About the right accorded to airlines with the countries trade agreement.
Freedom of the Air
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The term freedom of the air is misleading for those not in the airline business. It appears to implies that there is freedom, when in actual cases there are restriction. The restriction comes from two concepts, the sovereignty of airspace and economic control of the country’s resources. The restriction was agreed in the ICAO agreement.
Nature of Air Transport
Air transportation is different to most other forms of transportation or commerce, not so much of the international components but also because of the governmental active participation in the decision making. In fact that many national airlines or ‘flag carriers’ are either government owned, or, even if not, are supported by the government. This is because, having a flag-carrier is considered as a prestige to their nation
In addition, nations often feel that they can only rely on their locally owned carriers to have a commitment to providing service to their own country. This is unimportant if you’re a small country in Europe with excellent road and rail service to other countries, but if you’re a remote island in the Pacific, air service is essential.
Building the Restrictions
And so, for reasons variously reasons, international air travel has long been subjected to all manner of complicated restrictions and bilateral treaties between nations. One of the main treaties that sets out the fundamental building blocks of air transportation regulation – the ‘rules of the road’ – is the Chicago Convention in 1944.
These ‘building blocks’ are widely referred to as the “freedoms of the air”, and they are fundamental to the international route network we have today. There are five basic freedoms that are, more or less, recognized by all countries, two others less widely accepted, and one hardly accepted at all.
The specific conditions of the agreement, such as establishing the frequency of flights, that are determined through bilateral agreements between any two countries.
First Freedom – The right to fly and carry traffic over the territory of another partner to the agreement without landing. (Almost all countries are partners to the Convention but some have observed this freedom better than others. When the Korean airliner lost its way over Soviet air space a few year ago and was shot down, the Soviet Union (among other offenses!) violated this First Freedom.). However, some would consider this as his right of self protection. Overfly.
Second Freedom – The right to land in those countries for technical reasons such as refueling without boarding or deplaning passengers. Technical Stop.
Third Freedom – The right of an airline from one country to land in a different country and deplane passengers coming from the airline’s own country. Off Load passengers or goods.
Fourth Freedom – The right of an airline from one country to land in a different country and board passengers traveling to the airline’s own country. Upload passengers or goods.
Fifth Freedom – This freedom is also sometimes referred to as ‘beyond rights‘. It is the right of an airline from one country to land in a second country, to then pick up passengers and fly on to a third country where the passengers then deplane. An example would be a flight by American Airlines from the US to England that is going on to France. Traffic could be picked up in England and taken to France.
Sixth Freedom – The right to carry traffic from one state through the home country to a third state. Example: traffic from England coming to the US on a US airline and then going on to Canada on the same airline.
Seventh Freedom - The right to carry traffic from one state to another state without going through the home country. Example would be traffic from England going to Canada on a US airline flight that does not stop in the US on the way.
Eighth Freedom – This is also called cabotage and almost no country permits it. Airline cabotage is the carriage of air traffic that originates and terminates within the boundaries of a given country by an air carrier of another country. An example of this would be an airline like Virgin Atlantic Airways operating flights between Chicago and New Orleans.
The attempt to deregulate the airlines operation started in 1976 in USA. When the markets were left to determine the airlines’ operations, the scheduling the pricing, the result were disastrous to some airlines. We saw the end of airlines such as Pan Am and Eastern Airlines.