article correctly reflected a State’s sovereignty over its airspace as specified. In the end, most States agree that

sovereignty is the stepping stone of the Chicago Convention. Therefore, States have the “freedom” to establish any

restrictions to their own airspace, and the word “may” in Article 9 should be kept as it is. However, for the problems

exposed, some delegations stressed the solutions are to develop guidance materials, such as Cir.330 and Doc. 9554 to

de facto improve the oversight of safe use of airspace. See ICAO, ‘Special Group to Review the Application of

ICAO Treaties Relating to Conflict Zones’ (18 September 2015) SGRIT-CZ/1 Draft Report, paras. 2.6-2.9. 6 Ruwantissa Abeyratne, Convention on International Civil Aviation: A Commentary (Springe 2014), 13-45.

7 Van Aaken, Anne. “Behavioral International Law and Economics.” Harvard International Law Journal, vol. 55, no.

2, 2014, 421, 432. 8 This started with the so-called Ultimatum Game. See Werner Guth et al., An Experimental Analysis of Ultimatium

Bargaining, 3 J. Econ. Behav. Org. 367 (1982). Other games include: the Dictator Game, the Power to Take Game,

the Third Party Punishment Game, the Gift Exchange Game and the Trust Game. For details on the experiments, see

Ernst Fehr & Klaus M. Schmidt, The Economics of Fairness, Reciprocity and Altruism—Experimental Evidence and


for the well-being of others (for fairness and reciprocity) need to be taken into account if

behavior in social interactions is to be understood.9 “[T]he real question is no longer whether

many people have other-regarding preferences, but under which conditions these preferences

have important economic and social effects.”10

Those preferences are especially important for

explaining collective action and multilateral cooperation that are central to international law.11

Altruism is a form of unconditional kindness, that is, a favor given does not emerge as a

response to a favor received.12

A known conditional form of altruism and/or envy is the so-called

inequity aversion,13

a situation in which, in addition to the actor’s material self-interest, her utility

increases if the allocation of material payoffs becomes more equitable. Such reciprocity has been

recognized by social scientists14

as one of the main basic social relations that constitute societies

and IR.15

Also, international lawyers have an intuitive affinity for the concept.16

In Behavioral

economics, three possible rationales are identified: (1) self-sustaining sequences of mutual favors

that can be solely self-interested; (2) balance, often related to equality and fairness concerns

(reciprocity strictu sensu); (3) liking, because being favored induces liking, which induces

favoring (a sort of Facebook effect), or because liking can directly result from being liked.17

With respect to the issue of airspace, the rationales of ‘self-sustaining sequences’ and

‘balance’ can be especially useful. It is an altruistic act for the State to establish prohibited

airspace to protect the safety of overflown passengers. A State sacrifices his or her own resources,

air traffic management revenue in order to improve the well-being of others. Further and more

important, to label oneself as a ‘non-flyable’ State also has undesirable political effect in the

New Theories, in I Handbook of the Economics of Giving, Altruism and Reciprocity 621 (Serge Kolm & Jean

Mercier Ythier eds., 2006). 9 Fehr & Schmidt, ibid 55.

10 Ibid, 617.

11 Eric Posner & Jack L. Goldsmith, "A Theory of Customary International Law" ( John M. Olin Program in Law

and Economics Working Paper No. 63, 1998). Eric Posner, "Erga Omnes Norms, Institutionalization, and

constitutionalism in International Law" ( John M. Olin Program in Law and Economics Working Paper No. 419,

2008). Alan O. Sykes, "The Economics of Public International Law" ( John M. Olin Program in Law and Economics

Working Paper No. 216, 2004). 12

Jon Elster, Altruistic Behavior and Altruistic Motivations, in Handbook of the Economics of Giving, Altruism and

Reciprocity, supra note 8, at 184; Gary Charness & Matthew Rabin, Under- standing Social Preferences with Simple

Tests, 117 Q.J. Econ. 817 (2002). 13

Gary E. Bolton & Axel Ockenfels, A Theory of Equity, Reciprocity and Competition, 100 Am. Econ. Rev. 166

(2000). 14

Serge Kolm, Reciprocity: Its Scope, Rationales, and Consequences, in Handbook of the Economics of Giving,

Altruism and Reciprocity, supra note 8, at 371. 15

Beth V. Yarbrough & Robert M. Yarbrough, Reciprocity, Bilateralism, and Economic “Hostages”: Self-Enforcing

Agreements in International Trade, 30 Int. Stud. Q. 7 (1986); Francesco Parisi & Nita Ghei, The Role of Reciprocity

in International Law, 36 Cornell Int’l L.J. 93 (2003). 16

Bruno Simma, Das Reziprozita¨tselement im Zustandekommen vo¨ lkerrechtlicher Vertra¨ge. Gedanken zu einem

Bauprinzip der internationalen Rechtsbeziehungen (1972);Bruno Simma, Das Reziprozita¨tselement in der

Entstehung des olkergewohnheitsrechts (1970). Van Aaken, Anne. “Behavioral International Law and

Economics.” Harvard International Law Journal, vol. 55, no. 2, 2014, 421, 433. 17

Serge Kolm, Reciprocity: Its Scope, Rationales, and Consequences, in Handbook of the Economics of Giving,

Altruism and Reciprocity, supra note 8, at 371.


international community, which leads to an negative image of ‘a failed State’.18

Therefore, it is

difficult for States to declare their airspace unsafe, in face of domestic armed conflict.

If international law also thinks this line and makes such a choice, the air law system then

is not self-sustainable. Airlines will have no way to obtain accurate information to plan a safe

route. Passengers’ confidence in aviation safety will decline and this industry will face a strong

backlash. In the absence of a territorial State’s proactive measures, can we rely on other actors,

i.e., the overflown airlines and other States’ warnings/evaluation of airspace safety? Whose

rationality should servers as a clincher? This paper now turns to this question from an economic

perspective.

II. The Challenges to the Economic Analysis

Following the downing of Malaysia Airlines Flight MH17, an Task Force was set up by

International Civil Aviation Organization to address this issue. During the said Conference, it was

agreed that there was a need for a centralized repository of relevant information, Conflict Zone

Information Repository (ICAO CZIR). This information repository would support the availability

of notices to airmen (NOTAMs), aeronautical information circulars (AICs), aeronautical

information publication supplements (AIPs) and other types of operational information intended

to support the conduct of comprehensive risk assessments related to operations in conflict

zones.19

There had been significant progress on the part of States and industry in developing new

and innovative systems, separate from the ICAO CZIR, to share information concerning risks

associated with operations over or near conflict zones. In considering these developments and

noting the decline in the number of postings in the ICAO CZIR, this study should also look into

the practice of sharing risk information in the applicable risk assessment process of States and

industry.

The hypothesis was that there is a lack of uniformity and user-friendliness of the content

and mechanisms employed to share the information. States and industry indicated that they still

base their risk assessment on operating advisories and restrictions, which concern publications of

a State directed to its own operators for operations within and outside the State’s sovereign

airspace, than airspace advisories and restrictions, which are published by a State for its own

sovereign or delegated airspace over high seas.20

1. Whose Rationality?

18

Akpınarlı, Neyire. The Fragility of the 'failed State' Paradigm : A Different International Law Perception of the

Absence of Effective Government. Developments in International Law ; Vol. 63. 822043963. Leiden [etc.]: Nijhoff,

2010. Haims, M., Gompert, D., & Treverton, G. (2004). Breaking the Failed-State Cycle (Occasional paper Breaking

the failed-state cycle). Santa Monica: RAND Corporation. 19

http://www.icao.int/czir/Pages/default.aspx. 20

ICAO, ‘Report on the Conflict Zone Information Repository (CZIR)’, C-WP/1455, 6 Feb, 2017.


For the purpose of this study, a State’s own evaluation/warning for its own sovereign airspace is

categorized “internal” risk assessment; whereas those published by another State are “external”

assessment.

With respect to the internal assessment, it is well consistent with the sovereignty principle

enshrined in Article 1 of the Chicago Convention. Suppose Country A declares certain part of its

sovereign/delegated airspace as dangerous and establish prohibited/restricted airspace, then none

civil flight can fly over this area.

Another scenario may be more complicated - Country A did not consider its airspace as

unsafe and has not issue any notice, but Country B command its airlines not to fly over A.21

This

may pose confusion because not only Country B, but Country C, D,E… all can have their own

evaluation regarding A’s airspace. They may evaluate its risk differently and thus airlines

registered in different countries may receive dissimilar information.22

To validate this hypothesis, a survey was conducted to analyze how differently various

countries evaluate whether certain airspace is dangerous or not. Data are obtained from six

jurisdictions: USA, UK, France, UAE, China and South Africa (Figure I -V).

A clarification needs to make here is that the data is on how many FIR (flight information

regions) in one country are declared prohibited/restricted by different States. This does not

necessarily reflect how many international traffic is reduced over that country. If Country B

prohibited its airline to fly over Country A, there will be no B’s traffic over A. However, if

Country C does not issue warnings or NOTAMS for Country A, this does not mean C is not

vigilant or C’s airlines still fly over A. It could well be that C has no international route over

Country A ever.

This study collected data from six countries: USA, UK, France, China, UAE and South

Africa. The data concerns prohibited/restricted airspace due to armed conflict. Such information

is promulgated in various forms, be it (NOTAMs), AICs, AIPs, Safety bulletins or flying

warnings.

We can see the inconsistency and confusion with respect to how safe an airspace is.

Different countries give different assessments and conclusions on whether airlines should fly

over one particular airspace. There could be many reasons for diverse risk assessments. Geo-

political reason may be a salient one. To analyses this aspect or harmonize States’ perception on

certain airspace is a long way to go.

While the amount of information available in the ICAO repository has dropped

substantially, world events that can generate risks to civil aviation have not declined. Further

21

E.g. ‘There is a risk of attacks against US civil aviation in Afghanistan’. FAA, Notice to Airmen KICZ A0022/16,

https://www.faa.gov/air_traffic/publications/us_restrictions/media/kicz_a0022_16_afghanistan.pdf 22

For instance, US NOTAMS only apply to : 1) All US. air carriers and commercial operators; 2) all persons

exercising the privileges of an airman certificate issued by the FAA, except such persons operating US - registered

aircraft for a foreign air carrier; 3) and all operators of aircraft registered in the united states, except where the

operator of such aircraft is a foreign air carrier. FAA, ‘Prohibitions, Restrictions and Notices’,

https://www.faa.gov/air_traffic/publications/us_restrictions/.


evidence of this can be substantiated by the amount of advisories and restrictions pertaining to

risks from conflict zones issued by States through their own channels.

After collecting all the data and dot them in Figures I-V, the author uses the following

chart to code the info and produced the Figure VI.

Prohibited FIR Restricted FIR Open FIR

Situations The whole FIR is not

accessible anyway

The FIR is declared

dangerous but leave certain

latitude (x) or airways open

Not declared as

dangerous

Symbol FIR abbreviation FIR abbreviation with safe

latitude and airways indicated

N/A23

Valuation24

100 (x/66025

) x 100 0

Statistics from Figure VI show different countries evaluate a FIR's safety differently. For

example, for the Pakistan airspace, FIR OPKR and OPLR,26

1) US considers all of it as

dangerous and command all US flight avoid it;27

2) the UK considers it as risky but allow planes

to fly above FL 250;28

3) France took a similar position but flights can operate above FL 240.29

Similar situations happen with the airspace of Yemen where divergent risk evaluations came out

from different CAAs.30

This will bring the confusion to code-share flights. Because potentially the two carriers

may receive different directions from their registry countries. If we leave it to States to assess the

safety situation pursuant to statistical data, it will indeed lead to diverging interpretations and

hence civil aviation will be in peril. Current international law is not clear on 'whose' assessment

should be the ultimate authority. This leads to international chaos and add to the uncertainty of air

safety.

23

For the data from US, EASA and UAE, N/A means aircraft from those jurisdictions still fly to/over this area. US,

EASA and UAE adopt an approach that absent of CAA’s declaration that an FIR is declared dangerous, it is safe;

whereas for China, the data is different. We have the data on the destination and airways taken by international flight

from mainland China, but China Civil Aviation Authority never officially declares a foreign FIR should be avoided.

Therefore, N/A means Chinese airlines still fly to this area. 24

Some NOTAMS just state the “whole” country X’s airspace is not safe, so all FIRs concerned this country are

declared prohibited or restricted. For how may FIRs are pertinent to such a country, the author refers to ICAO

database, ‘Current FIR Status’, http://www.icao.int/safety/FITS/Lists/Current%20FIR%20Status/FPL%20Status.aspx. 25

For civil aviation, normally the highest latitude an air traffic control radar can reach is FL 660, so we assume the

height of an FIR is FL 660 for the purpose of this study. 26

In aviation, a flight information region (FIR) is a specified region of airspace in which a flight information service

and an alerting service (ALRS) are provided. For the overview of FIRs, please refer to https://gis.icao.int/firmsd/. 27

US FAA, KICZ NOTAM A0024/16 – Security – United States of America Advisory for Pakistan, 2016. 28

NOTAM AFP56646 issued by United Kingdom Civil Aviation Authority (UK CAA), Oct 2015. 29

AIC France Circular A 23/15 issued by DGAC-France, Oct 2015. 30

CAA UK NOTAM V0051/15; AIC France Circular A 05/15 issued by DGAC-France; FAA NOTAM FDC

5/5575 - Security – United States of America Flight Prohibition for the Sanaa Flight Information Region (OYSC

FIR).

http://www.icao.int/safety/FITS/Lists/Current%20FIR%20Status/FPL%20Status.aspx


2. The Airline as a Rational Actor?

The aforementioned survey indicated that despite an adequate volume of information, it

was often difficult to take in the precise information. Existing solutions do not yet provide

information in a uniform and automated manner, which continues to be an impediment in the

timely sharing of risk relevant information. A key finding is that different countries deliver

different safety assessment about a particular airspace, resulting in the disruption of the timely

availability of critical information. At present, there are no ICAO provisions that address both the

content, format and mode of transmission of information specifically related to risks associated

with flights near or in conflict zones.

Airlines, especially those code-sharing flight, 31

may face contradictory instructions from

respective national authorities. Under such circumstances, which instruction should a fight obey

and which to ignore?

Suppose Country A prohibits its airline A1 to fly over Country X, whereas Country B and

its airline B1 have no such concern. If A1 and B1 code-share to run a route over Country X,

should the aircraft take a detour? Does the flight always have to be better-safe-than-sorry and

conform to Country A’s NOTAM, whereas such a NOTAM’s applicability excludes foreign

aircraft operated by a foreign airline?

For instance, the US Department of Transport held that foreign carriers are expected to

adhere to all FAA flight prohibitions while carrying a U.S. carrier’s code, including while

conducting foreign air transportation abroad.32

The FAA issues flight prohibitions for U.S. civil

aviation regarding flight operations in airspace controlled by other countries as U.S. Flight Data

Center (FDC) NOTAMs and Special Federal Aviation Regulations (SFARs). These prohibitions

or warnings shall be respected not only by US airlines but any foreign carrier code-sharing with a

US airline. But such practice has not been taken on board by other States.

It is clear that, with respect to eastern Ukraine, a number of airlines, including all U.S.

commercial airlines, British Airways, Qantas and Cathay Pacific did avoid Ukrainian airspace for

months before the downing of MH17 after receiving a Notice to Airmen (NOTAM).33

But why

KLM and Malaysia Airlines still chose to fly over that dangerous area?

At the present time, there are 13 States suffering armed conflicts.34

Maybe our mind is

numbed by such abstract figures and cannot comprehend them. The graphically concrete

31

A code-share agreement between airlines effectively allows each airline to sell seats on its partners’ planes as if it

owned the seats. 32

US Department of Transportation Office of the Secretary Washington, D.C. Order 2016-11-11. ‘Qatar Airways

Q.C.S.C. Violations of 49 U.S.C.§§ 41301 and 41712. ’Docket OST 2016-0002. 33

U.S. FDC 4/2182 (A0025/14)–null AIRSPACE SPECIAL NOTICE UKRAINE POTENTIALLY HAZARDOUS

SITUATION -SIMFEROPOL (UKFV) AND DNEPROPETROVSK (UKDV) FLIGHT INFORMATION RE-

GIONS (FIR). See also Rupert Neate and Jessica Glenza, ‘Many airlines have avoided Ukrainian airspace for months’

(London, 18 July 2014) <http://www.theguardian.com/world/2014/jul/18/airlines-avoid-ukraine-airspace-mh17>

accessed 14 May 2016. 34

International Civil Aviation Organisation, Conflict Zone Information Repository

<http://www.icao.int/czir/Pages/posts.aspx?state=default> accessed 14 May 2016. Uppsala Universitet, UCDP/PRIO


description would be “dozens of passenger planes are still flying over war zones and conflict

areas on a daily basis”.35

As detours are usually fairly costly for airlines, taking the risky route above conflict zones

is desirable from an economic perspective. This explains why there has been no harsh reproach

towards airlines in the aviation community. The concept of ‘efficient breach’36

has direct

applicability to the law regulating airlines. Analogous arguments can be made from economic

analysis of domestic contract law.37

Before turning to the argument in more detail, it is imperative to clarify that it is, so far,

not ‘illegal’ for airlines to fly over conflict areas. ‘Breach’ or noncompliance herein is not strictly

in a legal sense, but a breach of passengers’ expectation. Air flight is expected to eliminate all

possible risks and play safe. Such a breach of expectations can be excused due to the fact that the

costs may exceed the benefit, the same as those contractual clauses force majeure etc. As aviation

naturally needs to traverse vast areas, it is not practically for every flight to avoid every conflict

zone. Plainly, some African conflicts where the main weapons are machetes and where no missile

capability is present may present a different scenario than the MH17. Consequently, airlines have

little concern flying over the Democratic Republic of the Congo whereas they would be most

alarmed to plan a route over Syria, for instance. This explains that in face of conflicting air

warnings, a code-sharing flight tends to choose a route that minimize its operational cost.

In summary, this section’s empirical research presents that it is not optimal for airlines or

other States than the territorial one to issue airspace warnings and declare an airspace as unsafe.

That will result in more disorder and economic inefficiency. It is therefore indispensable to seek a

new law-making design.

III. New Law-making Design

Although economic analysis of international law is in a fledgling phase, the limited work

discussed a welfarist approach and suggests two principal ways in which international law may

Armed Conflict Dataset <http://www.pcr.uu.se/research/ucdp/datasets/ucdp_prio_armed_conflict_dataset/> accessed

1 May 2016. Council on Foreign Relations, Global Conflict Tracker < http://www.cfr.org/global/global-conflict-

tracker/p32137#!/> accessed 10 May 2016. The International Institute for Strategic Studies, Armed Conflict Data-

base < https://acd.iiss.org/> accessed 10 May 2016. European Aviation Safety Agency, ‘List of Safety Information’

(Cologne, 14 May 2016)< http://ad.easa.europa.eu/sib-docs/page-1> accessed 14 May 2017. 35

Janene Pieters, ‘Passenger Jets Still Flying Over Conflict Zones’ < http://www.nltimes.nl/2015/07/14/passenger-

jets-still-flying-over-conflict-zones/> accessed 5 May 2016. Arguably, not all armed conflicts could affect air space

and some conflicts present no missile capability so far. However, MH 17 accident was also considered astonishing in

that the conflict should expand to airspace above the flight level 320. See Dutch Safety Board, Crash of Malaysia

Airlines flight MH17, (the Hague, October 2015) <www.safetyboard.nl> accessed 15 May 2016, 195. A full exami-

nation of risk assessment and management is beyond the scope of the normality discussion this paper hopes to offer. 36

Alan O. Sykes & Eric Posner, "Efficient Breach of International Law: Optimal Remedies, “Legalized

Noncompliance,” and Related Issues" ( John M. Olin Program in Law and Economics Working Paper No. 546,

2011). 37

See Brooks, Richard R.W. and Stremitzer, Alexander, "Remedies On and Off Contract" (2010). Yale Faculty

Scholarship Series. 94. Steven Shavell, Damage Measures for Breach of Contract, 11 Bell J. Econ. 466, 470 (1980).

course, renegotiation is a possible option in this regard as well, as we discuss below.


promote global welfare.38

Notably, international law aims to coordinate cooperation to improve

various international problems that caused by national unilaterality.

With respect to external risk assessment of an airspace, due to sovereignty equality

enshrined in Article 1 of the Chicago Convention, neither registry country's assessment should

prevail over the other; To be consistent with territorial jurisdiction principle, the ultimate

authority can only be 'the territorial government'. Therefore, the proper function of air traffic

requires a territorial government to play as 'the ultimate authority' and thus be responsible for its

decision on whether to prohibit/restrict certain airspace.

However, a State may be reluctant to declare its airspace as unsafe. The announcement of

existence of armed conflict, especially internal armed conflict, on its territory by the government

will definitely favor political opponents and may imply official recognition of insurgency.39

Consequently, a government often treat conflicts as a mere internal disturbance which is more

expedient to suppress.40

This is to say that governments are better in taking care of their own

interests, but generally ignore the consequences of their policies for foreign airlines and

passengers, who are unrepresented in the domestic political process.

When national governments choose their policies unilaterally (also termed ‘non-

cooperative’ or ‘Nash equilibrium’ policy choices), they will tend to select policies such that their

marginal benefits are equal to their marginal costs (perhaps in political rather than conventional

economic terms) from a national perspective.41

In the case of airspace safety, if a State is silent

about its airspace’s safety, then this will impose net costs on other nations. Other States will have

to probe into the ‘risky’ airspace at issue and try to advise their national airlines on whether or

not to utilize this airspace. Therefore, the territorial State’s omission or silence will arise to an

economically extent from a global perspective, taking into account of the resources and personnel

involved.

If the marginal benefits of a policy are equal to the marginal costs from a national

perspective, the marginal benefits will be less than the marginal costs from a global perspective.42

Because the potential detriment to other States does not factor into the territorial State’s decision-

making formula, problems appear and net benefits on other States are harmed.

38



2011), p3. For books, see Andrew T. Guzman, How International Law Works: A Rational Choice Theory (2008);

Jack L. Goldsmith & Eric A. Posner, The Limits of International Law (2005); Eric A. Posner, The Perils of Global

Legalism (2009); Robert E. Scott & Paul B. Stephan, The Limits of Leviathan: Contract Theory and the Enforcement

of International Law (2006); Joel P. Trachtman, The Economic Structure of International Law (2008); and Posner, E.,

& Sykes, A. (2013). Economic Foundations of International Law. Cumberland: Harvard University Press. 39

See Lindsay Moir, The Law of Internal Armed Conflict, Cambridge University Press, 2004, 34. 40

See also Anthony Cullen, The Concept of Non-International Armed Conflict in International Humanitarian Law,

Cambridge University Press, 2010, 55-56. 41



2011), 4. 42

Ibid, 4-5.


Behold of these problems, it is necessary to make States aware of the move from the non-

cooperative (Nash) policy equilibrium towards an efficient ‘cooperative’ equilibrium. 43

It means

that States should ‘internalize’ the inconveniences imposed on other nations by their decisions in

making such a decision. Actions that harm other nations in Nash equilibrium shall be discouraged,

while actions that benefit other States in Nash equilibrium will be advocated. In air law, it means

that a State should have taken into account the impact to the air transport utilizing its airspace

when deciding whether to share the intelligence on domestic armed conflict.

And because global welfare increases, it is possible for each nation to enjoy an increase in

its welfare as well, although there is no guarantee that each nation benefits individually in the

absence of some “side payment” mechanism to redistribute the surplus from globally efficient

policies.44

The airspace information sharing can be understood as enhancing global welfare by

lowering the harm to passengers. It requires States to dispense resource that would likely not to

be distributed in Nash equilibrium because the territorial State bear the costs but the passing

airlines receive the benefits. It is a mechanism for inspiring States to bear the costs of maintaining

a sustainable international air transport environment and such benefits flow to the international

community which treasure humanity and altruism over self-interest.

Since its inception, aviation has imbued the public mind with feelings of amazement ac-

companied by an exaggerated fear regarding its associated dangers.45

In response to these latter

concerns, States have made safety and security a priority of global regulation. States have

surrendered their sovereign authority over the subject to an extent far beyond what has been done

in other fields of international law.46

It is mutual favorable for States to provide in-time precise

airspace warnings to benefit airlines of all countries. The declaration of its own airspace as

unsafe may incur some detriment, economically and politically, and thus prevent a State from

making such a decision. However, By factoring the benefit of overflown flights, the territorial

State can help build up a cooperative equilibrium. This way, airlines have reliable information to

decide where to fly. Other States will not need to spend resources probing into another State’s

airspace. Less political disputes, such as those on the infringement of sovereignty, will emerge.

This brings self-sustaining consequences for the air industry.

IV. Conclusions and Outlook

Following the downing of Malaysia Airlines Flight MH17, risks arising from conflict

zones have gained attention. In practice, conflict zones on Earth are so extensive that airlines

cannot circumvent all of them. Furthermore, one the one hand, detours will increase airlines’ cost

enormously; on the other hand, the choice to stop air service over certain areas will produce

43

Ibid. 44

Ibid. 45

Brian F. Havel & Gabriel S. Sanchez, The Principles and Practice of International Aviation Law (CUP 2014) 173-

175. 46

ibid 176-216.


significant (negative) political effects for the State at issue, for it will be stigmatized as a ‘non-

flyable/failed’ State, and its national aviation management service may inflict heavy loss.

Among others, this study discerned a problem faced by airlines engaging in code-sharing

could face some dilemma. Military actions on land may necessitate detours and lengthier routes

which added pressure on airlines. In the long run, international air law, and the stability of the

international aviation relations which it is intended to govern, are bound to suffer from the

continuing difference of views with regard to the use of airspace over conflict zones.

Given the huge economic cost of a detour, it is significant for the aviation industry to get

informed of precise risk information. Consequently, it is important to put an end to this situation:

States are obliged to share information regarding its airspace appear to be the most appropriate

means of achieving that goal.


Figure I USA’s evaluation regarding conflict zones

47

FAA, ‘Prohibitions, Restrictions and Notices’, https://www.faa.gov/air_traffic/publications/us_restrictions/. 48

This is not strictly a ‘conflict zone’, but due to north Korea’s history of unannounced launching of medium-range

ballistic missiles.

https://www.faa.gov/air_traffic/publications/us_restrictions/media/kicz_a0012_16_pyongyang_fir.pdf.

https://www.gpo.gov/fdsys/pkg/FR-1998-02-17/pdf/98-3837.pdf. 49

KICZ A0001/16 amended SFAR no. 107 supersedes KICZ Notam a0031/15 and incorporates the prohibition on

US civil flight operations in the territory and airspace of Somalia at altitudes below fl260 that was contained in KICZ

NOTAM a0031/15 into SFAR 107.

FIR declared to be closed by US for US airlines47

(as of Feb, 2017)

Afghanistan OAKX , below FL330

Egypt HECC

Iraq ORBB

Iran OIIX

Kenya HKNA, below FL260

Korea, North48

ZKKP

Libya HLLL

Mali DRRR and GOOO, below FL260

Pakistan OPKR and OPLR

Somalia49

HCSM

Sudan HSSS, below FL260

Sudan, South HSSS, below FL260

Syrian OSTT

Ukraine/Crimea UKFV and UKDV

Yemen OYSC

https://www.faa.gov/air_traffic/publications/us_restrictions/

https://www.faa.gov/air_traffic/publications/us_restrictions/media/kicz_a0012_16_pyongyang_fir.pdf


Figure II Europe’s assessment regarding conflict zones

FIR declared to be closed by EASA for European Airlines50

(as of Feb, 2017)

UK France51

Afghanistan OAKX, below FL24052

OAKX, below FL 240

Egypt HECC, below FT25053

N/A

Iraq ORBB ORBB

Iran N/A OIIX, below FL240

Kenya N/A N/A

Korea, North N/A N/A

Libya HLLL54

HILL

Mali55

N/A N/A

Pakistan OPLR and OPKR, below FL 25056

OPLR and OPKR, below FL240

Somalia HSCM, below FL260, excluding Airway UR

40157

HCSM, below FL240

Sudan N/A HSSS, below FL240

Sudan, South N/A58

HSSS, below FL240

Syria OSTT59

OSTT

Ukraine/Crimea The airspace over Crimea, the Black sea, and

the sea of Azov

UKDV and UKFV, except for a few

routes segments

Yemen OYSC, excepting Airways N315,UL425,and

R40160

OYSC

50

European Aviation Safety Agency, List of Safety Information, http://ad.easa.europa.eu/sib-docs/page-1. 51

AIC France Circular A01/16 issued by DGAC-France, Appendix 2 to EASA SIB 2014-26R1. 52

UK CAA NOTAM AFP 5510, Appendix 1 to EASA SIB 2014-21R1. 53

Appendix 1 to SIB 2014-30R2. 54

Appendix 1 to EASA SIB 2014-23R1. 55

In EASA SIB No: 2014-27, EASA draws the aviation community’s attention to FAA’s NOTAM; whereas UK and France national

authority does not issue specific warning to its national carriers as in the case of, e.g. Libya. 56

NOTAM AFP56646 issued by United Kingdom Civil Aviation Authority, Appendix 2 to EASA SIB 2015-02R2. 57

CAA UK NOTAM V0014/16, Appendix 3 to EASA SIB 2015-23R1. 58

In EASA SIB No: 2014-35, EASA draws the aviation community’s attention to FAA’s NOTAM; whereas UK does not issue specific

warning with respect to the FIR HSSS to its national carriers. 59

CAA UK NOTAM V0017/16, Appendix 2 to EASA SIB 2014-25R1.. 60

CAA UK NOTAM V0051/15, Apppendix 1 to EASA SIB 2015-05R3.


Figure III UAE’s assessment regarding conflict zones

61

UAE General Civil Aviation Authority, https://www.gcaa.gov.ae/en/epublication/pages/safetyalerts.aspx. 62

The area is within the following lateral limits:

311855N 0321900E TO 294443N 0322815E TO 281650N 0331928E TO

272900N 0341900E TO 292920N 0345500E then along the eastern land border of Egypt TO

311800N 0341300E TO 311855N 0321900E. See UAE Safety Alert 12/2015. 63

UAE Safety Decision 17-2016, 28th December 2016. 64

UAE Safety Alert 10/2016. 65

UAE Safety Alert 04/2015. 66

UAE Safety Decision 17-2016, 28th December 2016. 67

UAE Safety Decision 17-2016, 28th December 2016.

FIR declared to be closed by UAE for UAE airlines61

(as of Feb, 2017)

Afghanistan N/A

Egypt HECC, below FL 26062

Iraq ORBB, excepting flights to and from ORBI, ORNI,

ORMM and ORER airports using southern corridor and/or

northern corridor for Erbil63

Iran N/A

Kenya HKNA , below FL26064

Korea, North N/A

Libya N/A

Mali N/A

Pakistan OPLR and OPKR, below FL24065

Somalia N/A

Sudan N/A

Sudan, South N/A

Syria N/A

Ukraine/Crimea The Simferopol (UKFV) AND Dnipropetrovsk (UKDV)

including Crimean area and adjacent areas of the black sea

and the sea of AZOV66

Yemen The Sanaa (OYSC) excepting Airways B400, UB403,

B404, R40167


Figure IV China’s evaluation regarding conflict zones

68

China handles the issue in a different way. The CAAC does not declare certain areas as dangerous but change air routes de facto. Uses

can refer to the system of CNMS (China NOTAM Management System) to check whether Chinese airlines detour certain areas. All

information are published via the CNMS system regarding international flights’ destination and overflown areas. 中国民用航空局空中交

通管理局航行情报服务中心, see http://www.aischina.com/EN/EnDefault.aspx, ‘Flight Routes for International Flights from Mainland

of China (EFF201702011600UTC)’. 69

In this table, N/A means Chinese airlines still fly to or over this area; the blank cell means Chinese airlines do not fly to this area but

there is no data whether certain routes are over this area. 70中国民航局要求国内所有飞越乌克兰的航班绕飞, http://news.carnoc.com/list/288/288193.html.

FIR declared to be closed by China for PRC airlines68

(as of Feb, 2017)

Afghanistan N/A69

Egypt N/A

Iraq N/A

Iran N/A

Kenya

Korea, North N/A

Libya N/A

Mali

Pakistan N/A

Somalia

Sudan N/A

Sudan, South N/A

Syria

Ukraine/Crimea UKFV and UKDV70

Yemen

http://www.aischina.com/EN/EnDefault.aspx


Figure V South Africa’s evaluation regarding conflict zones

71

AERONAUTICAL INFORMATION SERVICE, REPUBLIC OF SOUTH AFRICA, 23FEB17 0530, O2300110.

FIR declared to be closed by South Africa for its airlines71

(as of Feb, 2017)

Afghanistan N/A

Egypt HECC, below FL 260

Iraq ORBB , below FL300

Iran OIIX

Kenya N/A

Korea, North N/A

Libya N/A

Mali N/A

Pakistan N/A

Somalia N/A

Sudan N/A

Sudan, South N/A

Syria OSTT

Ukraine/Crimea N/A

Yemen N/A


Figure VI The Overview of External Assessment of Conflict Zones

0

50

100

150

200

250

300

USA

France

UK

UAE

China

South Africa

draft in progress - university of chicago law school · 2017-08-11 · draft – in progress...

Documents