“Open skies” refers to an international policy concept and air transport agreements, which liberalize the rules and regulations on international aviation. It contains the rules for international aviation markets and minimizes government intervention. Open skies applies to passengers, all-cargo and combination air transportation, and encompasses both. These agreements open a free market for the airline industry. Open skies agreements can be bilateral or multilateral.
An open skies agreement establishes a framework for growth in air services by giving carriers the operational flexibility to adjust to changing market conditions and to provide a range of competitive services to passengers and cargo. This system facilitates commercial and business exchanges, lowers air transport costs, and promotes investment, exports, and tourism.
The important features of an open skies agreement are as follows. An open skies agreement:
- does not provide a limitation on the number of airlines that is designated by countries;
- provides unrestricted capacity and frequencies on all routes;
- provides full third/fourth-freedom, fifth-freedom and sixth-freedom rights, unlimited change of gauge, co-terminalization, substantial routing flexibility, and seventh-freedom cargo rights;
- provides a double-disapproval pricing provision on all routes;
- provides liberal charter arrangements;
- opens code-sharing opportunities;
- provides intermodal rights;
- provides pro-competitive doing-business provisions;
- provides commercial opportunities, currency conversion/remittance, ground handling, and user charges; and
- provides model provisions on safety and security.
The Convention on International Civil Aviation (1944), known as the Chicago Convention, prepared a framework within which civil air transport could develop. The Chicago convention introduced nine freedoms of the air for those states that have adopted the Convention. The ASEAN Multilateral Agreement on Air Services and the ASEAN Multilateral Agreement on the Full Liberalisation of Air freight services (2009) are multilateral air transport agreements among the 10-member Association of Southeast Asian Nations.
In the U.S., open skies policy goes hand-in-hand with airline globalization. Open Skies agreements provide maximum operational flexibility for airline alliances by allowing air carriers unlimited market access to markets and the right to fly to all intermediate and beyond points.
The U.S. entered into open skies agreements in 1979. The U.S. is party to over sixty five open skies agreements. Open skies agreements act as a foundation of the U.S. international air transport policy. In 2001, the U.S. signed the Multilateral Agreement on the Liberalization of International Air Transportation (MALIAT). The MALIAT, the world’s first multilateral air transport agreement based on open-skies principles, establishes a mechanism for the expanded exchange of route rights and a uniform standard for commercial aviation relations. Open Skies agreements have vastly expanded international passenger and cargo flights to and from the U.S. These agreements promote increased travel and trade, enhancing productivity, and spurring high-quality job opportunities and economic growth by eliminating government interference in the commercial decisions of air carriers relating to routes, capacity, and pricing, freeing carriers to provide more affordable, convenient, and efficient air service for consumers.