In our day-to-day life, we enter into multiple agreements, impliedly or expressly, without noticing it. In today’s time, no sector is untouched by commercial deals, contracts, and other legal relationships as a result, there arises the scope of dispute among the parties. The parties try to resolve these disputes through an alternative dispute resolution mechanism as it is speedy and efficient. Aviation is one such sector where there are multiple agreements between passengers and airlines and air transport agreements between states.
The first type of agreement in the aviation sector is the air service agreement, or air transport agreement (ASA). It is an agreement between two states whereby they agree to operate the international commercial air transport services between the two states. Such agreements cover the economic rights granted to the airlines to fly between the two countries. This agreement confers various rights related to tax and customs duties, traffic rights, designated airlines, etc. between the signatories. There arise conflicts between the state parties related to tax policies, trafficking policies, operating issues, etc. In case of any dispute arising between the states, airlines mostly choose to adopt alternative dispute resolution techniques to resolve these issues.
Another category of agreement is the interline agreement, where two or more airlines voluntarily agree to handle passengers who are travelling on itineraries requiring multiple flights. These airlines agree that the passenger’s baggage will be handled till the final destination and during check-in while the passenger changes the flight to another airline. If, due to any delay, the connection is lost, the free rebooking is promised by the airlines. Interlining is not supported by most of the new low-cost airlines as a result, if there is any delay or issue or the passenger lost his/her luggage, there is a lack of support or rebooking without cost cannot be done. There are certain mandates applicable to the participating airlines, such as the plating/issuing carrier collects the fare from the customer and pays the operating airline the portion of their fare and taxes. The agency commission must be paid by the plating airline. So, in the case of any dispute between the airlines relating to the payment of fares, issuance of tickets, or payment of commission, the parties seek to resolve it through alternative dispute resolution. There are a number of airlines and airports that are members of alternative dispute resolution bodies.
Another set of disputes that are very frequently observed is the dispute between the airlines and passengers related to loss or damage of baggage, denied boarding, delay, loss or damage to the items carried by passengers, unfair trade practices, or cancellation. In the case of such disputes, the parties also seek to adopt arbitration or mediation to resolve the issues. The issues are submitted to arbitration according to the agreements made between the parties, and the parties adhere to the arbitration or dispute resolution clause present in the agreement. Mostly, in cases of air agreements, arbitration or mediation is undertaken as a suitable means for dispute resolution as it is expeditious and cost-effective and most of the airlines being part of ADR bodies are bound by the awards. Also, there is no issue as to the jurisdiction when it comes to ADR mechanisms, which make it easy for international flights to resolve their disputes and determine the rights and liabilities of the parties without challenging the jurisdiction of the authorities.
Codeshare agreements are mutually beneficial agreements between two or more airlines that use similar flight numbers. This enables passengers to purchase a flight ticket from one airline and use the flight number for a flight on another airline. In the case of codeshare, the check-in is often done in the operating carrier and not in the actual airline. The baggage allowance is also given by the operating airline. It is beneficial for airlines as they could offer a variety of destinations even where they do not operate their aircraft just through an alliance with other airlines. It expands their market and gains passenger trust through their effective services. There are various terms and conditions agreed upon by the airlines relating to inventory control, passenger handling, safety and maintenance, marketing, taxes, pricing, etc. So, in cases of disputes, arbitration is taken by the airlines as the most effective means by which they resolve disputes among themselves, with the help of a neutral third party.