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Liberalization of air transport services and passenger traffic

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  • Piermartini, Roberta
  • Rousová, Linda

Abstract

We find robust evidence of a positive and significant relationship between the volumes of traffic and the degree of liberalization of the aviation market. An increase in the degree of liberalization from the 25th percentile to the 75th percentile increases traffic volumes between countries linked by a direct air service by approximately 30 per cent. In particular, the removal of restrictions on the determination of prices and capacity, cabotage rights and the possibility for airlines other than the flag carrier of the foreign country to operate a service are found to be the most traffic-enhancing provisions of air service agreements. The results are robust to the use of different measures of the degree of liberalization as well as the use of different estimation techniques.

Suggested Citation

  • Piermartini, Roberta & Rousová, Linda, 2008. "Liberalization of air transport services and passenger traffic," WTO Staff Working Papers ERSD-2008-06, World Trade Organization (WTO), Economic Research and Statistics Division.
    • Handle: RePEc:zbw:wtowps:ersd200806
    DOI: 10.30875/4c6e79ff-en
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    References listed on IDEAS

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    More about this item

    Keywords

    Bilateral air service agreements; air transport; air service trade liberalization; gravity model; passenger traffic; open skies agreements;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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