A bilateral air service agreement is concluded between two contracting countries and liberalizes commercial civil aviation services between those countries.....

The bilateral air services agreements allow to the designated airlines of those countries to operate commercial flight that covers the transport of passengers and cargoes between that two countries. Also they normally regulate frequency and capacity of air services between countries, pricing and other commercial aspects.



Bilateral air service agreements later expanded into multilateral air service agreements. “A multilateral air services agreement is the same as bilateral air service agreement, the only difference is that it involves more than two contracting states”. These agreements later led to another form of agreement known as open skies agreement.





History of the bilateral system

In 1944, when the World War II was in closing stages, 54 countries came to the Conference in Chicago, USA to talk about the future of international aviation. The conference resulted in the signing of the Convention on International Civil Aviation, commonly known as the Chicago Convention. The Chicago Convention established the rules under which international aviation operates. It also established the International Civil Aviation Organization (ICAO), the United Nations organization responsible for fostering the planning and development of international air transport (ICAO, 2011).



The Chicago Convention determined that no scheduled international air service may be operated over or into the territory of a contracting state without their permission. Over the following years, ICAO developed a series of traffic rights, known as Freedoms of the Air. These freedoms continue to form the basis of rights exchanged in air services negotiations today (The Australian Government. Department of Infrastructure and Transport, 2009).






Since using planes within the borders of a single country does not make any economic sense it became necessary for countries to come up with a way of expanding their operating areas. This situation led to several agreements between countries which were in form of bilateral air service agreements between two countries. One of the first air service agreements after World War II was the Bermuda Agreement. This agreement was signed by the United States of America and the United Kingdom in 1946. Features of Bermuda agreement became models for the many of such agreements that were to follow (Kasper, 1988).


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