bluesideup340
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US, EU, Others Agree On Airline Liberalization Framework
By Ann Keeton, Of DOWJONES NEWSWIRES
Representatives of the European Commission, the United States and six other countries on Monday signed a pact to set the framework for less restrictive regulations on the international airline industry that could pave the way for global consolidation.
The framework, which covers 60% of the global airline market, came out of the Agenda For Freedom Summit in Montebello, Quebec, Canada, sponsored by the International Air Transport Association.
Giovanni Bisignani, head of the airline trade group, said the countries signed a statement of policy principles to bring more liberal business practices to the international airline industry. Currently, international air service is regulated through a complex web of bilateral "open skies" treaties. Other industries aren't subject to such restrictions, Bisignani said. He said the 65- year-old regulatory system has hampered the airline industry to the point that it can't enjoy sustained profitability.
The new statement indicates governments' willingness to give airlines the freedom to pursue foreign ownership, as well as lift restrictions on flights, fares and routes.
Countries also signing the new agreement include Chile, Malaysia, Singapore, Panama and the United Arab Emirates.
Other countries, including India and Canada, are reviewing the proposal, Bisignani said.
A study of 12 countries by IATA found that more liberal business rules for airlines would add about 1% to each country's GDP, increasing air traffic by about one-third. For consumers, air fares would drop an average of 16% around the globe as airlines got more efficient.
"Carriers for many years have been fighting with one hand tied behind their backs," Bisignini said.
After World War II, countries agreed on multilateral safety rules, but didn't find common ground for commercial regulations. Under the new regulatory framework, the open-skies agreements would remain in place, but countries would refrain from enforcing regulations that hamper airlines' businesses.
-By Ann Keeton, Dow Jones Newswires; 312-750-4120;[email protected]
By Ann Keeton, Of DOWJONES NEWSWIRES
Representatives of the European Commission, the United States and six other countries on Monday signed a pact to set the framework for less restrictive regulations on the international airline industry that could pave the way for global consolidation.
The framework, which covers 60% of the global airline market, came out of the Agenda For Freedom Summit in Montebello, Quebec, Canada, sponsored by the International Air Transport Association.
Giovanni Bisignani, head of the airline trade group, said the countries signed a statement of policy principles to bring more liberal business practices to the international airline industry. Currently, international air service is regulated through a complex web of bilateral "open skies" treaties. Other industries aren't subject to such restrictions, Bisignani said. He said the 65- year-old regulatory system has hampered the airline industry to the point that it can't enjoy sustained profitability.
The new statement indicates governments' willingness to give airlines the freedom to pursue foreign ownership, as well as lift restrictions on flights, fares and routes.
Countries also signing the new agreement include Chile, Malaysia, Singapore, Panama and the United Arab Emirates.
Other countries, including India and Canada, are reviewing the proposal, Bisignani said.
A study of 12 countries by IATA found that more liberal business rules for airlines would add about 1% to each country's GDP, increasing air traffic by about one-third. For consumers, air fares would drop an average of 16% around the globe as airlines got more efficient.
"Carriers for many years have been fighting with one hand tied behind their backs," Bisignini said.
After World War II, countries agreed on multilateral safety rules, but didn't find common ground for commercial regulations. Under the new regulatory framework, the open-skies agreements would remain in place, but countries would refrain from enforcing regulations that hamper airlines' businesses.
-By Ann Keeton, Dow Jones Newswires; 312-750-4120;[email protected]
