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treaties are still governed by these principles, and
others are influenced by deliberations undertaken,
but not ratified, at the Chicago Conference. The
`Two Freedoms Agreement' considered in Chicago
remains the most basic of international aviation
rights agreements. The first freedom provides
for safe passage over the sovereign territory of
another nation. The second freedom provides for a
non-commercial stopover in another nation. The
`Five Freedoms Agreement' likewise remains significant
as a statement of international aviation
rights. In addition to the first two freedoms, it
called for nations to permit commercial carriage to
a bilateral partner, from a bilateral partner, and to
a bilateral partner and beyond to another bilateral
partner.
Although the areas of agreement following
Chicago were considerable, the areas of disagreement
were even more numerous. Further clarity of
governance issues came in 1946, but without total
agreement. At the behest of the United Kingdom
and the United States, a temporary bilateral
agreement between the two nations was reached in
what commonly is referred to as the Bermuda
Agreement. This embraced in principle the five
freedom rights of the Chicago Conference ± that is,
overfly, technical stopover, to, from and beyond
rights ± but practically committed both parties to
only the first four freedoms. The typical Bermuda
Agreement specified the routes served, number of
carriers eligible to provide service, and other
capacity constraints. Most notably, the typical
Bermuda Agreement deferred fare and rate issues
to development by the International Air Transport
Association, a carrier-based discussion
group.
Owing to a curious mix of economics and
politics, airline deregulation became the official
policy of the United States in 1977. Deregulation
by whatever name means placing a maximum
reliance on market forces rather than government
regulatory schemes in setting prices and capacity.
The domestic air cargo industry was deregulated
that year, and the domestic airline passenger
service the next year. Other domestic transportation
markets were largely deregulated in 1980. In
the same year, the USA declared its intention to
support deregulation of international airline markets.
But unlike domestic markets, no nation can
unilaterally impose its policies upon international
markets. For the past twenty years, the United
States and others have tried to negotiate open skies
agreements, pushing for the full exchange of rights
and a diminished role for the International Air
Transport Association. Notable successes have
been achieved in Europe and Asia, but much
remains to be accomplished. Deregulation means
placing a maximum reliance on market forces
rather than government regulatory schemes in
setting prices and capacity. Some refer to the
system as one of caveat emptor; but only time will tell
who the buyer is.
Further reading
international aviation liberalisation 317
Dobson, A.P. �1995) Flying in the Face of Competition,
England: Avebury Aviation.
Haider, D. �1996) `The United States±Japan Gateway
Awards Case of 1990: international competition
and regulatory theory', Public Administration
Review �January/February). �Examines the impact
of deregulation and increased competition
on regulatory politics in the international
setting.)
Hill, L. �1997) `Bilateral ballistics', Air Transport
World �February): 53ff. �Discusses the replacement
of traditional air services agreements with
open skies agreements.)
international aviation
liberalisation
KEVIN BOBERG, USA
International aviation liberalisation is a result of
the airline deregulation movement that began in
the United States in 1977 �see deregulation,
airline). Emphasis was placed on the removal of
economic regulatory barriers, which hindered a
free market approach to domestic and international
air services. Gradually this freedom spread to
other regions of the world, and it continues today.
As nations and economies become more globally
linked and interdependent, the necessity for free
market approaches to international aviation services
is essential.