In late 2004 and early 2005, liberalisation of the UK-India air services agreement opened up an aviation market which had been tightly constrained by bilateral agreements for over fifty years. Using the available evidence from a variety of different sources, the paper in turn examines the impact on consumers, airlines, airports and the wider economy of the increased aviation activity enabled by recent regulatory changes and seeks to quantify this where possible. The duration over which services were tightly constrained, and the speed with which these constraints have been removed (albeit partially) in the last two years, sets India apart from most other long-haul markets.
These factors combined with the strong demographic, cultural and economic links between the two countries, present a unique opportunity for an examination of the effects of aviation liberalisation. The paper starts with a brief description of the historical context of the changes that have taken place in the market over the last two years, before examining the evidence of the impact on consumers, airlines, airports and the wider economies of both countries. Click here to read more…
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