IN CONFIDENCE
12 September 2024
OC241047
Hon Matt Doocey
Action required by:
Associate Minister of Transport
Friday, 20 September 2024
Rt Hon Winston Peters
Action required by:
Minister of Foreign Affairs and Trade
Friday, 20 September 2024
AIR SERVICES AGREEMENT WITH HUNGARY
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Purpose
Approve the text of the Air Services Agreement between the Government of Hungary and the
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Government of New Zealand, and agree to its signature by New Zealand.
Key points
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Officials have negotiated an air services agreement with Hungary. Services that might
result from the Agreement would enhance New Zealand’s international connectivity.
Cabinet has delegated to the Ministers of Transport and Foreign Affairs the authority
to jointly approve bilateral air services agreements that are not subject to the
Parliamentary Treaty Examination process (CAB-22-Min-0162 refers).
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This paper recommends that you approve the text of the Agreement with Hungary
and agree that New Zealand sign the Agreement.
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There are no specific risks associated with the Agreement. The Ministry of Foreign
Affairs and Trade contributed to the development of this briefing.
Recommendations
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We recommend you:
1
note that a mandate to negotiate an air services agreement with Hungary was
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issued by the Ministers of Transport and Foreign Affairs in November 2017
2
note that New Zealand and Hungarian officials have negotiated, by
correspondence, the Air Services Agreement between the Government of Hungary
and the Government of New Zealand (“the Agreement”)
3
note that authorisation to sign the Agreement and take binding treaty action
requires the decision of the Minister of Foreign Affairs that the Agreement is not a
major bilateral treaty of particular significance and, therefore, needs not be subject
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INFORMATION
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THE
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AIR SERVICES AGREEMENT WITH HUNGARY
1
We propose that Ministers approve, and authorise for signature, the Air Services
Agreement between the Government of Hungary and the Government of
New Zealand (“the Agreement”).
Relation to government priorities
2
Enhanced air services improve New Zealand’s connectivity with the rest of the world.
This relates to the Government’s priority of “accelerating the recovery” from COVID-
19 through global trade. Tourism and improved people-to-people links, including for
education and business development purposes, and will help to accelerate recovery.
Background
3
Under an international system dating back to the 1940s, airlines are able to operate
international services only where the right to do so has been expressly permitted in a
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bilateral air services agreement or one of the limited number of multilateral
agreements.
4
Air services agreements set out the routes airlines may operate, the amount of
capacity they may provide, and the origin and destination of traffic they may carry.
Standard provisions address aviation safety and security, as well as “doing business”
matters such as the establishment of local offices and the repatriation of earnings.
5
Hungary is one of the largest European markets with which New Zealand does not
have an Air Services Agreement. Establishing an agreement to facilitate code-share
services will enhance New Zealand’s international connectivity and improve New
Zealand’s chances of negotiating a comprehensive agreement with the European
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Union.
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6
The mandate to negotiate this Agreement was given November 2017.
7
New Zealand and Hungary discussed air services matters via correspondence, before
meeting in Montreal to conclude negotiations on the text of an air services agreement.
An associated memorandum of agreement was signed on 28 September 2022.
The Agreement
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The Agreement provides for standard provisions such as:
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8.1 no restrictions on non-stop capacity
8.2 open route schedule and traffic rights that can subsequently be agreed
8.3 flexible airline ownership provisions
8.4 flexible tariff filing provisions
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8.5 code-sharing provisions, including with third-country carriers, with unrestricted
capacity and route rights
8.6 standard aviation safety and aviation security provisions.
9
Although we do not expect airlines to start operating services with their own aircraft
anytime soon, the Agreement does allow for New Zealand airlines to offer dedicated
services, especially cargo-only, between Hungary and third countries such as
Australia. There are New Zealand operators that would be capable of providing such
a service, which would promote competition and otherwise assist Hungary’s greater
participation in international trade.
Parliamentary treaty examination and entry into force
10
The Ministry of Foreign Affairs and Trade has advised that it is separately seeking a
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decision from the Minister of Foreign Affairs that parliamentary treaty examination can
be waived on the basis that the Agreement is not a major bilateral treaty of particular
significance, in accordance with Standing Order 405. The Agreement cannot be
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signed in the absence of a parliamentary treaty waiver.
11
The Agreement will enter into force 30 days after each side has notified the other of the
completion of its internal processes for entry into force of international treaties. For
New Zealand, this will be once you have jointly approved the text and agreed to the
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signing of the Agreement.
12
The Agreement will be signed in both English and Hungarian, with the English text
prevailing in the event of any conflict of interpretation.
Risks
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13
Aviation safety and security are addressed through the inclusion in the Agreement
with Hungary of internationally accepted standard provisions. Any airline operating
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to/from New Zealand is required to meet stringent safety and security standards
before being granted the appropriate operating certificate by the Director of Civil
Aviation, in addition to the requirements applied in its home state (where relevant).
14
A ‘whole of government’ approach will be applied as required to manage any potential
risks at the border from the increased flight and passenger arrivals that arise from any
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new air services opportunities. Border agencies (the New Zealand Customs Service,
the Ministry of Business, Innovation and Employment, and the Ministry for Primary
Industries) require all airlines licensed to fly to New Zealand to meet New Zealand’s
legislative requirements for advance information provision (Passenger Name Record
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data and Advance Passenger Processing information), to enable effective risk
assessment and management of passengers.
15
Ministry of Transport officials routinely ensure that information on new air services is
shared as soon as possible with interested departments. Prospective new airlines are
advised as soon as possible of the range of requirements that the New Zealand
Government has for passenger processing. The Ministry of Transport also advises
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new airlines to engage with the border agencies as soon as possible to ensure that
they are compliant with regulatory requirements before services commence.
Signing
16
Subject to ministerial approval, officials will explore opportunities to sign the
Agreement. One option might be during the proposed visit of the Associate Minister of
Transport to Hungary, planned for 8/9 October 2024.
Consultation
17
This briefing was prepared in consultation with the Ministry of Foreign Affairs and
Trade, which agrees with the recommendations.
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INFORMATION
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THE
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AIR SERVICES AGREEMENT BETWEEN THE GOVERNMENT OF HUNGARY
AND THE GOVERNMENT OF NEW ZEALAND
The Government of Hungary and the Government of New Zealand (hereinafter, "the Parties");
Desiring to promote an international aviation system based on competition among airlines in
the marketplace with minimal government interference and regulation;
Desiring to facilitate the expansion of international air transport opportunities;
Recognising that efficient and competitive international air services enhance trade, the welfare
of consumers, and economic growth;
Noting the Agreement between the European Community and New Zealand on certain aspects
of air services of 21 June 2006;
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Desiring to make it possible for airlines to offer the travelling and shipping public a variety of
service options, and wishing to encourage individual airlines to develop and implement
innovative and competitive prices;
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Desiring to ensure the highest degree of safety and security in international air transport and
reaffirming their grave concern about acts or threats against the security of aircraft, which
jeopardise the safety of persons or property, adversely affect the operation of air transport, and
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undermine public confidence in the safety of civil aviation; and
Being Parties to the Convention on International Civil Aviation, opened for signature at
Chicago on December 7, 1944;
Have agreed as follows:
Article 1
Definitions
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(1) For the purposes of this Agreement, unless otherwise stated, the term:
(a) “aeronautical authorities" means, in the case of Hungary, the Director General of Civil
Aviation, and, in the case of New Zealand, the Minister responsible for Civil Aviation, and
any person or agency authorised to perform the functions exercised by the said Minister;
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(b) "Agreement" means this Agreement, its Annex, and any amendments thereto;
(c) “air transport" means the public carriage by aircraft of passengers, baggage, cargo, and
mail, separately or in combination, for remuneration or hire;
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(d) “airline”' and "stop for non-traffic purposes” have the meanings respectively assigned
to them in Article 96 of the Convention;
(e) "Convention" means the Convention on International Civil Aviation, opened for
signature at Chicago on December 7, 1944, and includes:
(i) any amendment that has entered into force under Article 94(a) of the Convention
and has been ratified by both Parties, and
(ii) any Annex or any amendment thereto adopted under Article 90 of the Convention,
insofar as such Annex or amendment is simultaneously in effect for both Parties;
(f) "designated airline" means an airline designated and authorised in accordance with
Article 3 (Designation and Authorisation) of this Agreement;
(g) “ICAO” means the International Civil Aviation Organization;
(h) "international air transport" means air transport that passes through the airspace over
the territory of more than one State;
(i) “Member State” means a Member of the European Union;
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(j) "price" means any fare, rate or charge for the carriage of passengers (and their baggage)
and/or cargo (excluding mail) in air transport charged by airlines, including their agents,
and the conditions governing the availability of such fare, rate or charge;
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(k) “scheduled" means a series of flights performed by aircraft for the transport of
passengers, cargo and mail between two or more points, where the flights are so regular or
frequent as to constitute a systematic service, whether or not in accordance with a published
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timetable, and which are operated in such a manner that each flight is open to use by
members of the public;
(l) "territory" has the meaning assigned to it in Article 2 of the Convention, provided that,
in the case of New Zealand, the term "territory" shall exclude Tokelau.
(2) References in this Agreement to nationals of Hungary shall, with the exception of
paragraph (1) of Article 6 (Safety) of this Agreement, be understood as referring to
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nationals of European Union Member States.
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(3) References in this Agreement to airlines of Hungary shall be understood as referring to
airlines designated by Hungary.
(4) References in this Agreement to the "EU Treaties" shall be understood as referring to
the Treaty on European Union and the Treaty on the Functioning of the European Union.
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THE
Article 2
Grant of Rights
(1) Each Party grants to the other Party the following rights for the conduct of international air
transport by the airlines of the other Party:
a) the right to fly across its territory without landing;
b) the right to make stops in its territory for non-traffic purposes; and
c) the rights otherwise specified in this Agreement.
(2) The airlines of each Party other than those designated under Article 3 (Designation and
Authorisation) of this Agreement shall also enjoy the rights specified in subparagraphs a) and
b) of paragraph (1) of this Article.
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(3) Nothing in this Article shall be deemed to confer on the airline or airlines of one Party the
right to take on board, in the territory of the other Party, passengers, their baggage, cargo or
mail carried for compensation and destined for another point in the territory of that other Party.
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Article 3
Designation and Authorisation
(1) Each Party shall have the right to designate as many airlines a
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international air transport in accordance with this Agreement and to withdraw or alter such
designations. Such designations shall be transmitted to the aeronautical authority of the other
Party in writing.
(2) On receipt of such a designation, and of applications from the designated airline, in the form
and manner prescribed for operating authorisations and technical permissions, the other Party
shall grant appropriate authorisations and permissions with minimal procedural delay, provided
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that:
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a) in the case of an airline designated by Hungary:
i. the airline is established, under the EU Treaties, in the territory of Hungary and has
a valid Operating Licence from a Member State in accordance with European Union
law; and
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ii.
effective regulatory control of the airline is exercised and maintained by the Member
State responsible for issuing its Air Operator’s Certificate and the relevant
aeronautical authority is clearly identified in the designation; and
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iii.
the airline has its principal place of business in the territory of the Member State
from which it has received the Operating Licence; and
iv. the airline is owned directly or through majority ownership, and effectively
controlled, by Member States and/or nationals of Member States, and/or by the
Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway or
the Swiss Confederation and/or nationals of those other states;
b) in the case of an airline designated by New Zealand:
i.
it has its principal place of business and place of incorporation in New Zealand; and
ii.
New Zealand has and maintains effective regulatory control of the airline;
c) the airline is qualified to meet the conditions prescribed under the laws, regulations and
rules normally applied to the operation of international air transport by the Party
considering the application or applications.
(3) When an airline has been designated and authorised in accordance with paragraphs (1) and
(2) of this Article, it may begin to operate the agreed services, provided that the airline complies
with the applicable provisions of this Agreement.
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Article 4
Revocation of Authorisation
(1) Either Party may refuse, revoke, suspend or limit the operating authorisa
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technical permissions of an airline designated by the other Party where:
(a) in the case of an airline designated by Hungary:
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i.
the airline is not established, under the EU Treaties, in the territory of Hungary
or does not have a valid Operating Licence from a Member State in accordance
with European Union law; or
ii.
effective regulatory control of the airline is not exercised or not maintained by
the Member State responsible for issuing its Air Operators Certificate, or the
relevant aeronautical authority is not clearly identified in the
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iii.
the airline does not have its principal place of business in the territory of the
Member State from which it has received the Operating Licence; or
iv.
the airline is not owned and effectively controlled, directly or through majority
ownership, by Member States and/or nationals of Member States, and/or by the
Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway
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or the Swiss Confederation and/or nationals of those other states; or
v.
the airline is already authorised to operate under a bilateral agreement between
New Zealand and another Member State and New Zealand can demonstrate
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point in that other Member State, it would be circumventing restrictions on the
traffic rights imposed by that other agreement; or
vi.
the airline designated holds an Air Operators Certificate issued by another
Member State and there is no bilateral air services agreement between
New Zealand and that Member State and that Member State has denied traffic
rights to an airline designated by New Zealand;
(b) in the case of an airline designated by New Zealand:
i.
that airline is not incorporated or does not have its principal place of business in
the territory of New Zealand; or
ii.
effective regulatory control of that airline is not maintained in New Zealand.
(c) the airline has failed to comply with the laws, regulations and rules referred to in Article 5
(Application of Laws, Regulations and Rules) of this Agreement; or
(d) the airline fails to operate in accordance with the conditions prescribed under this
Agreement; or
(e) paragraph (7) of Article 6 (Safety) of this Agreement is invoked.
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(2) In exercising its rights under paragraph (1) of this Article, and without prejudice to its rights
under sub-paragraphs (1)(a)v and vi, New Zealand shall not discriminate between EU airlines
on the grounds of nationality.
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(3) Unless immediate action is essential to prevent further noncompliance with any of
subparagraphs (1)(c) - (1)(e) inclusive of this Article, the rights established by this Article shall
be exercised only after consultation with the other Party.
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(4) This Article does not limit the rights of either Party to withhold, revoke, limit or impose
conditions on the operating authorisation or technical permissions of a designated airline of that
other Party, in accordance with the provisions of Article 7 (Aviation Security) of this
Agreement.
Article 5
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Application of Laws, Regulations and Rules
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(1) While entering, within, or leaving the territory of one Party, its laws, regulations and rules
relating to the operation and navigation of aircraft shall be complied with by the other Party's
airlines.
(2) While entering, within, or leaving the territory of one Party, its laws, regulations and rules
relating to the admission to or departure from its territory of passengers, crew or cargo on
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aircraft (including regulations and rules relating to entry, clearance, aviation security,
immigration, passports, customs and quarantine or, in the case of mail, postal regulations) shall
be complied with by, or on behalf of, such passengers and crew and in relation to such cargo of
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the other Party's airlines.
(3) Neither Party shall give preference to its own or any other airline over a designated airline
of the other Party engaged in similar international air transport in the application of its customs,
immigration, quarantine and similar regulations.
(4) Passengers, baggage and cargo in direct transit through the territory of either Party, and not
leaving the area of the airport reserved for such purpose, may be subject to examination in
respect of aviation security, narcotics control and immigration requirements, or in other special
cases where such examination is required, having regard to the laws and regulations of the
relevant Party and to the particular circumstances. Baggage and cargo in direct transit shall be
exempt from customs duties and other similar taxes.
Article 6
Safety
(1) Each Party shall recognise as valid, for the purpose of operating the international air
transport provided for in this Agreement, certificates of airworthiness, certificates of
competency, and licences issued or validated by the other Party in accordance with the latter’s
laws and regulations including, in the case of Hungary, European laws and regulations, and still
in force, provided that the requirements for such certificates or licences at least equal the
minimum standards that may be established pursuant to the Convention. Each Party may,
however, refuse to recognise as valid for the purpose of flight above its own territory,
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certificates of competency and licences granted to or validated for its own nationals by the other
Party.
(2) If the privileges or conditions of the licences or certificates referred to in paragraph (1) of
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this Article, issued by the aeronautical authorities of one Party to any person or designated
airline or in respect of an aircraft used in the operation of the agreed services, should permit a
difference from the minimum standards established under the Convention, and which difference
has been filed with ICAO, the other Party may request consultations between the aeronautical
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authorities in conformity with Article 13 (Consultations) of this Agreement with a view to
clarifying the practice in question.
(3) Each Party may request consultations at any time concerning the safety standards
maintained by the other Party in areas relating to aeronautical facilities, flight crew, aircraft and
the operation of aircraft. Such consultations shall take place within thirty (30) days of that
request.
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(4) If, following such consultations, one Party finds that the other Party does not effectively
maintain and administer safety standards in the area
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that meet the standards established at that time pursuant to the Convention,
the other Party shall
be informed of such findings and of the steps considered necessary to conform with the ICAO
standards. The other Party shall then take appropriate corrective action within an agreed time
period. Failure by the other Party to take appropriate action/s within fifteen (15) days, or such
longer period as may be agreed, shall be grounds for the application of Article 4 (Revocation
of Authorisation) of this Agreement.
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(5) Pursuant to Article 16 of the Convention, it is further agreed that any aircraft performing
international air transport by, or on behalf of an airline of one Party, to or from the territory of
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another Party, may, while within the territory of the other Party be the subject of a search (in
this Article called "ramp inspection") by the authorised representatives of the other Party,
provided this does not cause unreasonable delay in the operation of the aircraft.
Notwithstanding the obligations mentioned in Article 33 of the Convention, the purpose of this
search is to verify the validity of the relevant aircraft documentation, the licensing of its crew,
and that the aircraft equipment and the condition of the aircraft conform to the standards
established at that time pursuant to the Convention.
(6) If any such ramp inspections or series of ramp inspections give rise to:
a) serious concerns that an aircraft or the operation of an aircraft does not
comply with the minimum standards established at the time pursuant to the
Convention; or
b) serious concerns that there is a lack of effective maintenance and
administration of safety standards established at that time pursuant to the
Convention,
the Party carrying out the inspection shall, for the purposes of Article 33 of the Convention, be
free to conclude that the requirements under which the certificate or licences in respect of that
aircraft or in respect of the crew of that aircraft had been issued or rendered valid, or that the
requirements under which that aircraft is operated, are not equal to or above the minimum
standards established pursuant to the Convention. This same determination may be made in the
case of denial of access for a ramp inspection.
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(7) When urgent action is essential to ensure the safety of an airline operation, each Party
reserves the right to immediately suspend or vary the operating authorisation of an airline or
airlines of the other Party.
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(8) Any action by one Party in accordance with paragraph (7) of this Article shall be
discontinued once the basis for the taking of that action ceases to exist.
(9) With reference to paragraph (4) of this Article, if it is determined that one Party remains in
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non-compliance with ICAO standards when the agreed time period has elapsed, the Secretary
General of ICAO should be advised thereof. The latter should also be advised of the subsequent
satisfactory resolution of the situation.
(10) Where Hungary has designated an airline whose regulatory control is exercised and
maintained by another Member State, the rights of New Zealand under the safety provisions of
this Agreement shall apply equally in respect of the adoption, exercise or maintenance of safety
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standards by that other Member State and in respect of the operating authorisation of that airline.
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Article 7
Aviation Security
(1) In accordance with their rights and obligations under international law, the Parties reaffirm
that their obligation to each other to protect the security of civil aviation against acts of unlawful
interference forms an integral part of this Agreement. Without limiting the generality of their
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rights and obligations under international law, the Parties shall in particular act in conformity
with the provisions of the
Convention on Offences and Certain Other Acts Committed on Board
Aircraft, done at Tokyo on September 14, 1963, the
Convention for the Suppression of Unlawful
Seizure of Aircraft, done at The Hague on December 16, 1970, the
Convention for the
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Suppression of Unlawful Acts against the Safety of Civil Aviation, done at Montreal on
September 23, 1971, the
Protocol for the Suppression of Unlawful Acts of Violence at Airports
Serving International Civil Aviation, signed at Montreal on 24 February 1988, and the
Convention on the Marking of Plastic Explosives for the Purpose of Detection, signed at
Montreal on 1 March 1991 and any other multilateral agreement governing civil aviation
security binding upon the Parties.
(2) The Parties shall provide upon request all necessary assistance to each other to prevent acts
of unlawful seizure of civil aircraft and other unlawful acts against the safety of such aircraft,
of their passengers and crew, and of airports and air navigation facilities, and to address any
other threat to the security of civil aviation.
(3) The Parties shall, in their mutual relations, act in conformity with the aviation security
provisions and appropriate recommended practices established by ICAO and designated as
Annexes to the Convention; they shall require that operators of aircraft of their registry,
operators of aircraft who have their principal place of business or permanent residence in their
territory, or in the case of Hungary operators of aircraft which are established in its territory
under the EU Treaties and have valid Operating Licences in accordance with the law of the
European Union, and the operators of airports in their territory act in conformity with such
aviation security provisions.
(4) Each Party agrees that such operators of aircraft may be required to observe the security
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provisions required by the other Party for entry into, for departure from, and while within the
territory of that other Party. Each Party shall ensure that adequate measures are effectively
applied within its territory to protect aircraft and to inspect passengers, crew, carry-on items,
baggage, cargo and aircraft stores prior to and during boarding or loading. Each Party shall
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also give positive consideration to any request from the other Party for reasonable special
security measures to meet a particular threat.
(5) Each Party shall also give sympathetic consideration to a request
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enter into reciprocal administrative arrangements whereby the aeronautical authorities of one
Party could make in the territory of the other Party their own assessment of the security
measures being carried out by aircraft operators in respect of flights destined for the territory
of the Party making such a request.
(6) When an incident or threat of an incident of unlawful seizure of civil aircraft or other
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unlawful acts against the safety of passengers and crew, airports or air navigation facilities
occurs, the Parties shall assist each other by facilitating communications and other appropriate
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measures intended to terminate rapidly and safely such incident or threat thereof.
(7) Each Party shall take such measures as it may find practicable to ensure that an aircraft of
the other Party which is subjected to an act of unlawful seizure or other acts of unlawful
interference and which lands in its territory is detained on the ground unless its departure is
necessitated by the overriding duty to protect human life. Wherever practicable, such measures
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shall be taken on the basis of mutual consultations.
(8) When a Party has reasonable grounds to believe that the other Party has departed from the
aviation security provisions of this Article, the aeronautical authorities of that Party may request
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immediate consultations with the aeronautical authorities of the other Party. Failure to reach a
satisfactory agreement on the issues involved within fifteen (15) days from the date of such
request shall constitute grounds to withhold, revoke, limit, or impose conditions on the
operating authorisation and technical permissions of an airline or airlines of that Party. When
required to do so by an emergency, or to prevent further non-compliance with the provisions of
this Article, a Party may take interim action prior to the expiry of fifteen (15) days.
Article 8
Commercial Opportunities
(1) The airlines of each Party shall have the right to establish offices in the territory of the other
Party for the promotion and sale of air transport.
(2) The designated airlines of each Party shall be entitled, in accordance with the laws and
regulations of the other Party relating to entry, residence, and employment, to bring in and
maintain in the territory of the other Party managerial, sales, technical, operational, and other
specialist staff required for the provision of air transport.
(3) Any airline of either Party may engage in the sale of air transport in the territory of the other
Party directly and, at the airline's discretion, through its agents. Each airline shall have the right
to sell such transport and any person shall be free to purchase such transport, in the currency of
that territory or in freely convertible currencies.
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(4) Each airline shall have the right to convert and remit abroad, on demand, local revenues in
excess of sums locally disbursed. Conversion and remittance shall be permitted promptly
without restrictions or taxation in respect thereof at the rate of exchange applicable to current
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transactions and remittance on the date the carrier makes the initial application for remittance.
(5) The airlines of each Party shall be permitted to pay for local expenses, including purchases
of fuel, in the territory of the other Party in local currency. At their discretion, the airlines of
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each Party may pay for such expenses in the territory of the other Party in freely convertible
currencies according to local currency regulation.
(6) In operating or holding out international air transport pursuant to this Agreement, any
designated airline may enter into code-sharing and blocked-space arrangements with any other
airline, including airlines of third countries, provided that all airlines in such arrangements hold
the appropriate authority and meet the requirements normally applied to such arrangements.
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(7) In addition to the rights granted in paragraph (6) of this Article, the designated airlines of
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each Party may, in operating or holding out international air transport pursuant to this
Agreement, use aircraft (or aircraft and crew) leased from any company, including other
airlines, provided all participants in such arrangements hold the appropriate authority and meet
the requirements applied to such arrangements.
(8) Each designated airline shall have the right to perform its own ground-handling in the
territory of the other Party ("self-handling"
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such services in whole or in part. The right may be subject only to restrictions justified by
specific constraints of available space or capacity. Each designated airline shall be treated on a
non-discriminatory basis as regard their access and ground handling services provided by a
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supplier or suppliers. Ground handling activities shall be carried out in accordance with the
laws and regulations of each Party including, in the case of Hungary, European Union law.
(9) Notwithstanding any other provision of this Agreement, airlines and indirect providers of
cargo transport of the Parties shall be permitted, without restriction, to employ in connection
with international air transport any surface transport for cargo to or from any points in the
territories of the Parties or in third countries, including transport to and from all airports with
customs facilities, and including, where applicable, the right to transport cargo in bond under
applicable laws and regulations. Access to airport customs processing and facilities shall be
provided for such cargo, whether moving by surface or by air. Airlines may elect to perform
their own surface transport or to provide it through arrangements with other surface carriers,
including surface transport operated by other airlines and indirect providers of cargo air
transport. Such intermodal cargo services may be offered at a single, through price for the air
and surface transport combined, provided that shippers are not misled as to the facts concerning
such transport.
(10) The designated airlines of each Party shall submit for approval to the aeronautical
authorities of the other Party, not later than thirty (30) days prior to the introduction of services
on the specified routes, their flight timetables. This shall, likewise, apply to later changes. In
special cases, this time limit may be reduced subject to the approval of the said authorities.
Article 9
Customs Duties and Charges
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(1) Each Party shall on the basis of reciprocity exempt a designated airline of the other Party to
the fullest extent possible under its national law from customs duties, excise taxes, inspection
fees and other national duties and charges on aircraft, fuel, lubricating oils, consumable
technical supplies, spare parts including engines, regular aircraft equipment, aircraft stores
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(including but not limited to such items of food, beverages and liquor, tobacco and other
products destined for sale or to be used solely in connection with the operation or servicing of
aircraft) and other items, such as printed ticket stock and air waybills, distributed free of charge
by that designated airline, intended for use or used solely in connection with the operation or
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servicing of aircraft operating the agreed services.
(2) The exemptions granted by this Article shall apply to the items referred to in paragraph (1)
above:
a) introduced into the territory of the Party by or on behalf of the designated airline
of the other Party;
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b) retained on board aircraft of the designated airline of one Party upon arrival in or
leaving the territory of the other Party
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territory; or
c) taken on board aircraft of the designated airline of one Party in the territory of the
other Party and intended for use in operating the agreed services; whether or not
such items are used or consumed wholly within the territory of the Party granting
the exemption, provided the ow
OFFICIAL nership of such items is not transferred in the
territory of the said Party.
(3) The regular airborne equipment, as well as the materials and supplies normally retained on
THE
board the aircraft of the designated airline of either Party, may be unloaded in the territory of
the other Party only with the approval of the customs authorities of that Party. In such case,
they may be placed under supervision of the said authorities up to such time as they are re-
exported or otherwise disposed of in accordance with customs regulations.
(4) The exemptions provided for by this Article shall also be available in situations where
the designated airlines of either Party have entered into arrangements with another airline
or airlines, for the loan or transfer in the territory of the other Party, of the regular equipment
and the other items referred to in paragraph (1) of this Article, provided that such other airline
or airlines similarly enjoy such exemptions from that other Party.
(5) Nothing in this Agreement shall prevent Hungary or New Zealand from imposing, on a non-
discriminatory basis, taxes, levies, duties, fees or charges on fuel supplied in its territory for use
in an aircraft of a designated airline of New Zealand that operates between a point in the territory
of Hungary and another point in the territory of Hungary or in the territory of another European
Union Member State.
(6) In the event that there exists an applicable special agreement between the Parties for the
avoidance of double taxation, such agreement shall prevail.
Article 10
Fair Competition
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(1) Each Party shall allow a fair and equal opportunity for the designated airlines of both Parties
to compete in providing the international air transport governed by this Agreement.
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(2) Each Party shall allow each designated airline to determine the frequency and capacity of
the international air transport it offers based upon commercial considerations in the
marketplace. Consistent with this right, neither Party shall unilaterally limit the volume of
traffic, frequency or regularity of service, or the aircraft type or types operated by the designated
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airlines of the other Party, except as may be required for customs, technical, operational, or
environmental reasons under uniform conditions consistent with Article 15 of the Convention.
(3) The competition laws in force in the territory of the Parties including, in the case of Hungary,
the European Union law shall apply to the operation of the airlines within the jurisdiction of the
respective Party.
(4) Without limiting the application of competition law by either Party, if the aeronautical
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authorities of either Party consider that their airlines are being subjected to discrimination or
unfair practices in the territory of the other Party, they may give notice to this effect to the
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aeronautical authorities of the other Party. Consultation between the aeronautical authorities
shall be conducted according to Article 13 (Consultations) of this Agreement.
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Article 11
User Charges
(1) Each Party shall use its best efforts to ensure that the user charges imposed or permitted to
be imposed by its competent charging bodies on the designated airlines of the other Party for
the use of airports and other aviation facilities are just and reasonable. These charges shall be
based on sound economic principles and shall not be higher than those paid by any other airlines
for such services.
(2) Neither Party shall give preference, with respect to user charges, to its own or to any other
airlines engaged in similar international air services and shall not impose or permit to be
imposed on the designated airlines of the other Party user charges higher than those imposed
on its own designated airlines operating similar international air services using similar aircraft
and associated facilities and services.
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(3) Each Party shall encourage consultations between its competent charging bodies and the
designated airlines using the services and facilities. Reasonable notice shall be given whenever
possible to such users of any proposal for changes in user charges together with relevant
supporting information and data, to enable them to express their views before the charges are
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introduced or revised.
Article 12
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Pricing
(1) Each Party shall allow prices for air services to be decided by each designated airline based
on commercial considerations in the marketplace. Intervention by the Parties shall be limited
to:
a) prevention of unreasonably discriminatory prices or practices;
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b) protection of consumers from prices that are unreasonably high or restrictive due to the
abuse of a dominant position; and
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c) protection of airlines from prices that are artificially low due to direct or indirect
government subsidy or support.
(2) The tariffs to be charged by the airlines designated by New Zealand for carriage wholly
within the European Union shall be subje
OFFICIAL ct to European Union law. European Union law will
be applied on a non-discriminatory basis.
(3) The tariffs to be charged by the airlines designated by Hungary for carriage wholly within
New Zealand shall
THE be subject to New Zealand law. New Zealand law will be applied on a non-
discriminatory basis.
(4) Each Party may require notification or filing of tariffs proposed by the designated airline(s)
of the other Party for carriage to or from its territory. Such notification or filing may be required
not more than thirty (30) days, or such lesser time as may be permitted, before the proposed
date of introduction.
Article 13
Consultations
(1) Either Party may, at any time, request consultations relating to this Agreement. Such
consultations shall begin at the earliest possible date, but not later than sixty (60) days from the
date the other Party receives the request unless otherwise agreed.
(2) At the request of either aeronautical authority, the aeronautical authorities of the Parties
shall exchange information as promptly as possible concerning the current authorisations
extended to their respective designated airlines to render service to, through and from the
territory of the other Party. This shall include copies of current certificates and authorisations
for services on proposed routes, together with amendments or exemption orders.
(3) The aeronautical authorities of either Party shall supply to the aeronautical authorities of the
other Party, at their request, such periodic or other statements of statistics of traffic uplifted
from and discharged in the territory of that other Party as may be reasonably required. 1982
Article 14
Amendment
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(1)
This Agreement may be amended by written agreement of the Parties. Any amendment
shall enter into force in accordance with Article 18 (Entry into Force) of this Agreement.
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(2)
In the event of the conclusion of any general multilateral convention or agreement
concerning air transport by which both Parties become bound, the present Agreement shall be
amended so as to conform with the provisions of such convention or agreement.
Article 15
Settlement of Disputes
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(1) Any dispute arising under this Agreement that is not resolved by a first round of formal
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consultations may be referred by agreement of the Parties to some person or body for decision.
If the Parties do not so agree, the dispute shall, at the request of either Party, be submitted to
arbitration in accordance with the procedures set forth below.
(2) Arbitration shall be by a tribunal of three arbitrators to be constituted as follows:
(a) Within thirty (30) days after the
OFFICIAL receipt of a request for arbitration, each Party shall
name one arbitrator. Within sixty (60) days after these two arbitrators have been named,
they shall by agreement appoint a third arbitrator, who shall act as President of the arbitral
tribunal;
THE
(b) If either Party fails to name an arbitrator, or if the third arbitrator is not appointed in
accordance with subparagraph (a) of this paragraph, either Party may request the President
of the ICAO Council to appoint the necessary arbitrator or arbitrators within thirty (30)
days. If the President of the Council is of the same nationality as one of the Parties, the
most senior Vice President who is not disqualified on that ground shall make the
appointment. In the event the President of the Council or the senior most qualified Vice
President appoints the third arbitrator, that third arbitrator shall not be a national of either
of the Parties.
(3) Except as otherwise agreed, the arbitral tribunal shall determine the limits of its jurisdiction
in accordance with this Agreement and shall establish its own procedural rules. The tribunal,
once formed, may recommend interim relief measures pending its final determination. At the
direction of the tribunal or at the request of either of the Parties, a conference to determine the
precise issues to be arbitrated and the specific procedures to be followed shall be held not later
than fifteen (15) days after the tribunal is fully constituted.
(4) Except as otherwise agreed or as directed by the tribunal, each Party shall submit a
memorandum within forty-five (45) days after the tribunal is fully constituted. Replies shall be
due sixty (60) days later. The tribunal shall hold a hearing at the request of either Party or on
its own initiative within fifteen (15) days after replies are due.
(5) The tribunal shall attempt to render a written decision within thirty (30) days after
completion of the hearing or, if no hearing is held, after the date both replies are submitted. The
decision of the majority of the tribunal shall prevail.
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(6) The Parties may submit requests for clarification of the decision within fifteen (15) days
after it is rendered and any clarification given shall be issued within fifteen (15) days of such
request.
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(7) Each Party shall, to the degree consistent with its national law, give full effect to any
decision or award of the arbitral tribunal.
(8) The expenses of the arbitral tribunal, including the fees and expenses of the arbitrators, shall
be shared equally by the Parties. Any expenses incurred by the Preside
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in connection with the procedures of subparagraph (2)(b) of this Article shall be considered to
be part of the expenses of the arbitral tribunal.
Article 16
Termination
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(1) Either Party may, at any time, give notice in writing to the other Party of its decision to
RELEASED
terminate this Agreement. Such notice shall be sent simultaneously to the Secretary General of
ICAO. This Agreement shall terminate at midnight (at the place of receipt of the notice to the
other Party) immediately before the first anniversary of the date of receipt of such notice by the
other Party, unless the notice is withdrawn before then by agreement of the Parties.
(2) In the absence of acknowledgement of the receipt of a notice of termination by the other
Party, notice shall be deemed to have be
OFFICIAL en received fourteen (14) days after the receipt of the
notice by the Secretary General of ICAO.
THE
Article 17
Registration with ICAO
This Agreement and all amendments thereto shall be registered with ICAO.
Article 18
Entry into Force
This Agreement and its Annex shall enter into force thirty (30) days after the date of the later
note in an exchange of diplomatic notes between the Parties confirming that their respective
constitutional requirements have been fulfilled.
IN WITNESS WHEREOF the undersigned, being duly authorised by their respective
Governments, have signed this Agreement on air services in duplicate in the Hungarian and
English languages, all texts being equally authentic and with each Party retaining one original
in each language. In the event of any divergence of interpretation, the English text shall prevail.
1982
DONE at this day of , in duplicate, in the Hungarian and English languages.
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For the Government of For the Government of
Hungary
New Zealand
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RELEASED
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without directional or geographic limitation and without loss of any right to carry traffic
otherwise permissible under this Agreement provided that the service serves a point in the
territory of the Party designating the airline.
Section 3
Change of Gauge
On any segment or segments of the routes above, any designated airline may perform
international air transport, including under code sharing arrangements with other airlines,
without any limitation as to change, at any point on the route, in type or number of aircraft
operated provided that, in the outbound direction, transport beyond such point is a continuation
of transport from the territory of the Party that has designated the airline and, in the inbound
direction, transport to the territory of the Party that has designated the airline is a continuation
1982
of transport from beyond such point.
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