Foreign investment in airlines: an ICC view

    Prepared by the ICC commission on : Commission on Customs and Trade Facilitation
    Publication date : 08/11/1994

    The time has come for a relaxation of the rules on foreign investment in airlines. Trends in the economy have long pointed to the internationalisation of markets in a number of other important fields.

    Since it was established in 1919, The International Chamber of Commerce (ICC) has argued for the freer flow of trade and capital across borders. It gave strong support to the completion of the Uruguay Round of Trade Negotiations, which was recently brought to a successful conclusion. It has worked with other international bodies to reduce barriers to foreign investment in developing countries. And in air transport, the ICC has argued that nations should progressively move to replace the existing bilateral system with new multilateral accords, which would be negotiated by groups of nations using a broader aggregated market to increase opportunities for airlines and ease the flow of passengers to a wide range of destinations.

    In the current paper, the ICC addresses the issue of cross border investment in airlines, not only as a means of providing needed capital to the industry, but also as a lever which can be used to liberalise the air transport negotiating process. Recent developments on airline privatisation and the increasing number of cooperative airline ventures have made the issue an increasingly timely one. Indeed, the ICC agrees with a number of observers who see cross border investment as one of the most important aviation policy issues of the 1990s.

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