chapter  8
16 Pages

Transnational airlines

It is true that some national governments are beginning to relax restrictions on foreign ownership, but if foreign ownership goes beyond a certain point, this raises serious questions regarding traffic rights on international routes. Ownership clauses in bilateral air service treaties restrict the grant of the relevant freedoms of the air to airlines owned and controlled by nationals of the state concerned. As things stand, if an airline of one state takes over the airline of another state, then this could invalidate the third, fourth, and fifth freedoms held by the airline being taken over, on the ground that it no longer qualifies as a national airline of the state concerned. In terms of Figure 4.6, if the airline of State B took over the airline of State A, this could mean the loss of third and fourth freedoms between State A, and States X and Y.