Executive Summary

The liberalisation of the ASEAN air transportation sector has increased tremendous
competition in the business approaches of Air carriers and Passenger traffic. This research
work is about the process of understanding the act of liberalisation through the Open Sky
policy and analyse the same in terms of the increasing competition in the selected domains.
For this purpose the Case Study research methodology has been selected as the appropriate
means of meeting the answers to the research questions. Moreover, interview sessions with
experienced professionals from the aviation sector are also considered by this research work.
The basic idea is to know the competitive advantages and the disadvantages led by
liberalisation in the business approaches of air carriers and passenger traffic in ASEAN
region. The data collected for CAPA (2016) will also be analysed in justification of growth
that the liberalisation has added to the aviation sector. The way to control the activity of
liberalisation for better benefit of the ASEAN aviation sector will remain as core target of
this research work.

Executive Summary

The liberalisation of the ASEAN air transportation sector has increased tremendous
competition in the business approaches of Air carriers and Passenger traffic. This research
work is about the process of understanding the act of liberalisation through the Open Sky
policy and analyse the same in terms of the increasing competition in the selected domains.
For this purpose the Case Study research methodology has been selected as the appropriate
means of meeting the answers to the research questions. Moreover, interview sessions with
experienced professionals from the aviation sector are also considered by this research work.
The basic idea is to know the competitive advantages and the disadvantages led by
liberalisation in the business approaches of air carriers and passenger traffic in ASEAN
region. The data collected for CAPA (2016) will also be analysed in justification of growth
that the liberalisation has added to the aviation sector. The way to control the activity of
liberalisation for better benefit of the ASEAN aviation sector will remain as core target of
this research work.

1.1 Background Overview
The ASEAN Single Aviation Market, or as popularly termed as ASEANSAM is the ASEAN
Open Sky policy, which gets recognised as the most major policy of this particular region.
Based on this policy, ASEANSAM geared up all the developmental approaches and further
aimed in enhancing the unified as well as the market of single aviation business among the
ASEAN members. According to the report of Tan (2009), the initial proceedings of
ASEANSAM for the Southeast Asian members date back to 1 st of Jan., 2016. The Air
Transport Working Group of ASEAN proposed the policy of ‘Open Sky’ in the aviation
domain, and the same was supported by Senior Transport Officials. Moreover, ASEAN
Transport Ministers endorsed it.
The research based declarations of Chinaview (2007) and Tan (2009) state that the
establishment of ASEANSAM was initiated with the aim to establishment the strong hold of
ASEAN Economic Community, whereby it was expected to get accomplished by the activity
of liberalization and air travel business among the ASEAN members. The approach of the
‘Open Sky’ policy is to offer direct benefits to the aviation sector and add the element of
growth and sustainability in the business of air travel in the global sky. This policy is also
meant to establish free tourism related services, ventures of trade and commerce, and assist in
high quality based services to all the ASEAN member states (Chinaview, 2007 and Tan,
2009).

1.2 Problem Formulation
The problem that this research laid emphasis on- is about the clashes of policies and
agreements that are liable to happen between the aviation services of the ASEAN member
state. Based on the investigative research of Forsyth, et al. (2004) and Forsyth & Rodolfo

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Liberalisation in Aviation: ASEAN Open Sky Page 5
(2006), this research concentrates in gaining the key towards progressive solution to the
probable clashes. It also is in pursuit of attaining adequate amount of resolution in the
implementation of liberalisation to the aviation industry under the regulations of ‘Open Sky’.
The problem with the air traffic liberalisation among the capital cities, the ASEAN members
are subject to get into the competition of holding unified aviation principles and at the same
time designate individual competitive approaches, hence the current research approach.

1.3 Research Questions
Keeping in consideration with the aforementioned problem formulation, the current research
has attained some questions in terms of understanding the challenging competitive platform
between the air carriers and passenger traffic, while implementing and developing ‘Open
Sky’ policy, by the ASEAN liberalisation of aviation sector. These are the research questions
are as follows:

1. What is the process of liberalisation of the air transportation system in the region?
2. How does liberalisation of the air transportation system create an impact on the
   competition between air carriers and passenger traffic?
3. What is the impact of air transport liberalisation on competition between air carriers
   and passenger traffic in ASEAN region?
4. What are the recommendations provided to appropriate entities for controlling
   liberalisation of the air transportation system that creates an impact on the competition
   between air carriers and passenger traffic in ASEAN region?
   The selection of these questions are meant for the understanding of the ‘Open Sky’ policy
   and the impact that the same as on the futuristic approaches of air carriers and passenger

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Liberalisation in Aviation: ASEAN Open Sky Page 6
traffic among the ASEAN members. Moreover, these are the questions that are further
considered in adding research objectives to the current paper and are mentioned hereafter.

1.4 Research Objectives
This research paper aims in gaining the insight into the liberalisation of Aviation in the
peripheral count of ‘Open Sky’ venture noted by ASEAN. Diversified aspects, especially the
concerns of capacity deregulation, along with the approach on the process of implementing
price related controls, will be investigated hereby. This research work will focus in
understanding all sorts of different agreements and policies, counted as per geographic as
well as functional dimensions in the competitive arena of air carriers and passenger traffic,
for the meeting the liberalisation approaches as noted by the formulations of ASEAN ‘Open
Sky’. The core objectives of this research paper are as follows-
 To gain adequate critical information about the relevance of liberalisation through
‘Open Sky’ by ASEAN.
 To understand the challenges and the issues related to the developmental approach of
ASEAN air carriers.
 To understand the challenges and the issues related to the developmental approach of
ASEAN passenger traffic.
 To identify the competitive stress among the air carriers & passenger traffic, caused
by liberalised ‘Open Sky’.
 To figure out the possible resolutions in offering better competitive edge to ASEAN
air carriers and passenger traffic.
1.5 Research Rationale
The rationale behind this research work, is to gain a critically analysed understanding of the
liberalisation of ASEAN aviation sector and to point out the impact of ‘Open Sky’ policy

over the ASEAN air carriers and passenger traffic. As this gets initiated this research paper
aims in offering resolution to the increasing competitive stress between the air carriers and
passenger traffic of the ASEAN members. The chief purpose is to derive all those proceeding
through which this research can aim in generating the positive aspects of liberalisation and
eventually add a comfort level to the international competitive platform of aviation industry.

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