By Linda Chiem

Law360 (March 12, 2020, 9:31 PM EDT) -- President Donald Trump's abrupt decision to restrict travel between the European Union and U.S. in an attempt to stem the coronavirus outbreak has triggered regulatory chaos for the global aviation industry and questions about U.S. violations of international aviation agreements, experts say.

The president, in an address from the Oval Office on Wednesday night, banned European travelers from 26 countries from entering the U.S. for 30 days starting at midnight Friday, but noted that the travel restrictions won't apply to U.S. citizens and permanent residents, their immediate family members, as well as the United Kingdom.

The executive order set off an immediate scramble among airlines to trim routes and brace for staggering service disruptions and financial losses, and drew a rebuke from European Commission officials, who said in a statement Thursday that they were blindsided by a U.S. decision that was taken "unilaterally and without consultation."

Experts agreed that industries worldwide should take the necessary precautions to ensure public health and safety amid the pandemic, but expressed concern that a cherry-picked travel ban containing loopholes for some people still traveling to and from the region might not be entirely effective in managing the outbreak.

Additionally, the U.S. ban covering European travelers — which comes on the heels of existing U.S. travel restrictions for China, Iran and other countries that have been hit hard by COVID-19 — raises questions about whether such actions are tantamount to a violation of bilateral air transport agreements or so-called open skies agreements, and what the potential repercussions might be.

"In this unprecedented time, we are witnessing some governmental decisions that are not only contrary to long-recognized international norms, but also do not appear to be grounded in facts or common sense," said Roy Goldberg, a partner with Stinson LLP. "The equal, nondiscriminatory treatment of domestic and foreign air commerce, and domestic and foreign travelers, is the touchstone of the complex network of agreements regulating international aeronautical traffic of which the U.S. is a major beneficiary."

Goldberg explained that under the 1944 Chicago Convention on international aviation, open skies agreements and bilateral compacts between the U.S. and other nations — including European countries — require that air carriers of other countries and their passengers be subjected to evenly applied laws and regulations.

"Such considerations were tossed aside last night when the U.S. government announced that European nationals will be barred from flights to the U.S.," Goldberg said.

It remains to be seen what legal remedies governments or airlines might have to blunt the impact of such a sweeping ban, given that formal challenges to violations of international air transport agreements can be rare and typically go through a lengthy dispute resolution process.

Goldberg pointed to Article 84 of the Chicago Convention, which states that "if any disagreement between two or more contracting states relating to the interpretation or application of this convention ... cannot be settled by negotiation, it shall, on the application of any state concerned in the disagreement, be decided by the council" of the International Civil Aviation Organization. A total of five disputes have been addressed under this article since ICAO was established in 1944, he said.

But open skies and bilateral agreements also have dispute resolution or arbitration provisions, offering ways for airlines — not just their governments — to pursue legal redress against the U.S. for the discriminatory treatment, Goldberg said.

Bart Banino, an aviation litigation partner with Condon & Forsyth LLP, agreed that airlines and other aviation businesses — already reeling from wary passengers fearful of flying during the outbreak — will be grappling with diminished traffic and fallout well beyond the initial 30 days the ban is in effect.

"It calls into question the principles of the open skies agreement, but of course, the U.S. government and the president are working on an effort that he believes is in the best interest of the country," Banino said. "But it certainly raises the issue that sometime in the future, other countries may impose similar bans on U.S. citizens traveling to their countries."

The International Air Transport Association, the leading trade association for global airlines, issued a statement Thursday urging governments to weigh the enormous financial pressures that such drastic actions have on the industry.

"This will create enormous cash-flow pressures for airlines. We have already seen Flybe go under. And this latest blow could push others in the same direction," IATA Director General and CEO Alexandre de Juniac said in a statement, referring to the regional U.K. carrier that recently shut down, partly because of the coronavirus.

De Juniac said such "extreme circumstances" should prompt governments to consider all possible means to assist the airline industry, such as extending lines of credit, reducing infrastructure costs or lightening the tax burden.

"Air transport is vital, but without a lifeline from governments, we will have a sectoral financial crisis piled on top of the public health emergency," de Juniac said.

Airlines for America, the lead lobbying group for U.S. airlines, lauded the president's "decisive action" in protecting the health and well-being of American people and reiterated that the safety of passengers, crew and cargo is, and always will be, its top priority.

"The unforeseen outbreak of the coronavirus has directly impacted the U.S. airline industry, which is critical to the U.S. and global economies," the group's president and CEO, Nicholas E. Calio, said in a statement late Wednesday. "This action will hit U.S. airlines, their employees, travelers and the shipping public extremely hard. However, we respect the need to take this unprecedented action and appreciate the administration's commitment to facilitate travel and trade."

But some are optimistic. Mark Dombroff, a partner with Fox Rothschild LLP and a former U.S. Department of Justice and Federal Aviation Administration attorney, told Law360 on Thursday that airlines are well-suited to adapt to global emergencies.

"Obviously, there will be significant financial implications and that's true for the airlines themselves, ground handling crew, airport landing fees, because like almost all industries, there are ripple effects," Dombroff said. "In some respects, there's probably very few industries in the world that are as well-prepared as the airline industry is to deal with these business continuity or emergency situations."

But some questioned the role that politics played, rendering the situation with airlines worse than it needed to be.

"The U.S. decision would frankly have more credibility if there was not a recent record of friction between the White House and European governments, as reflected by the unprecedented [World Trade Organization] tariff/sanctions trade war between the U.S. and Europe," Goldberg said. "International law could take a backseat if there were dangers to avoid. But studies have shown that the particular air screening on an airline is better than most other public places."

The World Health Organization has documented some 125,000 cases of the novel coronavirus worldwide, with approximately 4,600 deaths. In the U.S., the Centers for Disease Control and Prevention has confirmed 1,215 cases and 36 deaths.

The outbreak has rocked financial markets, with stocks tumbling on Thursday to their lowest point since 1987. There's been widespread cancellation of large public events and announcements that New York City's Broadway performances and Southern California's Disneyland will be shutting down for several weeks. During his address, Trump asked Congress to provide $50 billion worth of funding to help the Small Business Administration furnish loans to businesses negatively affected by the virus. He also called for lawmakers to enact a payroll tax cut.

--Additional reporting by Alex Lawson. Editing by Aaron Pelc and Emily Kokoll.

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