Экономические науки/2. Внешнеэкономическая деятельность

Mykhalchenko I.

National Aviation University, Ukraine

The Evolution of Air Service Agreements

International air services are regulated by a complex web of bilateral and reciprocal Air Service Agreements (ASAs), which were designed to protect national carriers, but now limit the ways in which carriers can provide air services. Some countries have begun to liberalize ASAs, creating opportunities for carriers and users of air services to benefit through improvements in productivity and wellbeing.

In 1944, when the World War II was in closing stages, 54 countries came to the Conference in Chicago, USA to talk about the future of international aviation. The conference resulted in the signing of the Convention on International Civil Aviation, commonly known as the Chicago Convention. The Chicago Convention established the rules under which international aviation operates. It also established the International Civil Aviation Organization (ICAO), the United Nations organization responsible for fostering the planning and development of international air transport [1].

The Chicago Convention determined that no scheduled international air service may be operated over or into the territory of a contracting state without their permission. So, it was the beginning of bilateral relationships between the countries in the field of aviation. But in 1913, in what was probably the earliest such agreement, a bilateral Exchange of Notes was signed between Germany and France to provide for airship services [2].

A bilateral air transport agreement (also sometimes called a bilateral air service agreement or ATA or ASA) is an agreement which two nations sign to allow international commercial air transport services between their territories.

USA was initiator of bilateral agreement on Chicago Convention as a country that had great temps of economic development. The Chicago project of bilateral agreement was underlain the point about mutual grant by the sides of agreement of all five types of commercial «air freedoms». The Chicago type of agreements was as an intermediate measure of routes and rights exchange with the purpose to establish the unique multilateral regime of air transportation in the world. Such agreement did not include the capacity and tariffs points (see table).

Table

The characteristic of air transportation agreements

	Market Access	Carrier Capacity	Carrier Tariffs
Chicago type agreement	limit set of routes, freedoms of air; operating component.	does not contain positions	does not contain positions
Bermuda type agreement	limit set of routes, freedoms of air; operating component.	capacity determination	regulation of tariffs; flexible system of tariffs.
Liberalized agreement	wide access, no regulation	minimum or no regulation	free of government control

According to the fact that it was not achieved the multilateral regulation of international transportation and that the Chicago type agreements grant the advantages to the high developed counties, this type of agreements was not spread in the world.

One of the first air service agreements after World War II was the Bermuda Agreement. This agreement was signed by the United States of America and the United Kingdom in 1946. Features of Bermuda agreement became models for the many of such agreements that were to follow.

The Bermuda type agreements are the first generation agreements that reflect the regulation of the market. The second generation agreements reflect the deregulation processes and the third generation agreements are open skies agreements which are rather liberal than the original ASAs.

First generation ASAs granted third and fourth freedoms to a single designated carrier from each country and limited the set of routes that carriers can fly. In Bermuda I regime, changes in airfares are negotiated by carriers at conferences under the auspices of the International Air Transport Association (IATA), and require the approval from each government. Service standards are also set in a way that limits non-price competition across carriers. Capacity limits are also common, ensuring that neither country’s airline has the ability or incentive to dominate passenger flows on particular routes. The result is little or no competition and high fares on most international routes.

In the 1990s, a new generation of liberalized ASAs emerged, called Open Skies Agreements (OSAs). The principle governing OSAs was to liberalize everything but investment restrictions and cabotage rights. The latest example is the concluded OSA between the US and the EU in 2008 [3].

It is estimated that, in 2012, this involved about 35 per cent of country-pairs with non-stop scheduled passenger air services and about 58 per cent of the frequencies offered, through either bilateral “open skies” air services agreements (ASAs) or regional/plurilateral liberalized agreements and arrangements (compared with about 23 per cent and 46 per cent, respectively, eight years ago as shown in Figure 1 below) [4].

As of March 2013, 440 Open Skies Agreements (OSAs) have been signed: 112 States signed OSAs with the United States, twenty-four with the EU, or any of its members, and nineteen States signed OSAs with both the EU (or any of its member States) and the United States. Over 60 per cent of the agreements also grant “Seventh Freedom” traffic rights for all-cargo services (twelve agreements granting this right for passenger services, and ten agreements granting “Eighth Freedom” traffic rights or consecutive cabotage rights for all services) [4].

So, nowadays the air transportation market is rather liberal. That’s why it’s necessary to meet the tendency prepared to achieve the advantages from such conditions.

Literature:

1. Bilateral Air Service Agreements / AviationKnowledge. – Resource: http://aviationknowledge.wikidot.com/aviation:bilateral-air-service-agreements.

2. Bilateral air transport agreement / Wikipedia. – Resource:

http://en.wikipedia.org/wiki/Bilateral_air_transport_agreement.

3. Jomini P. The changing landscape of Air Service Agreements / P. Jomini, A. Chai, P. Achard, J. Rupp. - 30 June 2009. – 18 p.

4. Regulatory and industry overview / ICAO Secretariat. – ICAO, 2013. – 29 p.