European aviation liberalization: A view from afar

Abstract

This paper traces the development of Australia’s aviation relationship with European countries and shows how new European air carriers have entered and exited the market. The traffic rights available and the emergence of codes-shares as a marketing presence and network substitute for own aircraft operations is demonstrated. Negotiations between Australia and the European Union for a so-called ‘horizontal’ agreement to replace the 16 existing air service agreements are discussed and the obstacles to such an agreement identified. Similarly, a review of air service arrangements and operations arising there from both ASEAN states and New Zealand with Europe is conducted. The paper concludes by noting New Zealand’s very limited physical operations with Europe whereas ASEAN carriers have extensive physical operations but ASEAN has a very limited capacity to negotiate a horizontal agreement with the European Union. The rise of the Gulf State carriers through geo-political optimization of traffic rights and location has led to the replacement of European service by European carriers with service by carriers from Dubai, Abu Dhabi and Doha.