Measuring the degree of aviation liberalisation: Should we trust bilateral agreements?

This paper revisits the assessment of aviation regulatory regimes through air liberalisation indices (ALIs). Most studies are based on the clauses of bilateral air service agreements (BASAs) that are coded and converted into scores to form an ALI. However, BASAs are commonly amended by memoranda of understanding or other kinds of arrangements that are usually not made publicly available. This paper investigates the gap in ALI values between the original BASAs and further amendments, considering a large range of BASAs signed by Belgium and Brazil with third countries. It is found that the degree of aviation liberalisation of amended BASAs is often significantly higher than the original BASAs’ clauses (Belgium: +86% on average; Brazil: +146%). This confirms that ALIs based on the original BASAs can be significantly biased and underestimate the actual degree of aviation liberalisation. This calls for making all agreements and their subsequent amendments publicly available. We argue this should be done under the auspices of the ICAO.