This book provides a comprehensive and contemporary study on the reform of the airline nationality rule. It explores how the traditional system of airline ownership and control, rooted in the post-World War II bilateral framework, has become an increasingly contested obstacle to foreign investment in national aviation sectors.
The airline nationality rule has long served as a cornerstone of international air transport regulation. Designed to preserve state control over air services, the rule restricts foreign ownership of airlines operating under bilateral air services agreements. However, the globalization of the aviation industry and the growing need for cross-border capital have intensified demands for regulatory liberalization. This book examines whether the existing ownership and control regime remains reconcilable with the economic realities of contemporary international aviation.
The analysis traces the evolution of the liberalization agenda pursued by the International Civil Aviation Organization (ICAO), including its strategic initiatives on foreign investment in airlines; the 2003 liberalization balanced approach principle; and the ICAO's work on the draft convention on foreign investment in airlines. In addition, the book examines recent regional liberalization initiatives and provides comparative case studies from various jurisdictions on foreign direct investment in airlines. It also evaluates the paradoxical retreat of major aviation powers from earlier liberalization commitments, despite their historical support for liberal air transport policies.
Particular attention is devoted to the ICAO's institutional capacity to act as a "norm entrepreneur" capable of facilitating regulatory reform at the international level. The book concludes with policy recommendations aimed at strengthening the ICAO's effectiveness in promoting liberalization, including procedural innovations, enhanced stakeholder engagement, and renewed efforts to conclude a multilateral treaty on airline ownership and control.
Given its scope and focus, the book will be of interest to policymakers, regulators, aviation entrepreneurs, legal practitioners and industry professionals, as well as scholars and students of international air law and air transport policy.