Protectionism in the air transportation industry

On most routes, the civil aviation market is apportioned by bilateral agreements between countries designating specific carriers on particular routes and the frequency of the service. Some developing countries also use bilateral agreements to control the number of flights and passengers that a foreign airline may fly to or from their territories to protect their own, much smaller, national airlines from competition from airlines of developed countries. At the non-governmental level, air fares are agreed upon in tariff conferences of the International Air Transport Association (IATA), subject to the approval of the governments concerned. Despite bilateral agreements and other controls, it would seem that the influence of IATA on the setting of tariffs has been declining in recent years, notably due to a policy of reduced intervention by the United Nations. Almost every country reserves for its national airline all flights wholly within its territory. Some regulations and practices in both developed and developing countries frequently favour local airline companies. Foreign airlines may be subject to differential taxation, such as higher business and sales taxes. National carriers are also frequently granted preferential airport user rates on such items as landing fees and hangar and parking charges. Furthermore, national carriers are accorded preference in airport facilities and services. Ground handling services may be the monopoly of the national airline or some other designated national company. The access of foreign airline companies to automated reservation and ticketing systems may be limited.
(D) Detailed problems