Traffic impacts of EU horizontal air service agreements

Abstract

The EU has signed a number of “horizontal air service agreements” to bring existing bilateral air service agreements (ASAs) into legal conformity with the European Court of Justice 2002 ruling on “nationality clauses”. These new agreements allow EU carriers to operate so-called 7th freedom routes from all Member States to third countries, and not only from their home countries (Community carrier designation). Based on schedules data analyses, we however do not see many positive effects on service levels. This is mainly because bilateral frequency restrictions remain in effect, or as long haul services remain to be concentrated at the carriers’ home hubs. A frequent use of 7th freedom rights is mainly observed for low cost carriers on short-haul, "open sky" markets, like between the EU and the Member States of the European Common Aviation Area (ECAA) or Morocco.