Legal Definitions - air-services agreement

An air-services agreement is a formal treaty or understanding between two or more countries that establishes the legal framework for international commercial air transport services.

These agreements are essential for facilitating global travel and trade, as they define the rights and rules under which airlines from the signatory nations can operate flights between their territories. Key aspects covered often include:

• The specific routes airlines are permitted to fly.
• The capacity, such as the number of flights or seats available on those routes.
• Traffic rights, which determine whether an airline can pick up passengers or cargo in a foreign country and carry them to a third country (known as "fifth freedom" rights).
• Pricing regulations and other operational details.

Here are some examples to illustrate how air-services agreements work:

• Example 1: Establishing New Passenger Routes

  Imagine the governments of Australia and Vietnam wish to increase tourism and business travel between their countries. They would negotiate an air-services agreement. This agreement might specify that airlines from both nations are permitted to operate up to 10 direct passenger flights per week between Sydney and Ho Chi Minh City, and up to 5 flights per week between Melbourne and Hanoi. It would also outline the rights for these airlines to land, pick up, and drop off passengers and cargo in each other's territories. This agreement provides the necessary legal authorization for airlines like Qantas and Vietnam Airlines to launch and operate these new international services.

• Example 2: Expanding Air Cargo Capacity

  Consider a scenario where the United States and Mexico want to significantly boost their cross-border e-commerce and manufacturing supply chains. They might amend an existing air-services agreement or negotiate a new one specifically focused on cargo. This revised agreement could remove previous restrictions on the number of cargo flights, allowing carriers like FedEx and Aerounion to operate more frequent freight services between major logistics hubs such as Memphis and Mexico City. The agreement would ensure that these cargo airlines have the necessary landing rights and operational freedoms to efficiently transport goods, thereby supporting increased trade volume.

• Example 3: Implementing an "Open Skies" Policy

  The European Union and Brazil decide to adopt a more liberalized approach to air travel between their regions. They would negotiate an "Open Skies" air-services agreement. This type of agreement typically removes many traditional restrictions on routes, capacity, and pricing, allowing airlines from both sides greater flexibility to choose where and when they fly, and how they price their tickets, based on market demand rather than strict government quotas. For instance, a Portuguese airline could launch a new direct route from Lisbon to a previously underserved Brazilian city without needing specific bilateral approval for that exact route, as long as it operates within the general framework of the "Open Skies" agreement.