Travel Reference
In-Depth Information
Competition and international tourist mobility are facilitated through the bilateral (and
sometimes multilateral) exchange of the freedoms listed in
Table 27.1.
To illustrate the
complexity of tourist fl ows in the context of air service arrangements and the limitations that
they often impose,
Figure 27.1
provides a simple example of three states and the potential for
the distortion of tourist fl ows based on the availability of air access rights (or simple air rights)
across multiple countries.
For an airline designated in State A to take passengers from State A to State B (and then
back again), a set of third and fourth freedom air rights is required (denoted in
Figure 27.1
by
the solid, bi-directional arrowed line). Securing such rights is relatively common, and the
fi nal agreement - assuming both states would seek a balance of opportunities for their own
passenger airlines - can be assumed to a true exchange, such that both states provide third and
fourth freedom access to airlines designed by the other state.
Let us assume, however, that an airline of State A wishes - for commercial reasons - to fl y
to State C, but is restricted from doing so because of geography and technology. In other
words, the existing range of its fl eet renders non-stop services impossible because of distance.
In this case, a stop in State B would be required for technical reasons (e.g. to take on fuel).
Let us also assume that State A and State B have already agreed to so-called
transit rights
(the
second freedom) which would allow the airline of State A to stop in State B for refuelling
purposes, but not to pick up passengers and fl y to a beyond point. To enhance even further its
commercial opportunities, State A's airline may wish to take advantage of this stop by not
only dropping off some State A passengers in State B, but by picking up some State B passen-
gers and carrying them, along with some State A passengers, to State C. Doing so would
allow State A's airline to effi ciently allocate seats across its fl eet on this particular route and
accrue maximum revenue through revenue management, effi cient cost allocations and
marketing.
For this to happen, however, State A must enter into negotiations with both State B and
Country C. The agreement between State A and State B would declare State C to be a
'beyond point' in the A-B-C service operated by State A's airline. Concurrently, the agree-
ment between State A and State C would declare State B an 'intermediate point' (item (b) in
Figure 27.1
) in the A-B-C service. Note that, in this case, the agreement between State B and
State C is irrelevant for services undertaken by Country A's airline. While the above pattern
outlines the air rights required, their negotiation may not be straightforward. For example,
State B and State C may both - or individually - have reservations about granting these
rights, particularly if their own airlines regularly provide services on either a B-C-B or
C-B-C routing. The presence of Country A's airline on those routes could be seen as a
Figure 27.1
Tourist mobility potential given existing air service arrangements
