Government policy makers and bureaucrats regulating the airline industry would agree that their long-run objectives are essentially two-fold: to serve consumer interests and to ensure a strong and viable airline industry within the country. This chapter argues that liberalization of bilateral air services agreements will help achieve both of these long-run policy objectives. It discusses the challenges facing Asian carriers in their journey towards liberalization and various issues Asian countries may encounter in adopting different approaches to liberalize their air transport markets. In many Asian countries, consumer power is weak as compared to in North America and Europe. Japan is the most economically advanced country in Asia. International trade in civil aviation services is constrained by a complicated and outdated system of bilateral agreements, which govern every aspect of the airline business: market entry and exit, carrier designation, capacity, frequency, type of aircraft used, prices, and other business conditions.