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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.
Draft – in progress
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
Draft – in progress
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
Draft – in progress
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.
Draft – in progress
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.
Draft – in progress
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/.
Draft – in progress
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).
Draft – in progress
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
Draft – in progress
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.
Draft – in progress
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
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), 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
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), 4. 42
Ibid, 4-5.
Draft – in progress
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.
Draft – in progress
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.
Draft – in progress
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
Draft – in progress
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.
Draft – in progress
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
Draft – in progress
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
Draft – in progress
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
Draft – in progress
Figure VI The Overview of External Assessment of Conflict Zones
0
50
100
150
200
250
300
USA
France
UK
UAE
China
South Africa