Fact Sheet: Agenda for Freedom

International air transport is governed by over 3,500 bilateral air service agreements
These agreements contain clauses that limit airlines’ ability to do business
Restrictions to access markets with regulations on:
- Traffic rights
- Airports that can be served
- Pricing
- Capacity
Airlines must be ‘substantially owned and effectively controlled’ by that country’s Government or its citizens
- Preventing international mergers and acquisitions
- Limiting airlines’ ability to raise equity on international capital markets
This has led to air transport fragmentation

The top 10 airlines have a market share of about 30%
- of a $490 billion industry
The top 10 auto manufacturers account for 75%
- of a US$ 2 trillion industry
Industry fragmentation has led to chronic losses:
- US$10.4 billion in 2008
- US$9 billion forecast for 2009
Over the past 60 years industry has reported
- US$11 trillion in revenues
- but net profits of only US$32 billion
- an average profit margin of just 0.3%

A study on the Economic Impact of Air Service Liberalization (Boeing/Intervistas) 2006 revealed
- a 10% rise in airline flight connectivity
Supported a 1.1% increase in long-term GDP
The doubling of traffic in European Single Market generated 1.4 million new jobs
The study also revealed global liberalisation would create
- a 63% increase in traffic
- 24.1 million jobs
- and US$490 billion in additional economic activity

Held in Istanbul on 25-26 October
- Convened by IATA’s Director General and CEO, Giovanni Bisignani
- Chaired by former US Under-Secretary of Transportation Jeffrey Shane
Called on 14 progressive governments and the European Union to consider an IATA proposal to grant airlines more commercial freedoms
Attendees:
- Australia, Brazil, Canada, Chile, the European Commission, India, Mauritius, Morocco, Panama, Singapore, Switzerland, Turkey, the United Arab Emirates, the United States of America and Vietnam

Works within the bilateral system and provides a mechanism to ensure fair competition
Suggests States waive certain clauses in their bilateral agreements
- market access clauses
- ‘ownership’ clauses or both
- and they would select partners with which they do it
Flexible: Governments could chose which restrictions they drop and with respect to whom
Quick: The fastest legal instrument for this would be a unilateral declaration. Under international law, governments issuing such declarations are bound by them.
Fair Competition: governments are in control
- Governments could withdraw the declaration and reinstate the (dormant) bilateral
States retain the duty to oversee the safety of airlines and the right to license them
Requires no change to the Chicago Convention
Requires no Change to Existing Bilateral Agreements

States asked IATA to facilitate this discussion with a second meeting in 2009 to turn the discussion into action
States asked IATA to facilitate the development of a Multilateral Statement of Policy Principles
- a non-binding statement that outlines how States could interpret bilateral air services agreements liberally with a focus on providing airlines with greater access to markets and foreign capital.
- sends a strong signal from key regulators that policies on ownership and control elsewhere in the world must change fast.
Consultation (Nov 08-Jul 09 has led to a draft Statement which is it its final stages of adoption.
- Governments asked to signal willingness to sign by Sept 15. If a critical mass agrees, a second summit will take place in Canada on Nov 15-16, 2009.
Agreed to spread best practices in liberalization
- by making available the most liberal agreements being negotiated.

Updated: September 2009