By Vivek Pattanayak* in Bhubaneswar, November 13, 2016

In last seven decades,  since the Chicago Convention on international civil aviation came into existence establishing International Civil Aviation Organization (ICAO), a specialized agency of the United Nations system with aims and objectives of promoting growth of safe, efficient, orderly and economical intentional air transport with international legal regime, the world has changed beyond recognition politically, economically, socially and culturally. Technology has contributed immensely to these changes. Rapidity in which changes are taking place is incomprehensible.

Rising middle class in almost all parts of the world will bring about tectonic shift in economic and political balance globally. Greater trade and commerce propelled by that phenomena in the world between the developing and developed countries and among the developing countries and emerging markets will be the outlook for the future. Spectacular growth of aging population with advanced medical and health care and relentless effort to develop technology to defy aging will have remarkable effect on travel and leisure.  In the changes that have taken place in the world, air transport, more particularly international air transport has played a dominant role, and it will also continue to play that big role as the years will pass by.

Forecast of ICAO (a public international organization of sovereign States) and IATA (a private international organization of airlines) have indicated that the air traffic will double in the next fifteen years. Manufacturing companies like Boeing and Airbus have forecasted that India alone would have demand of 2000 wide bodied long distance passenger and commercial aircraft within less than a decade. Indonesia will acquire 500 passenger and commercial aircrafts in next few years. China’s air transport growth has been phenomenal.

From propeller driven aircraft there was jet engine. It brought about a revolution in air transport making fast trans-continental flights possible. Now there is definite movement towards sub-orbital flights, possibly reintroduction of sub-sonic flights and may be introduction of hypersonic aircraft which was the concept in the early eighties. Fuel cost – which impeded the profitability of airlines in the absence of adequate return on investment for years to the stock holders has in recent months shown decline. However, it may be a temporary phenomenon.

Solar energy driven aircraft has already appeared in the aviation horizon. Shale oil would affect the oil economy. All these will have impact on international air transport in next few decades. Although five freedom agreements which had envisaged liberal exchange of traffic rights among the sovereign states without bilateral mechanism, could not become a universal regime, as the world of aviation unfolded the developed countries started the concept of “open sky”.

In the early years the developing countries were protectionist for their national carriers. The colloquium of 1992 organized by ICAO gave the clarion call of liberalization of air transport. It has been followed up by subsequent Air Transport Conferences with the same theme of opening the market in air transport. Since the collapse of the socialist system the world engulfed by the liberal economic thoughts, ushering in of World Trade Organization (WTO) creating a regime to remove barriers for free trade, commerce  and services, rise of emerging markets called BRICS (Brazil, Russia, India, China and South Africa), and growth in Indonesia, Malaysia, Philippines, Turkey and Gulf Region have demonstrated an uninterrupted trend for last two decades ,that is   expansion of air traffic in Asia Pacific and Middle East.

Although economic growth since global financial crisis has stagnated America, Europe and Japan, Africa is making growth and with cheap labour has potential of attracting investment in manufacturing sector. China’s growth has slowed but in terms of numbers a trillion dollar economy has its staggering impact. India grew at 7 % in 2013-14, and according to IMF and World Bank will grow at 8% and 9% in the coming years, perhaps out space China in growth. The potential in Latin America is also unfolding.

Most striking impact of all these is that some of the air carriers  of the middle east taking advantage of their oil resources are vigorously penetrating into the market of the developed countries particularly North America giving rise to a new phenomena that is protectionism and restriction to “open sky concept”. Recent reaction of the US Congressmen against increase in flights by the carriers of the Gulf Region is an indication of protectionist approach of USA which for decades championed in favour of open sky.

To spark engine of economic growth international air transport can be leveraged by both the groups of countries – those (like USA, Canada, France, Germany, UK, Italy, Sweden and Spain) who have the technology and finance to manufacture airframe, aero-engine, simulators, avionics and other allied equipment and those countries who have the capacity to provide air services economically and efficiently like national carriers of the Gulf countries. Potential of this sector to provide employment to bulging number of youth which represent demographic dividend of the world is very well recognized. Much needed services to the aging population across the continents can be provided with free flow of human resources and transport for travel and leisure.

In this context, the Chicago Convention which had demonstrated in past the flexibility to accommodate open sky and liberal air transport can continue to serve as the legal instrument to promote all the freedoms of air which have evolved in last seventy years from first freedom to tenth freedom.

First freedom was the right to over fly the territory of another sovereign state, second freedom is to stop in another country for non-traffic purpose, while the remaining eight freedoms relate to carriage of traffic of both passengers and cargo between the countries, to a third country, domestic passengers (cabotage) and operating outside own countries. The existing bilateral legal regime for exchange of rights restricts the exercise of these freedoms although conceptually they have developed over the time. What is needed at the present is the global cooperation and consensus to drive the concept forward.

*(Former Director of International Civil Aviation Organization)