Asean Open Skies Agreement Benefits

April 8, 2021 10:46 am

While the third and fourth freedoms are already a common practice in the ASEAN region, ASEAN-SAM would grant the fifth freedoms, leaving the right of the seventh freedom in the air. However, there would be no full implementation of the Fifth Freedom. Although there is an open sky for capital cities, there will be a cap for slots for airlines. In addition, there are restrictions for some host countries that do not exist in other international open-air agreements. As a result of the opening of their local markets by Member States, the ASEAN single market offers many opportunities for new airlines. On the other hand, the increase in the number of airlines will lead to lower prices due to increased competition. Increased air traffic, thanks to price competitiveness, will have a ripp wave effect that will allow related industries such as freight, ground-handling and advisory services to thrive. There is no doubt that ASEAN open skies is an advantageous policy that will benefit industry players throughout the ASEAN region. While the concept of a fully unified air transport market is full of benefits, one wonders if it is really as good as it sounds.

As with all things, there are pros and cons: growth will therefore have a domino effect in other related sectors, such as aeronautical-MRO services, training, stopover assistance services, freight and tourism. In addition, the growth of the industry represents more employment opportunities for ASEAN citizens. However, regulatory barriers, poor infrastructure and insufficient human resources in each ASEAN member country could hamper the sector`s growth. Lax safety standards will also be a major concern when it comes to ensuring that ASEAN`s open airspace policy brings maximum benefits to ASEAN Member States. “Asean is now an LCC market – in fact, the figures show that more than 60% of traffic in the region is already covered and growing by CFCs,” professor Alan Tan, an aviation law expert at the National University of Singapore, told The Edge. “But as soon as the implementation of the Asean Open Skies is fully implemented, the full service sector will be even more efficient.” ASEAN`s open skis cannot be fully operated without the availability of adequate infrastructure. Despite the fact that support for airports is essential, not all ASEAN airports are open to this policy. In the best interests of their local industry, some Member States limit their “openness” to ASEAN open skies policy.

Of course, this can reduce potential opportunities for many airlines. The ASEAN-SAM Internal Aviation Market, also known as the ASEAN Open Sky Agreement/Policy, is the most important aviation policy in the region. It aims to develop a single aviation market between ASEAN members in South-East Asia, which is due to start on 1 January 2015, although not all agreements have yet to be signed. [1] Aviation policy was proposed by the ASEAN Air Transport Working Group, supported by the ASEAN senior officials` meeting and supported by ASEAN transport ministers. [2] The creation of ASEAN-SAM was a key part of the roadmap for the creation of the ASEAN Economic Community. [1] “Open skies will not benefit airlines like Malaysia Airlines Bhd, but for AirAsia, its strategy has been very effective in reaching places – intra-Asian segments that were not fully operated by other airlines before.” Aviation industry analysts are very supportive of the new policy and many say that the internal aviation market will lead to growth and development, as it will open up the market to increased competition.