Asia’s Air Services Regulation More Regulated Than EU

Date: 2015-08-27

The level of air services liberalisation is arguably a more important factor driving demand for airports than airport charges themselves.

International air services between countries operate under the terms of bilateral air service agreements (ASAs) negotiated between the two countries. These ASAs between countries typically state which airlines can operate between them, the routes they can operate on and whether the airlines are granted fifth freedom rights. Often these ASAs also put limits on the frequency and capacity at which the airlines can operate on the stated routes.

The EU and the US are single aviation regional markets, which means airlines are free to fly from any airports in these markets irrespective of where the airlines are based. In contrast, the air markets in Asia are highly regulated. 

International route rights in Asia are governed by a series of often undisclosed, country-to-country bilateral agreements. Regulation at most of the major airports for third and fourth freedom flights is light. There are considerable fifth freedom rights, i.e. Cathay Pacific flying Hong Kong to Singapore and then on to Jakarta, in Asia. However, unlike in the EU, these fifth freedom rights are not automatic for Asian airlines and are allocated by countries in return for rights for their home-base airline. 

While there are still many regulatory bottlenecks in Asia, with the exception of mainland China and India, international point-to-point route rights in Asia are relatively liberal, especially in the ASEAN markets. Finally, the planned ASEAN liberalization due in 2015 may further improve access to key cities in many ASEAN countries. (HSBC)


Contact With Us
Join templatemonster at google+
Customized Research
Request Sample