Abstract

Policies and regulations governing the air transport industry find their roots in various motivations that go beyond purely economic reasons. These include safety, national sovereignty and defense, and environmental sustainability. Indeed, since the signing of the Paris Convention in 1919, which provided states with sovereign rights of the airspace over their territory, airspace has become a natural resource for governments, and the ‘laissez-faire’ approach that developed in the early years of aviation has been progressively replaced by state administration of publicly owned flagship monopolies (Doganis, 1973). Cross-border transportation was regulated through bilateral agreements between states, often supplemented by confidential arrangements on commercial issues between airlines. However, by recognizing the need to freely exchange ‘air traffic rights’, to regulate fares and tariffs, and to develop an optimized traffic flow management, states embarked on international negotiations that sought to develop multilateral agreements. Both the Chicago Convention in 1944 and the Geneva conference in 1947 failed to reach such agreements, leaving the International Civil Aviation Organization (ICAO) and the International Air Transport Association (IATA), created in 1944 and 1945, respectively, as the governing bodies in charge of common standards for international aeronautical activities.