At last, countries representing 60 percent of global aviation have signed the principles for air liberalization at the end of the International Air Transport Association’s (IATA) Agenda for Freedom Summit in Montebello, Canada.

Chile, Malaysia, Panama, Singapore, Switzerland, the United Arab Emirates, the United States of America, as well as the European Commission approved the Multilateral Statement of Policy Principles for the Implementation of Bilateral Air Service Agreements, “a historic achievement that will help set the foundation for a financially sustainable global aviation industry,” according to Giovanni Bisignani, IATA’s Director General and CEO.

The policy principles will allow the aviation industry to have freedom to access capital markets, freedom to do business and freedom to price their services.

Those who signed the pact agreed on principles that would open the possibility for airlines to access global capital markets. This would be achieved with an agreement not to exercise bilateral rights that could allow them to block international services from airlines with non-national ownership structures. States also agreed to consider the possibility of a multilateral agreement to waive ownership restrictions.

They also agreed on principles that seek to reduce restrictions on market access, to hasten the opening of markets in future bilateral negotiations and to have greater freedom in pricing airline services in line with market realities.

The 65-year-old bilateral system of air service agreements restricts airlines from doing business in ways that no other industry faces. National ownership requirements do not allow airlines to merge across borders, precluding the development of global players that has been seen in other previously regulated industries such as telecommunications. Airlines are also restricted in market access, until government negotiators conclude agreements to allow cross-border services.

“Sixty-five years ago, when airlines were divisions of the state apparatus, the bilateral system and its restrictions made sense,” he pointed out. “But the world has changed. Airlines are real businesses. Their bottom lines are subject to the harsh discipline of the market that has seen the industry lose a net of US$53 billion since 2001. Airlines made global business possible, but they remain a highly fragmented industry unable to cover their cost of capital. We don’t want government handouts. We need a level playing field and the freedom to do business. Today’s signing is a major step towards that goal.”

However, “One agreement will not change the world. But this is a strong signal that this industry’s future must be realized in a much more liberal environment,” he acknowledged. “This signing is the beginning of change. Our shared task now is to bring even more countries on board.”

While these policy principles are non-binding, they are an important statement of common government intention among the most active countries driving global aviation policy. The document notes specifically that the signatories “recognize the importance of promoting compatible regulatory approaches and reducing the potential for conflicts” and the intention to use the policy principles to guide “implementation of existing air service agreements and our approach to the negotiation of new or amended air services agreements in the future:’

Finally, the Statement of Policy Principles is in line with the International Civil Aviation Organization (ICAO)’s vision, declared Roberto Kobeh Gonzalez, ICAO Council President. “While safeguarding safety, security and environmental responsibility, governments and industry must also find a platform for financial sustainability in civil aviation.”