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As global economic gloom grows, ASEAN liberalises skies, but ratification could drag

7-Nov-2008

In the midst of a worsening global economic downturn, the ten-members of ASEAN have taken crucial and timely steps to liberalise aviation access. The multilateral agreements aim to deepen and broaden internal economic integration and linkages with the world economy, to realise an ASEAN Economic Community.

ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Burma, the Philippines, Singapore, Thailand and Vietnam.

The agreements signed on 06-Nov-08 aim to facilitate and enhance passenger and freight services by removing access restrictions on a gradual basis, "with a view to building a single unified aviation market within ASEAN by 2015".

The key agreement, the so-called ‘Multilateral Agreement on Air Services', calls for unlimited third and fourth freedom traffic rights between the ASEAN capital cities for implementation by 2008 and unlimited fifth freedom traffic rights between the ASEAN capital cities for implementation by 2010.

But the key to the achievement of these lofty ambitions will be the individual ratification of the agreement by member states.

Indonesia, in particular, is expected to be slow in opening its skies. The country still restricts foreign low cost carriers from operating to four key airports and no decision has been made on a timeframe for lifting the ban on foreign LCCs, let alone signing up to unlimited third and fourth freedom rights linking other ASEAN capital cities.

The details of each agreement are provided below.

Multilateral Agreement on Air Services

Each contracting party grants to the other contracting parties the rights for the conduct of international air service by the designated airlines of the other contracting parties the right to fly across its territory without landing, the right to make stops in its territory for non-traffic purposes. The agreement also grants unlimited third, fourth, and fifth freedom traffic rights within and between the ASEAN Subregions; unlimited third, fourth freedom traffic rights between the ASEAN capital cities, for implementation by 2008; and unlimited fifth freedom traffic rights between the ASEAN capital cities for implementation by 2010.

Multilateral Agreement on the Full Liberalisation of Air Freight Services

Each contracting party grants to the other contracting party the right for the conduct of international air freight services by the designated airlines of the other contracting parties the right to fly across its territory without landing; the right to make stops in its territory for non-traffic purposes; and the rights specified in the agreement, including unlimited third, fourth, fifth freedom traffic rights among designated points in ASEAN as well as unlimited third, fourth, and fifth freedom of traffic rights among all points with international airports in ASEAN. The agreement is for implementation by 2008.

ASEAN Framework Agreement on the Facilitation of Inter-State Transport

This agreement aims to facilitate inter-state transport of goods between and among the member states, to support the implementation of the ASEAN Free Trade Area, and to further integrate the region's economies; to simplify and harmonize transport, trade and customs regulations and requirements for the purpose of facilitation of inter-state transport of goods; and to work in concert towards establishing an effective, efficient and integrated and harmonized regional transport system that addresses all aspects of inter-state transport. The Agreement is for implementation by 2009.

Under the agreement, each contracting party shall grant to other contracting parties the right to inter-state transport by: allowing transport operators duly established in one contracting party to undertake transport of goods into and/or from the territories of other contracting parties; and to load and discharge goods destined for or coming from contracting parties.

The contracting parties shall also endeavor to provide facilities for inter-state transport and that inter-state transport, provided that it complies with the relevant laws and rules of the host contracting party, shall not be subject to any unnecessary delays or restrictions.


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