International Transport Forum Discussion Papers

ITF Discussion Papers make economic research, commissioned or carried out in-house at the International Transport Forum, available to researchers and practitioners. They describe preliminary results or research in progress by the author(s) and are published to stimulate discussion on a broad range of issues on which the ITF works.

English, French

Dominant Carrier Performance and International Liberalisation

The case of North East Asia

Numerous studies on the aviation industry have confirmed that significant benefits can be brought by liberalizing the international market. After a comprehensive review of the recent studies on this issue, Fu and Oum (2014) concluded that there is strong evidence that liberalisation introduces substantial economic benefits to the countries involved. In the airline industry, liberalisation has led to increased airline competition, decreased average fares, increased frequency, improved load factor and airline productivity, increased traffic volumes and new route services. These changes not only lead to higher employment and economic output in the aviation industry, but also provide better inputs to other related sectors such as tourism, trade and logistics. Yet despite such well recognized benefits, mostly developed countries have liberalised their air service agreements, notably the United States followed by the EU. As of 2003, 57 liberalisation agreements out of 87 involved the U.S. As of October 2012, over 400 liberalized agreements were reached among 145 economies, among which more than 100 were U.S. open-skies agreements (ICAO 2013). In most other markets, air liberalisation has made limited progress over the past decades, even in regions characterized with strong economic and international trade growth.


This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error