Howthe Global aviation market has been affected by Aviation Law
Howthe Global aviation market has been affected by Aviation Law
Aviationregulation is an important aspect throughout the world. Theconventions in aviation law have changed over time, and there aresignificant effects felt specifically regarding the market economics.Most of these changes have come about as a result of the collectiveefforts to promote the climate change agendas, energy, and resourceefficiency as well as uprising legal issues. It is due to thesevariations that we come up with the question, “How has the globalaviation market been affected by air laws?” this paper identifiesand reviews these effects based on literature reviews of two renownedpublications.
of the Papers
Theaircraft demand demonstrated by the European Union is considered thelargest in the world, and this poses a tremendous challenge to theoverall operations concerning communication, transportation, andcommerce. However, there is a considerable decline in the profitmargins over the years and is attributed to the deregulation of bothnational and international markets. The article Consequences of E.U.Airline Deregulation in the Context of the Global Aviation Marketobserves that the motive behind these policies was based on theimprovement of competition while at the same time reducing as much aspossible any unfair practices. Acts that have also been developed aimto safeguard the well-being of passengers and the regulation offares. The first laws defined the fares, and thus, there was no pricecompetition but rather a contest regarding service quality. This ledto tremendous growth in this industry which was further fuelled byreduction of carrier costs. In this way, the transportation fareswere easily maintained for approximately twenty years. Later on, theemergence of bilateral agreements facilitated changes in the airspacesovereignty regulations, allowing the carriers to put down or pick uppassengers even in countries where they are considered foreign [ CITATION Mor01 l 1033 ].
Inthe year 1975, the United States was emboldened by previousexperiences to scrap off the authority to determine and control thefares. The effects of this decision were felt and characterized by arapid transformation which included an increase in demand for travel,especially between cities. Consequently, the levels of competitionalso greatly increased leading to a massive decrease in the averagefare cost up to 40%. Also, the Airline Deregulation Act pushed thecarriers to develop major route hubs. Finally, the passenger boardingincreased dramatically accompanied by this 40% lowered fare.Liberalization of the European Union has also seen notable changes.Routes with higher competition have much lower airfares compared tothose with minimal competition. Also, additional courses have come upas a result of the liberalization. The formation of strategic airlinealliances are the outcome of liberalization, and it facilitates fleetrationalization, expansion and cost reduction and marketing [ CITATION Mor01 l 1033 ].
MichaelBuenger’s paper “The EU’s ETS and Global Aviation: Why “LocalRules” Still Matter and May Matter Even More in the Future”describes how the important states or nations utilize their influenceof policy making to manage policy practices even beyond theirborders. The relationship between economics and the environment areaspects that are closely related and the effects of human activity onthe ecosystem cannot be ignored, and thus, the application of ETS tothe global aviation sector is the evidence that the environment andthe economy are synergistic aspects that need to be regulated. Moststates have the interest of getting other states to adopt its rulesand regulations. As a consequence of these policies and laws, globalleadership is expanded and encourages the growth of new technologies,industries, and innovations. Apparently, the global directive isimplemented either through the domination by influential states orcoercion by other influential states to conform to the specificallystipulated standards. The paper ardently elaborates that the aircraftoperators have to cover their carbon emissions efficiently.Additionally, they must also provide adequate documentation relayingan appropriate monitoring plan and discharge reports based on thescheme. While this law provokes a strong environmental rationale,there is also an economic logic that surmounts to the reduction ofenergy usage, motivating innovation, the establishment of enhancedworldwide standard, enhancing favorable market mechanisms and theprotection of indigenous industries. However, if this directive isapplied only to the European Union aviation, the European airlineswould then be at a competitive disadvantage in comparison to theirinternational counterparts. In summary, the aviation directive servesas a critical example of how the powerful states can use theireconomic power, political power, and municipal lawmaking to protecttheir interests [ CITATION Mic13 l 1033 ].
Applicationto the Research Topic
Mostly,these two papers clearly elaborate on how different laws haveimpacted aviation market behavior over time. The relationship betweenairline policies and the market economy can be understood by how theairfare prices fluctuate and also by the number of competitors in theaviation sector. A good example of this situation is where the strictlaws in the previous years indicated that the number of customers wasconsistently reduced, but later on, the multilateral airspaceliberalization promoted an increase in passengers and routes offlight. Additionally, the competition arising due to theliberalization affected the market by reducing the overall prices.While the environmental degradation factors associated with pollutionhave led to the generation of directives to reduce contamination ofthe ecosystem, the economic associations such as the increase inoperation cost for carriers impact the overall aviation market. Thismeans that there is an association between this directive and themarket demand.
Aviationpolicies and regulations affect the air travel market either directlyor indirectly. Some of these laws have facilitated the ease ofmovement of people at affordable costs and also the management andimprovement of the otherwise increasing levels of atmosphericpollution. Although, the benefits have been focused upon to a greaterextent, other ethical and negative issues such as the use ofpolitical and economic power to impose regulations on other countriesand states are aspects that cannot be left unmentioned. All in allthe application of international laws can be the right approach toachieve trans-national problem solving. Finally, global communityaction will possibly facilitate the liberalization of the competitionlaw to ensure that healthy unbiased competition prevails.
Buenger, M. (2013). The EU’s ETS and Global Aviation: Why “Local Rules” Still Matter in a Globalized World and Why They Might Matter Even More in the Future. Denver Journal of International Law & Policy, 417-465.
Scharpenseel, M. F. (2001). Consequences of E.U. Airline Deregulation in the Context of the Global Aviation Market. Northwestern Journal of International Law & Business, 91-116.