Could the cargo sector quietly be leading the way towards more liberal international air service agreements? Trend analysis of recent bilaterals suggests that it could

Talk of liberalisation tends to concentrate on the high-profile deregulation of passenger services. Rarely do all-cargo or freighter operations take centre stage. Yet history suggests that freight could indeed prove to be an important bell-wether for the course of wider liberalisation. Take the example of US deregulation in the late 1970s. All-cargo operations were freed a year before passenger services. Could the regulatory liberalisation of international all-cargo service follow a similar path and outpace that of passenger services?  

Bilateral agreements containing cargo provisions

Date of signing

Total bilaterals signed

With cargo statements number share

Granting equal & separate rights number share

Single airline designation number share

1995 - 2001


14 8%

76 45%

22 13%

1990 - 1995


20 7%

68 24%

19 7%

1985 - 1990


9 6%

31 20%

19 12%

1980 - 1985


5 3%

12 8%

6 4%

1975 - 1980


14 4%

30 10%

14 5%

1970 - 1975


5 2%

8 3%

nil 0%

1965 - 1970


14 7%

3 1%

nil 0%

Note: Total bilaterals = The number of air service agreements signed in the period. With cargo statements = Agreements containing provisions for route or routes dedicated to all-cargo service, or which contain a note in the routes scheduling, or other part of the tex, referring to all-cargo service. Granting equal rights = Agreements in which cargo service is explicitly delineated from passenger service. Single airline designation = Agreements specifically designating a single airline and containing the phrase "separately or in combination". Source: Aero-Accords.

To answer that question, Aero-Accords has reviewed all new agreements registered with ICAO and the United Nations, plus various air service agreements provided by other sources. That represents over 1,500 signed during the past three decades. These have been grouped into five-year periods by date of signature - generally a more telling guide than either the entry-into-force or registration date.

The number of agreements signed in any five-year period can vary largely although the proportion of them that directly and exclusively address freight service seems to remain consistently low- never beating the 8% mark.

Yet analysis of these headline figures can be misleading. In the most recent periods, these few cargo specific agreements include those from the USA authorising all-cargo operations outside home territory - seventh-freedom. Other agreements of the same periods address inter-modal freight operations. Both of these features can be thought of as improving cargo market liberalisation by providing greater operating flexibility. Yet an even more profound change in cargo opportunity can be generated by granting international air rights.

Each air service agreement has - or should have - one article which enumerates the transit and traffic rights being exchanged. Originally there were wide variations in the formats common in air-rights articles chosen by English-, French- and Russian-speaking states. But over the years, the format found in most agreements has come to follow the English-speaking model. Nevertheless, within this format, slight changes in wording can offer significant changes in application.

The simplest and most common wording incorporates the statement "to embark and disembark international traffic in passengers, cargo and mail -", without specifying the type of aircraft or the kind of service which may carry such traffic. Such specifications are to be found in the route schedule or elsewhere within the body of the agreement. For example, details of inter-modal service are generally placed in a separate article within the body of the agreement, while any separate all-cargo routing can be found in the annex within the route schedule.

A similar format, which is increasingly common, is of the form which mandates companies "to embark and disembark - passengers, baggage, cargo and mail separately or in combination -". This wording provides the opportunity for all-cargo operations in parallel with passenger and/or combination services, whether or not other provisions for all-cargo services are provided in the body or annex of the agreement.

It can be successfully argued that the former format did not exclude parallel passenger and all-cargo services. Nevertheless, incorporation of the words "separately or in combination" testifies to the negotiators' intent that separate all-cargo operations are acceptable.

Additionally, their inclusion in agreements which provide for only a single airline designation supports the application of one designated airline offering combination passenger/cargo service and the potential of another separate airline offering all-cargo service.

By extension, it could be argued that these agreements endorse multiple "single" airlines operating separate routes and/or separate services on the same route. The incorporation of seventh freedom - plus inter-modal and separate all-cargo operations - says that international regulatory liberalisation of cargo services is very active and may indeed be outpacing that of passenger services.

Source: Airline Business