The EU-ASEAN Comprehensive Air Transport Agreement and the ASEAN’ cross border joint ventures: The prospects of ASEAN single aviation
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Aviation in ASEAN accounted a remarkable expansion over the last decade. Domestic scheduled traffic passenger grew by 10.7% in 2017, making it the world’s largest domestic market. Despite the fact that ASEAN is still not a complete open sky, Low cost carriers’ penetration grew from less than 30% to over 50% in 2018. This was mainly due to the introduction of cross border joint ventures that captured an important share of the domestic market. ASEAN in that perspective is near completing the comprehensive air transport agreement with the European Union. This paper assessed the prospects of ASEAN single aviation market by analyzing the effectiveness of cross border joint ventures with the open sky already in place and analyzed if the new comprehensive air transport agreement would contain up to the sixth freedom carriers to overcome the fierce competition of the sixth freedom carriers already operating under designed bilateral agreement between EU and ASEAN member states. The study found that the establishments of cross border joint ventures have contributed to the rapid expansion of ASEAN aviation industry, and with the unequal bargaining position that lay between the two region, they should perhaps attempt to adapt some of the successful agreements of the European Union and other countries such as Canada and the USA. That is in including eventually fifth freedom rights and removing the ownership restrictions of other airlines. The Comprehensive agreement constitutes a breakthrough in ASEAN’s aviation recovery in regard to the ongoing covid-19 pandemic.
Abstract
Aviation in ASEAN accounted a remarkable expansion over the last decade. Domestic scheduled traffic passenger grew by 10.7% in 2017, making it the world’s largest domestic market. Despite the fact that ASEAN is still not a complete open sky, Low cost carriers’ penetration grew from less than 30% to over 50% in 2018. This was mainly due to the introduction of cross border joint ventures that captured an important share of the domestic market. ASEAN in that perspective is near completing the comprehensive air transport agreement with the European Union. This paper assessed the prospects of ASEAN single aviation market by analyzing the effectiveness of cross border joint ventures with the open sky already in place and analyzed if the new comprehensive air transport agreement would contain up to the sixth freedom carriers to overcome the fierce competition of the sixth freedom carriers already operating under designed bilateral agreement between EU and ASEAN member states. The study found that the establishments of cross border joint ventures have contributed to the rapid expansion of ASEAN aviation industry, and with the unequal bargaining position that lay between the two region, they should perhaps attempt to adapt some of the successful agreements of the European Union and other countries such as Canada and the USA. That is in including eventually fifth freedom rights and removing the ownership restrictions of other airlines. The Comprehensive agreement constitutes a breakthrough in ASEAN’s aviation recovery in regard to the ongoing covid-19 pandemic.
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