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In spite of the extensive literature on the regulation of air transport services, until the development of the Quantitative Air Services Agreements Review (QUASAR) methodology no systematic review existed of the degree of liberalization granted through air services agreements. The chapter lays out QUASARs key features, and presents the main results its application has generated. It then elaborates on how the methodology could be further refined and extended to other segments of the air transport industry yet uncovered. Based on QUASAR, the chapter critically evaluates some commonly held beliefs about the liberalization of international passenger transport and then moves on to explore the technical feasibility of creating a liberal multilateral regime for air transport services. QUASAR has demonstrated that, although the air transport sector has experienced some liberalization over the past few years, this has been, overall, rather marginal. The skies are not truly open.

This chapter reviews the effects of air transport liberalization, and investigates the roles played by airport-airline vertical arrangements in liberalizing markets. Our investigation concludes that liberalization has led to substantial economic and traffic growth. Such positive outcomes are mainly due to increased competition and efficiency gains in the airline industry, and positive externalities to the overall economy. Liberalization allows airlines to optimize their networks, and thus may introduce substantial demand and financial uncertainty to airports. Vertical arrangements between airlines and airports may offer a wide range of benefits to the parties involved, yet such arrangements could also lead to airline entry barriers which reduce the effects of liberalization. Three approaches have been developed to model the effects of liberalization in complex market conditions, which include the analytical, econometric and computational network methods. These approaches should be selectively utilized in policy studies on liberalization.

Recently, China has taken steps to open up its international air transport services at a higher level during its 14th Five-Year Period. As one step, a number of pilot free trade zones (PFTZs) have been launched with different tasks for foreign economic cooperation based on institutional innovation. Some cities in these zones have been chosen to develop airport economy by liberalization of the fifth freedom traffic right (FFTR). Considering the different economic situations between passenger and cargo market following the outbreak of the coronavirus, this chapter focuses on its implication of the FFTR for air cargo and airport economy in these cities. Some air service agreements (ASAs) between China and other countries have contained the arrangements on the FFTR. However, this study argues that such arrangements are too general and need further negotiation and policy support for practical utilization. FFTR liberalization may drive cargo growth and economic development in the cities which have gained such policy support, but it may also bring competitive pressure on Chinese airlines. Furthermore, the FFTR liberalization policies do not guarantee an immediate positive result in fostering airport economy, and much work is needed for better utilization of the FFTR in China.

The purpose of this paper is to examine, with a specific reference to the Indian economy, the interface between the World Trade Organization (WTO)/General Agreement on Trade in Services (GATS) disciplines and aviation services; the challenges to the incorporation of air services regimes into the world trade treaty; and the alternative routes for the liberalization of air services markets.

The paper adopts the doctrinal approach to legal research in analyzing literature on the integration of air services into the multi-lateral trading system. The paper takes a critical look at the current state of the aviation industry, the rationales and routes for liberalization, as well as the challenges facing it.

The paper reveals the state of the Indian aviation market and its preparedness for integration into the global market system. The merit of a gradual approach is examined.

The WTO framework offers the traditional route for the liberalization of trade. However, since the inception of air travel, air traffic rights have been traded between countries on a bilateral basis, involving concepts of sovereignty over national airspace. The paper offers some ideas on how the two can be integrated.

The research draws on recent events in the Indian aviation sector. It is of importance, especially to other emerging economies with similar social-economic indicators. It objectively questions the rationales for liberalization or globalization and its merits.

Deregulation of domestic markets and the liberalization of international markets have dramatically changed air transportation. One of the important results of this change is the environmental effects of air transportation. This study aims to examine the implications of air transportation on environmental sustainability in the context of airline business strategies in liberalized and globalized air transport industry.

The paper discusses the relationship between liberalization, airline strategies and environmental sustainability of air transportation using the related literature. Then, to show some environmental impacts on the axis of the relationship discussed, emission rates for the aircraft landing and take-off phase were calculated on a global basis based on the aircraft traffic.

The discussion in the paper shows that the liberalization policies and the strategies of airlines supported by these policies, in essence, contradict the environmental sustainability of air transport. Considering the flight share projections of EUROCONTROL for different aircraft types on a global basis and the World Bank’s global flight traffic forecast for the years 2016 and 2025, it has been demonstrated that the number of aircraft departures will increase by 30%, whilst the number of aircraft emissions will increase by 41.5%.

Airlines are one of the main actors that will play a role in reducing the environmental impacts of air transportation. Therefore, this study is important in giving an idea to both policymakers and airline managers on how airline companies’ strategies should be shaped to realize both corporate sustainability and environmentally sustainable air transportation.

There are many studies in the literature regarding the environmental effects of air transport. However, there are not many studies linking environmental impacts with airline strategies that directly affect air transport demand. This study is different in that it gives environmental sustainability by associating it with its root causes.

The rapid expansion of low-cost carriers (LCCs) in East and Southeast Asia has brought fierce competition to full-service carriers (FSCs). Competition in the air transport market is at an all-time high, thanks to the ongoing liberalization in air transport in the last several decades. This chapter assesses the efficiency performance of major FSCs in this region. It provides indicative evidence of the close association between FSCs' efficiency, and air transport liberalization and LCCs penetration. Singapore Airlines and Asiana are identified as the star companies in this region for their ability to achieve higher efficiency and, at the same time, report positive growth in productivity.

European air transport policy, emerged through the confluence of case law and legislation, in four broad areas: liberalization, safety and security, greening, and the external policy. Following the implementation of the single market for air transport, policy shifted to liberalizing and regulating associated services and in recent years to greening, the external aviation policy, and safety and security. Inclusion of air transport in the Environmental Trading Scheme of the European Union exemplifies the European Commission’s proactive stand on bringing the industry in line with emission reduction trajectories of other industries. However, the bid to include flights to third countries in the trading scheme pushed the EU into a controversial position, causing the Commission to halt implementation and to give ICAO time to seek a global multilateral agreement. The chapter also discusses how the nationality clauses in air services agreements breached the Treaty of Rome, and a court ruling to that effect enabled the EC to extend EU liberalization policies beyond the European Union, resulting in the Common Aviation Area with EU fringe countries and the Open Aviation Area with the USA. Another important area of progress was aviation safety, where the EU region is unsurpassed in the world, yet the Commission has pushed the boundary even further, by establishing the European Safety Agency to oversee the European Aviation Safety Management System. Another important area of regulatory development was aviation security, a major focus after the woeful events in 2001, but increasingly under industry scrutiny on costs and effectiveness. The chapter concludes by arguing that in the coming decade, the EU will strive to strengthen its position as a global countervailing power, symbolized in air transport by a leadership position in environmental policy and international market liberalization, exemplified in the EU’s external aviation policy.

This chapter reviews the history of regulation and deregulation in international air transport and discusses the positive impacts of deregulation and open skies on the tourism sector in the Asia Pacific region. The Hong Kong–Bangkok market was examined, which shows that the granting of the fifth freedom rights has given the two places sufficient air service provisions to build tourism. Future reforms in air transport such as relaxing ownership restrictions and expanding air freedoms rights are explored.

This chapter examines the unique regulatory environment that trans-border air carriers work within. Using a U.S. perspective the concept of the bilateral air agreement is outlined and discussed. These agreements form the basis for how two countries decide to share their airspaces among their air carriers. The trend has been toward more liberal approaches. To explain this trend the concepts of the Freedoms of the Air and Open Skies are discussed. Other liberalization programs are also discussed; specifically, co-terminalization and cabotage. Finally, the air cargo transfer operations at Ted Stevens Anchorage International Airport are used as an example to highlight a rare example of unilateral liberalization on the part of the United States.