Air Service Agreement Liberalisation And Airline Alliances

Open skies agreements have significantly increased international passenger and cargo flights to and from the United States, encouraging more travel and trade, increasing productivity and boosting employment opportunities and quality economic growth. Open skies agreements do this by eliminating state intervention in airline business decisions about routes, capacity and prices, and by enabling airlines to provide consumers with more affordable, convenient and efficient services. This report examines key elements of bilateral air services agreements and recent trends in liberalization. It examines the links between air agreements and international aviation alliances. The report addresses issues related to revisions to proposed cartels and abuses of dominance and analyzes the impact of liberalized air service agreements and alliances on competitiveness and economic prosperity. Although liberalized or open skies agreements generally do not contain provisions for the authorisation of aviation alliances, their provisions generally change market conditions to meet the requirements of competition authorities, facilitate accreditation and exploit gains in connectivity and efficiency. This report is part of the International Transport Forum`s “Political Analysis by Country” (CSPA) series. These are recent studies on specific transport policy issues carried out by the ITF on request for a country. The United States has made open skis with more than 100 partners from all regions of the world and at all levels of economic development. In addition to the bilateral open skies agreements, the United States negotiated two multilateral open skies agreements: (1) the 2001 Multilateral Agreement on the Liberalization of International Air Transport (MALIAT) with New Zealand, Singapore, Brunei and Chile, to which Samoa, Tonga and Mongolia subsequently joined; and (2) the 2007 Air Services Agreement with the European Community and its 27 Member States.

America`s open skies policy goes hand in hand with the globalization of airlines. With airlines` unlimited access to our partners` markets and the right to fly all intermediate points and crossing points, open-air agreements offer maximum flexibility for airline alliances. Supply restrictions are the main obstacle to the liberalisation of air transport. The liberalization of air transport is in a phase of different maturity in the four examples. The evolution of transport over time can give an overview of the impact of progressive liberalization in all cases: overall traffic increases more rapidly when restrictions are lifted, but new demand is not distributed equitably between airports on both sides. The effects on concentration, as measured by the Herfindahl-Hirschman Index (HHI) at the airport level, vary considerably from market to market. Political, geographic, demographic and economic factors influence the dynamism of the air network and lead to different patterns of expansion. Particular attention will be paid to the analysis of the role of aeronautical alliances, ownership restrictions and specific obstacles such as visa restrictions and Siberian overflight licences. Most air services are excluded from U.S.

trade agreements. When air services are included, the scope is very limited. In these cases, the Office of International Aviation cooperates with the Office of the United States Trade Representative and the State Department to ensure that these provisions are consistent with U.S. aviation policy. In the General Service Tariff Agreement (GATS), the Air Services Annex explicitly limits air service coverage to aircraft repair and maintenance operations, computerized reservation systems, and the sale and marketing of air transport. Under our bilateral and multilateral free trade agreements (FTAs), air service coverage is limited to repair and maintenance services for