chapter  10
20 Pages

Cheap liberalisation

157Cutting regulatory corners in air transport or cutting one’s own throat?
WithJan Walulik

Liberalisation has led to exchange of 5th freedom of the air, deregulation of airline designation, tariffs, frequency and routes. This shift is widely perceived as a success. However, it is far from being complete. The industry usually calls for further liberalisation of traffic rights, operational rights and airline ownership and control.

Generally, these recommendations seem sound. However, any regulatory reform should be based on the long-term policy goals, rather than on current political availability of certain legal measures. A preliminary analysis of specific liberalisation proposals suggests that some easy solutions may be counterproductive and harmful for the industry.

This chapter will concentrate on 7th and 9th freedoms of the air. Due to lack of legal safeguards, liberalisation in this respect may lead to ‘offshore’ operations without appropriate regulatory oversight, and thus compromise aviation safety. In the long run, it may also hamper liberalisation awaited in other fields of air law.

In conclusion, a more balanced solution for liberalisation will be proposed. It will be argued that a proper reform of airline ownership and control restrictions may successfully substitute for the economic benefits of the 7th–9th freedoms of the air, although at a lower price for the industry’s safety.