Open Skies Closed: ASEAN

Source: The Nation

Asean’s ambitious open-skies scheme has clearly missed the 2015 year-end deadline, and its full implementation appears elusive.

Three members of the 10-nation bloc — Indonesia, the Philippines and Laos — seem reluctant to join the scheme for full liberalisation of Southeast Asia’s aviation sector.

The three have reportedly not committed to the Asean Single Aviation Market (Asam) and still restrict airlines based in fellow member states from flying from the home country to all cities in the three countries.

Indonesia has only opened up Jakarta, the Philippines has excluded Manila from the open-skies list, and Laos is not keen to free up Luang Prabang and Vientiane for Thai carriers.

The other Asean members have complied with the scheme to create a single integrated market for the region’s airline industry.

This is in line with the broader aims of the Asean Economic Community (AEC), which took effect on the same Dec 31, 2015 deadline.

For Asam, much work remains for economic and market integration of the aviation sector, while technical and regulatory integration is still in the early stages, said Alan Tan, an aviation law professor at the National University of Singapore.

“It is thus likely that Asam will have to be extended or have a second stage declared for the post-2015 period to tackle both unfinished and new matters,” he said. “In other words, Asam remains very much a work in progress.”

A liberalised aviation sector would boost air traffic in a region home to 625 million people, stimulating air connectivity, encouraging higher service quality and lowering ticket prices for passengers as competition increases.

Fear of competition among Asean carriers is a sticking point for member states that continue to drag their feet to protect their own airlines, according to aviation analysts.

The Asam process of liberalising market access is currently limited to so-called third-, fourth- and fifth-freedom rights, Prof Tan said.

The upshot is airlines must still begin and end their flights at home-state points. For instance, a Thai carrier cannot station aeroplanes in Indonesia to connect Jakarta and Manila (i.e. the “seventh freedom”).

At best, it can operate a Bangkok-Jakarta-Manila-Jakarta-Bangkok route — a fifth-freedom operation that starts and ends in Bangkok but enjoys traffic pickup rights in Jakarta going both ways.

Prof Tan said the seventh freedom must be addressed explicitly in the post-2015 period and allowed to flourish.

 

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