Airline Business 25th anniversary messages and contributions

Brian Havel from DePaul University discusses why today's open skies deals should be a milestone rather than the culmination of liberalisation efforts

When faced with the prospect that the "end of history" was imminent, Nietzsche responded with revulsion to what he saw as the coming stultification of the human race. We, too, should experience a similar horror at the prospect that air transport liberalisation has reached its apotheosis through "open skies".

Intended to stretch the restrictive regime of bilateral treaties that had regulated international air traffic since the end of the Second World War, open skies should be seen as a significant milestone on the road to an authentically liberal global aviation market, but surely not as the culmination of our efforts.

The policy's most prominent features - open gateways, free pricing and capacity, change-of-gauge freedoms, and removal of "doing business" restrictions - merit high praise. But the retention of restrictions on foreign investment and the continuing embrace of cabotage deserve only derision in a world that has reaped the benefits of international trade.

To be clear, blame for these shortcomings does not rest with those free-market proselytizers in the US Departments of State and Transportation who invented open skies. Their willingness to push bold initiatives has been checked many times by populism, by special interests, and by a Congress which - even during recent Republican dominance - could not bring itself to countenance even a modest DOT reinterpretation of the foreign control rules.


 Brian Havel
Brian Havel is professor of law, associate dean of administration, director of the International & Comparative Law Program, and director of the International Aviation Law Institute at DePaul University Chicago. He also is a visiting scholar at University College Dublin.
Nonetheless, the State Department's air transport negotiators, ably led by recently retired deputy assistant secretary for transportation affairs John Byerly, did manage to negotiate the historic 2007 Air Transport Agreement with the European Union (as well as an amending protocol earlier this year). This air services compact between the economic giants of the transatlantic market contemplates deeper liberalisation, not just for their own aeropolitical relations, but for the global market as a whole.

Both sides, for example, have agreed not to rescind traffic privileges granted to third countries that allow US or EU citizens to take ownership and control interests in their national airlines. This is an important step toward "denationalising" the commercial environment for international aviation. It may also have a powerful demonstration effect that would encourage other states not to insist on citizenship "purity" before granting market access.

But the most formidable challenge to global aviation liberalisation still lies in US domestic politics. If open skies is to evolve, America - once the champion of air transport liberalisation - must accept a paradigm shift toward complete "denationalisation" of airline ownership and control.

Whether cabotage is also formally dismantled is really of little moment - if foreign citizens can buy US airlines or establish US subsidiaries of foreign airlines, US domestic cabotage routes will be theirs by regulatory right. And if the US can win symmetrical rights abroad for its own nationals - exactly what the EU offered during the recent negotiations - nothing further should stand in the way.

The inventor of open skies should rediscover what it once took for granted in its international aviation policy - an inherent recognition of the industry's "cosmopolitan mentalité", that is, its self-understanding as both an engine and an emblem of globalisation. The industry that allowed the world to globalise should itself become global.

Source: Airline Business